Sanjiv Singh is CEO and cofounder of Near Earth Autonomy, a technology company focused on autonomous flight.
Sanjiv has 25 years of experience working on autonomous ground and air vehicles. He came to Pittsburgh 30 years ago to participate in the DARPA challenge and has spent decades exploring different applications for self-driving and self-flying robots. Near Earth Autonomy started by developing self-flying technology for the United States Government and has expanded to bring their technological capabilities to a variety of enterprise customers. In this conversation, Sanjiv and Aaron discuss applications for self-flying vehicles, the origins of the company, and the difference between working with the military and the FAA. Sign up for a Weekly Email that will Expand Your Mind. Sanjiv Singh’s Challenge; Imagine a world in which you could autonomously fly from point A to point B. Connect with Sanjiv Singh
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YouTube Near Earth Autonomy Website If you liked this interview, check out episode 306 with Bryan Salesky where we discuss autonomous vehicles. Text Me What You Think of This Episode 412-278-7680
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Demetri Kofinas is a media entrepreneur and host of Hidden Forces, a podcast devoted to exploring the underlying forces driving the most powerful changes we see in the world.
His show covers a qide range of topics, including culture, philosophy, economics, technology, social science, and the hard sciences. Demetri has previously co-founded Guerilla Gaming Concepts, an interactive entertainment company focused the middleware of gaming. He has also reported on financial news and told stories to hundreds of thousands of people around the world. In addition to his show, Demetri consults blockchain and distributed ledger technology companies, helping them anticipate security vulnerabilities by building theoretical attack frameworks against token-based systems, and he consults hedge funds and venture capital firms on how to invest in and around these same emerging technologies. In this episode, Aaron and Demetri have a far reaching conversation about truth, technological progress, and geopolitics. Mentioned The Meaning of Human Existence by Edward O. Wilson Peter Zeihan Ian Bremmer Grant Williams Sign up for a Weekly Email that will Expand Your Mind. Demetri Kofinas’s Challenges; 1. Hold yourself to a higher standard. 2. Put space between your thoughts/emotions and actions. 3. Try not to judge people Connect with Demetri Kofinas
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Hidden Forces Website If you liked this interview, check out episode 463 with Jeff Booth where we discuss the deflationary nature of technology.
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Demetri Kofinas
Aaron Watson: Demetri, thanks for coming on the podcast, man. I'm excited to be talking with you. Demetri Kofinas: My pleasure to be on Aaron. Thanks for having me. Aaron Watson: So there's a bad habit in, in podcasts generally, where hosts kind of have to figure out a novel way to blow smoke up the butts of their guests and you know, say these different nice things to them, but I can very earnestly and genuinely say that your show is one of my absolute favorites. It is one of the podcasts that I look to as a model, really from an interviewing and a topic standpoint for people to explore. And so one of my, you know, hopes or goals with this conversation is that if anyone is listening to me, aware of me, and not yet aware of Hidden Forces that they'll at least give it, give it a try. And I think that maybe the kind of best entree here into a conversation I want to have with you is just the name of the pod itself, Hidden Forces. This idea that, you know, generally, if you've taken a civics class, if you've read a headline, you could articulate the very apparent frontline forces that seem to be acting on people. But the exploration of those that are less legible, less right there in your face, but having an enormous impact is a kind of really cool intellectual pursuit. So take me to the audience a little bit deeper into that name specifically of the show and how you came up with it. Demetri Kofinas: Yeah. I mean, I think that's, it's kinda right. It was just a recognition that most of what we experience in our life is, is surface layer phenomenon. So that's absolutely true in financial markets, which is where I experienced it most in my media career, because I started with on radio and in TV, on the finance media side. But it's true across the board. I mean, all these conversations that are sort of in vogue lately around simulation theory, deal with that as well. The, the idea of being that, we really don't know whether or not we, we don't know really what reality is. We sort of approximate it through the use of models or so we could be living in a simulation and not know it. So it's the kind of map and the territory. But the underlying reality, if, if you believe this does influence what we experienced on the surface. So the idea is what are those deep down the vector forces, which are, which if you move them slightly. Cause massive changes in our experience of the world. And so the idea of Hidden Forces was to apply the kind of framework that I had been using in financial markets to everything else, which is why when I started the program, the episodes that I started with were episodes on postmodernism, philosophical mathematics, television history, and culture. I mean, television history is a really fascinating one because. We don't realize just how much impact, let's say movies like Rambo or shows like not Murphy brown, I'm confusing Murphy Brown with someone. Aaron Watson: Cheers? Demetri Kofinas: No, it was that - it was a movie with a working woman that was very popular. I can't, I'm blanking on it now, but, or like, you know, Night Rider, for example. Night Rider. What it told us about our relationship to technology and what we were, we felt the future was going. But anyway, the reason I brought up Rambo is cause Rambo, even though it's not TV, it's a, it's a movie, is that it reframed our relationship to the Vietnam War. Like if you look at the movies and, and a program that came out in the seventies around that, again, I'm talking now movies and not television. Apocalypse Now, Platoon came out in the early eighties. Our relationship to the war was very dark. And if it was seeped very much in the language of the 1960s late sixties, early seventies, and the anger against the government for the war for bombing, Cambodia, Laos, et cetera. And what you saw later was that through Hollywood, the culture telling itself a new story about its role in the war. You know, we went from being the bad guys who were bombing Vietnam, Vietnam to being the good guys who were going to rescue our POW's. Who were being held captive by these, you know, really awful communists. And so it's, there's an interesting, it's an interesting example of the interplay, both what we want, but then also what we tell ourselves and how we can move so far away from actually what we knew to be empirically true. Right, which was our role in the Vietnam war. That's just one example, but it's true across the board. And that it's sort of, it's another way of talking about taking an epistemic approach to truth, to fact finding, to understanding the world. And I think this is more important than it's ever been in my lifetime because the world feels more propa - my, my world. So to speak, the world that I inhabit. It feels more propagandized than I ever remember it. And it feels like a giant battlefield of narratives where you're constantly getting hustled. And so I think it's more important than ever to be an independent thinker and Hidden Forces started as a show that was meant to give you the tools that you needed in order to come to your own determination of what the world was. To be able to differentiate between the map and the territory. And that was up to you. What I wanted to do was bring the tools to make that happen. And to, to help you challenge consensus narratives about what I now call the structures, the power, the powers that structure our world. So the forces that structure our world. So that's what Hidden Forces is. That's sort of the origin story of the name. Aaron Watson: Right on, and it has the capacity to splinter into so many different directions. So you start with the economics and I've always been of the mind that, you know, often, particularly for folks that, that kind of don't focus on that side, that field of study, that it's actually influencing way more than one might suspect. So I started with a degree in political science and we're breaking apart. Like how did this war, you know, get set off? And so often there were these just kind of like fundamental economic realities, underpinning those which drew me away from the political study of political science to economics. And so, you know, to me, just even being able to point at, to use another, you know, metaphor, the signal versus the noise in the sense of what is actually the catalyst for something. What is actually, the driver is exceptionally hard to do because in addition to being propagandized, it's exceptionally complex between the digital revolution. The, you know, the dangerous kind of footing that certain, you know, bellwether blue chip, historically companies find themselves on in the present day. Globalization. Geopolitical unraveling. An arguably new cold war, at least in narrative between U.S. and China. There's, there's an immense amount of complexity to try and absorb which it, like it basically creates the scenario for that propaganda to happen because there's so many people just trying to make sense. It scales so far beyond what we're biologically optimized to be able to deal with when our biology is like, hey, 120 person tribe. Do I trust these people? Are we okay? And kind of looking outwards. And now that's being scaled to these just numbers that don't really make sense in a human. Demetri Kofinas: Yeah, that's a really great point. So, I mean, a few thoughts, one in terms of the economic reasons for war that's absolutely true. The civil war is a great example. It was a war that, that it was founded on a moral quandary between slavery and abolition. But there were economic forces that made the war possible. That actually pushed the north towards outright confrontation with the South where I would argue it wouldn't have either wanted to, or been able to do that, had it not been industrialized. So there were, there were very different economic interests that were diverging, and tariff policy reflected that us tariff policy reflected that. So there were economic components of the war. So I totally agree. In terms of what you're getting to, which is the complexity of the world, it's a really interesting observation. I mean, it makes the thing that immediately came to my mind was because I'm havingSergey Nazarov on the show, or Nazarov . I don't know how you pronounce his last name. The founder of Chain Link, which is a decentralized oracle that's used, it's the primary oracle that's used in DeFi applications and other smart contracts. And it made me think of the world of blockchain and decentralized computing because, I do think that there's this desire to bring simplicity and order to the complexity of the world. And, you know, I think what's important there, and I'm still in the process of meditating on this cause I just started prepping for this today. Again, you know, I'm of the view that you can never know what reality is like in an ontological sense. You can never actually be clear on it. Perhaps it's possible to know it, but you won't know that, you know it. So you won't have an epistemic view of it. So what I, I sort of, I think what it's important for the con - one of the things that I think is important to develop clarity around this in the blockchain community is to recognize that when we talk about truth, when we talk about these centralization or the truth machine, Michael Casey's great book. What we're really talking about is and I think this comes across sometimes in the conversation, is consensus. It's a consensus view of reality. It's not reality. I said, do we agree that this is the map of reality? So I think what we're struggling with right now is because the world is changing so rapidly, our models of the world no longer work as effectively. And so we need new models in order to understand. We've seen this in the field of economics. I mean, you know, how many more people talk about behavioral science today than they used to? You know, Daniel Conaman was nowhere 20 years ago. I mean, I took economics in college. We didn't even. There were like no banks. Like we didn't learn about the financial system. We didn't know. I mean, when we were taught interest rates, it didn't make sense. You know, I had a huge aha moment in my life. I've talked about this before on the show, I think, I was failing intermediate macro. Failing. Right to the final. I was heading into the final, like the night before the final with that wasn't failing. That's not correct. I was, I was gonna fail, because I had no clue what, like the course was about the teacher was this, it was also awful because the teacher had the worst Italian accent ever. Every time he said focus to the class, he would say, fuck us. And everyone would laugh because we're teenagers, we're not teenagers, but we're in college, so. And then I got it. He came to me and I saw interest rates where the price of money and boom, everything just made sense. So you know, and post financial crisis, this there's been so much work on this front right? And you've seen like the rise to celebrity of people like Nasim Caeleb and others. So I think that's kind of where we are today. We have this, the world is changing rapidly. We're one of those in one of those periods of, of rapid change and the models that we've used, the structural reality artificially in order to make sense of it so that we can move through it, aren't as predictive. They don't work as well. And so again, bringing it back to Hidden Forces. One of the reasons that I started Hidden forces was because I felt that we were in a world where those models are less valuable. The education that you get from college are less useful. And so you need to rely more on yourself and you have the tools to do it. People are far more intelligent and able to learn than they realize. So so yeah, that's, that's kind of what I was thinking about in response to your question. Well, your comment. Aaron Watson: Right on. So, the other part here, you mentioned TV, you mentioned this previous time and talk about a model. There were just a couple of channels, just a couple of airwaves and the just sheer girth of the attention that could be funneled across a narrative in that kind of very concentrated way was exceptionally powerful. And you've, I don't know the exact percentile of the Hidden Forces show, but you are at the very least in the top decile. Who knows exactly where that lands, just in terms of an audience that you can reach - Demetri Kofinas: Decile, like that. Aaron Watson: - within the landscape of podcasts, but we know that, you know, even the biggest podcast is a fraction of the scale that could be reached with a story that's being told. So it's simultaneously this amazing opportunity for the individual to influence the narrative, to contribute for bad actors, all sorts of other stuff. Taking it back to Hidden Forces and where with this, you know, on a relative basis, smaller hosts and the old TV channels, radio stations of yore but in the context of today, an exceptional power and candidly responsibility, where are you most drawn to bringing people's attention and having them be aware of in the context of these Hidden Forces, the things that, you know, I don't know how you sleep, if it's something that keeps you up at night, or if it's something that, you know, you feel a sense of responsibility. I know for me, I just feel like the conversation around deep fakes is not happening to a degree that I would like to see, but I'm much more interested in, in you, the conversations that you're hoping more people will latch on to. Demetri Kofinas: Well, I mean, you know, today could even further down the vector, you know, when you bring up deep fakes, what you're really talking about is truth. And epistemology, and how do we know what's true? But how can we know if Joe Biden came out and told the country that we're under cyber attack or that were, or whatever? I mean, how do we, how do we validate content today? Or how do we know something was said today when the way in which we've definitively been able to prove it is through let's say video or audio? You know, like, like go to the videotape. Was that the broadcast or used to say that in sports, let's go to the videotape. I mean, that is deeply embedded in the culture. So to your point, I agree. I think questions of truth and reality. What is truth? What is real? I think that is very fundamental to where - so one of my deepest sort of interests, I think even deeper than that for me, I think has I realized looking at the episodes that I've done and where I think I've done some, my best work with the show and where I think we've led both in terms of quality and in terms of lead time over others, is at the intersection of humanity, humanity and culture, and technology. So our, how our brains. We're like incredible builders and in this way, I've also, it's why I love - I am Greek and I'm not one of those Greeks that's like, Greeks are the best at everything. I hate when people do that. I really do. I hate it. But I do, you know, I do value the Greeks in a way that I don't value the Romans. The Romans were incredible builders. They were incredible architects. The Greeks couldn't match that. Of course, the Romans also came after that, but the Romans imported so much of what's the, what of what ancient Greece created culturally. And so what I, what we're really great at, and there's another great quote by, I wish - I need to start anything, actually grabbed the book and have it here cause I've been thinking about it a lot recently. Edward O. Wilson, the entomologist. The scientist who developed a theory of use sociality, wrote his most recent book. Maybe his last will be able to turn out to be his last cause he's in his eighties. The book was called on the mea - I think it was called the Meaning of Human Existence. And in the book he talks about how, if an alien species were to visit earth, you know, what would they find interesting in our society? You know, you could think about this as a thought experiment. Like if we were going to go to a different planet and we're going to visit a society that was supposedly inferior to ours. Right. At least technically. What would we find valuable? Well, you know, his point was, it certainly will not be our mathematics or our science because this species will have, you know, progressed far beyond anything that we have, but they will find value in our arts and our culture. And yeah, if you think about it, this is also what fascinates us about other species. And aboriginal societies were not interested in our technology. And it's like, oh, they have a really great bow and arrow. Like, did you see just how tightly they want while on that string? How did they do that? That's not what interests us, what interests us is what makes them who they are and all the, the, those, the, the cultural aspects of it. So for me, to me, it's really, we're so exceptional at building things or using our minds to create a world around us. That's different than the one that we inhabited just prior. And then that world begins to influence us. And so for me, the question is how has that influence happening? Well, who are we, what do we value? What makes us who we are? What do we value in ourselves? And what is worth holding onto is who we are so that when we get through this cycle of innovation, we go through constant cycles of innovation. Is there something that's central that's important that's not, that's too important to lose under any circumstances that we want to hold through that transition? And I think that that's what comes across to me when I, when I do different episodes, whether it's digital minimalism with Cal Newport, or especially with my episode on surveillance, capitalism was Shoshana Zuboff. What does it mean to be a human being? What do I value? What am I unwilling to give up? And what am I willing to fight for in the face of people telling me that the future is that we're all going to become digital avatars. That we're going to transcend our bodies and upload our brains to the cloud and that this is the future of humanity. And that, that the soul is really just a network of connections that can be replicated into a virtual space. And they're all really as the brain. And I think that's, you know, my personal view is that sort of view of immortality that you just upload your brain. You've created a virtual version of it, is Hell. I mean, a horrible movie is that there's a movie called Transcendence with Johnny Depp. It's a horrific movie. It's a movie that I only watched in part because I was on an airplane. But there is that one part where, you know, he uploads to the cloud and he has changed. He's a different person. There's also a great, great scene, similarly, also that captures this, and this is why movies and stuff like this is so valuable because it really, it captures something that can't be expressed in words that the culture isn't even fully able to understand, but it's coming out like Black Mirror. But in the HBO series, Westworld, have you seen the series? Aaron Watson: Yeah, loved it. Demetri Kofinas: Okay. Okay. So, I mean, remember the Scottish guy who was the father of William's wife? Aaron Watson: Mmhmm. Demetri Kofinas: Short barrel chested guy? Guy was amazing. He said he amazing actor. Did play that role perfectly. And he dies unbeknownst to him. And he had said that he wanted to be brought back and he's brought back and I was in this little glass, you know, case or whatever, basically a room. And he wakes up every morning and he goes through the same thing and he plays that, you know I think it was, he was the song that he played. It was a Role, not a Rolling Stones. Yeah. Was it Rolling Stones? Yeah. It was a Rolling Stone song and he's like, that guys living in Hell. You know, he's like living in Hell. He can never actually, because he was changed. So anyway, that was a long winded response to what you said about what started as a question about deep fakes. Aaron Watson: Yeah, but I think that the, you know, the other analogy is, you know, the, we shaped the tools and then the tools shape us is another one of the little pillars of what you were saying there. And so to me, what I'm always struggling with is, yes, there is, there is real capacity at the individual or the small community or the team level to go make your impact, make your debt on the universe, a whatever kind of metaphor that you and speak. If you can be really focused and, and patient and disciplined, what have you. But there are these. You know, goliath shifts in the tools and the things that we're interacting with. So, you know, whether that be the deep fakes or just the existence of blockchain based cryptocurrencies or these other things that they're now part of the world. There's not something that, you know my parents, my parents had their own things that they were navigating in the seventies that were their own shifts of the time. But these are the shifts and the changes. That are in front of us today. And, you know, without getting into the argument of like, is there like an ultimate kill switch that could take that stuff down. We need to just have an inventory of the things in front of us. And I am, I'm struggling to, to bring it to the question there, but the idea that, you know, even having legibility into those things that are happening right now in the present, I don't know. I think that that's, it's getting, it feels like it's getting rarer. Demetri Kofinas: Legibility into the things that are happening in the present. What do you mean exactly? Do you mean just do you, are you basically expressing a sense that reality feels hazy, that the world feels hazier than it used to, and we need to just have a more deterministic sense of what's happening. Aaron Watson: Yeah, not that maybe need is, is not the right word there, but yes, there there's, there's a haziness in like the feeling of you use the map and the train analogy. I'm talking to the people and I don't even think they have the same models. Like I can maybe kind of like insinuate our guests, the model that they're bringing and kind of see how that's maybe, you know, tied to a complete lack of understanding that this force is here in the present right now today. It's not, it's not futurism. It's not, hey. Imagine if there was an artificial intelligence that could perfectly differentiate every single image in a photo, that's here today in the present right now. Like, are we even just cognizant of where we are, where we currently stand? Demetri Kofinas: Yeah. That's a great point. I mean, I do. I said hazy. You didn't say it, but I did say it and it does. I mean, there does seem to be a fog. And that does, that's something that makes me nervous. I mean, I've become increasingly nervous when I started the show. Like it was way more embracing of the future and excited, and I would, you know, call it optimistic. I mean, I always liked doing those shows that were meant to scare the shit out of my audience. Like I did an episode on cyber warfare, like episode eight. I had an editor before Stianos came on, who's my amazing editor who I love to death. I think he came on an episode, a firmly, he came on episode 10, I think. So he was almost the very beginning, but they had another editor who had said that he was doing my shows and he said that he, the way he understood what my show was about was that it was, it was meant to, it was basically meant to terrify my audience, which I don't think is true, but it was true for some episodes. So like I was, you know, I started this show in part because I had been, you know, I had. As I said, I had a radio show and a TV show. My TV show ended in 2013, both were financial and I had a brain tumor that I had been diagnosed with years before that, that eventually became just really, how do we say highly symptomatic. And I had no choice, but to undergo surgery in 2013. And so I kind of just went into this long hiatus from the world of media and technology and finance and, and actually before finance, I'd gotten my start in tech. I had started a video game company that was a middleware skill gaming company for the console game industry. And then I moved into application development and design for the television industry, developing on the set top box environment. So I had some interest in tech to begin with. And so what I was really not interested in getting back in finance and around 2015, I started going to meet up groups. So I was going to all these, like, you know, do it yourself, like IOT stuff or like machine learning or AI or blockchain or whatever. And it was getting me excited again. And so when I got, when I really started Hitting Forces, they didn't start it with the, with the thing of like, I want this to be a financial program. It was actually much more drawn to the philosophy, neuroscience, technology and science. But as it's progressed, I've become more and more focused on the social dimensions, political, economic, and the whole thing about, you know, the fog and the haze. I see it and it worries me and I, I also see kind of a mob mentality on social media and elsewhere where people just can't seem to agree on anything. Everyone's hustling, everyone's pushing their own agenda and there's no unified sort of narrative about anything. And that I think does contribute to part of this sort of sense of haziness. We're just kind of, not sure, like who are the authority figures. You know, whether or not for example, you are, I'm a, I'm a sort of someone who I've always been very, I've always really not taken well to authority, but it still matters who the authority figures are to know who they are. So we're in a period of dramatic change when it comes to authority. You know, whether it's at the international level with the U.S. led global order or whether it's domestically people are challenging norms, everything again is changing. And in that change, it's almost like the world that was so clear, begins to break apart into smaller and smaller pieces that sort of float in front of your face and it's coming together. And as it's coming together, that's an enormous opportunity because an opportunity to influence, and shape the world. Which is why you see so many people out there pushing their agenda and hustling. And there's so much propaganda. And at the same time, it's a very risky world because in those, in that sort of period of change, a dramatic change can occur. For example, a dictator of sorts can emerge in the society because there's a huge vacuum for that, or very huge, very big decisions can be made that are going to impact, you know, the next a hundred years. And if we're not really prepared to take them correctly, that can be dangerous as well. I guess I don't know what I was responding to. Exactly. But yeah. Aaron Watson: I'm riding with you. I like this. So in that same sense, you know, the crumbling of the U.S. led global order. Once again, it's something you're either, you know, you're reading, Peters Zeihan. You're, you know, following Ian Bremmer. You're, you're listening to these folks that have kind of laid out that framework, so, to make it legible. Or it's just not, you know, that there's a whole universe of headlines and media outfits that that's not the, that's not what the missionaries are pushing forward. That's not the kind of core discussion that's being had. And yet, if you're able to take a more global view, and I think I'm particularly guilty of this. You know, born and raised here in Pittsburgh, have done some traveling and to try and expand my mind, but to even just see things globally, as opposed to seeing them through, you know, an overly U.S. centric lens. lends itself to being able to appreciate not just China, but you know, Greece is immediately adjacent to Turkey. Turkey is, you know, going to have an immense influence on the coming decades. Talk a little bit about, you know at a geopolitical level, the narratives forces that you think people need to be paying more attention to. Demetri Kofinas: Yeah. Great, great observations. First, I do want to say this is the one area where, I mean, I loved. I majored in both political science and economics. And I loved political science. I mean, in my us foreign policy class, I've talked about it so many times on the show. It was my favorite class at NYU. I just loved it. And and I studied it so much on my spare time, but there came a point in time where I, I made this realization, which was that if I really wanted to talk about foreign policy and make this my career, would I be willing to do that if I were not someone who had spent ample time on the ground in conflict zones. And I realized I didn't. I didn't. Because I felt that I couldn't sort of speak about it in a way that felt credible. You know, I just didn't, I, I, everything was secondary, right. I wasn't actually experiencing the conflicts for myself. And so I decided that as much as I loved it, I would move into other fields that would be, you know, where I could, where it wasn't as important to sort of get that external data that said, it's a way of saying, you know, take everything I have to say in context with a grain of salt. But, given all the time and attention that I spent trying to understand the world through secondary sources or primary sources, but not through my own sensorium. Yeah, I would say again, to this point, it is changing dramatically. The world is changing dramatically and you know, Greece is a perfect example, Greece and Cyprus and their security Cyprus, especially, but Greece as well, this, their territorial security threatened by a NATO member. This is you know, up until a few years ago, maybe 20 years ago, the conversation was really even 10 years ago, the conversation was really about how quickly can we get Turkey into the union? Greece wants Turkey into the European Union. Other countries in Europe didn't. Me, as a Greek citizen, I certainly understood the case for Turkey being part of the union geopolitically. And it was increases national interests. I actually didn't think it was a good idea because I do think Europe should have borders. And if you were to allow in Turkey, well then, what stops Syria? What stops Lebanon? Why is Turkey? Is it just because Constantinople was there? So that's a larger point, I guess, about you know, it kind of fits in. I mean, so the world was moving in this direction that was still being driven by the forces of the end of World War II. The European Union expansion enlargement. That's been on hold now. No, one's enlarging anywhere. They're just trying to keep it together. So that's like obviously a great example. Where's that going to go with Turkey? Not clear. My, my hope as a Greek citizen, again, is that Turkey ends up getting sucked into and bogged down in conflict. On their Eastern and, and Southeastern fronts in the middle east, basically. And that's perfectly possible. The alliances in the region are changing. Israel has forged a much closer relationship with Saudi Arabia now. That's both a political and an economic relationship. Well, the Israelis and the Saudis do a deal with the Turks to create a new economic zone? To pipe oil and natural gas into Europe. How will that impact Greece? So there's a lot. I mean, Greece is in a tough situation geopolitically, you know, you mentioned Ian Bremmer and Peter Zeihan. Ian Bremmer is someone whose work I studied as a college student, I believe. I think senior year, perhaps. Well right out of college, I was watching tons of, yeah, it was probably in college. I was watching tons of shows like C-SPAN all the time. For years actually I did this and there was a great feed that would come on every now and then. It's actually amazing to think about this now. It's so I'm feeling very fortunate that I grew up in this intersection of growing up without internet as a little kid, but more importantly, not having mobile internet until I was out of college and not having social networks until I was out of college. I mean, that's really, to me the difference, it wasn't the internet. It was the switch to ubiquitous connectivity that has transformed society in a way that is, you know, good and bad. But it's funny. Cause like CSPAN would, you know, you'd get like the guide function would drop on the screen and say like, you know, this is what's going to be coming up in the next, you know, 24 hours on C-SPAN and the Nixon Center would broadcast their meetings for the National Interest Magazine. And Ian Bremmer was there with Demetrius Sams and and, and lots of other people. So I first became aware of his work. Then he was, he's always been a brilliant thinker and he's been remarkably successful. He's very interesting how we've now seen. We had it during the Bush era, the celebrity financial policy thought leader. But we didn't have what Ian Bremmer has done. And now Peter Zeihanis doing, which is building this really powerful business around, you know, providing analysis to foreign policy issues and geopolitical issues. So you know, Peter Zeihan’s view, you know, Ian Bremmer's view is, is less I think, developed or definitive on this front. But Peter Zeihan’s view on this and it's compelling is that in this new world that we're moving into where America really takes a back seat, and the world becomes more multipolar America is going to thrive. And America's going to thrive in his view because America benefits from all the strategic advantages it has. And also it also has besides all the strategic geopolitical advantages, it has an exceptional body of legal history. A culture that embraces freedom and privacy. Again, these things have been challenged, property rights, and so it'll become a destination for capital. I think that's a very compelling argument. I would tend to agree with it. And I, but I think in - to Zeihan’s point, because I think Zeihan’s theories and people like, but basically a view of view of geopolitics that really puts geography front and center. Which again, this will go, this, this is strongly opposed by one of my recent guests, Balaji Srinivasan, whose view of the network state is that actually it's going to be the opposite that borders don't really matter. Geographies matter less and less. And eventually we're all just going to be our digital relationships that are going to be primary to the physical world. So, but I think that, you know, areas like the middle east are in trouble. Border areas, traditional frozen conflicts, whether it's in Azerbaijan and Armenia, or whether it's in Kurdistan or weather or Kashmir or in Taiwan, the Taiwan Strait. These are gonna flare up. But I think these are the, these are the canaries in the coal mine. That's where you need to look for, for the beginning of, and it's already happening. So I think security is going to become increasingly important and citizens are going to demand a higher premium on security may have been putting on it, which I think empowers governments, which is why I've also said that in this new century, I'm actually bullish on government's. Contract - I suppose this is - strongly opposed to the block, to the blockchain writ large and particularly Bitcoin community, which believes that the power will now move towards the merchant classes and towards an independent monetary sovereign. And I actually think that misses the larger point that people will feel more insecure today than they did under the U.S. global order. And the reason why we've been able to have all these experiments around money is because the U.S. has provided this umbrella of safety. So that's sort of my initial answer to your question. Aaron Watson: And, that security generally has all sorts of ramifications. So in a, in a more or less peaceful, series of decades because of that global order you take for granted that that has become so sublimated behind the narratives, behind the stuff that we're consuming on the surface. It's hard to really consider all the assumptions of something like that. Switching, something like that, changing, which, you know, someone like Zeihan does a great job of, or at least, you know, pointing to, and then articulating what the potential ramifications of that could be. But the hard, hard thing to do is to number one, we're all mimetic creatures. You hear a great story. It's really hard not to just latch onto that and be like, hell yeah, give me more of that. I'm going to completely adopt that. And be someone who is taking information from high quality sources, how do you, how do you even judge that? I don't, I don't wanna get into that, but like taking permission from high quality sources so that you can start to make some conclusions. And I find myself having the instinct to be more globally aware. Partially because of the pandemic, it's a great catalyst for something like that, but that also is a kind of awakening that needs to happen. And not just because, you know, I have a family friend that's being deployed to Okinawa and is going to be right there by the Strait, you know, near Taiwan. If something happens, I'm going to be involved in some way, shape or form. You know, there's stuff that pulls you like a magnet that you must pay attention to it. But then there's the opportunities to just actually, you know, bring your head up and try to have that larger, more global view. Demetri Kofinas: Yeah. You know, what, what I, what came to mind while you were saying speaking was, well, I just love these conversations. I got to say, like, I love engaging and interesting thoughtful discussions about things because it, it, first of all, it really helps me besides the fact that it just is pleasureful. And I, and I'm, and I thought about how wonderful it would be if we just had more and more of these conversations, because there are so many issues to work through. And, again, to something I mentioned earlier on about feeling a bit fearful and dark, sometimes. The cacophony makes me feel anxious. It creates a, and this, this might also have to do with just, you know, the way I grew up. And, you know, I didn't grow up feeling very secure for all sorts of reasons. And I think that when I. The environment today. And I'm going a little bit off of what you said. I didn't mean to sort of go take a tangent, but the environment today that cacophony, the constant arguing, there was a tipping point for me recently with the, or maybe, or maybe around the time of the storming of the Capitol building. I think actually, I think when I think about it now, I'm pretty sure the moment was the day that I had the block works guys. Jason Yanowitz and Michael Ippolito. And we talked about it a bit in the overtime. I think it was around that time. I just, it was a tipping point for me, where I felt like this has just worked in a, too much of an unsafe environment. And they're just, they're not enough adults. There are two people who do many people running around, and this is an issue that I have with the Bitcoin community or with certain elements of the Bitcoin community, which I don't find to be true with like Ethereum people, which is that there's a strong impulse to burn it all down. And you know, I just think that would be a universally awful idea, but at the same time, I kind of get where they're coming from, because when I was in my early twenties, you know, with the Iraq War and everything, there were, I had a strong impulse to say, you know, fuck it. The state is corrupt. You know, we need to burn it down more or less. Cause I wasn't as concerned. I hadn't built so much. I hadn't. Lived so much and learned so much in and created so much in the world that I loved and saw value in what existed and wanted. Didn't want to just, you know, burn it all. You, you mentioned, you know, at the very beginning of your answer about, I think something along the lines of like, trusting sources of data or something like that. Again, that makes me think a little bit about oracle's, decentralized oracles, and chain link and this conversation that I'm going to have. But it also makes me think about how people like me and you and other people with podcasts or television programs or a regular, you know, sub stack destination have grown much more powerful in today's world than we would have been 10 years ago or five years ago. Joe Rogan's a classic example. Although, it's not Joe Rogan's primary function. And I think that's because in this world where the sort of authority, figures and institutions that we had, you know, a consensus view on that we sort of, oh yeah, the New York Times says it. We all more or less agree that that's true. In a world where that's coming apart, ironically, even though the world is becoming more digitized, what we're relying on is more of our more innate biological tendencies to trust other people. And so, we see Joe Rogan was saying, I believe Joe Rogan. If Joe Rogan says something, maybe he's wrong because he doesn't understand it. But I know that he's not lying to me. And I think people are looking for people that they can trust in a world that feels increasingly untrustworthy. And I, and I would argue unsafe. And I think that might also be a little bit why if you'll notice, I mean, I did, I wrestled in school throughout high school and I picked up jujitsu and then Muay Thai when I was in college, and I did it up until my brain surgery pretty much. I - when I was doing martial arts, not many people knew how to fight. And there was a sense that, you know, if you ever did get into a fight, especially if you didn't start it, you can feel pretty safe that, you know, you, you were going to know what you're doing. And the other guy wasn't necessarily going to be like, you know, some expert MMA fighter. That was not like a common thing today. Lots of people know how to fight. And lots of people are interested in martial arts and lots of people are also interested in hunting. There's this whole, you know, thing about hunting and killing your own animal and cooking, skinning it and cooking it, preserving it. And Joe Rogan's at the center of both of those trends. And I don't think that's a coincidence. I think part of it is because people are trying to find, again, some sense of identity and foundation. What does it mean to be a person, a human being in this world is changing. And I think some of it also has to do with safety. And I think I actually, you know, I've had this thought in much more concrete terms because I, I remember when I was growing up watching movies, like, you know, Karate Kids, a great, great example or other movies that took place in the, you know, in the seventies or shows in the seventies or eighties, that's where that's when martial arts really became popular in the U.S. and I think a big part of that had to do with some of the security concerns in urban environments. Cities we're in a safe, like New York is a really scary place. And during the pandemic, when my building was broken into a number of times, I thought I could see now how MMA and all sorts of other self-defense forms and weapons will become more popular than they used to be. So I think that's a really interesting trend that I would keep an eye on, which is self-defense and all the whole economy that can come up around self-defense whether we're talking digitally or physically. Aaron Watson: Yeah. I've - sent me down so many different rabbit holes that you started at the beginning of this conversation as we impose wrapping up on truth too. And the beauty of both punting and self-defense is there's a lot of truth in it too. You can't lie about, Hey, I just got kicked in the head. He can't lie about where did this deer that I, you know, hunted came from. I was in the forest where it was. So I think that that also ties in really nicely to the kind of themes that we've touched on today, Demetri. We're running up on, on the limits of the time that we set aside for this conversation. I'm really hopeful that we can do it again in the future. But before I ask the standard last two questions that I do with every interview, just wanted to check and see if there's anything else you were hoping to share today that I did and give you a chance. Demetri Kofinas: That's a really great, no, that's a really great point that you made. I actually love what you said. One I'll take the one that I liked, but didn't, it just wasn't the one that I loved, but I really like it. And I agree on which one. That you know, where your food came from, it's definitive like theirs. And what does that really speak to? And one of the things that speaks to is trust. I don't need to trust where the food came from. I know where it came from. There's less complexity in the food chain. And to your point, early on about the increase in complexity and trying to wrap our heads around it. But the one I really resonated with me was by getting your ass kicked or getting kicked in the head and you know.... I dunno, I, this maybe is a little too close to home or too literal, but which is that when I was growing up for all sorts of reasons, I moved a lot. I would, there were oftentimes where I would get into fights. And getting into fights with scary for all sorts of reasons. But the one thing that I always liked about it was that it was once it, once a fight broke out, there was a resolution. The resolution was imminent. And what was one of the challenges for me is becoming an adult was that you had to navigate conflict in a much more different way. And which is fine and appropriate. We should not be going around and getting into fights with people, or physical confrontations. But what's happened today is this has gotten, gone to such an extreme today where you can be cursed at, maligned, and ultimately canceled and your life destroyed. All through some words that are also taken out of context or manipulated or whatever. And you feel, and, and people who may have felt strong in their physical space, you know, over the course of their life, or even to this moment. Like if you, if you know that they're, you're not going to get pushed around. We live in a world today where a lot of people who are otherwise strong human beings can be easily bullied. And I think that's a really, you know, it's an interesting observation and, and I think that's for me, the appeal of, I love when I, I, what I love about Joe Rogan. I really love that the most popular show in the world today is a guy who knows how to fight doesn't approach fighting as this thing that he's, you know, I'm sure Joe Rogan has his moments where I certainly had them growing up feeling cocky, but he's humble. And he's been around really, really, I mean the biggest ass kicking people in the world. So like, I just love that that's being introduced into the zeitgeists cause I think it's really, really important. Any ending thoughts? No, I mean, this was a really great conversation. I think it was, this was awesome. I really enjoyed it. Aaron Watson: Enjoyed it too. And I really want people to follow, find some digital coordinates where they can connect with you and, and check out episodes of the show. What coordinates can we provide for folks that want to do so, Demetri? Demetri Kofinas: So I would say first and foremost, you can follow me on Twitter @Kofinas with a K. K - O - F as in Frank, I - N as in Nancy, A - S as in Sam. I learned that - my dad, when I was a kid, he would always be he's the doctor. And he would be on the phone and be like, go finesse with F as in Frank. But I've learned that I had to also do it for N and the S. So @Kofinas also @HiddenForcesPod on Twitter, both of those. And then obviously at our website, hiddenforces.io. There's a pop-up where you can give your name, email, and zip and be added to our mailing list. We're gonna be, I've been saying this for a long time, that we're going to start using that soon, but we really are. I hired a team of consultants to help me sort of build Hidden Forces, to change it, to add structure around it, to make, to really grow it in a way that's more consistent with my vision. Because up until now, it's been primarily kind of like a, it's been run almost like a hobby, even though it's not anymore. So those are my, those are my three recommendations. @Kofinas @HiddenForcesPod both on Twitter, and the website, hiddenforces.io. And then of course, anywhere on any podcast application, you just search Hidden Forces. You'll find, you'll find the show. Aaron Watson: Wonderful. We're going to have that linked in the show notes for this. And every episode of the show at goingdeepwithaaron.com/podcast or in the app. We are probably listening to this episode right now, but before I let you go to Demetri, first of all, I'm going to just reiterate that I, for a podcast junkie like myself, there's like the, you know, the A tier,the B tier, the C tier of shows and the A tiers, when they drop, I know I'm listening to them. I just don't know exactly when. The B tier, once I get through the A tier, I get, I, you know, listen to my B tiers shows. And then the C ones for if it's a particularly, you know, a heavy week of driving or something like that. And yours is firmly in the A tier. I learned stuff there consistently and have my mind experience. So I really appreciate that. And I want to give you that. One final time to issue an actionable personal challenge to the audience. Demetri Kofinas: You know, you told me about this before the episode started. So I actually wrote some stuff down because this is actually, and I was surprised that what came out was not so much, I was surprised at what came out. I was surprised at how much came out. I had a lot of thoughts about this. You know, one of the things that I think is important for people to try and do is. To hold themselves to a higher standard to the, to the standard of their idyllic self when it comes to public interactions. So like, I, you know, I, I can use myself as an example here. I've done all sorts of things in my life that I'm embarrassed of. That I felt like were not magnanimous, were particularly petty. Born out of insecurity. For example, that was, that's always been a thing for most of my life where I've let my insecurity and my emotions dictate my actions. And I see this a lot on social media and other places. People are really dickish. They're mean. They're gross. They're vindictive. They're jealous. They're envious. They're narcissistic. And I think people really need to try and be their best selves in public. Doesn't mean, it doesn't mean that you're, you know, you can't make mistakes, but try to try to keep those for your personal life. And really try to set an example and say, you know, the person that sees what I tweet or the person that hears me on this podcast, what will they think? Who will they think I am? Is that person consistent with who I want to be? And I think there's a difference, there's a difference between being who you want to be versus being somebody else. You Should always be yourself. But you should be yourself, I think at least in public circumstances, the person that you want to be. That you strive to be every day. So I think that's the first challenge I would tell people. The second one sort of applies to that, which is to put space between your thoughts and your actions. Or your emotions and your actions. Because that also will help you be a better person and be more of the person you want. So that means again, when it comes to social media, don't tweet it right away, and ask yourself, why am I tweeting? What is the reason that I'm doing this and is the reason consistent with who I want to be? And that's true not just there, it's true in all sorts of other areas, but it's surprisingly easy to do on social media. If you just implement the practice because you know, it's, there's a digital interface here. Also, I would say put boundaries around your mobile devices, and your connected devices. There are all sorts of ways to do this. I did it when I started Hidden Forces. That was, I wouldn't probably wouldn't be able to do it otherwise. I took an old iPhone. I swapped out the card with my new one. I made it so there was just phone and texts, no internet, nothing else. Just phone and text. And it helped me get unaddicted. I'll lose my addiction within a week. Now I'm back to being addicted and I'm trying to figure that out, but that's because, you know, I'm trying to navigate promoting my show. I don't actually enjoy being on Twitter like I used to, when I was much more self-absorbed. But I was, you know, kinda on my TV program. Now I'd really do it for marketing and I really wish I would, I don't particularly enjoy it. But I do engage, I do enjoy getting feedback and engaging with people. Another thing I thought of, I wrote was. And the last thing is to try not to judge people. You know, I think again, to my point about me having done things or said things in my life, and I'm not proud of, I think one of those things has been to be overly harsh in my criticism and judgment of people. And again, a lot of that has, was, and has been born out of insecurity. I've heard Tim Ferriss talk about this when he says, you know, if someone doesn't get back to you, if you send an email to someone and they don't get back to you. A perfect example of, if you send an email to Tim Ferris and he doesn't get back to you, you know, don't take it personally. Don't like, you know, take everything as an affront against you where it's what it says about you. It doesn't have to do with you. You know, people are busy. They're overwhelmed. You know, that's just one example, but there are all sorts of ways in which you're - that sort of concept of mind mapping, you think, you know what the other person's thinking, where their intentions are, you know, but most of the time you're just projecting. So, you know, try not to judge people and, you know, just focus on yourself, focus on being a better person, focus on being accountable. And I'll, and I want to say there's someone who really does this in a beautiful way. A friend of mine, Grant Williams, who has a podcast that's very successful. He's been in media a long time. I've only started now to become even as even close to as magnanimous. And good a public person as Grant is. Because for years in my interactions with Grant, he was always so giving. And Joe Rogan is like this as well. And Tim Ferris is like this also. They have reputations of being very giving. Joe Rogan transformed the comedy circuit, you know, comedians traditionally have been very selfish. At least that's how they have been described to me. And Joe Rogan and now competitive Joe Rogan has really opened his eyes to that, and it's not surprising. He feels very secure. He's secure in his work. You are secure in yourself. And he's able to do that. Grant is a, is a, is a perfect example of that. He's a remarkably giving individual. And so I often ask myself and I also do this with, with Jim Grant as well, both Grants. Jim Grant is someone who I got to know early on in my career and we've become friends over the years and I, and he's such a gentleman the way he treats people. And so I think it's, you know, and to end it on that point. Look, to look, try to find the people who you think live an admirable life. It's not just about money or success, but whose character and values you, you value that you say, I want people to see me that way and try and measure yourself up to them every day. That helps me. So, you know, that's what I would say. Aaron Watson: Beautiful. Powerful note to wrap up on and a lot to aspire to as we make our way in the world. Demetri, I am very grateful that you agreed to come on the show. I really enjoyed talking with you and look forward to doing it again soon. Demetri Kofinas: My pleasure. Thanks, Aaron. Aaron Watson: We just went deep with Demitri Kofinas. Hope everyone out there has a fantastic day.
Black Tech Nation Ventures is launching its first flagship venture fund in Pittsburgh, PA. The firm is founded by three managing partners, Kelauni Jasmyn, Sean Sebastian, and David Motley have come together to form an investment thesis focused on investing in black and other minority founders who have historically missed out on opportunities to raise venture capital.
As David outlines in this podcast, these represent an underutilized asset capable of creating outsized returns, not a charitable donation. David brings experience from three decades in corporate America, sitting on the boards of multiple public companies, investing tens of millions of dollars into real estate, and a track record of venture investments through the Blue Tree Venture Fund. David has also raised a $207 Special Purpose Acquisition Vehicle (SPAC) called Deep Lake Capital. David Motley has also co-founded 3 enterprises: The BlueTree Venture Fund, DLM-WCM (a real estate development company) and, MCAPS, LLC (a professional services company focused on Managed Services, Staff Augmentation, and Consulting). In this episode, David and Aaron also discuss how to craft a fulfilling career, how to raise money from large institutions, and why SPACs are taking off. Sign up for a Weekly Email that will Expand Your Mind. David Motley’s Challenge; Don’t undershoot. Set a goal and go after it. Connect with David Motley
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BTN.vc If you liked this interview, check out episode 265 with Kelauni Jasmyn about Black Tech Nation, episode 290 with Ned Renzi about Birchmree Ventures, or episode 405 with Matt Kesinger about his medical device startup.
Paul Martino is a venture capital investor and has raised 5 funds totaling over $350 million in capital. That money has been deployed into FanDuel, Grove, Ipsy, and SpotHero.
Before forming Bullpen, Paul was an active angel investor and personally invested in the first rounds of Zynga, TubeMogul, and uDemy. Prior to his investing career, Paul founded four companies including Ahpah Software (a computer security firm acquired by InterTrust) and Aggregate Knowledge (a big data advertising attribution company acquired in 2014 by Neustar). He is the holder of over a dozen core patents covering social networking and big data. In this episode, Paul and Aaron discuss the FanDuel success, his advice for startups going through tough times, and the different space that venture capital investors make their mark. Sign up for a Weekly Email that will Expand Your Mind. Paul Martino’s Challenge; Start every meeting on time Connect with Paul Martino
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Bullpen Capital Website paul@bullpencap.com If you liked this interview, check out episode 231 with Andy Rachleff where we discuss how to find non-consensus investing ideas that work.
Aubrey Strobel is the Head of Comms for Lolli, a free browser extension that lets users earn free bitcoin when shopping online.
The platform’s mission is to help make cryptocurrency more accessible to the average shopper. Founded in 2018, Lolli has over 1,000 retail partners including Expedia, Nike, and Glossier. In this episode, Aubrey and Aaron discuss stacking sats, bringing women into crypto, and how Aubrey has modeled the Lolli brand and marketing off of Barstool Sports. Sign up for a Weekly Email that will Expand Your Mind. Aubrey Strobel’s Challenge; Call an elderly person in your life. Connect with Aubrey Strobel
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Lolli Website Lolli Youtube Lolli TikTok Lolli Twitter If you liked this interview, check out episode 426 with Flori Marquez where we discuss creating the ‘Chase Bank’ of crypto, BlockFi. Text Me What You Think of This Episode 412-278-7680
Mike Green is the Chief Strategist at Logica Funds and has spent nearly 30 years studying markets.
These days, he calls on that experience and his proprietary research to educate the public, the Federal Reserve, the BIS, and the IMF about the shift from actively managed portfolios and investment funds to systematic passive investment strategies. Previously, Mike has served as the portfolio manager for Thiel Macro, an investment firm that manages the personal capital of Peter Thiel, founded Ice Farm Capital, a discretionary global macro hedge fund seeded by Soros Family Management, and founded and managed the New York office of Canyon Capital Advisors, a $23B multi-strategy hedge fund. In this conversation, Mike and Aaron discuss the popular narratives around index funds and Bitcoin, what those narratives get wrong, and how to effectively develop non-consensus views when investing. Sign up for a Weekly Email that will Expand Your Mind. Mike Green’s Challenge; Vote better. Connect with Mike Green
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Logica Funds Website If you liked this interview, check out episode 427 with Ben Hunt where we discuss investing and the Coronavirus, or episode 339 with Jim DeCicco where we discuss building his healthy coffee company. Text Me What You Think of This Episode 412-278-7680 More from Mike on Bitcoin and Index Funds Mike debates Anthony Pompliano Index Funds Flaw on Zeroes TV
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify Aaron Watson: Mike, thanks for coming on the podcast, man. I'm excited to be speaking with you. Mike Green: Aaron. It's a pleasure. Thank you for having me. Aaron Watson: So I wanted to start off for, for folks just defining your role at Logica Funds. You know, it sounds cool. It sounds like a, like a compelling part of the C-suite, but as chief strategist, what's your role there? And what is the larger service that Logica as a service provider is playing in the financial space to your clients? Mike Green: Sure. So Logica is a hedge fund and a hedge fund is a effectively, a type of investment manager that is, has a particular limitation in terms of the number of investors that it can have. It falls under a regulation called 501-C3 that requires the investors in hedge funds, which tend to be more complicated strategies to have a certain level of net worth or a certain level of financial experience that's driven by the regulatory framework. It also limits the number of investors that we can have. Logical fills a role in the portfolio that is similar to protection. We have two primary products, tail risk product, and what's referred to as an absolute return product. The absolute return product is designed to deliver uncorrelated returns. With the objective of making profits under both up markets and down markets and does so by taking advantage of what we see as particular opportunities that are created in the options market. And so in particular, the work that you may have heard me talk about about how markets are being changed by the growth of passive and systematic strategies, that, that actually changes the way that options should be priced and it should be evaluated, and that is influent. That influences the way that we construct our portfolios and that we trade our positions. Most portfolios are looking for some type of protection. Over the past several years, that's been primarily obtained through the purchase of bonds. And so a portfolio that runs with an allocation to risk-free bonds will often have protection characteristics in strategies that are referred to things like risk parody, et cetera. We think that as interest rates have gotten much lower, that it becomes less valuable on a riskier way to express protection in your portfolio. And so the strategies that we pursued, where we own options is what's falls into the category of long volatility funds. And you have to recognize that there are challenges associated with that. There's also opportunities you tend to have what's referred to as a convex payout either to the top side or the downside. Or markets move in an extreme fashion. Your portfolio should respond with a positive return pulse. The role of the chief strategist is to do a couple of different things. So I play by my official title is chief strategist portfolio manager and partner. My job is to collaborate with the rest of the team in terms of identifying the opportunity for us to structure our portfolio and to structure our strategies. It's also to represent the firm in terms of thought pieces to give us, give us a leadership role in the industry in terms of helping people understand how markets are behaving or what may be risks that they face in their portfolio, and to represent the firm publicly in situations like this, where I'm being asked to speak as a representative of the firm, or to provide some interesting commentary to individuals or corporations institutions that may ultimately become investors. Aaron Watson: And so, you know, to use an imperfect analogy, I think about like basketball. And if I go and I play pickup at some park, I'm looking for, you know, someone that can handle the ball, someone that can shoot someone that can set a screen, but the, the heightened sophistication of an NBA front office. Looking for the perfectly complimentary, you know, shooting big that, you know, can also run because they have a young point guard with a ton of speed is very similar to how these large institutions, when they think about their capital allocation is basically what you're articulating is. You know, we, we were going to put some of our money into say bonds, and we're going to try to find the best manager associated with. The ownership of bonds to handle that portion of our portfolio, but in order to compliment that whether that's exposure to equities or derivatives or cryptocurrencies or wherever, our kind of macro framework of the, the portfolio. The same way a GM would have a framework of the type of team that they want to build your basically saying as Logica, if you maybe kind of by a couple of these assumptions, or you have this gap as a job that is to be done, which is associated with what you just explained, we can kind of fill that role within the context of your larger portfolio and you are playing with these large institutions. So it really is the kind of NBA, you know, prime time level, type of investor. Mike Green: I mean, I think you're flattering us to a certain extent, but yes, I think that's correct. I mean, what you're describing is the role of the capital allocator. So when you are a large institution and endowment or a pension plan or a corporate treasury, you're looking for investors that can help you fill certain slots in your portfolio, very similar to a point guard or a big man, et cetera. I fall into the big man category, larger than ideal and also large, but the that characteristic I think is correct. And then the role to, to fit that is you're both the player and also the agent. And so one of the challenges that you recognize as you grow into any business role is that there are jobs that are execution there's jobs that are sales there's jobs that are theoretical or, you know, tied to research and development activities and within an organization like Logica, if people wear a lot of different hats, cause everybody has to contribute to the thought process. Everybody has to contribute to the sales process. Everybody has to be capable of representing the firm in one form or another. And it's just a question of, you know, who's playing that role at any given point in time, but that is one of the characteristics of, of hedge funds is that you tend to have individuals who or in smaller organizations. So the size of even the largest hedge funds with the exception of a few, like an AQR Bridgewater are going to be measured in the tens at most hundreds, right. For large multi strats, those individuals tend to be relatively high achieving individuals. Right. And so you, you, you tend to have a somewhat self-selecting crew of people who have. Strong, theoretical backgrounds, strong selling backgrounds, strong strategic background, and the strong market backgrounds. And all of those have to come together in an interesting kind of stew to create a successful firm. Aaron Watson: So before you're at Logica, you were at Tio macro helping manage the capital for Peter T on one of his big ideas is mimetics, which is this idea that humans copy each other. We copy each other all the time. Way more than we probably realize way more than we probably appreciate it. And the two. Ideas, particularly for someone my age, I'm 29 years old, you know, you're, you're trying to like, just read some stuff, a little sophisticated, one form of everyone copying everyone else is just throw yourself money in passive index funds. It's low fee. It's passive sounds great. Passive income like that. That sounds fantastic. Just sit there. Don't think about it. Don't touch it. You know, Jack Bogle designed this with Vanguard however many years ago. It's a great idea. You've got that on one end and then on the other side, a whole other contingent. You know, I used to work at a software as a service from the two founders who are tech guys. They're like my entire life savings is in Bitcoin. And I'm just this super crypto believer. Just put your money in Bitcoin. You'll be fine. Don't look at it for however many years. And you've got nothing to think about. And, you know, what's fascinating to me is that not only have you kind of pointed at those two very big, very widely dispersed memetic ideas and investing philosophies as potentially riskier than people appreciate. Do you see a connect? I, I guess there's a too big of a question. Now, maybe you can spend a little time explaining that for people that haven't heard, you share those two ideas, and then we can kind of explore how you actually get comfortable going out on a limb like that. Mike Green: Well, so I actually do think the two are similar and I would suggest that they are, you did a very good job of actually describing exactly why they're similar, right? They are functionally offering you the same advice, put your money in, do so on a consistent basis and just ignore it. It should be fine. Right? In the case of Bitcoin, you're buying into a quote unquote future monetary system or a store of value that is not only a store of value, but also makes you money because you've bought into the next operating system for currency or how the world is going to work or whatever the narrative that wants to be pushed out today. On the passive side, it's effectively a narrative of incompetence on the aggregate market side, and that you're better served by simply matching the performance of all the active managers, which is the theory behind passive it's effectively a free rider on the information that is provided or created by those who are engaged in the capital allocation process. It says by buying into that output at a fraction of the cost, you receive the same before fees results and your after fee results will be superior because you have paid less for it. Right. In both situations, they're encouraging you to put money in and basically ignore it. And that should create wealth for you in the future. Right? The challenge with that is twofold. One is the idea that wealth is supposed to accumulate without effort at scale can't possibly work. Right. We know that, if we were all just decided that we would. Do the exact same thing as everybody else with our money and that nobody was actually paying any attention to it. That's not a prescription for societal wealth to be created. And so in both situations, you're looking at a, an element of fundamental misunderstanding in the case of passive investing. It's the idea that you're actually passive. And my fundamental insight was building off the work of an individual at AQR, a gentleman by the name of Lasse Pederson, who in 2016, wrote a paper called sharpening the arithmetic of active management. That paper ties back to a paper written in 1991 by a gentleman by the name of Bill Sharp. Those who are active in the investment world will know Bill Sharp for what's referred to as the Sharp Ratio, which is a measure of the effectiveness of managers for adding return per unit of risk. Right. He won the Nobel prize for his work on portfolio theory and portfolio construction, along with one of his advisors, a gentlemen, by the name of Harry Markowitz, their theory that passive managers are capable of free riding on the behavior of active managers. I'll say Peterson identified a flaw, which is that when an index rebalances, as the passive manager becomes an active manager, they have to make changes in line with the index construction. So many of your listeners will be familiar with the idea that Tesla was recently added to the S and P 500 right in 2020. And so when that occurred, somebody who was managing an S and P 500 index fund would have had to sell an existing security out of their portfolio. They'd have to buy into Tesla. And Laci Peterson identified that when that occurs, that those passive managers become active managers. And therefore you really can't think of them in the framework that Phil Sharp originally laid out because by Sharp's definition, by his own definition, a passive manager is one who never transacts. It's one who only holds in proportion to the existing market capitalization weighted index. My recognition was something, a little different, which is if everybody is putting money into passive funds, then those passive funds have to transact on a daily basis. So they aren't passive at all. What they actually are, are giant active investors who have the world's simplest algorithms, right. The algorithms by which those funds are managed, or did you give me cash? If so then buy, did you ask for cash? If so, then sell, what is the proportion that I should allocate the cash? What, how much of things should I buy? Well, I'm going to buy things in proportion to whatever their existing market cap or more accurately float weighted market cap is. Does that change? Sure. If the price of something goes up, I'm going to buy more of it. If the price of something goes down on incremental flows, I'm going to buy less of it. Right? And so what that does is it creates a momentum feedback, things that go up, get more capital allocated to them, things that go down, get less capital allocated to them. It creates a feedback loop. And then the second component is, is when you think about the impacts that they themselves have by transacting in the market, you need to begin to actually look for that. And so that's what I've built my work off of is building agent-based models, building diagnostic tools to help understand how these strategies are affecting the underlying market. And unfortunately, the answer is it relates to passive is that they're having a dramatic impact on markets. And, you know, we can demonstrate that in a wide variety of ways, one of which is what we're seeing in markets today, which is. Everything going up in price, right. The valuations rising dramatically. And so I have different conclusions than a lot of other people that, you know, we'll look at the market and say, oh, well, clearly what's happening. Is this just the fed printer goes bur meme, right? Yeah. We're printing endless amounts of money. The dollar is collapsing and therefore everything is going up. I don't think that's actually accurate. Right. I think that there's, there's elements of truth to that. Clearly the federal reserve is actively involved in trying to support the financials, but I don't actually think that's the causal factor that people think it is. And so that's kind of the first one is, is understanding that passive impact. And my theories are far from universally accepted, by the way. Although the academic community is now starting to wake up and ask questions in a different way. Right? So until 2020, the questions that were asked were always some variant of how does membership in an index influenced the behavior of a single stock today? They're starting to ask the question, how is the stock market influenced by the growth of these passive strategies? In line with my work, we're beginning to find that the answer is significantly. Aaron Watson: So to that end, the exact notion that you just said, people are kind of coming around to it, but there's plenty of people that disagree. There's plenty of people and they're probably a third, even more spirits when it comes to Bitcoin, we can get there. But you know, in a past interview we talked, we spoke with Andy, Rachleff a venture investor and he talks about this a two by two matrix of, you know, it can be right or wrong, but then consensus non-consensus and really the essence of any good investment is you have to be right. But it's really about being able to land in that non-consensus bucket so that you are effectively ahead of that curve. So, so whatever narrative it is, there's, you can be at the back end of the narrative, the last one to receive it and you follow along. And then you're the person caught holding the bag. As we saw evidenced with the game SOG and the people that rushed in when it was, you know, in the high three, four hundreds, where the people that really got creamed. So the, the essence of kind of, I just want to, I just, I'm really just trying to like, grab onto that for a second is the bet that you're placing or the, the sale that you might make to the institutional investor that backs this strategy is saying, we have this struck, this fundamentally non-consensus view. We have a lot of evidence to support the idea because of the studies that we've done and what have you to indicate that it's right. And so therefore the way that we might convince you to allocate capital to us versus some other player, Is through the convincing pitch of that notion. Is that accurate? Mike Green: Yeah, I think that's right. And you know, that is that's going to be true in any situation. I think that two by two matrix is actually quite useful to think about, you need to establish truth, right? And you need to establish, are you going to have other people begin to believe it? Right? And so as you point out, you can be right and you can be the last person to realize it. And that can be a bad outcome, right? You can be right, the very first person to realize it and be an ineffective salesperson or an ineffective storyteller to help people understand what's going on and fail to attract people to your point of view. And that also can prove to be fatal. Right. That's you know, th there's a classic expression in markets, you know, early is wrong. And so you have to be very thoughtful of that. One of the things that's interesting about the passive dynamic is just that it creates the immediate reaction that people tend to have when you, when you explain to them the impact of passive and that it creates an increase in prices. Most people initially will respond to that and say, okay, so it creates a bubble. When's the bubble going to crash? And the hard part for people is to understand, you know, kind of the James Joyce, you know, the sign of genius is the ability to hold two opposing ideas, right? You're both going to crash and you're going to explode higher. We're nowhere close to the full impact of passive investing as it's currently set up. And so perversely, this actually creates a lot of the behavior that we're seeing, where prices of securities are rising in an increasingly rapid fashion. Despite the fact that valuations are extreme. And that's a very hard thing for people to accept, because anyone who's been in markets has been taught over the years, that the price that you pay for something, if you pay too, if you pay a higher price that should lower your returns, that raise your returns, right. We've seen the opposite. We've seen this happen over and over again. And again, it directly feeds back to who is the marginal investor. So if the marginal investor is someone who says, Hey, the price of this has gone up, therefore I should buy more of it for virtually. That's going to drive returns in a momentum direction, right. It's going to reinforce a momentum factor. The other part of this is, you know, the dynamic of, of trying to make people aware and get people to buy into the narrative. And that I think is where the exciting stuff is happening. Right. So when I look at the challenges that I'm articulating. One, it creates a very negative feedback loop in the markets where those who try to approach markets from a standpoint of information collection and rationality, right. Figuring out what a company's sales are going to be figuring out what a company's profits or cash flows are going to be, or more accurately calculating what they think the cost of capital should be for the company that you should be discounting those back out. Those individuals have been decimated in the markets in the past five, six years. And we're actively seeing a narrative that emerges that says, well, the problem with active management in the fund space is that there's just too many active managers and the market is too competitive and therefore we need to have more passive to create opportunities. My work suggests actually the exact opposite, the greater the passive share, the worst the performance of the active manager community. Cause there we're actually changing the structure of the market and perversely things like the Sharp Ratio increasingly lead you in the wrong direction. Now for us, that creates all sorts of opportunities because the same thing suggested options are mispriced. The same thing suggests that there are ways for us to take advantage of that. But you know, we're still very early in this process and there's a lot of assumptions that have been made in markets that are now embedded into the regulatory structure that are going to be very difficult to turn around. And I think that, you know, it's both terrifying and it's exciting because it suggests that these, these dynamics are going to persist and the opportunities will exist for an extended period of time. Aaron Watson: So let's, let's move it to, to Bitcoin too now, because that's another you know, very, I mean, particularly for people in my age range that, that see themselves as a kind of digitally native, like it just checks these boxes. I, you know, for me, I have this memory of, you know, Jack Dorsey of Twitter and Square basically saying, well, what just kind of makes sense that there would be a form of currency that was native to the internet. And you're like, damn. I mean, like. He, he seems to be a pretty prolific successful dude. And that kind of seems pretty matter of fact, particularly for someone of my age demo. So that's, that's another one that you've got a non-consensus view on. Mike Green: Well, so I, again, I think it boils down to a core misunderstanding, right? So in the same way that passive is not passive money, doesn't exist in a natively digital space. Right. Money is actually a construction of government. And by government, I mean, as a social setting, right, there are strong governments. There are weak governments, but at the end of the day, money is a mechanism that is used for one very particular purpose, which is to cancel out obligations. Right? So when you think about what a dollar bill actually says on it, it says this is legal tender for the settlement of debts, public and private. That's actually a really important statement. Because it actually tells you what it is at its core. And that's what Bitcoin doesn't have. It is not legal tender for the settlement of debts, public and private. And it's one of the reasons why you have seen it fail as a transaction mechanism, right? Merchant transactions have fallen on the Bitcoin network. They have not risen over the past four years. Since 2017, we actually have seen a decline in the end number of retail transactions occurring with Bitcoin. What it has become as a speculative asset, similar to Beanie Babies or gold or anything else. And I would suggest that, that, that fundamental misunderstanding about what money is right, where people struggle with that dynamic. It doesn't feel good to say it doesn't feel good to say that, you know, the, the legal standing or the dynamics behind a dollar bill and, and the U.S. Dollar as money, ultimately rest with a system of violence. And enforcement that resides in our court system, in our army and our, you know, our military framework, our police forces, et cetera. If you do not pay your debts, you will be thrown out of your apartment. You will have your car repossessed. All of that will be done by agents of the government who have a legal right to do so. And you have a legal right to settle it with green pieces of paper, right. Those that just does not exist in the Bitcoin space. Right. And so what I would suggest is happened in the Bitcoin space is that you have had a number of individuals who have bought into this idea. Yeah. It just makes sense. Right. It doesn't make sense that it would evolve this way and it's not the way the system works. It's the same thing as passive, you know, being quote unquote passive. It's not right. What you're actually building is you're building a system that is in opposition to the U S government and the points that I'm trying to make to people. Is while we may object to the U S government. And we may think that the U S government is hypocritical. We may not like all of the actions of the U S government. And this is certainly true for us citizens. And it's probably even more true for those who are not us citizens, right. Younger generation, I think in particular feels robbed and rightly so by some of the policy choices that have been made by the U S government. So I understand the frustration, but it's not true that the world would be a better place. If it was, if the us did not fill the role that currently fills, right? The lack of the U S dollar, the lack of the U S government to protect property rights, the lack of the U S government to be able to protect its citizens on the national, on the global stage. And broadly speaking to maintain a global piece, the PAX Americana, right, while it's far from perfect is better than a system of competing warlords. And that's, you know, effectively with those who are trying to break this down. Are increasingly advocating for you. You're seeing a lot of people who are at their core are functionally and Arco capitalists, or the means is, is that they believe that the rules of capitalism should exist. But the enforcement of those rules is functionally tied to the individual, right? Where might equals right on the individual basis. That's not a good system. That's, you know, that's a very, very dangerous system for the average person. Aaron Watson: So, I appreciate you articulating those positions. I, I really, I want to get to this like next level past that, and I'm going to link to, for listeners that want to explore more, you've done fantastic. In-depth articulations of these two ideas, more that people will be able to get to what I'm really fascinated by. Yeah. Is, you know, I think the people will benefit just from hearing that perspective if they haven't heard it before, but the, you know, the, not the give someone a fish, but the teach Amanda fish part here is that idea of mimetics and to be comfortable in a space of non-consensus you've firmly, particularly in the financial part of the world, Finn, Twitter, all that stuff. And I know you've got people that, you know, co-sign and, and, and ride with your ideas. But the reality is that that there's some vociferous people on the other side that, that, that don't care for this non-consensus view that you have. And it's very uncomfortable. We're social creatures. You know, if you buy the, the memetic theory framework of Gerard it's deeply. Deeply uncomfortable to, you know, be ostracized from the tribe and to be in that type of, you know, cross hairs. So can you talk about the, the, the meta pattern that allows you to occupy that space with consistency in the work that you do? Mike Green: Well, I think it ties back to the same underlying feature, right. Which is the recognition. That oftentimes markets don't mean what people think they mean. Right. So when you think about a stock market or you think about the price of Bitcoin, ultimately what you're looking at is a record of transactions, right? So somebody bought Bitcoin, somebody sold Bitcoin, somebody bought a stock somebody sold a stock. My focus in my career has been on understanding. Why, why did somebody buy that? Right? Why did somebody buy the stock? Why did somebody buy Bitcoin? And when you do that, would you discover it. What you discover is that oftentimes transactions are not a function of a deeply reasoned and philosophical or, or thoughtful approach to, I think this is the right price for this particular security, right? In the case of a stock. Buying and selling activity can happen on an individual stock. Not because it's being considered in an absolute sense, but because it's being considered in a relative sense, I don't have anything against Coca-Cola. I just think Pepsi is a better buy right now. Therefore I'm going to sell my Coca-Cola and I'm going to buy my Pepsi. And so I'm making two separate choices there. And the price of Coca-Cola may or may not be too high in absolute terms, but in my judgment as an individual investor on a relative basis, it's too expensive relative to Pepsi. Likewise. An individual could need to buy a house and therefore they're selling their mutual funds and that's leading to the mutual fund manager, making a redemption, you know, having experiencing a redemption and being forced to sell, not because of anything that has to do with any of his securities, but because of what's happening in the life of one of his investors. And so the minute you start to understand that you begin to understand that nothing is quite as simple as people think, right? So when the Bitcoin proponents say, well, the price goes up, right? Price just goes up. They're viewing that as validation. Same thing is true for Tesla. Same thing is true for the S&P 500. Right? And so when you talk about the Geradi dynamic, as soon as there's things that people are deeply uncomfortable with, one of them is uncertainty. And so when people are uncomfortable with uncertainty, they seek out narratives that give them certainty. Bitcoin must be true because the price goes higher. Therefore, I believe those who are Bitcoin proponents. Likewise, the economy is linked to the stock market. The stock market is the discounted future cash flows associated with the components that are in the economy. Therefore, a higher stock market price must mean that the economy is going to do well in the future. If you recognize that that's untrue, that those are individuals seeking security in a narrative, right. I know you've, you've met with Ben Hunt and, and discuss some of these dynamics with him. If you understand that, that, that, that truth doesn't have to exist, right. That there's always going to be uncertainty. Then you grow more comfortable with a non-consensus view because you're, you're able to say, well, that's, that's an, an explanation. It doesn't have to be the explanation. And so my objective is to actually just find out what I think is the most likely explanation that can be for the most part explained by the structural features, that force people to do something. And so in the passive space, again, to go back to that example, figuring out the rules by which passive managers operate. That's very simple. If you give them cash, then buy. If you ask for cash, then sell it. Doesn't feel like a breakthrough once you've made it. But it's really hard to get to that point. Aaron Watson: So you've led me perfectly into the, like the, the question that I was most excited to ask you, Mike, which is, I took very easily to your no index fund or anti index fund view because I've never spent any time or my money investing in index funds. Conversely, I was, frankly, just insanely lucky because of a specific friend to get early into cryptocurrency investment. And it was so successful that it was actually enough for me to sell and pay off my student loans, which is the reason that candidly, I was able to buy my first piece of real estate. Start a business, have a degree of financial security or independence that is just not granted to a lot of the peers in my generation. And so it's been a lot more kicking puling dragging screaming to maybe not completely accept, but like to appreciate your view as it pertains to the crypto, because that's been, you know, the thing that gave me comfort in the storm that made me feel good in all this complexity that we're, we're drowning in. And so having. You know, maybe this isn't the right word, but blown up these two icons to which you know, loads of people are worshiping, what. Advice, can you give, when most of the listeners and most of the people, the humans out there are not accredited investors, they don't have the privilege of these copious amounts of funds and the ability to diversify between some of the best, you know, money managers and allocators in the business and are just trying to make. Very simple decisions with maybe the 5,000 per year they can put in their Roth and the, you know, 2% that their company matches in the 401k. Like when you, and I'm guessing you're not talking to those characters that often, and like the day to day of the hedge fund business, but to those type of characters, what kind of breadcrumbs or advice might you leave? Mike Green: Well, so this is actually, I mean, this is the hardest part of this process, right? Because what you're describing is a situation that, again, I think is improperly framed. So when you talk about security in retirement, which is, which is what you're describing. Right. The initial introduction of things like social security were designed as a social insurance program, it was designed to help individuals whose life expectancy had risen in a manner that they had not anticipated. And if they effectively exceeded the genetic lottery in life, in terms of years of life expectancy, it was not reasonable to expect them to have also succeeded in the lottery and have accumulated enough financial assets to fund that retirement. All right. So, so that was the core of the observation about financial security. And the way it historically was addressed is that you'd have children and you were relatively nice to those children. You didn't beat them too often. And if you didn't beat them too often, then they would probably feed you, you know, at least the leftover cross and gruel so that you would be able to survive into your old age. And again, that was much less of a problem because of, you know, an increasing communicable diseases and, and accidents and everything else that would have happened. We replaced that world with a social safety net. First from the government in the form of social security. And then because of competition with the government in the form of defined benefit plans, et cetera, that were introduced in the 1940s, in extraordinarily tight labor markets. And in the 1970s, as the supply of individuals began to rise, strip the capacity to provide that safety net. We changed the structure so that it increasingly was pushed onto the individual to be responsible. All right. So social security became an increasingly un attractive retirement vehicle, right? Relative to the contributions. It's one of the worst investments that you can make, right? If you stop and think about that every single year, roughly 15% of your income for the vast majority of people is going into something that you are then going to make withdrawals on an inflation adjusted, but not return adjusted basis. Once you exceed the age of 70, in most cases today, it's just a terrible investment. Right. You'd be much better served taking that 15% and putting it into any number of things that you could identify yourself. Right. But we have augmented that weak social security system with a personal responsibility system in the form of 401ks and IRAs, where you are expected to be able to guarantee your own security in retirement. Right. And I think that's actually where the core of the problem sits since the vast majority of people don't have that capacity. You were very fortunate. You nailed it. You were introduced to an asset early on, you generated enough income and wealth that you were able to give yourself a head, start in life. That's an extraordinary gift. And I wouldn't take anything away from Bitcoin and the speculative activity that you were involved with that facilitated that. And I think that's actually part of what people see in Bitcoin is they see individuals like yourself. Whose lives were impacted by moving early into an asset and selling it to allow them to retire debts and obtain assets that have facilitated a level of fiscal independence that has changed your life. And I think that's really powerful, but that's not what people are now being encouraged to do. Right. What people are being encouraged day is to buy Bitcoin and hold that Bitcoin. Because it's going to make them rich without them making any other choices. That's where my objection begins to emerge. I can't possibly know the future. I can't possibly tell you that Bitcoin is going to a million or the Bitcoin is going to zero. That's not my job. Right. What I'm doing within Bitcoin is identifying something very, very different, which is that the narrative that people are being told is not true. The us dollar is not collapsing. We are not seeing, you know, levels of money printing that are guaranteed to cause any particular outcome, whether that's inflation or deflation or, you know, the stock market going up or anything else. Right. It contributes to those. I'm not gonna deny that, but the narrative that we're being pitched is one that's untrue. The narrative that Bitcoin is a truly decentralized system that can't be stopped. That is not true. Right. The nature of the system is increasingly centralized. They're being told that the energy consumption doesn't matter because it's being produced off for waste energy. Again, these are not true statements and it's very uncomfortable to your point. Like what makes you deeply uncomfortable with in, in interactions? And it makes me uncomfortable, right? In interactions is to look people in the eye and say, no, that statement you just made is not true. Now that's a socially unfriendly thing to do. It makes me very angry when people say it to me, right? That is, that was an untrue statement. Like I did it intentionally. If I intended to deceive somebody, I'm going to be very defensive. I'm going to be offended that somebody would, would feel that way. And I think you see that from the crypto community. I think at the core, most of the people that are involved deeply in the industry know that they're engaged in a variant of fake it till you make it right. What's the hope. If they can get this thing large enough that effectively the government views, it is too big to fail. Right? I don't think that's going to happen here. I think this is what has not been told to people is that this is different than Airbnb, right? Which was unlicensed, lodging. This is different than Uber, which was unlicensed taxis. This is different than YouTube, which was unlicensed communications or Facebook, which was unlicensed communications in a variety of ways. Right. Those have managed to make it through, but now you're actually talking about money and the role of money in a government is very, very important, right? It is what actually allows the government creates the money. Where do you get that dollar from the only possible place you can get a dollar from is from the government. You may not feel that way, right? You may have gotten it from your boss who paid you a check, you know, who, who wrote you a paycheck? And you think the money is coming from him or her? Who did she get it from? Right. Well, it was given to her by somebody who got it from a bank, which is a licensed agents of government or got it from the government and some of their purchasing activity, right. The government isn't paid for by taxing government creates demand for currency via taxation. And so like all of these things just are the way it is presented within the Bitcoin or crypto universe. Is, Hey, this is just like everything else, right? This is just like all the other technology stuff. It's just totally native and totally normal. And it's the way we should think about it. And it's not, it's just not the same thing. And if you, if you go a step further and you ask yourself, like, who are the actors and who are actually involved in this and you dig in and you start saying, is Bitcoin increasingly used for transactions? The answer is no, it is not. Right. Is Bitcoin disproportionately used for money laundering, activity, drug activity, paying for various forms of nefarious actions? Yes, it is. Right. It represents the lion's share of the activity. If you dig into it and you look at it and you correctly do the analysis and you recognize that transactions shouldn't include things like exchanges, right? Where it's one person buying some Bitcoin and another person selling Bitcoin. That's not actually a use of money. All right. This is speculative activity to do the same math on the U S dollar. It's not $20 trillion in GDP that you should compare it to or $20 trillion of monetary supply, right base money supply it's 700 to $800 trillion worth of transactions that occur in any given year that actually result in that $20 trillion of economic activity. Right. The Bitcoin universe. Really only has somewhere in the neighborhood of $400 million a year in actual transaction activity. It's meaningless. It's totally, totally meaningless. I could go away tomorrow. And the only thing that would change is there would be a bunch of really ticked off people who kept their life savings in it. Aaron Watson: And they'd be very mad online. Mike Green: They would be extremely mad online and I'll be candid with you that like my wife is terrified that they'll be convinced that I caused it. Right. I mean, it's, it's That is that, that is the scary part is that, you know, rather than stopping and thinking, wait a second, we built a trillion dollar assets on $400 million worth of transactions. You know, that's absurd, right? It's no different than Tesla stock or, you know, and people may disagree with me on Tesla stock. So, you know, pick something else, GameStop. Right. $25 billion worth of market cap on a company that is losing money and candidly, nobody is ever going to use, you know, a Game Stop is not going to become a central part of any economy going forward. So it's a, it's a very similar setup and it's just made worse to, to continue down that path by the fact that the players that are increasingly involved. Is China, Russia, Iran, Kazakhstan, et cetera, countries that are using Bitcoin to evade us sanctions and effectively, you know, drive a narrative that is against the interest of the United States itself. Aaron Watson: Mike, this is this has been heavy. This has been a lot. I really appreciate you walking us through all this stuff, because it is not a perspective that is easily gleaned. From most of the sources of media and education, I prepped you before the interview with the kind of standard last two questions that we always do actually have two, before that, the first little bit of a different vibe, would you pitch Keto as an effective diet to folks out there looking to try potentially a different diet? Mike Green: So the quick answer is it works for me, right? It is very clear that. Consuming carbohydrates in large quantity is adverse to, to my health. And so embracing that and understanding that I've now done it twice, the sustainability of it is difficult, right? It's very hard to ignore carbohydrates and a society that throws them at you. And, you know, a loaf of bread is an extraordinarily cheap source of calories. And as human beings we retain. The underlying features of our ancestors that say, Hey, get as many calories in as quickly and cheaply as you possibly can. Right? I mean, you don't see a paleolithic tribes, you know, walking around and be like, eh, I don't know. That's kind of, you know, that, that mammoth meat thought, not the best mammoth meat. Let's go to the next group of mammoth and, you know, try to find like, you just don't do that. Right. You find food and you eat it. That's what we are. We're omnivores. And. You know, carbohydrates are remarkably calorie dense. They do an amazing job of giving you the energy to stay alive and your brain needs to consume an incredible number of calories. And so we're, we're naturally evolved to gravitate to that sort of stuff. Now we happen to live in a world in which the biggest problem that we have is not how do we for, for the developed world, I just want to emphasize this. The biggest problem is not, how do I obtain enough calories, but how do I raise the output of my body in terms of exercise or various other activities to dispense with the calories that are available to me or restrict my caloric diet and keto proves to be an effective way of doing that by isolating particularly towards proteins and to a certain extent toward fats, but at the end of the day, it's all calorie restriction and your body reacts to, you know, eat is very, very easy for people to eat a bag of chips. It is very, very hard for people to consume, you know, a 64 ounce steak. Right. You, your body starts to shut down and says, please stop long before you make it through, you know, two giant steaks or whatever the equivalent calorie component would be. And so it, the the answer is yes, I would recommend it with the caveat that it works for me. I can't speak to everybody else. Aaron Watson: I've done it and I've found that it helps. I did it with my, my now fiance and my mom to kick off a year and the little bit of like commiseration while you're going through it. And like staring longingly at the box of pasta in the cabinet is definitely a helpful part of it. Mike Green: Well, the other thing that I would say, so my wife and I are both doing it between the two of us. We've lost crazily 80 pounds since October. And so I'm, I'm actually really pleased with the way that's gone. I will tell you that I've done it twice. This is the second time. And the number of choices that are available to you to consume is keto products. Whether that is keto sweets or that is keto snacks or that is guidebooks or KIDO, pasta, pastas shirataki noodles. For example, I actually really enjoy it. It works, you know, your options are much better today than they were five years ago and that makes it easier to manage. So to answer your question yes, with the caveat, I'm glad to hear that it worked for you as well. And I agree the secret is support. Aaron Watson: For sure. I'll also link for folks. The, the DiCicco brothers and their key to life coffee is like a keto friendly drink. I freaking love it. It's protein and coffee. Amazing way to start the day, but there are a past interview doing really well. Mike, this has been fantastic. I don't want to take any more of your time away from the, the swim meet weekend that you're participating in. So not participating in your you're you're cheering on with, with your son. Where can people connect with you in the digital world if they want to follow, you know, other, other things that you're finding. Interesting. Learn more about logical, all that good stuff. Mike Green: So for Logica you can go to logical funds.com, www.logicalfunds.com. We have a research blog where we regularly publish our thoughts to follow me in the electronic space or in the internet space. The easiest thing to do is, is Twitter, where I'm confusingly prof, plum 99, P R O F P L U M 99. That's a, there's a long story behind that. And even more confusingly I managed to find the only better bolder guy as my avatar. So I've got Vicini from the Princess Bride is my avatar again, and an outgrowth of never thinking that I was going to have a meaningful social media presence, but now it's too late to change. And if I were to replace Wallace Shawn with myself, people would be very confused. Aaron Watson: So I yeah, I don't know if it was like 18 months or so ago. I was following some other fin twit characters and I saw them interacting with this guy. And I was like, who is this? Like, cause, cause you're used to some of the suit anonymous characters in, in financial Twitter. Okay. But there was a couple of like characters that I had known current past guest of the show. And there was this guy with like this ridiculous picture. I was like, is this really who this is? I could not figure it out. And it took me like six months to realize it had been, cause I'd seen your real vision interviews. It took me a while to figure that out. So hopefully a couple of more people will figure it out soon. This has been fantastic. Thank you so much for doing this. I'm going to link all the show notes or all the links you just mentioned in the show notes, going deep with aaron.com/podcast for every single episode or in the podcast app. You're probably listening to this right now, but before I let you go, Mike, I'd like to give you the mic one final time to issue an actionable personal challenge to the audience. Mike Green: So the challenge that I keep trying to get people to engage on and I've used the, you know, what may or may not be good language is vote better. Right. And what I actually mean by that is that many of the problems that we see in our society, the reaction that people have to things like Bitcoin, et cetera, is actually a reaction to saying, Hey, the policymakers, aren't making choices that I support. I don't agree with the decisions that are being made. And, do you attempt to take that power away from them? By changing the system in wholesale format is unfortunately somewhat doomed to fail and is rife for manipulation. What I would encourage people to do. And I actually think it's one of these things that the coronavirus could have an unintended positive effect here is to get people, to try to engage at the local level attend. It sounds crazy, but attend your local city council meetings. Pay attention to who's running for office locally at participate, run for office. If you think you have good ideas, right. But become engaged as a civic citizen, because the core of the problem that we face in our society today is that we are coming apart. We no longer have the capacity, or we don't seem to have the capacity to interact with people that are nearby us that may only share a geographic location with us in terms of our viewpoints. And so that is what I really truly believe is going to be the critical dynamic is seeing the young people like yourself who were brilliant, successful, have the future ahead of them. Haven't had their children yet. And aren't looking at it from the lens of somebody who saying, boy, I really need to actually try to make sure that I'm securing a future for my children. Right. Look at it and somewhat dispassionately pretend that you're, you know James Madison and saying, how do I build this future society? What do I actually want the restrictions on government action to be, and start with your local community? And you'd be surprised how enjoyable that process can be. It can also be a real pain in the ass, but it's, you know, it's a technical term, but it really is like if we're going to make this place a better place, we got to start there. Aaron Watson: Well now it's your turn be, being into kind called me brilliant. But I really, really you know, I love the challenge. I appreciate the insights that you've delivered as we've shared this hour or so together. And I hope that we can, you know, continue to have the conversation at some point down the road as we all struggle to make sense of, of everything that's going on. Your, your voice has been in, in certain ways of light in the dark. Yes, for me and hopefully for others as well. I really appreciate you coming on the podcast. Mike Green: Well, I'm incredibly flattered by that statement and I hope it's true and I'd be thrilled to continue the conversation on the future. Thank you for having me as a guest. Aaron Watson: We just went deep with Mike Green. Hope everyone out there has a fantastic day.
Mark Kovscek is a mathematician, inventor, and entrepreneur. His company, Conservation Labs, builds and sells a smart water meter that provides consumption insights, custom conservation recommendations, and leak detection.
At the cutting edge of Internet-of-Things and conservation, Mark uses his experience from a career building products and delivering solutions to address multi-billion dollar challenges. He has spent time using his mathematics skills in marketing analytics, finance, and supply chain management, but says this is the most compelling challenge he’s ever faced. In this episode, Mark and Aaron discuss the sound that pipes make, where the idea came from, and the potential for environmental and bottomline impact. Sign up for a Weekly Email that will Expand Your Mind. Mark Kovscek’s Challenges
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Conservation Labs Website If you liked this interview, check out episode 432 with Charlie Dolan where we discuss waste management, tech, and bootstrapping a software company.
Matt Harbaugh is a co-founder and Managing Director at Mountain State Capital. The 20 million dollar fund has invested in over 16 firms in the greater Appalachia region.
Prior to founding MSC, Matt served as CEO of a machine learning-based software company that was acquired by Facebook and was the Chief Investment Officer at Innovation Works, one of the most active seed funds in the United States. Across his career, Matt has invested in, managed, and advised more than 100 private companies over the past twenty years. He realized that he was interested in being involved in venture capital back in 1999 as an investment banker at PNC and has spent more than a decade and a half preparing himself to succeed. In this episode, Matt and Aaron discuss his career arc, the venture capital business model, and how startups in the region are still lacking enough funding options. Sign up for a Weekly Email that will Expand Your Mind. Matt Harbaugh’s Challenge; Build the skills and find an avenue to be an entrepreneur. Connect with Matt Harbaugh
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Mountain State Capital Website If you liked this interview, check out our conversation with Stephen Gurgovits about private equity in Western PA and our conversation with Glen Meakem about the DotCom bubble and his experience venture investing.
Andrew Gazdecki is the solo founder of MicroAcquire, a marketplace for buying and selling small Software-as-a-Service companies.
He has previously started two companies, Bizness Apps and Altcoin.io, which were both acquired. MicroAcquire has reached $250,000 in annual revenue in just one year, by collecting fees from buyers in exchange for connecting with the entrepreneurs selling their business. Andrew is applying lessons that he’s learned from past successful companies to *hopefully* make this his best business yet. In the episode, Aaron and Andrew discuss playing entrepreneurship on “hard mode”, the mistakes Andrew has made in the past, and how MicroAcquire has grown to more than 30,000 subcscribers. Sign up for a Weekly Email that will Expand Your Mind. Andrew Gazdecki’s Challenge; Start journaling. Document your goals, memories, and experiences. Connect with Andrew Gazdecki
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MicroAcquire Website If you liked this interview, check out episode 394 with Ryan Kulp where we discuss buying and selling small businesses.
Chris Anderson is the founder and Chief Technical Officer of Innotescus. He leads a multi-functional team of machine learning scientists, software architects, and engineers that are innovating in the world of image annotation software.
Prior to founding Innotescus, Mr. Anderson was the Director of Software Engineering and IT for ChemImage. Here he oversaw the core innovative software products for hyperspectral data acquisition, analysis and visualization. These products range in application potential across forensics, defense, pharmaceutical and medical markets. He joined ChemImage in 1999 as intern developing a data-driven course on “Chemical Imaging”; assuming exponentially increased responsibilities over time as the core imaging technology of ChemImage required ever more dynamic and intuitive software. In this conversation, Aaron and Chris discuss spinning the company out of ChemImage, how Chris has taught himself the technology, and the constant curiosity needed to succeed. Sign up for a Weekly Email that will Expand Your Mind. Chris Anderson’s Challenge; Learn something new every day. Connect with Chris Anderson
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Innotescus.io If you liked this interview, check out episode 399 with Hayden Cardiff where we discuss spinning the company out of Pitt Ohio, challenges in the trucking industry, and raising capital.
Jeff Booth led BuildDirect, a technology company he co-founded in 1999, for nearly two decades through the dot-com meltdown, the 2008 financial crisis, and many waves of technological disruption.
BuildDirect aimed to simplify the building industry and graduated from online catalog to logistics network to artificially intelligent platform. Last year, Jeff released his first book “The Price of Tomorrow – Why Deflation is Key to an Abundant Future” where he outlines the current state of our economy and what must happen to enable a brighter future. Jeff believes it essential for everyone to understand the deflationary nature of technological progress and the implications of this core truth. In this episode, Aaron and Jeff discuss this idea, the story of BuildDirect, and how anyone can use this period of upheaval as an opportunity. Sign up for a Weekly Email that will Expand Your Mind. Jeff Booth’s Challenge; Have empathy. Recognize that economic deflation and its symptoms are causing political polarization. Connect with Jeff Booth
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Website If you liked this interview, check out episode 440 with Brent Johnson where we discuss his Dollar Milkshake Theory and its implications for entrepreneurs.
Stephen Tse, is founder and CEO of Harmony.one. Harmony is a blockchain-based open source development project with its own cryptocurrency.
Stephen has been obsessed with protocols and compilers since high school. He reverse-engineered ICQ and X11 protocols, coded in OCaml for more than 15 years, and graduated with a doctoral degree in security protocols and compiler verification from the University of Pennsylvania. Prior to founding Harmony, he has worked a researcher at Microsoft, a senior infrastructure engineer at Google, and sold his startup, Spotsetter, to Apple. In this conversation, Stephen and Aaron discuss how a blockchain project is like a traditional startup, the technical tradeoffs of blockchains, and how Stephen expects future projects to work together. Sign up for a Weekly Email that will Expand Your Mind. Stephen Tse’s Challenge; Set up a monthly newsletter to your close friends and family to keep them updated on recent events. Connect with Stephen Tse
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Harmony.one Website If you liked this interview, check out our library of past episodes with blockchain innovators, investors, and entreprenuers.
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify Tse: The broader picture the harmony is in or where technology is at novel blockchain. It's really about a FinTech revolution. Watson: Hey everyone. Welcome back to going deeper there. And Watson, my guest today is Stephen Tse Stephen is the founder of the harmony blockchain project. It is not only a cryptocurrency, but a internet protocol that is focused on connecting different. Blockchain projects together to create more liquidity, faster transaction times and lower fees for everyone involved. It's a pretty lofty goal. It is definitely technically. Complex and above my pay grade, frankly, uh, but tried to make sense of it and get some wisdom, insight perspective from Steven in his position, operating the project. Uh, if you are a completely unfamiliar with how Bitcoin works, how Ethereum works, then I would hesitate to recommend continuing listening to this episode, I'd recommend either visiting past episodes of this show that we've linked in the show notes. Or other resources around the internet to familiarize yourself with those projects. First in my experience, most context around cryptocurrencies and blockchain. Start with understanding Bitcoin follow by beginning to understand and Ethereum and then everything kind of spirals outwards from that. But once you have that context, I'm fairly confident that you will find this both valuable and insightful. And I hope that you enjoy it. Here is Stephen Tse Watson: All right, Steven. Thanks for coming on the podcast, man. I'm excited to be talking with you. Thank you, Aaron. So excited. So I'm going to start things off. We we've done different like crypto Bitcoin, blockchain, different types of interviews in the past. And you are the CEO and founder of a independent blockchain project called harmony. And to try and start things off, maybe we can just try to explain what harmony is and where it falls in this landscape, because there's so many technologists, there's so many, you know, coin market cap. A thousand different cryptocurrencies out there. It is exceptionally hard for people like me to keep it all straight. So where does this harmony and your project fall in that ecosystem? Tse: Thank you, Aaron, for actually your audience, having a background in technology, um, and a little bit about Bitcoin, but understanding what is the entrepreneurial journey? Uh, that bring harmony of the project. And why is it different from maybe some of the blockchain projects that some of you may have heard before? I think it comes from the main. Right. Uh, I think it's interesting that finally, um, there was many technology breakthrough that allow people to collaborate together and subsequently, uh, uh, around the open source project. Well, um, I think the theory I'm in harmony coming into places now, can there be a different platform that said, oh, we may have a contract to do freelance and we may have a global business. Like, um, different community that not only this community can come together, but they can build an economy out of it. I think that economic aspect it's interesting because finally people can share anything online and open source contribution comes into any, uh, any like a WhatsApp group or, um, telegram group. Well, how many really want to emphasize this? Can the epi community that can create an economy, if not? Watson: And so it is part of the preset position then that the coordination that's enabled by a shared ledger, a trustless ledger, uh, much, much in the way that Bitcoins trustless, this allows every transaction to occur without that intermediary that can be applied to just more activities beyond a simple, you know, transport of value for some external agreement. There's, there's the idea here that if every sort of agreement is codified, Okay. And those, um, qualifications can be executed quickly. Cause that's another, another issue here is, you know, basically from a, from a psychological standpoint, most of the mind share to the general public is Bitcoin and then maybe a theory, um, and then maybe like blockchain or crypto beyond that. And the reality is is that there's this, um, there's this impossible Trinity, right? To be trusted. To be secure and to be fast is very, very challenging. So, so you kind of are pointed at that, correct? Tse: Right. Well, thank you, Aaron. You summarized it better than I did. Uh, but most of all, bringing out some of the key topics, both technical, but also like why, right? Why is this different? Why there has to be another system rather than just a bunch of my consortium or liars? Try to figure it out. Why couldn't we do it on Bitcoin right now? I think what you've mentioned about, uh, there are still, uh, deep protocols. Uh, but I think your audience would love to know why that matters. I think the amazing thing is people finally find it will community or even open source project, or even Cisco into a Kickstarter to really find a way of making a difference in the world. What people couldn't figure out is, wow. It was possible 10 years ago. 12 years ago for Bitcoin to top up money or investment or store value. And then you can improve that as possible to that anything can be on it or it's not possible. And why we take this route is we are a bunch of Silicon valley engineers infrastructure guys does it cannot be that. Expensive or slow that we are still in the dial up era. I don't know whether you ever use a slow modem and play with life like windows period of time, where they carry your map off you it's just too slow to do anything. Why would anyone do it that style compared to just go into the office ticket box? It's where we are exactly right. It is okay to tell the user and say, oh, now you can create money to your own community. But it's not so easy to lose money. It's not secure. It's so slow. It's so painful. You'll rather just like mail check, right? If it's so slow and then worst of all is it really doesn't work for people other than the few thousands people that'd been playing with the technology until I will say condition. Watson: And so to try to provide more clarity of where harmony lands in the ecosystem. You know, the, the different things that I'm aware of are the concept of like layer one layer, two layer layer three in the, in the traditional analog sets. So I might have cash and I might hand that cash to the bank, and then I might get a credit card somewhere else. And when I'm swiping that credit card, the money isn't immediately moving out of my account. Those kind of transactions are reconciled later on down the road, out of my bank account and that credit card. Is optimized for speed. And the cash is kind of optimized more towards being secure cash that is relatively stable. It's Fiat, the whole everything is that there's yacht, but it is still a well-worn technology to you, a Fiat based currency. So, so where can, can you paint, uh, maybe using that medicine? Where harmony lands Tse: really actually, it's a really great hierarchy. If not an Archer to think about it. As a matter of fact, maybe it's telling the audience I'm on entrepreneurship fundraising, if not a little bit investment, the broader picture the harmony is in or where technology is at alpha. Blockchain is really about a FinTech. The financial technology and solution, right? For the longest time, we can only play with my personal computing or what technological information. I think this decade, the entire time. It's exactly to what you just said, right? Different stacks, different layers of, uh, of our day-to-day life related to our economy activities. Most of our financial instruments, wherever the Capital has been provided, the only government you will trust to solve the problem. This one, you mentioned about different layers. So let me quickly touch on that. I'm not going to go into like the whole money supply waste of money coming from how the fed is printing money, I think is pretty well known by now. Well, it's the naughtiest going and we're how many position maybe you give me a good framework to clean. Two people will understand it become by now. I hope I feel it should be by now. It is really like the gold, right? Like digital gold. You need to trust it. You know, it's going to be there. It will be limited supply. You can really, it's just like, it's not going to disappear. People cannot make it right. Good, uh, limitation. So people consider that a slow value. That's all good, but people can normally do any sane about it. Right. We cannot create new economy top all at different application or contract the way that internet enabled Twitter, Facebook. So you do them to stop. Right. The second layer of allowing people, not just about me sending you a package, which is like a network. You have an eye on the internet, they can sent you a package, but, uh, nuclear might allow you to say, oh, now we can have email. Right. Very slow. But at least we can exchange an email. Well, how many will you want to be able to use? It should be allowing to do anything right now. You're doing on entrepreneur, but it has a value attached. Well, we're still very far from there, right? Otherwise you would be doing somewhat form four, even though my mom and pop. Right. The hardest of all is you sell, dealing with banks and government definitely base we'll work with flushing. Can we have that love for that? Everyone can really use that. How many, one position at that layer or level on top of harm? Uh, do you want me to mountain top Bitcoin at that? That's all to say that while it will be your day-to-day life, uh, not just the product, but like any other things that you want to do with the community. People you don't need to trust, honestly, but in you transact. Watson: And what's so challenging to kind of wrap your mind around here is in the same way we used these layers of legacy financial rails to illustrate me swiping a credit card. There's also layers and layers of technology that helped me, you know, set up this zoom call or send my emails and use the G suite within Google or use Google maps. And so th-the way. I'm trying to kind of like force myself to think creatively is, you know, the analogy. The other analogy is the first time that they set up a website for a new space, it was basically the front page of the newspaper turned into a website. There was, there was like side stories and the story in the middle. And eventually we realized that's not the optimal way to consume something in a digital format. We had to kind of rethink it. But the first step was to just take something from the old world. And push it into this new paradigm. And then we have to kind of start to learn how this changes, maybe the constraints or the obstructions, and allows us to go in some of those different directions, right? Tse: exactly. That's great analogy. People don't remember how we even do email sharing information before like web right. People that should go and remember that they, uh, day-to-day uh, to hold they were taken with other phone. Uh, I was right there. Right. I was using like developing, operating system called Linux in my high school, first version, and then doing web development. I was on the cool maps team when people didn't even think it was possible to be a, such an application out on their website. Right. Just click the click. You can already direct allow that. 12-12, 15 years ago, I'm showing my age. And then the last one, the mobile, right. I have my iPhone one lighting out for a few years, all the way to add like 12 models of iPhone. That to talk about blockchain now is really early. You have to really believe that something is wrong. Something you can do it differently. That what you said about like, kind of your day-to-day life, all the systems that you use now can just be slapped on now. I would say yes, but no. Right. People asked, can all that AI data, privacy and disrupting all of the companies be possible. Now in blockchain, I would say yes. Okay. Not now. There are people that are trying really therapy all the time. The last few years. Tens of millions of are pouring the space. That is really not a lack of ambition, passion or that temps. But the amazing thing is, um, there are really builders to left, um, that keep going. And, uh, it has been exciting the last few months. Watson: So I want to talk a little bit about the start and then we can kind of catch up to where things stand in the present. Because another thing that we've explored a lot on this show are these basic kind of two-- One much very well-worn in one relatively well-worn paths of entrepreneurship, the ones, the most common you bootstrap, a company, you find something to sell. You sell it. You keep doing that at a greater and greater scale and you grow from a one person shop into a a hundred person company. Then there's the model of the traditional VC, which is you go in and you have an idea. Maybe you have a concept for technology. This is something that you've done in the past. You get a seed investment, you start to develop that project and you're hopefully on this like hockey stick-stick type of ladder where you, you grow super-fast and you get a big series, a and a series B and some form of an exit via an acquisition or an initial public offering. These cryptocurrencies, these blockchain based projects don't really work in the same way. And they're tied into the open source software movement, and they're tied into these kind of very, uh, you know, digitally native communities type of framework. But can you kind of paint more of a picture of your story, which was you sold a company to apple. You decided to leave that position and start this thing and what you needed at the beginning in order to get any sort of momentum. Tse: Yeah, thank you, Aaron. Again for like we still talking about, well, the overall structure that people can still get on the startup journey and actually knowing what's ahead of them and what is possible now? Um, I think you need a slurry. Any entrepreneur, we map back to what we just said, right? It was so different 10 years ago for web and mobile. And now even for entrepreneurship is very different, right? As we know, Kickstarter and all kinds of online platform for a freelancer are quite possible. Right now. Whether you have a project, a hardware to ship, or you just want to get people to pay you monthly, even though you don't get sharing community fishing. And I would say the core of entrepreneurship, at least technology entrepreneurship in Silicon valley has also been quite. Okay. As well because of blockchain because of technology. Uh, so just to backtrack a little bit, uh, I, when I finished my PhD, I went to Google maps to work, and then it come to say goodbye to my first startup. At that time, I was fairly new to Silicon valley to know like, what are VC. And we went through that round. We raised more than a million, and then we sold to apple for google itself. Uh, but then, uh, both of AI and blockchain really changed my perspective. Do I want to repeat the same? Like, if you have to write a website again or to new podcast again, Completely different paradigm of tools you can use. It's not a blockchain, allow us to do it. So we quickly raise 80 million within a few weeks. It's not because of the, of the money is because now that you don't need to be so focused on just regional and, uh, That have certain trash in for certain GC said lots of people failed after getting a few tens of millions. Um, we were just so a little bit quite hardcore. I was just like having to build a mentality where you said like, oh, they're still users, even though you build that, it's still a true question. You only need to ask revenue. You don't need to show the chart, but you still need to keep in mind that it's not just about the train, but the product that make impacts people's lives. So for us, we quickly go on that journey to raise it on plot in about Money, but also feel it community. And I think that's. Melissa product or like a startup didn't even talk to the customer until, I don't know, six months or one year later, they don't even feel accountable to pop up to public five, seven years later. And blockchain kind of compressed all that into more than a year. Watson: And so would you call that an initial coin offering or is that not how you explain it? Tse: It was a, so we have to, we have to figure it out. So there are two way to think about it. Like, what is like, what does the IPO box slide after five, seven years? Usually you have to, you only figure out when you're five, seven years do the training. So you have to kind of figure it out in the first five. It's not five weeks. So if it could that be quite the token. Meaning all your community investors, your customers, how they will use this currency of this tokens is what people call it. The initial coin offering of the tokens token is just mean exchange of your share if you know, setting up C corporate measure. The other thing that we did is once we figured it out, we still want to keep it to the public now. And Watson: that's a really important idea there because there's like this, this risk or default to go it's paradigm, shifting everything is different, totally different. But at the same time, this idea that you might need to determine the economics of your project, right? At the very earliest stages, it's somewhat different. But at the same time, you start at, you have a startup and you say, okay, We're going to have a, a four year vesting period with a one-year cliff, for anyone that joins our company in order to have equity in this project that we're building together. So really this is just more variability in the model, more creativity for how that might be formed and where the kind of initial investment might come from and how people get a piece of it. But it's not really that different in the sense of like, Yeah, that's how it started. So I've always worked by finding an economic model that gets everyone together, working on the project at the same time. Tse:. Yeah. I still, you, you, you, you are really good at making analogies and I think that's what people need. I love it because like, it helped me to tie all your frequencies new as some details. What happened is, is exactly the same thing, right? It's exactly the same IPO, your customer acquisition strategy, but now you've put a incentive to it. It's just so many the technology has changed. So say having a website or newspaper allow you to publish by minutes in sublime one week later or the next day. But once the moment it goes out, everything's you soon check off track. You still get to have the distribution. There's nothing that allows you to get around, but how to do share and distribution. So coming back to Boston is a symptom, the money still really fast. I'm talking about seconds. Right. They are like, uh, two years ago, they are like, uh, 50 million guests sold in mid, like insane sort of timescale changed because of the technology. But what you said about the structure of an economy of a product of a company really haven't changed, but just compressed. Watson: And so can you talk from like a community standpoint about the incentivization of developers? Because the traditional model is, man, we have to figure out how much equity are we going to give this developer on? Is it one is a, three is a five is a 10% whatever. And you know, that's, that's the asset in order to get this thing built in the early stages. But now it could be something where maybe I'm full-time, maybe it's, maybe it's one of your old, when your old colleagues at a Google or an apple or something like that. Who's really technically sophisticated. Kind of can put in there 40 hours a week and one stack have some sort of project on the side and maybe it's 10 hours of contribution, but there's the motto where that works. Tse: Yeah. Um, I think that's another fundamental shift in this last year. If not this decade, I also see the FinTech revolution only because technology is changing, but humans behavior in humans, jumps to engagement is completely different the last few years, and last year, just push it all over, over the edge of it. So I can talk a little bit. Harmon you think about that, but I also can say how blockchain and napalm different level of freelancing, if not even open source. So I-I'm happy to a couple of both, but let me do a little bit more specific, probably you know, about freelance podcasts during audience, anyone, but, uh, but the open source and technology is also very, very unique and way more crazier than what I knew three years ago in the stock is apart. We know that open source is really where the future research human creativity company. Right. Everyone just contribute what people, if we could figure it out, it's just incentives, right? If every go and source, like how much did I get many open source prototypes because of it community couldn't stay together at one vision incentives doesn't make sense. No money there. The flip side of the coin is even though you figure it out, people can just copy it. Right. Just like podcasts. People actually do better as curator or distributor. A lot of them, the one actually doing the hard work of putting a content and philosophy technology together on some code. So in open source or in particular for a blockchain project, the hardest thing they call it a forging. Of a community or a project. Um, it just means that I copied it exactly the same. You, you put it out. I copy it. There's nothing wrong because we learned from the one before us as well. And we copied just as much, but how to keep them the value of the community and keep the incentives. Um, I would say it's actually still experimenting, like, as we talk about at the hundred million scale in the timeframe of the few nicks. So if you catch anything about decentralized finance deep by last year, that's exactly what happened. People just exactly copy it, but let me just boil it down and bring it back to the excitement to top our world, the product. This is truly where things are going or research or source code development or technical department mine, or the digital economy are very cloneable copy about. So I think it's actually normal. What they, what people would never have is a style level of capital injection. To make all these experiments worthwhile. I think back to your point, Kim, I can, I attract my colleagues that were going to come out to work on some new, to increase the risk giving is what, uh, this whole economy enable, um, many people on to try to last week. Watson: And so in terms of like your role, once again, it's like the CEO of this project. How is your. Like, how has your blending of responsibilities? Cause back to like old paradigms, you, you gotta do sales, you gotta have product, you gotta have some customer support. And to some degree you need to be driving the technical growth of the project. you need to be recruiting talent to be a part of the project, but then you also need to be pitching this as a sales person. To the potential, the people that aren't gonna be building are acting, they're just investors trying to speculate and make a return, yep. Tse: Well, speaking of pitching, let me pitch that anybody interested in technical or marketing for harmony, please come into on us, I know this is true. I mean, I used to be academically and research, but now it is everyday telling about. And I'm not sure whether you touch on one heart that dilemma is. We, uh, I call myself finder a lot more thinking about the CEO started this project, right? At the end of the day, this should be a community project. It should be an open project. Anyone can contribute, but also ticked out on the ship going forward. Right. I've been pulling my time. I've done it before. I've done one startup that I know that it really just heads on everything I saw entrepreneur. But what is difficult now is it's like, you have to, like, you have hundred of your podcast partners to do this project together and you want each of them to drive and in the future sustainable, I think that's the hard one of it become. Watson: It is at the same time though. So interesting. It's an insight into human behavior that both of these trustless, huge community, widely known projects, both Ethereum and Bitcoin, they both have like a figurehead, right? Satoshi, Nakamoto, and unknown character is the figure of the Bitcoin. The talk Buterin is the figurehead of Ethereum. So there is this like weird tension where you want to stimulate community, but at the same time, There's probably a human default to like, like we just had an inauguration here. Like who's the guy or the gal. Tse: Exactly, exactly. I think it is for sure. Like what are the typewriting divisions? So good. I would just follow even the same division or metallic, right? His yard. He's smart. He still eat it everyday. And he's. Uh, I think not only about having the right vision is not efficient to be a leader, but whether it's stay anonymous, pseudo anonymous, or just complete public, it's also the biggest challenge, right? The more involved you are hands-on and even doing the 30 that data, the more harder to be sustainable when it's with the value right. And the same thing, we have anonymous and public, right? Uh, there are quite a few successful project being a pseudo anonymous, all completely anonymous, but the trust may be so much higher. Right. And there are bad actors in this space. So I think back to the point about a public company only in Banda, what 200, 300 years. Right. If the point was, it's not about a founder that make all the decision for the next 10. If you read that case from here, I think it still makes sense. Watson: Um, so talk a little bit about like what you guys have been rolling out and working on lately. I know that interoperability is like one of the buzzwords. I don’t quite completely understand what that means. Tell me a little bit more about what you guys are. Tse: Of course. Yeah. That's all great here. And I think that's where, uh, you didn't miss any ethical. The price is not too high yet. This is still a good time to feel, uh, would love to tell you more like, like we, you can easily learn what happened. Uh, two or three years, if not 10, but what is exciting this two, three months, if not this year, maybe you would jump to this share. Maybe you'll learn something that connect back to, um, uh, the, uh, like other way of doing like, uh, entrepreneurship for your audience. I think blockchain is only a compressed, uh, landscape of my wife's possible genuine technology. We call it the inter-opera. I think it's really the end game of what open system or blockchain . So they are finally not just Ethereum, but multiple networks finally have a product, not just talking about like the token economies or like the ambition that came online just last year. I'm talking about the last six months. Right. Funny enough, he is, they all talk in their own way, their community in suddenly competing in some, but, uh, uh, like, uh, don't work with each other, but the broader vision to harmony, again, back to that, we can all work together. If we don't even get a few blocks to new work together, a lot of chances to get other communities, other, I don't know, gold of mine and, and banks to work together. Finally, that it makes sense now that we can should. Um, you and your team should be able to connect two different networks. If the use of the choose to, to work on any applications, we call it into the opera ball because it is still very hard. You need to go to something called centralized exchange, finance, Coinbase. That is great for like protecting users, getting educated by the end of the day, the choices of another system allow you to easily move any of the application. Most of all your data, your money, who is not bad. I mean, I worked there before apple. It's not bad, but you want the choices and it's only possible if it's interoperable, right? Just like back in time, you can port your phone number to any other new. Watson: Here's another metaphor might be appropriate. It might not be, we use Zapier, right? So we have this document management system and this invoicing system and this project management system, and they don't have a natural symbiosis, but they all have public facing API APIs that you, that zap you're not used. The app you're allows you to make relate to one another. And I created this document. So create this action over here on this software and save myself some time. Is this. Is Zapier more, the current exchanges and you're trying to replace them or you're trying to be the Zapier for people to use. Tse: Yeah, it is exactly that analogy. Uh, the whole idea of actually blockchain itself should be about that. Even if you just go, people are still fading, just like Facebook PTP, whether they are an API, that's open up, pay for logins time, it should be permissioned or permission loves. Right. So what we said about Sapio is the person nausea, right? Everyone wants that. But they couldn't figure out how much you open up, how much limited, how much it captured the value per API. Right? So is that the, that's a great analogy because it forced us everyone to see that by opening up, you actually capture far more value for most users from a usage. Right? So we also played a role to be the SAP here, but anyone can do this now, the API and the schemes and incentives on committed on. Watson: I, I think, um, I think I'm starting to get it, Steve, and I appreciate you. Tse: Uh, it's really good. Watson: Yeah. I appreciate you answering all my questions. Um, I want to ask our standard last two questions here, but before we get to that, anything else that you were hoping to share today that I just didn't give you the chance to? Tse: Yeah, I do. I do think that's, uh, it is not about people will find it, you know, that, uh, of course it has to be there. Yeah. I think, uh, the product message, I really felt like that, uh, the future can prepare. If you see the change of technology, and if you see some of the brightest minds that work on this problem and this problem, it's not particular, we're not just trying to figure out how to make something called faster than calling it gone. We actually think is quite fundamental that we can control our own, uh, economic health. It community should be having its own, say how to form and how to create wealth together. I think that's a broader in such way. Watson: I take that and I, I hope, uh, it comes to fruition very soon, folks that want to follow along, uh, and just kinda see what you guys are up to getting both in some way, shape or form. What did you coordinate? Do you want us to point people towards. Tse: yeah, please follow me on Twitter. I promise my team and the company, not just about talking to yourself and like the broader picture. And I have a really, really short too in the console. You cannot miss it. It's just. And then T S E. So I turned to it a long time ago when I see imagined. So my name is Steven. My last name is T S E so Kimmy on Twitter. Our website is called harmony dot one, H A R M O N Y dot O R G. So we really liked the branding. Uh, so check out some of the technical stuff, but like subscribe this here. We used to bring a little bit more industry insight, not just talking about the particular technology. Watson: Right on, uh, we're going to link that all in the show notes for this episode can find it in the podcast link or in the description behind the video, wherever you're listening to this right now, I'm also going deeper there and.com/podcast for every single episode of the show. But before we let you go, Stephen, I want to give you the mic one final time to issue an actionable personal challenge for the audience. Tse: Oh, yeah. Personal challenge. Huh? I think many of us have like a new year resolution, but I would like to add one that, uh, really kept me, uh, Going for the last few years, in some way, it changed me. I used to be a CTO researcher, but one thing really forced me to be a little bit more about the broader message. So now it's writing a month new phone, uh, not everyone would do well. Uh, as a matter of fact, that's what my first VC told me to do. It doesn't matter what you do. It's just how to even follow the audience down the entrepreneur or having VC to appear candidate. Watson: And even socially, just socially, like people are once they controlled paradigm versus the new paradigm, you send a Christmas card once a year, because that's what was affordable to like print and send to everyone. And in this type of environment and you can kind of do quarterly or monthly or whatever type of update. Yeah. Tse: Yeah. I would say challenge yourself to do it. Maybe it could be to some, the audience must not be like, just be monthly accountable. By the end of the quarter, which is more likely before April 1st, write a letter to 10 people that maybe a few pages, six pages on some style, because it really impacts me the first time I received such a letter from my last school, but also I go feel that really change the way I can make it Watson: Beautiful. Stephen, I love the challenge and I appreciate you spending so much time with us today. Thanks for teaching us about Tse: Clara and you will send me one, right? Absolutely. Yeah, Absolutely Watson: thank you. We just went deep with Stephen Tse overnight. There has a fantastic day. Tse: Thank you so much, Aaron. Love you guys. Thank you. I'd love to be here again. Watson: Hey, thank you so much for listening to the end of my interview with Stephen. If you enjoyed this, then make sure that you've listened to all of our past interviews with other blockchain innovators and entrepreneurs from Joe Lubin and Roger veer talking about Ethereum and Bitcoin back in 2016 to pump talking about the 2020 pandemic financial crisis and other associated issues. It's all here. It was going deep other great interviews. Very soon. Tse: Thanks for listening. Connect with Aaron on Twitter and Instagram at Aaron Watson, 59.
Joshua Lisec has been a ghostwriter for a decade. Public figures hire him to write compelling books, newsletters, and tweets in their voice, so that they can build their media platform.
He has helped to write best selling and critically acclaimed books and teaches the best practices publicly online. Joshua coaches his clients to offer higher-ticket services, courses, and products in conjunction with book sales to build a sustainable business. In this podcast, Joshua and Aaron discuss the business model behind most successful books, why traditional publishing deals are hard to get, and how ghostwriters are like actors. Sign up for a Weekly Email that will Expand Your Mind. Joshua Lisec’s Challenge; Use the ‘Jobs to be Done’ framework to evaluate your business offering and improve it. Connect with Joshua Lisec
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Joshua's Ghostwriting Website Youtube If you liked this interview, check out episode 226 with Ed Latimore where we discuss writing online and personal growth.
Patrick Colletti is the founder of Net Health a $100M+ cloud-based provider of specialized software that serves specialized medical facilities like wound centers, senior care, and occupational therapy.
When Patrick began his tenure as company president in 2001, Net Health was experiencing significant financial turmoil resulting in laying off all but 2 employees. By utilizing a Refounder mindset as a framework for success, Patrick was able to spur rapid business growth and cultivate a flourishing corporate culture. He has spent two decades serving in multiple leader positions at Net Health, including the president, chief revenue officer, and chief operating officer. Now he wants to share what he has learned. In this episode, Patrick and Aaron discuss selling to private equity, building a company culture, and scaling the company. Sign up for a Weekly Email that will Expand Your Mind. Patrick Colletti’s Challenge; Regardless of your experience or seniority, recognize that you can be the change that you want to see in your organization. Connect with Patrick Colletti
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Refounder.com NetHealth.com Book Referenced 4 Disciplines of Execution by Jim Huling Chris McChesney, and Sean Covey If you liked this interview, check out our interview with Dr. Chris Howard where we discuss leadership and the role of universities. Text Me What You Think of This Episode 412-278-7680
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Watson: To start things off, let's just take people through what Net Health is. So, my understanding, and you can correct or add to, or men, whatever I say here, it's a saas company and the software that you guys sell helps with the operation of specialized medical service providers. So, a senior living center, an occupational therapy center, a wound care facility probably has a different model or way of operating than maybe kind of a conventional, a practice or a large hospital. And your solution is kind of tailored to the needs of those types of facilities.
Colletti: Yeah. That's a good way to think of it. So, you know, imagine that 20 years ago you went to your doctor's office, and they had a, you know, they had a paper record, and they may still actually, and they went through it and they filled out the information and it wasted your time and it wasted their time. And that the data was essentially valueless because there was no way to report or trend on it. And so what, what we did was find these really specialized markets where the largest vendors weren't paying attention to because they were focused on how do we just get prescriptions digitized. And we found quite a few of them, unfortunately, or for good, for good purpose. And we focused there and the idea was to find these areas where specialized care was, was needed, where outcomes actually measured. So, what I mean by outcomes would be, for example, if you have a chronic wound, it's going to be 12 or 15 visits until that wound is healed, or, more likely, if you don't get the proper attention you're going to end with an amputation. So, it's meaningful to see in between visits, how much of the wound is healed or, or wound velocity or healing velocity. Those kinds of areas are the ones that are ripest for big data and for artificial intelligence. And of course, we weren't doing that back then. We are today. Those are the areas we focused on. Watson: And to some degree, what you're also saying there is somewhat constrained, right? Like if I had those 12 visits, we know that I'm coming there to have the wound be addressed. And so therefore, we kind of know the limited scope of the data that we might be collecting. Versus if I have 12 general practitioner visits today, I have a cough tomorrow, I have a twisted ankle, the next time it's a receding hairline or whatever the thing may be. Colletti: Precisely. So, we're very intentional about finding these markets that were underserved and they were complex and through the enablement of technology could be improved. And so that was really our focus. So, a specialized approach towards the healthcare problem. Watson: And so the company is about 25 years old and you joined it back in your twenties. That's correct? Colletti: So the company, yea you could say it's 25 years old. I think we got serious right around, 9/11. So, you know, it's about 20 years old from what we would consider the turnaround. So those earliest days where everybody was laid off and there were just two of us, that was the week of September 11th, 2001. Watson: Wow. So, there's a lot there. And for someone my age, it's hard to necessarily have the visceral memories of everything that was going on. But if you know your business history, you know that the .com bubble, the .com bust, 9/11, there was a kind of very short window of time in which a lot of these things occurred. And so, can you maybe paint a little bit of a picture for where Net Health was at that point in time that led to you having to lay off a bunch of people and really, you know, re-ignite the company from the ground up. Colletti: Yeah, so in many ways it was a typical .com startup. So, three folks had an idea, a doctor, a lawyer, and a computer scientist, and they wanted to build a company. And so that's, that's the way a lot of these things got started. Investors came in, debts were created, and we were attempting to pick a direction. I came in a few years after, you know, that part, and with a small group of people tried to try to pick a lane, but as many people in startups know it's difficult, you know, sometimes you tick and you tack until you find a customer or a problem. And so, you know, this business, then known as Synaptic, it was no different. And so, after September 11th, I think a combination of a bunch of facts burning too much cash investors were nervous. People didn't want to put more cash into the business. We hadn't really hit a groove. I got a phone call from a fellow who was just appointed to be the chairman, and said, 'here's the deal. Everybody's laid off. We will give an opportunity to you and to Chris, who is today CTO, and we'll give you 90 days, we'll fund payroll for three months. And if you can figure out a path, get it to break even or flourishing within 90 days, you can go ahead and run it. And if not, we're going to close it down.' Watson: And so just to paint a lot more clarity there, the burn rate was high. And that's very common with startups, right? You take investment in saying we're not going to make money now, but we're building something that will spit off cash in the future. Was there any revenue coming in? Was it just kind of disjointed and going into many different directions? Like what was the state of the union? Colletti: Yeah, so there was a trickle of revenue, so that at the time, the company had a couple of product ideas but a very small trickle of revenue in the business. And obviously it was overwhelmed by the expenses. Watson: Gotcha. And so, what path specifically did you choose? And, and frankly, like what were those 90 days like? Because that's that's about as in the eye of the storm, as you can get. Colletti: Yeah. No doubt. Well, I relived them in the writing of the book Refounder. And so recently I've been thinking about them, but it was, it was a combination of, you know, horrific thinking about if this doesn't work I'm going to have to go look for a job. And I was young, I was 27 years old. I had just gotten married and I was not in the mood to go look for a job right after September 11th, 2001, which in many ways, looking back, felt a little bit like when COVID hit in March, you know, the world shut down, people reprioritized and reconsidered. And so, Chris and I took a hard look at what needed to be done. We literally did things like enter bills into QuickBooks because there were a hundred or more bills that hadn't been opened. And so we had to get to the bottom of what was the problem and how big was it? So we did some basic things like that. We also looked at who was interested in the products that we had, and we had three or four product ideas at that point. Where was the momentum. And we ultimately picked a lane in chronic wound care, but pivoted from a couple of the other product ideas and candidly said that the market, we thought the skilled nursing market was going to be the market. It turned out there was a very, very small, but growing business in outpatient wound clinics. There were about 300 of them at that time, difficult to find, today there's well over 2000 and we thought, you know, 'what if we've got some software that can track wounds? Let's go right to the place that deals with wound care, as opposed to places where wounds are one of 10 things that they deal with.' So we picked a lane and then the third thing we had to do was get serious with the debt and avoid bankruptcy. And so at that point we had 27 vendors that the company owed a half a million dollars to in total, and so any three of them could force us into bankruptcy. And so we had to be transparent and candid rapidly with them. And then we had to deal with the shareholders. Shareholders were skittish and concerned about the business, rightfully so. Didn't want to put more money in and didn't see a vision for the future necessarily. So we had to, we had to do those steps wise. Watson: And so one thing that you'll often hear with companies in these types of situations is talking about recapitalizing the company, which means if you are going to go and get some sort of outside funding in some way, shape or form, that means that equity shares change. That means that there's a lot of sales that have to happen. But frankly, just kind of like political management of all these different stakeholders with their different objectives, because this investment firm might have to, you know, show a return or liquidity in a short window of time. This other one might be, you know, a friend or a family that, you know, maybe back to you and had this kind of personal relationship and belief, like what was, what was that like? Colletti: The politics early on were very simple. The company was about to die. And so at that point it was can we, can we be a going concern? Can you make it two more months or three more months or four more months? And so at that point there wasn't a lot of jockeying for position or for more equity. It was, 'can you resuscitate this thing? Can you breathe new life into the business?' So I'd say for the first year or so there was none of that. It was just, 'can we survive?' Watson: Gotcha. And then did that change down the road? Colletti: All things change. You know, we've been through four sets of shareholders at this point over 20 years. So we've had lots of different investors and, you know, as any organization goes from small, you know, when we, when we took over, it was a, it was about a quarter million in revenue. And today it's obviously much, much larger than that. And so there are cycles with investors and there's a duty that management has to provide a great return for investors. And for their teammates. So all those things are really part of the equation. They all have different levels of drama and enthusiasm and highs and lows. And I think that's just all part of it. Watson: Of course. So, another thing that as I was kind of looking at the timeline and my understanding of some of the things that net Net Health has gone through, there was, you know, get back to break even, you know, address this wound care market. And then you benefit to some degree from just having that focus. And then the secular tailwind, I forget the original number, but the increase in general wound care facilities. If you're the preeminent provider there, that's a kind of a wind at your back, so to speak. And then as you start to see more money come into the bank account, see that growth happening potentially have a better case to solicit that future fundraising, you are on an acquisition spree. You acquired one, two, three, four, five companies over the last decade. Can you talk about the decisions, or basically more like the window when you realized, okay we're no longer in survival mode. We're no longer and just like, keep this thing running and now we're in strategic growth, pick a direction and go execute it. Colletti: Yeah there was a time, you know, when we crested three, four, five million dollars in recurring revenue that we felt off to the races and we had been growing 50% a year since, you know, essentially the turnaround, and we had grown with margin as well. So we weren't losing money. You know, we had kept a 20 or more percent margin from that point forward. So we were actually saving money and thinking about what we wanted to do with it. And that was part of it. You know, it gave us the ability to be more strategic, but job one really was to do the absolute best we can in this initial market where we've planted a flag, and let's actually make a difference in the lives of these patients who have chronic wounds. And part of it was the sobriety of seeing patients who have diabetes, 15% of them are going to get a lower extremity wound. And then about 15% of them are going to lose one of their legs. It was getting acquainted with those kinds of statistics and seeing a patient, meeting a patient and recognizing that we were creating patient engagement through the tools that we developed. And we were making the caregivers that treat them, we were making their lives a little bit better and easier to do their job. It was getting really focused and excited about the problem. It wasn't so much that we thought we had the killer product or the killer app. It was going a few layers deeper in the problem and actually becoming a part of the ecosystem. And so doctors and nurses and associations, they wanted to be associated with us because we were really solving a problem in the healthcare industry. So I think step one was really going there. Doing it well, not taking your eye off the ball too early, because you're focused on growing to a hundred million or 200 million in revenue. Watson: And it's so easy to do that, too. As soon as you get any sort of success like, 'Oh, and this and that and the other thing.' Colletti: Sadly, it's typical. And so a lot of companies are destroyed and value is destroyed in those early stages by anxious investors and sometimes anxious managers who say, 'okay, great, we're at two, three, four, five, $10 million in revenue. We've got to pick the next five things.' But I think we really, we went deep, and we got right recognized for that in that particular business. And then once we crested 10 million in recurring revenue, about 3 million in EBITDA, that's when we started working with private equity businesses and, you know, they have a particular thesis that's, you know, it's, it's clear. They'd like to double, triple, quadruple or more their money in five to seven years. That's pretty standard. But the benefit, first of all, as you get to work with some amazing people, you have access to capital, both equity capital that they can provide, and debt facilities. And so it's there that you become a platform. And the difference is a lot of companies have one product. And yes, you can argue that that's a company, but a company tends to have multiple services and multiple products. And so taking that leap from a very successful company, with one product, to a company, with multiple products that provides a diversity of things to a, to a constituency. That's the leap. And so getting involved with private equity, for us, really represented that, and working with my partner Anthony represented that. So, that was the difference between, you know, Turnaround status, worrying about dying, really going to flourishing in a particular industry, and then multiplying. Watson: And can you give us just a picture of, of timeline? So you said late 2001 was when the big layoff occurred and you had that 90 day window. And then how long from there until you started to in any way, shape or form engage private equity and start to go in this other direction? Colletti: Yeah, so it was a little more than a decade later, so 10 years, and had grown by 50% a year, every single year. So we're doubling every 15, 16 months, so it was as we crested 10 plus million in recurring revenue, about 3 million in EBITDA, is when we engage with private equity. Watson: And, and that's disciplined too. Like it's very easy, like we're approaching three years and I'm starting to get excited and bring my head up a little bit. And, but it's true that there's a lot of work yet to be done on the kind of core problem that you're addressing before you can start to go in this other way. Colletti: Yeah. And developing some, some roots, both in terms of a business, what kind of company do we want to have? You know, what do, what do we want it to mean? If you come and work here, how do we live in community with each other? Like getting those fundamentals right while growing rapidly, it's tough but it's worth it. Watson: And I would also imagine though, if you've had folks that maybe they weren't there from like the absolute first minute of that 10 year cycle, but the ones that came on in the second, the third, the fourth around 10 years, roughly, there's also a degree to which maybe the executive lineup for this company in particular is full or nearly full and there's rising stars or there's talent that you want to continue to provide an upward trajectory for otherwise they might leave. And in which case then diversifying into those different products helps you do that. Colletti: Absolutely, yeah, that growth while scary to start is just an opportunity for other great people that have come up. You know what, in the early days I would cringe when one of those, you know, up and comers, what I would call Net Health Next, would leave. And then after a little while I recognized that we gave them an opportunity. They had a platform to learn and grow and they're going to do something great. I mean, our responsibility ultimately is not to retain them, it's to grow them and help them flourish. And so if they do that at your organization, fantastic. And if they go somewhere else as well, it's part of their journey. So I think there's a scarcity and abundance mentality. You can have there and don't get me wrong. I mean, you need to retain employees. They have to want to be there, but in the bigger picture, there's something beautiful about knowing they learned some things at your organization and they went out and did them elsewhere. Watson: And if you have a kind of karmic point of view, there's also a degree to which if you did right by the people that worked with you and you maybe taught them a lot of skills, but also maybe like a specific industry, then they're probably gonna populate that same industry and other entities that can end up being business partners and customers and clients in the like. Colletti: Indeed. And I've seen it happen through just about a generation and a half now where some people who early on at Net Health have gone on to do some really amazing things. It's great. I mean, in a way it's kind of like the right of a grandparent, you know, to see people grow and flourish, come back and visit you. Enjoy those moments that you had together, particularly if you had a good culture and they want to remember those things. It's one of the joys, I think, of being in an organization. Watson: Now you've ended up in this interview and I've heard it in some of the other interviews that you've done, culture is a big deal, and that is part of the sustainability and the growth. And we've covered it so many, like, literally, maybe the number one thing we've heard from effective leaders on this show is that centricity on the culture that they build. And the culture, when you make these different acquisitions, Integris solutions, redox software, Optima healthcare, tissue, analytics that just occurred in may of last year, how do you manage that? Because you maybe, you have to set this standard and it's like, you know, it's like when someone comes and visits your family from out of town, it's like, we have a way that we like to move around this house. And then there's this other person, you know, banging around, making coffee at five in the morning or something. Colletti: Well, one of the decisions that helped us to take on private equity investors was we believe we had developed a culture that really was pretty special. And when we'd gotten some outside validation aside from just best places to work, we've got the outside validation. And so part of it was we'd like to double down and see, can you grow this to an organization of a thousand people or 10,000 people? Is that really possible? And so, as we acquired our first few businesses, we made lots of mistakes, just like everybody does, but we knew as we welcome new people to the enterprise, we actually had something beautiful to offer them. And the majority of people I know have worked in some pretty awful environments and they come beaten, battered, bruised from rough managers, bad cultures, toxic environments- the lot of it. And so I knew early on we had something special, so it was easy for me to greet them and smile and say, 'this is a good thing you're about to experience.' What's interesting is not everybody is open to accepting a gift. And sometimes even if you have something amazing to give someone, they don't want to receive it, or they've been too beaten up and battered to receive it that day. Now over time, they'll see, taste and enjoy and understand that there's something better there, but it takes time. So that's one reflection I have on, in terms of culture and acquisitions and the nature of imperialism, so to speak. Another one is that although we had, we thought killer programs, and people practices and things like connecting where we brought everybody together, and net talks, which is our version of Ted talks, you know, we had these things that we thought were beautiful and wonderful. They had expressions that were important to them as well. And so if you're not paying attention to the cultural expression of that organization and maybe one or two things they did really well that they want to keep doing, then you're full. And so you've got to pay enough attention to what they've done and what they do to recognize culture's big enough to absorb more things. And so you can bring those things in as well. So looking very carefully at some of the rituals and some of the things they did as an organization that are worthwhile and important to keep doing, embrace them as well, and bring them in. Watson: So, you referenced the pandemic. And I would say, I wouldn't say, most people would say that the 2008 financial crisis was another kind of macro economic hurdle to try to overcome while you're holding the reins of a business. So can you maybe paint some similarities and comparisons and differences to, you know, 2001, really being kind of like the eye of the storm or rebuilding, re foundering this thing from the ground up? And then these subsequent two were not necessarily that you were maybe able to predict them precisely, but having been through one storm, how did that steal you? Or how did that prepare you to deal with it a second and a third time? Colletti: [ Indeed. And I want to touch on something you just mentioned, which is every organization needs refounders. And many people don't recognize that they need it. But once people start to develop some success, it always happens. They get fat and happy. It's just a norm. People lose their level of competitiveness. They, as the revenues go up and the earnings get higher and you potentially put a flag in the ground and you're the leader. Entropy occurs and it seems like it's inevitable, and that's why every stage along the way, companies need refounders. And so whether that's your next gen, whether that's people that have been there quite a long time, they need these challengers to shake things up in the organization. So to answer your question, you know, early on, it was easy, it was change or die. And so the refounder moment was black and white. It was the debt is going to kill you, you got to pick a product, you gotta make it happen. And that was just survival mode. Around 2008, when the next financial crisis occurred, it was batten down the hatches, and aren't you glad you saved some pennies? Let's be really smart, that expense follows revenue. And that was a good lesson we learned early on. Which is, we're not going to live with a massive burn. We are going to go through this entire thing with some margin. And that's very unpopular. And there's times where it's important to not have margin, particularly when you take on a new market, you're growing quickly, you're getting market share. I get that, but for us it has been a discipline and helpful. And then in that next phase, it was how do you reinvent a business that has two, three, four, five product lines to have service bureaus and really be able to support multiple lines of business and get the leverage that you need out of it? Because you don't essentially just want to have five companies there. You know, you want to get the leverage in the balance and the flywheel effect from it. And so it was, you needed refounders who had essentially been there and done that, or were willing to seek that new ground and take it. Watson: So in 2017, the company was acquired by some really substantial private equity partners. The Carlisle group for the folks that don't know is one of the biggest in the whole game. And I would imagine that they, you know, to some degree, it's very hard to maybe wrap your head around this, but money is fungible, right? Like when you were big enough, when you are successful enough, there are multiple entities where you can potentially get capital from. And one of the, I would imagine, sales pitches from a group like that is that there is that we've been there, we've seen it, we've done it before. And this may be your time, Patrick's first time creating that flywheel, integrating these different business units, but we've helped umpteen dozen companies do the same. So is that part of the equation or where did you go to find the expertise in those rebounders that you needed for that period of time? Colletti: Yeah. Yep. And prior to the Carlisle group and, and also in this round, we've got level equity and silver Smith as well, so just great, great partners. Prior to them, we had Spectrum. So we went through an entire six year phase with just a terrific group of people at Spectrum with great resources, brilliant people, and a lot of the lessons that you learn along the way. So to answer your question though, how do we find those refounders, it's really two or three areas. So the first one is outside expertise. I'm a big fan of mentoring and being mentored. And, you know, you should have a personal board of directors. It's very uncomfortable for some people. And, you know, I just saw Simon Sinek posted about this the other day, saying that when you seek a mentor, you don't just walk up to some random person on the street. You have to have a relationship. And so it really does start from a relationship and it's a two-way street. And so, you know, the first part of the answer is you find refounders from people who have outside experience that can apply an analog to what you're doing and can teach you. And so that's, that's the first one. And that comes in the form of independent board directors, comes in the form of advisors, investors, you seeking externally other people who have ideas and can apply those ideas to your business. But that takes humility. And so where I can point out how you find founders at each step, along the way, it's going to require some humility. So that's one way. Another is that it's right underneath your nose. And there are what we would call Net Health Next. There is a next level group of people. It doesn't imply that they're young, either that have experience and have ideas. And in many cases already know how to solve the problems. One of the examples I tell in the book is, you know, a young post intern employee challenged a group of us to read a book, and we had this late night email and I'm thinking, ah, what. What's wrong? This isn't good. You know, a 2:00 AM email isn't a good thing. And he challenged the executive leadership team to read a book, and it turned out he was right. We needed a gut check on a few areas. And we did. And so sometimes those refunders are, are right there in your midst. And you just need to really be able to listen to them. Watson: What was the book? Colletti: It was The Four Disciplines of Execution for DX. And really the main teaching of the book is the difference between lead and lag measures. And most businesses say they follow lead indicators, but they really just track lag indicators. And so most strategic plans have a lot of lag indicators, not lead indicators. And so for us, it was a good reminder. And in some ways, a wake up call that you gotta be tracking the right thing. Watson: Amen to that. Well, one of the characters in the book I believe is Dr. Chris Howard from RMU. Colletti: Indeed. Yep. Dr. Howard comes towards the end of the book and he talks a lot about his VU car, world ideas. Watson: So he is one of the most popular episodes that we've ever done of this show. He like, you know, people would talk about listening to the conversation that we had with him multiple times, because of just maybe just the bare tone of his voice, but also the deep wisdom that he has. Colletti: So you're laying down the gauntlet right now. Watson: Well, I'm just curious, like, you know, I'm sure that you spent much time outside of just, what was, you know, captured in the book that people will eventually read and hear. But like, what's your favorite Dr. Chris Howard experience or conversation or takeaway? Colletti: Well, not as it relates to the book, but I'll tell you one of my favorite experiences with him. Maybe two years ago, my oldest son launched something called Free the Music PGH, and the idea was born out of seeing a publicly played piano. And he said, 'Hey, Hey dad, why don't we bring that to Pittsburgh? Like, why isn't that a thing?' And so we, we developed this plan. We got lots of people to donate pianos. We found lots of local artists, they painted the pianos. And I mentioned this to Chris early on, and wouldn't, you know it, at the launch party he was front and center with his wife and children, you know, showed up early, kind of stayed late and was part of this thing that was really my son's event. And at that point I had only known him maybe six or 12 months. So that's a story you won't hear from anybody besides me, but it talks about the character of this guy, Dr. Howard Watson:And It tells you a lot about what is resonant to people, which is showing up not necessarily when you're called explicitly. Like that's, that's what creates memories for people. Colletti: Absolutely. Watson: Amen. Well, Patrick, I want people to make sure that they both check out the book, check out Net Health, check out the stuff that you're up to. Before we give people the digital coordinates that they can go to, to follow that stuff, anything else you were hoping to share today that I just didn't give you the chance to? Colletti: Yeah. So the book is really an encouragement for people to rethink the places that they live, work and play. So yes, absolutely, it's a business book and many of the stories we tell are business books as well, but it's broader than that. And so there are people that need help in their relationships, and there are people who want to revive their neighborhood. We have stories in the book as well about that. Watson: And often I would imagine if there's good bones in place or any sort of bones in place, you're actually at a head start relative to starting from a dead stop. Colletti: Absolutely. Watson: Right on. So for people that wanna check it out, they want to learn more about all the stuff that you're working on, what digital coordinates can we provide people? Colletti: So for more information about the book Refounder, you can find it at www.Refounder.com. You're welcome to connect with me or follow me on LinkedIn, Patrick Coletti. And I think that's it. Watson: Beautiful. We're going to link that all in the show notes, GoingDeepwithAaron.com/podcast or in the app where you're probably listening to this right now. Is 'refounder,' was that a word that you had already seen out there or is that like an original you've got like the rights to the term refounder? Colletti: Yeah. So I've used that word off and on for about 10 years and it was crystallized for me, right around 2017, when I was meeting with one of our current board directors, Donna Maria. And she would always introduce me as the founder of Net Health, and I would say, well, I'm actually not the founder of Net Health, I'm really a refounder and it would give me the opportunity to share that. So I've used it in common conversation since around 2016. It's, you know, if you Google it, you'll find a couple of other people out there. I quoted one person in the book who wrote an article in 2017 but I think it's more common than people may think. Watson: Gotcha. Well, it's a good corner to plant your flag on. Colletti: Yeah. Watson: Like I said, we'll link that to everyone and they'll be able to check it out, but before we let you go, Patrick, I want to give you the mic one final time to issue an actionable personal challenge to the audience. Colletti: So if you're in college, I want to give you an encouragement that there are amazing organizations out there that are trying to create a better future. If you're a young professional and you're getting cynical because of the organization you work in, part of the challenge is that you are the change and there's a way to do that. And there's a stepwise process, there's an assessment profile that you may fit into, but it is doable. And so for those of you who are middle managers, or culture gurus in an organization, you feel like nobody's listening, or for CEO's who know something needs to change, there's absolutely a way you need refounders in your organization. Watson: So it sounds like, you know, the important part is after just even recognizing that there might be something wrong is the belief that it is even possible, like understate, like believing that that change can occur. Colletti: Yeah. So there's these four areas we think about in the book. And the first one is that you have to take a sober look at hard realities. And that's hard because a lot of people don't like to take sober looks and a lot of people don't like to look at hard things. And so combining those two things together as a big deal. Next is, to borrow a phrase, you've got to kill your darlings. And so this is a fancy way of saying selectively focus. We all have lots of opportunities and lots of things we could do, but there's really one or two things we need to do. And then the third is you have to imagine new possibilities just because you've taken a sober look at hard realities, and you've been able to focus, now you actually need to imagine how it could be much better and that creativity is key. And if you don't have it, it's your, the refounding that you're working on, won't ultimately survive. But the last and possibly the most important is execution. But, execution is an overused phrase, executing on the notion that you're creating better realities for people is the reason why there always has to be a just cause and a bigger purpose. And so just executing for executing sake will eventually fall flat. You got to do it for a bigger purpose. Watson: Beautiful. What a powerful note to wrap up on. Colletti: Thank you. Watson: Patrick, thanks so much for coming on the podcast. Colletti: Thanks.
Alex Berman is an actual serial entrepreneur. Before the age of 30, he has built a 7-figure agency, completed multiple movie projects, and built a 50,000 subscriber YouTube channel.
Most folks feel content to throw that title in their bio as a way to summarize some half-finished projects. Alex, on the other hand, builds systems in a focused and brutally efficient way. He has delegated leadership of his agency, Experiment 27, to someone else and has now set about acquiring more companies for his growing empire. Further, he has generated millions of dollars of B2B services revenue with his cold emailing skill. In this conversation, Alex and Aaron jump around discussing how Alex got his start, what makes a good cold email, and lay out the interrelated conglomerate Alex is building. Sign up for a Weekly Email that will Expand Your Mind. Alex Berman’s Challenge; Find someone that you look up to and reach out with a cold email. Connect with Alex Berman
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AlexBerman.com Email10k Website If you liked this interview, check out episode 394 with Ryan Kulp where we discuss avoiding competition, thinking creatively, and how he’s built a business empire through acquisitions. Also, Noah Kagan. 458 $100 Million Turnaround in the Oil and Gas Industry w/ Mark Marmo of Deep Well Services12/28/2020
When Mark Marmo took over as the CEO of Deep Well Services, the company was losing $2 million per year on $9 million in revenue. Six years later, Deep Well Services was making $30 million in net income on $110 million in revenue.
Mark accomplished this by focusing on bringing an innovative & efficient service to the market, building a healthy company culture, and trusting his data analysts to make good decisions. In this conversation, Aaron and Mark discuss the standard he has implemented, the challenges of 2020, and the plans Mark is making for the future. Deep Well Services’ mission is to help make North America energy independent and his team is proud to be working toward that end. Their clients include Ascent Resources, CNX, Chevron, Shell, XTO Energy, Hess Oil, Eclipse Resources, Range Resources, Gastar, Arsenal, HG Energy, Gulfport, Rice Energy, and Southwestern Energy. Sign up for a Weekly Email that will Expand Your Mind. Mark Marmo’s Challenge; Find a mentor. Build your network. Get into a firm with a great culture. Connect with Mark Marmo
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Deep Well Services Website mmarmo@deepwellservices.com. If you liked this interview, check out episode 425 with Matt Wieszczyk where we discuss land rights, gas prices, and the Marcellus Shale formation.
Frank Augustine is the founder of ILLEGAL apparel.
Frank and his brother created the brand, and associated company, in their parent's basement back in 2013. He has spent the last 7 years scaling production, opening a store on the South Side of Pittsburgh, and learning many lessons about entrepreneurship. He’s gotten the business off the ground via a relentless commitment to sales and a willingness to experiment with designs. Not bad for someone still in his early 20s. In this episode, Aaron and Frank discuss the way he has positioned the brand, how Frank sold shirts in the early days, and the hard lessons he’s had to learn along the way. Sign up for a Weekly Email that will Expand Your Mind. Frank Augustine’s Challenge; Be grateful and be positive. Check out Earl Nightingale and Positive Mental Attitude. Connect with Frank Augustine
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Website If you liked this interview, check out episode 451 with Will Dzombak where we discuss managing Wiz, marketing in Hip Hop, and launching a cloud kitchens restaurant.
Pete DeComo is the chairman and CEO of ALung Technologies. ALung is developing an artificial lung for patients suffering from Acute Respiratory Failure and has raised over $100 million to bring their product to market.
ALung’s Hemolung Respiratory Assist System is a dialysis-like alternative or supplement to mechanical ventilation that works by removing carbon dioxide directly from the blood. The medical device, which has been approved for use in 35 countries outside the U.S., has proven relevant during the 2020 Pandemic. Prior to running ALung, Pete was the founder and CEO of Renal Solutions. Renal Solutions developed of similar product focused on kidney dialysis and was sold to Fresenius in 2007 for $200 million. In this conversation, Pete discusses the arduous process of getting a medical device approved by regulators, how he has raised over $140 million for his companies, and his advice for all entrepreneurs. Sign up for a Weekly Email that will Expand Your Mind. Peter DeComo’s Challenge; Don't be afraid to take some risk. Connect with Peter DeComo
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ALung Website pdecomo@alung.com If you liked this interview, check out episode 405 with Matt Kesinger where we discuss the development of his life saving medical device and episode 413 with Dr. Gordon Vanscoy where we discuss his startup which serves as a pharmacy for treating rare diseases.
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify Watson: Well, Pete, thanks for coming on the podcast. I'm really excited to be talking with you. DeComo: Exciting to be here as well. Aaron, thanks for the invitation before to the discussion. Watson: So I am, self-admittedly not a biotech expert, a healthcare minded character. It is something where it seems like, you know, the whole world is half, has had to become familiar with, you know, phase one phase, two phase three trials and FDA approvals and all this other stuff because of 2020. But to start things off, maybe we can build up from a relatively complex, but hopefully simple explanation. Your company, ALung, it says it focuses on respiratory dialysis through extra corporeal, low flow, CO2 removal. What the heck does that mean? DeComo: Yeah, that's, that's pretty good for not knowing the vocabulary. You did well. Extra corporeal means we take blood out of the body and we treat it in some manner and we put it back in a, of course, respiratory failure means that an individual, in our case, a patient, has something afflicting their lungs and it can be a chronic disease like emphysema, chronic bronchitis, which progressively gets worse as time goes on for that particular patient. And that can lead to what's referred to as chronic respiratory failure. And then there's acute respiratory failure as well, basically meaning that an individual suffer some trauma to the lungs, and prior to that trauma had really nothing wrong with their lungs or a very little long wrong with their lungs. And so that trauma, for example, could come from, injuries due to smoke inhalation, aspiration of gastric contents, you know, patients that frankly overdose and then get sick and then vomit, and then inhale that vomitus into their lungs. It's acidic, as you might imagine, coming from the stomach and that burns the lungs. It could be blunt force trauma to the chest. For example, in a car accident, when the steering wheel hits the chest, it could be due to a war injury or something like that, where you have what's called an acute injury to the lungs and that's called acute respiratory failure. Of course, what we've created at a long is a technology, which is an artificial lung. Actually the name ALung stands for artificial lung and we have this artificial lung that sits outside the body. It's was conceived at the McGowan Institute for regenerative medicine at the University of Pittsburgh. ALung spun out of the university back in 1998 and we created this technology, from that original conception. And, it's now treating patients all over the world. It is the only device that's been conceived, developed, manufactured from the ground up to this particular therapy. It's meant to be minimally invasive, very safe, and very effective in terms of, sort of supplementing the native lung by sitting outside of the native lung, at the bedside, if you will, and doing up to 50% of the work of the native lung to remove carbon dioxide and to provide a little bit of oxygenation. So that's what extra corporeal means. And that's what we do at ALung. Watson: And so I think that people can make a pretty easy jump to the relevance for, you know, some of the symptoms that people have heard about associated with COVID-19 in the present, but you've been at this for 11 years and I'd hate to ever call something like a pandemic, an opportunity. But there is a degree to which what seems like, you know, someone kind of seizing a moment. Is often years in the making. So, specifically within the context of ALung, can you talk about the state where it was back in 2009 when you joined and what the last decade or so has looked like in terms of the different approvals and research and development that's gone into it. DeComo: Yeah, that's a good question. We often joke at ALung that we're the oldest startup in the region being 22 years old now and spinning out of the University of Pittsburgh. You know, I've been an entrepreneur for a while and my prior company was also in the extra corporeal space, but it was in the kidney dialysis space. And we can come back to that later, but that resulted in a successful exit. And, and then I got recruited to come over to ALung by some of my previous investors, because of my extra corporeal experience. And in addition to that, it's just coincidental, I started my early, early career as a young respiratory therapist at the University of Pittsburgh medical center at Presbyterian university hospital, where I worked in critical care medicine. And I was on the school of medicine faculty in critical care, teaching respiratory therapists, nurses, and physicians, how to use respiratory devices to treat respiratory failure. I certainly left that field for most of my career and then circled back to ALung and had to sort of dust off all the cobwebs of my old textbook and revitalize the brain in terms of my respiratory knowledge. But, I love the field it's done well for me. And it's brought me back to ALung, but, it's long history, has been a challenging one. It's been a difficult one and, You know, the story will not sound strange to many entrepreneurs who have gone through the same thing. Medical device is not a popular area for investors to invest in, especially what we call institutional investors like venture capital firms. They've moved so much later stage that they want you to be FDA approved. They want you to be in the market. They want you to demonstrate some recurring growth and an attraction in terms of selling your device. Well, ALung, because we touch blood and because we're the first of our kind, the FDA classifies us as a class three device. What that really means is in the eyes of the FDA it's the most high risk category you can be in for a respiratory or for a medical device. And that throws you into having to do what's referred to as a PMA trial, a pre-market approval trial, which is typically a very large trial. So pre COVID we were involved in this PMA trial, very large trial here in the United States. We had 40 clinical trial sites all over the country, attempting to enroll patients for us into this trial. And, we were doing quite well. And then COVID came along and this was back in the February, March, April timeframe of 2020. And basically hospitals were flooded with COVID 19 patients. And as you know, From the news, these patients were admitted to intensive care units. They were critically ill. They were put on ventilators and their mortality rate was as high as 80, 90% at the beginning of this pandemic. And the ventilator was causing a lot of harm to the lungs of these patients, as you, as you heard in the news as well. Well, two things happened first of all, our clinical trial came to a screeching halt. Because clinical research was deemed non-essential in these hospitals, clinical trial personnel were sent home and we were stuck in the water. We were basically treading water. We couldn't go forward. And that stalled our efforts with the FDA to become FDA approved in the United States and be able to bring our technology to market and actually sell it. It could have been the demise of the company to be very honest. But as you pointed out, sometimes these problems create opportunities, and I've been using a quote most recently as a result of my discussion around this topic. And that's a quote by Alexander Graham bell, who said that, you know, when one door closes, another door opens, but oftentimes we spend so much time focused on the door that's closed and we miss the opportunity by the door that was opened. And so COVID 19 actually opened a couple of doors for us. First of all, I went back to the FDA and said look, our trial is dead in the water, but we can help with COVID-19. Because we had just concluded a trial in the United Kingdom, on a respiratory failure for work refer, what is referred to is acute respiratory distress syndrome. ARDSM as it's called. And COVID-19 manifests itself in ARDS or acute respiratory distress syndrome. That trial was 412 patients and 204 of those patients were enrolled in our technology. So the FDA said, well, why don't you submit an application for emergency use authorization for COVID-19 the same that the vaccines are going through right now. And three weeks later, the FDA had approved, approved us for emergency use authorization in COVID 19. Since that time now keeping in mind, we're a small company and we're only producing enough product to, you know, utilize in our clinical trials. We're not a large organization that can produce thousands of these machines and thousands of the artificial lungs that go on these machines. But we had 40 clinical trial sites that were already rubbed up and running. They knew our technology, they were treating COVID 19 patients. So they were our first priority. And many of those clinical trial sites who had put the clinical trial aside, were now treating COVID 19 patients. In addition to that, we've brought on board about 10 new hospitals that were not our clinical trial side hospitals and were treating patients with COVID-19 in those hospitals, as well. As I said, we're small, but we've treated at now at this point 58, COVID 19 patients worldwide. We've also treated nine in the United Kingdom and in Ireland because we had a clinical trial going there and some of the hospitals there wanted to treat COVID 19 patients. So the door that closed was our clinical trial door. The door that opened was the ability to treat COVID 19. That's brought us a lot of notoriety and visibility in our space, to be honest about it. I also went back to the FDA and said, look, we can't complete our trial. It's impossible under these circumstances, no clinical trial has been completed at this point in time. We needed an alternative pathway to FDA approval and the FDA consented to an accelerated pathway for our device called a Denovo 5 10 K, basically, meaning Denovo, meaning a new device with no predicate device to claim substantial equivalency to a Denovo 5 10 K does not require a clinical trial. And we're in the process of that application right now. And in fact, we could be approved in the United States for commercial sale in mid 2021 if all continues to go well with the FDA and their review of our application. That cut about two years of clinical trial work off of our timeline because having to complete that clinical trial would've meant we wouldn't be in the marketplace until mid 2023. We will continue that trial when the pandemic slows down a bit and our clinical trial sites can continue to screen and enroll patients, but for now we're pursuing the Denovo 5 10 K. And frankly, that is really a huge door that's opened for us relative to getting to market sooner rather than later. Watson: So part of the story that you've just illustrated there is, and you almost said it like the way you would knock on your neighbor's door for like a cup of milk or something, but you're talking about going to one of the largest government agencies, right? That has at least to the outsider's perspective or just in general, regulatory bodies have this reputation for being bureaucratic for being a Byzantine, for being difficult to understand. And even some of the nomenclature that you use there. But it wasn't the tonality in the way that you said it you've made it seem like passe, like it was something that was highly attainable. So can you maybe piece that apart from you a little bit more? I'm sure that to some degree, it's you having been through the ringer before with other products to kind of know the lay of the land, but maybe there's relationships, maybe it's the extenuating circumstances of 2020. Help me make sense of that. DeComo: Yeah well, that's a good question, Aaron, and you're very astute in pointing out some of the things that lead to success with the FDA. In my prior company, I was involved with the FDA, clearly a different team, and then prior to that, I was also involved with the FDA because I was in the pharmaceutical drug distribution business, and that required interaction with the FDA as well. And you can tell by looking at me, I'm not a young man any longer out, although I joke around a bit about, this is what entrepreneurship does to you at the age of 30, you start to look like this, but, the reality of the situation is that, you know, it's like any other relationship, whether you're calling on a customer when you're, whether you're dealing with a another company and you're trying to do a business venture together, it's all about establishing trust and credibility and establishing a relationship that allows you to have open Frank diplomatic dialogue about the issues in front of you. And what I've learned in that process is that you've got to make it a win-win for whatever individual you're talking to or whatever organization you're talking to. The win-win in this particular situation is we have been involved with this FDA review chain for over 10 years now, it's been a very stable team at the FDA. And while they are very bureaucratic, our device is known as, or has been designated as a breakthrough device by the FDA, meaning it's novel in terms of what it does. And there are no alternatives to what it does in the marketplace. And then you get this novel breakthrough nomenclature attached to you, and long with that comes a team from the FDA who gets assigned to you because they want to get this novel technology to market as soon as possible. Now, as soon as possible, in the eyes of the FDA is not a nomenclature in my language. It's not equivalent to getting it to market as soon as possible my eyes, but for the FDA, they've been very collaborative, very compromising, in terms of working with us on getting this technology to market. And the win win is we get the technology to the market sooner. And the win for them is they've recognized a novel technology that can be beneficial to patients when there's nothing else out there that can be, and they want it to get to market as quickly as possible. And in the case of COVID-19, they want anything out there in the market that can have the potential of being beneficial. To these patients. And certainly having worked with the FDA on this particular project for the last 10 years, they recognize the potential benefit of our device in treating not only COVID-19, but any patient with respiratory failure where you've gotta be able to bypass the lungs if you will, that are malfunctioning and have gas exchange take place in the blood vessel itself, versus having to go through the lungs to get to the blood vessel. And so that was a win-win, but yes, to your point, you become comfortable having these discussions with organizations like the FDA, when you go through it over numerous years, number one, and number two, when you really get down to the heart of the matter. It's really my team sitting across the table with the FDA team and we're all human beings and the common good is trying to develop and get technologies to market that can be beneficial to patients. And certainly you've got to demonstrate safety and you've got to demonstrate efficacy to the FDA, but along that pathway of doing that and doing it right, you gain credibility with the FDA. And even though you've got to cross the T's and dot the I's, when you do it in a manner that the FDA understands that you're trying to do it and do it right, you gain credibility with them and you establish a little bit of trust, and you can move this process through the FDA a little faster than you normally would. Watson: So at a, I guess this is a question you can answer on two different levels at the. Pete Tacoma level. And at the ALung level, which is sustaining, you talked about it as being 22 years in the making the technology, but even the 11 years, since you started informed by your past experiences, bringing medical devices to market, how do you manage that process over such a time horizon? What I mean by that is, in terms of your own patients, because at some point, you know, when they were these investors that brought you in were pitching you on the idea, like you did your own snooping around, like, is this legit or is this baloney? And so you've reached the light bulb of like, this thing is real versus I need all these other people to realize that, and then simultaneously, and you can correct me if these numbers are wrong, you raised about $80 million in capital for this entity has, has, has been brought in and, you know, with big investors. And they also have their like, itchiness to get a return because that's the venture capital mindset. Like how do you, you know, satiate them and stay, you know, relatively like low expense as you're proceeding? Just take me through the strategy of that, because that's not a position, many people get to be in. DeComo: Yeah. Well, I'm not sure, you know, certainly there's strategy behind it all. There's strategy related to everything we do. And then we strategize as a team at ALung every day and every week. And you know, one of the unique characteristics of startups, especially life sciences startups, is that when you're in the business of innovation, you don't know what you don't know. And a wise old man told me one time, you know, if you don't know what you don't know, but you don't know that you're in real trouble. And in the process of innovation, we oftentimes don't know what we don't know. You know, it's a process of creativity, and trial and error. And sometimes you're going down a path and you hit a roadblock and you've got to make a determination of that. Make a left, make a right or turn around and go back or whatever the case may be. And one of the things I've learned about entrepreneurship as sometimes a decision is better than no decision. Even if you don't know if that decision is right or not. So quit procrastinating, make a decision, even if it's the wrong decision, at least you've learned something from that and you can move forward and ultimately get to the right decision. The other thing I tell young entrepreneurs when I lecture at, at Pitt or CMU, is that to me, the one trait that is most important for entrepreneurs in order to lead to success is perseverance. And perseverance means that, in my mind, that you never know you give up, you keep trying, but the, the ultimate goal, can't be futile. In other words, you've got to have clear sight to success, and have a recognition that your device, your technology, whatever you're creating, has a place in the world and can do something. You know, people oftentimes use a perseverance and persistence interchangably. And to me there's a clear difference between perseverance and persistence. Persistence sometimes sort of indicates stubbornness when it's futile. In other words, you don't have a clear vision of where your technology fits in the world. You don't know whether it works or can work. You don't know whether there's a market for it, et cetera, et cetera, but you continue to persist when the ultimate goal is oftentimes futile. And entrepreneurs need to recognize, when an endeavor is gonna end in futility. Clearly, ALung is not a futile effort, in terms of the technology and the place it has in treating respiratory failure. It could lead to futility if you can't continue to raise money. You brought up 80 million. It's actually, since I've been with the company, we brought in North of 100 million dollars in this company. And thank God our investors in the region are supportive because they also understand the value of this technology in terms of the treatment of respiratory failure, including COVID 19. And by the way, COVID 19 will not be the last respiratory virus we ever deal with. And I've been telling that story for 10 years as well. And not until COVID 19 comes along, do people realize, Oh my God, Pete knew what the hell he was talking about from the beginning. And so, you know, it stimulated interest in the company, but you've got to persevere. You can never, ever, you know, let the rejection that you receive as an entrepreneur deter you from the mission that you have in front of you. And that's completing whatever the project is you happen to be working on. The other thing is, and it didn't come easily to me and I'm sure it doesn't come easy to most entrepreneurs, but you have to be open and Frank and conversive with your board of directors, your shareholders, those individuals that are taking money out of their pocket to fund you. And you have to have credibility with those investors. So I've sort of practiced being an open book in my 30 year career as an entrepreneur, if you have a question as a shareholder or you have a question and as a potential shareholder, Do not hesitate to call me, do not hesitate to email me. I am always available to you. And there's no dumb question. And look, it's frustrating for an investor, especially our early investors that have been in this company, writing checks for 22 years, to not have an exit at this point in time. And oftentimes certain investors will look at that experience of taking longer and costing more and attribute blame to the management team. And my comeback to all of that, and my sort of response to that is that what you really need to look at in your management team and your CEO who who's formed that management team is what challenges have they been presented with? And have they mitigated risk worked or problem solved and worked around those challenges? Because it will always cost more and take longer than what you originally believe it will be. And if I'm not mitigating risk, and if I'm not problem solving and getting around those challenges with my team, then you have something to pick on. Then you have something to criticize. Then you may need to consider getting rid of your CEO and some of your management team, butALung is a company that historically has been presented with so many regulatory challenges, so many funding challenges, so many technology challenges that if you're not a person who can persevere and work around those things, you'll have a hard time being successful as an entrepreneur. Watson: And I would also imagine, you know, the $100 million raised for this, and the fact that you were recruited to join this company that was already in existence, and these investors knew that, or had the belief that you were someone who could execute speaks to the fact that some people were listening to you when you were talking 10 years ago, but also the track record that you had already built led to this opportunity. So preceeding ALung, you'd helped build renal solutions for eight years, you raised $40 million there, a $200 million exit. So can you talk a little bit about what has been similar versus what's been different between those two experiences and how that kind of laid the groundwork for the position that you're now in? DeComo: Sure. You know, when I started renal solutions, it was year 2000. And then you're probably too young to remember this, but some of your listeners may, but we were just coming out of the tech bubble burst thing at that point in time. And it caused a significant shift in how venture capital looked at investments, investments in technology, be it information technology or medical technology. Very, very difficult time to raise money. There was a great contraction by venture capital in terms of raising money. And so I had to raise angel money at that point in time as well, but much less angel money that I've had the raise at ALung, and venture capital was quite different back in the early 2000s than it is now. Venture capital to me means, it's a firm, an institution that's willing to take risk and invest early venture capital really doesn't mean that any longer. So to give you an example, my series, a round of investing that renal solutions was a syndicate of eight venture capital firms at $21 million in the company in a round based on a business plan without even a prototype of the technology at that point in time. You contrast that with ALung today, you can't raise venture capital money in an A round a B round or a C round. To be Frank about it, venture capital has become more growth, equity investment. In other words, they want to invest in you when your technology is far beyond proof of concept that you have FDA approval and you may have even have a revenue stream at that point in time. And so life has changed when I joined ALung in 2009. You couldn't raise venture capital. Our entire A round was angel investors, high net worth individuals in the Pittsburgh region. And of the $100 million plus that I've helped to raise over the last 10 years, probably 65 to 70% of that is angel money, high net worth individuals, not venture capital. Although we've had some smaller regional venture capital firms from the Western Pennsylvania area, Eastern Ohio area that have invested in us, but for the most part, it's been angel money. And, you know, most recently we've gotten some intention from strategic investors as well. So, you know, technologically, I would tell you both being extra corporeal devices. The renal solutions device was much more complicated than the ALung device. And we got both CE Mark approval in Europe, and we also got FDA approval in the United States. And we were pre-revenue when a large strategic came in and bought us for $200 million. And, that will never happen today. We're much further along in terms of human use and validating safety and efficacy with the ALung device than we were with the renal solutions device, and yet we cannot attract strategic buyers primarily because we're not FDA approved yet, and we're not in the market yet. We'll gain a lot more interest once we are FDA approved and in the market. And that's why we struggle so hard to get there. But, you know, back in the renal solutions days, You could find a strategic buyer on a pre-revenue basis on a, on a pre FDA basis, and in today's world, that's highly unlikely for that to happen. And things happen much quicker in the renal solutions days. From the time I raised my A round, which I'll never forget, entrepreneurs don't forget these things, I raised my round and we closed on November 27th , 2002 and the company was sold and the deal was closed on November 27th, 2007, five years to the day after we raised. And here at ALung we're 22 years old, and we still have not been acquired. And we have a much larger market, a much more developed technology than we did in those days, but it's the way the world works. And we've got to deal with it. And that's again, why perseverance is so important as an entrepreneur, because who would have thought 22 years later, a valuable technology like this would still be struggling to get FDA approval and be acquired by a larger strategic. Watson: That's wild, and it really says a lot about you and your entire team's composition to be able to continue to persevere through all that. You've been so generous with your time. I want to get to our last couple of questions, but before we do that, you seem perfectly positioned to maybe create some more clarity around the larger, I don't know if we want to call it healthcare or biotech startup space, generally, not just because of the past companies that you've helped build and run and sell, but also your role with Pittsburgh life sciences greenhouse, which incubates other similar types of startups. And I'm going to basically pause it. My hypothesis or my understanding from my vantage point. And then you can poke holes in it or tell me where I'm misaligned, but there's a lot of experimentation kind of in small labs or like universities where this stuff gets maybe funded, or kind of first developed in like an academic setting, it gets spun out, and you know, whether this is through university technology transfer or these other startups, or the professor that found it deciding, Hey, I want to try to commercialize this thing myself. But very, very few get through the FDA process and very few get the funding that they need to even see it through that entire arc. But once they go to market, it is very likely that the end result will be something more like an acquisition by one of the large players in the space, perhaps as opposed to an IPO, because there's this real gap between like what even a relatively well capitalized startup can do from actual production distribution relationships, with all the different insurers and every nuance and nook and cranny of all these different markets, but simultaneously those large strategics. Those large kind of players in this space, they can't necessarily take on the risk of trying to start something from its infancy through that process. So they leave those startups to kind of be the, the wild West, the Darwinistic evolution, like whatever comes up from the primordial ooze. And then, you know, they compete with one another to pick off the most promising startups once they've made it through that kind of survival alley, so to speak. DeComo: Yeah, yeah. Again, a very astute observation, Aaron. That gap that you talk about, we call the Valley of death and you know, that Valley of death can be just that for so many startups that, you know, spin out from the bench, whether it be a university or an R and D house somewhere. You know, one of the issues that we deal with here in the Pittsburgh region that has been present for decades, going all the way back to the late nineties and early two thousands is the lack of capital. And that creates that Valley of death. We don't have a strong venture capital community here in the Pittsburgh area. The support infrastructure is extremely positive. I mean, you've got the University of Pittsburgh, Carnegie Mellon, Duquesne, these organizations, are in the creative process, in the innovation process. And they want to get these technologies patented, licensed, and spawn out, they've got executives and residents that support young entrepreneurs. Many of these executives and residents become entrepreneurs, spin these companies out and they take them out. Yeah, the one of the other strong attributes of the Pittsburgh region is there's early stage money. You can find grant money from the state. You can find early investment from organizations like Pittsburgh life sciences greenhouse innovations works and others, but it's beyond that where the Valley of death comes in because you can find this early stage money, but oftentimes that early stage money isn't enough to get you through the evolutionary process, and to a point where that strategic is interested in investing in you or that venture capital firm is interested in investing in you. And that's where a stronger base of venture capital in the region would be helpful, and there are some new venture capital firms that have been formed. They're smaller in nature, but they're there. The Pittsburgh life sciences greenhouse has a venture fund. Innovation works as a venture fund. Blue tree angels has a venture fund, but we need more and we need larger venture firms. Without them what we're reliant on in Pittsburgh is having to attract money from the East coast or the West coast. And that's very challenging to do. Some do it, but most don't. And, you know, venture capital firms like to be close to home, they like to be close to the companies they're involved with. It takes a very differentiated technology with a very large market to attract big venture capital into Pittsburgh and other metropolitan areas. And that's where the Valley of death comes in. So there, there are good technologies to great technologies that are dying on the vine. Because they're stuck in this Valley of death and they can't raise more money. And then the other problem, Aaron, is that because strategics have moved so far later stage in acquiring a company, they may invest sooner, but they've moved so far later stage in a corner or your company. They don't want to take on the burn, the cash burn that the company has, especially if they're involved in large clinical trials. And if they're a publicly traded strategic, they don't want that to affect their earnings per share. So they would rather invest in you, help you develop the technology, build the infrastructure, get you to market, and then acquire you later on when you're revenue producing. And again, that sort of contributes to the Valley of death because you gotta be able to get to the point where that strategic has some interest in you and is willing to invest in you. To bring that product into their portfolio of products, which could be beneficial to them in terms of enhancing their revenue in future years. And you've got to find the right company as well. You've got to find a company where your product is synergistic to the product portfolio that they already have. And that's sometimes not easy to do. The good thing for us, as life sciences companies and medical device companies in general. Is that a lot of these strategics do not have strong R and D pipelines. So they're relying on companies like ALung to be the innovators in the world, and they're willing to help you get to a certain point and then acquire you at the right time. The R and D pipelines, even though these companies are typically strong in terms of the cash they have on the balance sheet, for whatever reasons, not many of these companies are investing in R and D and innovation. And one of the things about entrepreneurial based companies like ALung is we typically can move a lot faster. We have less bureaucracy, the development process happens faster. The regulatory process seems to happen faster. And so a lot of these larger strategics, like to keep the small company separate and distinct and allow them to go through their process, and get to market much faster than they can do it internally. Watson: Makes sense. I'm glad that people like you are doing this type of work, and it does seem like, you know, if it is that COVID breaks the dam that hopefully changes some of the speed or the attention, or the appetite for capital will be allocated these spaces, I guess that's, you know, maybe the silver lining or the opportunity that comes from a problem like this, that gives me some hope. Maybe that's just youthful naivete, and I'll get that beaten out of me in time. But Pete, I do appreciate you coming on the show and I do want to ask our standard last two questions. Anything else though, that you were hoping to share that I didn't give you a chance to? DeComo: Yeah. You know, I like to always point out to entrepreneurs, not only should you persevere, but also always remember that your, your best teacher is your last mistake. Don't be afraid to make mistakes. That's what entrepreneurship is all about. If it were easy, everybody would be doing it. If they were easy to create an artificial lung, there'd be thousands of companies out there doing it. You know, don't be afraid to make a mistake. It will help you move through the process much quicker. Watson: Amen. Well, for folks that want to keep up to date with ALung, with you, Pete, where can we point them in the digital world to do so? DeComo: Well, you can certainly go to our website, which is www.alung.com. And my email is first initial P for Pete. Last name Decoma D E C O M PDeComo@Alung.com. Watson: Awesome. We're going to link that in the show notes. You can find it for this and every episode of the show in the podcast app, you're probably listening to this right now, or at goingdeepwithaaron.com/podcast. In those show notes, we have a bunch of other characters around the Pittsburgh medical scenes, so we've spoken with Matt Kessinger from Forrest devices. We've spoken with Dr. Gordon Vanscoy from Panther Rare pharmaceuticals. Those episodes will pair nicely with the conversation we just had with Pete. But before I let you go, Pete, I want to give you the mic one final time to issue an actionable personal challenge for the audience. DeComo: Don't be afraid to take some risk. I got to be an entrepreneur in the circuitous way. But don't be afraid to take some risk and, and start your entrepreneurial ship career much earlier than I did. And, for me, I worked in a lot of big companies before I decided to be an entrepreneur, and before the term entrepreneurship was popular, but get out there and do it. If you've got an interest in a passion in creating something, go do it. And if I can help you in any way, don't feel hesitant to contact me. Watson: Beautiful. And I think that your career epitomizes that same idea of the stair-step approach, where you kind of build a little bit of a competency, you're able to stomach a little more risk, and then you kind of understand how to hit that next level. Once you've gotten that under your feet, but you'll never get to the third step without hitting the first in the exactly. Awesome. Well, Pete, thank you so much for coming on the podcast. I learned a ton from speaking with you. I really appreciate you sharing some time. DeComo: Well thank you, man. It was a pleasure. Take care and stay safe out there. Watson: We just went deep with Pete DeComo, hope everyone out there has a fantastic day.
Michael Mayer is the co-founder and CEO of Bottomless, a company that uses wifi connected weight sensors to do automatic home restocking. Their first, and only, offering is fresh roasted coffee.
Every customer pays an annual fee (like an Amazon Prime membership) and receives a coffee scale. The scale measures the amount of coffee remaining in your bag and automatically sends you the next one when you’re running low. Over time, Bottomless learns your coffee preferences and sends you personalized selections. This is not a paid endorsement. Bottomless was founded by Seattle-based by Mayer and his wife Liana Herrera in 2016. In 2018, they were admitted into the Y Combinator accelerator program. In this episode, Aaron and Michael discuss the constraints Bottomless has had to overcome, the future products that Bottomless might sell, and what he learned at Y Combinator. Sign up for a Weekly Email that will Expand Your Mind. Michael Mayer’s Challenge; Curate your inputs. Unfollow anything in your information diet that is not a building block for good thought. Connect with Michael Mayer
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Get a Free Bag from Bottomless If you liked this interview, check out this interview with Dr. Timothy Wong where we discuss reducing the cost of visiting a doctor and fundamentally rethinking medical care.
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify Mayer: In the long run, you're going to see people reinventing, essentially every single grocery vertical for the people that happens really care about that vertical. And so that's, that's sort of like our long-term vision is we're going to be sort of connecting those sellers to you in a way that is a lot more durable and consistent than a subscription. Watson: Hey, everyone. Welcome back to going deep with Aaron Watson. I am really excited about today's episode with Michael Mayer. Michael is the co-founder and CEO of a company called Bottomless. I've been a customer of bottomless and think that it is both a fascinating company, an interesting product, and a very likely revolutionary model for thinking about commerce. As you'll hear in this interview, Michael has been tinkering with the company idea for more than four years. He has taken it through Y Combinator and has seen some really exciting growth over the last year as it starts to catch on. But in this conversation, we also talked about the business strategy. His lessons learned from Y Combinator and Y a slower form of e-commerce is crucial, not only for lowering the price of the goods that we buy every single day, week, and month, but also for reducing the environmental impact of those things on our world. This is a powerful idea. Pay close attention. Here is Michael Mayer. Watson: Mike, thanks for coming on the podcast, man. I'm excited to be talking with you. Mayer: I am excited to be on. Watson: This is perfect timing alignment of the stars. I got an email this morning, 5:03 AM. Your fresh coffee has been ordered Ethiopia Costa gate. I'm going to say around Costa geish is going to be coming to my house here in the next couple of days. And the reason that that's occurring is I have a wifi connected scale in my kitchen and on it sits my bag of coffee, and it is being monitored so that when it hits some threshold for a low weight, it triggers an automatic order of my coffee to be delivered here. You are the man, the founder, the CEO behind the firm that makes that happen. So maybe we can start off by just, what did I miss out of the explanation of the service offering and where did the initial ideas started to come from? Mayer: Okay. So, I mean, it is fairly simple. You set up this wifi scale once. It lasts for a year on a single charge and you just start your coffee on top and then you just get more coffee in the mail whenever you need it. Basically, we just fixed the e-commerce subscription, starting with coffee. I guess another piece of the puzzle for the listening audiences that we don't try to market this scale device. So you, we essentially market you coffee, we sell you coffee and the scale just sort of comes with the coffee. So we're taking a different approach than the few other sort of like automatic reordering concepts that have been tried in the past. Where did the idea come from? My co-founder and I, we definitely did not sit there thinking how can we make the most kick ass coffee subscription ever like that, that was not the Genesis. We basically were sitting there and every time we went to the grocery store, we would forget something important. So it started with this German of an idea of like, why am I buying the same stuff over and over from my house manually? If the seller knew how much I had and how fast I was going through it, like they could just ship it to me, and at the same time I had signed up for a subscription. I don't know if everyone knows what swelling is. It's basically like you can think of it as like a protein powder thing. And like, I had so much piled up that I could have survived an apocalypse and I canceled it and then eventually I ran out of it after like six months later, sort of like realizing, okay, well, the reason why I don't have everything set up automatically shipped to me is like the best service model for that right now, the subscription, it doesn't work at all. So we sort of just had this thought experiment. What would it look like? What would a service look like that actually sent to me at the right time? And we sort of had an epiphany one day that weight is a really good source of truth and you could sort of over time figure out consumption patterns. It was such a crazy concept to be perfectly honest. And I really wondered if there was a good reason why nobody had tried this before. But we just went ahead and tried it anyway. It seemed to work. And here we are. Watson: And if we talk about those subscriptions, there's been some subscriptions forever people that subscribe to the news, a newspaper, and it was a novel piece of paper delivered to your doorstep every single day. But in the digital age, there was this new idea. I don't even know if it's necessarily connected to that, but there was either the Harry's razor subscription or there was like the box, like your quarterly box, or your monthly box and suffice to say that those were relative to this arrangement dumb because they don't have that actual feedback in any real way once the box gets in your home or, well, once the package gets in your home, other than that, it's been delivered, like that's where the kind of a wall of data stops being collected. And so the fact that you can establish a beachhead effectively in your customer's homes collecting this data, and that's a brand positioning thing. That there's a lot that kind of goes into that. That's a hardware device. There's so many different things is really, from my vantage point, that kind of core insight, and the primary proposition where eventually this isn't just a coffee company. This is another company that kind of, as you're talking about, like, forgetting things at the grocery stores, replacing these disposable goods, that to some degree, rely on freshness that people order with regularly. Mayer: Yeah. I mean, the general concept is there's a lot of stuff that you have in your house. You might be like in particular, we're starting with coffee because it's something that's not very good from the grocery store, right.So the best products for bottomless in the future are going to be the type of products that you really want to get straight from the producer. Right. And we have this whole grocery store supply chain just to get things really close to you. And it's very limiting in terms of freshness, but also selection, quality, there's many, many things that are limited by that sort of gating factor. If only having a couple of slots on a shelf and also needing products to be able to last for a long time and also really address a large market. So right now you see in the DTC e-commerce play, space, like a lot of different companies popping up out of nowhere, selling all kinds of different things. You never would have imagined. Like when I started this business, I never thought anyone would buy cereal DTC because it costs like $3 a box. Like how are you going to get that shipped to you? And since we started bottom line, we're seeing all these companies doing these like specialty cereal concepts. And so my theory is that in the long run, you're going to see people reinventing essentially every single grocery vertical for the people that happen to really care about that vertical. And so that's, that's sort of like our longterm vision is we're going to be sort of connecting those sellers to you in a way that is a lot more durable and consistent than a subscription. Watson: And it also, you're not necessarily holding inventory, you need inventory of the scales, but really you're the connective tissue between these specialty coffee roasters. Like you don't need to build the expertise in roasting. You need to build the stable of demand for the coffee or whatever the future product might be. And then basically play that connective tissue, almost like a drop shipper of coffee, so to speak. Mayer: Yeah, exactly. And the interesting, we sort of flattened the world of coffee, right. It used to be, if you were a small roaster in the middle of nowhere, you could not address the whole United States market. I mean, you could do a really good job of marketing and get your subscription going, but subscriptions really do not retain people very well. And so you're really stuck to your like local grocery stores are opening coffee shops and this is a real world example right now. Our number one, roaster by volume is out of billings Montana. And he's a one man operation. And he's beating out these huge companies and San Francisco and New York, that have a huge staff on and she just has better coffee and is more consistent at shipping. So, it definitely flattens the world. There's a story here about being able to address a bigger market from a smaller sort of like existing footprint. Watson: Right on. So let's talk about that monitoring and the algorithms. So like, another thing I can do is I can go to your website and it has this like data screen of my weight day by day of the coffee grounds and two. So we're not giving a ton of thought, never having to actually get hands on with it. It seems relatively like, okay, we know that below six ounces is time to ship, but like, I'm sure there's a lot more complexity to it than that. Can you talk a little bit about outside of just the monitoring of the weight, like what else is going on behind the scenes that informs when that coffee gets shipped? Mayer: Yeah, I mean, like, as a company, we're kind of like a dock, everything looks really simple and smooth above the surface, but underneath we're paddling, like hell to figure it all out. Like all the restaurants have their own sort of fulfillment performances, there's the postal service has different performance for different parts of the country for distances. And then every user has their own sort of consumption pattern. And so we do a lot to sort of combine all of that information to get you your coffee at the right time. It's definitely not like if you hit six ounces, we're going to order for you. You can imagine that you might drink a bag every month in which case that'd be really early when you're halfway through. And your next door neighbor might drink a bag every week. In which case we need to be ordering fairly quickly, probably earlier than six ounces. So yeah, we have a lot of sort of like magic hidden behind the scenes. Watson: And that gets easier as you guys get more customers and more data feeding into kind of see what works for them. Mayer: Yeah, absolutely. I mean, the more cases we have us ordering and seeing if the coffee arrives at the right time, the better we can get, the more we can improve our algorithms and also just sort of, what would you call like anecdotal improvements from customers reaching out and saying, hey, this isn't really working for me. In finding those, like sharp edges of this sort of like service model. Because we really are fundamentally doing something unique and new here. You can't just like drop in a JavaScript or Python library and just do this. You can't install a Shopify extension for bottomless right now. So we really are discovering all of these sharp edges all the time and continuously improving. Watson: So one of, I think that that causes all sorts of headaches that you do have to kind of solve these problems from the ground up. And you can't go to some repository, but at the same time, it's your edge and that you don't have a ton of competition and you are getting to learn this stuff right on the ground. I'm curious about how you got from 750 customers to 6,000 customers in a single year. Because one end of the spectrum, I love this. Like, I'm not someone I'm relatively minimalist. I don't spend a lot of money. I kinda got my routines and all this stuff. And I found myself talking to friends about my coffee subscription service. And I'm like I never spend time talking with them about things that I buy. So on one end of the spectrum, it seems highly referrable. But at the same time, there's probably concerns about like who's monitoring me. Like, I, we don't have Amazon echoes. We don't have like big tech cameras set up in my home so they can watch me. So there is like the other end of the spectrum that might make people uneasy having this type of stuff monitored. Mayer: Yeah. It's really interesting. I mean a lot of the state-of-the-art right now for automatic restocking is vision-based, you see Amazon go and you see that there's a YC company I think standard cognition. And very early on, I said, this started from this concept of how do you do reordering? We thought about all these different form factors of cameras originally of how to mount cameras in home. And we would not have been comfortable with that ourselves. I don't want a camera in the home. I don't really trust the company to tell me that they're not actually looking at the cameras. And so one of the beauties of what we're doing is honestly, like, do you really care if the whole world knows your coffee level? It's like, I mean, I personally don't like if my coffee level, God forbid, if there was some sort of horrible leak, somebody could figure out my coffee level. I probably wouldn't lose very much sleep over it. So, people's addresses are probably a lot more sensitive than even the coffee level. That's just like traditional normal e-commerce. So that's kind of cool. I mean, people do have to trust that we don't have anything else in the little black box than a weight sensor, but people can take those things apart if they want. And if we had a secret listening device, people would know by now. So, essentially it's like a really low invasion way to figure out when to reorder for you, in my opinion, I believe there was a second part of your question, not focused on the monitoring aspect. Watson: Yeah, just the growth and the fact that like the way it was perfectly framed up. You've referenced Y Combinator here, Paul Graham, the founder of Y Combinator retweeted the whatever public disclosure of going from 750 to 6,000 customers. And these are recurring customers. That's kind of the presumption baked into the business model. And he goes, I previously would've went, met 6,000 customers, but this is an eight X in one year, which is when people talk about growth rates. Pretty exciting if you extrapolate a deep deepen a little bit. So, what is, how is that occurring? What is the driver or the impetus behind that from your vantage point. Mayer: Yeah, we got to meet Paul, actually. We went through Y Combinator. In a certain number of companies, have office hours with him. And he was one of the fastest people to sort of into it what we were doing. Well, he said like immediately was like, wow, this is streaming for stuff. Which I think is such a great way to conceptualize what we're doing, but in terms of the growth, our retention is dramatically better than a normal subscription. And so when you play that out, each person is a potential promoter, right. And if you have five times as many customers after nine months or whatever, you really have five times as many promoters. And if it's something fundamentally unique in somebody's lives, it's not very often, you get a new product that really feels magical. And so it really is something that prompts a lot of word of mouth, even though I do think in the future, this is going to be a utility, right? So like, right now, if you order something online from Amazon and it shows up at your house, You're not going to tell all your friends, holy crap, I've made an order on the internet and it just showed up. But originally, you order a book and it shows up you're going to be telling everybody you ever met. Cause it feels like magic. So I think there's definitely a similar thing here, where this is just a fundamentally new service. And since so many people seek, there's more promoters. And since it's something magical, they tell their friends about it. So that's really been driving a lot of our growth. We do a little bit of paid ads on top, but probably fewer than a typical like subscription company that has grown this much, just because, we really don't have to acquire so many customers to keep our customer base consistent and growing it. Watson: Yeah. And there's also a degree to which this is any product, but particularly something like coffee, it's very hard to be able to make like a broad statement or proclamation about the purchase that you're making. I mean, maybe you're holding the Starbucks cup or maybe you're holding the Dunkin cup and that tells other people something about you and how you want to be understood. But otherwise you're making at home, in your kitchen, away from other people and unless someone is visiting and you're like making coffee for them and you're showing them like, I, this is a special blend and a grounded being and blah, blah, blah. It's very hard to like get the status games that we all want to play as human injected into it. And so by being, and I'm just being transparent, my own experience that we've talked about this, but it is this way of like, Hey, I found this new thing. I'm a very discerning consumer. Like, let me tell you something about myself and simultaneously something about the product. Mayer: Yeah, for sure. I think that's a good insight. And that's something that frankly, if you have any ideas of how to make bottomless something more of a signaling good. I'm all ears. Right now we basically just focus on delivering the product as best we can. And then a couple of ways, like customers that have been with us for awhile have a heat map that they can share stuff like that. But right now we're just sort of banking on the concept itself to carry us, which it seems to be doing an okay job. Watson: Yeah. I'd imagine that at the very least, like some sort of reward program for your 20th bag or what have you, that's like a bottomless mug that would remind me a lot of the morning brew cause they have their referral system and it's probably also be tied into the referral system that you guys have, but the ability to get something for referring, like small and tangible. It could just be sent any ways in the box or the shipment that you already making. But doing that in forms of swag that other people would be like, proud, represent, like I have a little sticker on my laptop, but other things that like the new thing came in and here's my bottomless mug with my new bag of coffee. Seems like a relative no-brainer. Mayer: Yeah, no, I love that. We do have these mugs by the way. Watson: I haven't seen those yet. Very nice. Mayer: Yeah. This is not going to translate on audio, but, yeah, I mean, it's definitely a good idea right now we basically have like shirts or mugs that we give out as referral bonuses. So we're doing a little bit of that, but I sort of wonder what else we can do, free coffee forever. If you get a bottom most. Maybe. Watson: Yeah we'll see how many of those convert The going deep podcast is underwritten by Piper, creative shooting, editing and publishing quality content is overwhelming. We make it easy. So you can save time, build your brand and grow faster, say hello@pipercreative.com. Watson: So let's talk about the future of something like this. Because to even get into Y Combinator, but also candidly from the way that you've talked about this company in the past, or even comparing yourself to an Amazon versus comparing yourself to Joe's diner down the street implies an audaciousness, implies a potentiality that frankly, most people don't even bake into their company or spend the time to pursue. So when you look further, years down the line. What do you see if you're talking about it being utility? Like what kind of world do you envision this being underpinning. Mayer: There's this interesting thing where I feel like building a multi-billion dollar company is only like five times harder than building a successful restaurant down the street. So, being crazily ambitious actually has really high ROY. It's better in a sense to be a tech investor because you get to diversify, I'm meant to actually be the entrepreneur. But, it's definitely fun. One thing is like I feel a lot of people, they get into the VC backed startup industry without fully understanding and internalizing what it means to do a VC back startup, right? Like when you take Venture Capital money. They're banking on one company having like a 30 X return. So you kind of have to be terrifyingly ambitious by definition. If this is the type of the way you want to fund your company and the way you want to grow your company. So I would just say that from the baseline that's we almost are terrifyingly ambitious as a result of the way in which we're building this company. But we are also sort of like were terrifyingly ambitious from the beginning and that sort of like, so there's sort of like a co-evolutionary thing about ambition and way of building a company that can sort of like build off of itself. But I think from the beginning, we've sort of recognized that when you make a whole new service model, there really is a lot of explosive potential. And the reason why we picked this idea amongst like dozens of other startup ideas that we had, whether it's just that there's really no limiting factor to growing a company like this. It's something brand new. It's kind of hard to do. It's going to be a little bit hard to copy, at least in the beginning. And a huge portion of the global economy is like repeatedly purchased goods. So it would be crazy for us to not be insanely ambitious with this sort of this sort of solution that we're working on it, I guess. Watson: Yeah, I think what would be super educational, but also just like kind of an insight into how you think about building something like this is maybe over the last two years, or maybe just from the inception of the company, if you could like almost sequentially go through the different constraints that you've faced. So like one of the presumptions is, there's never enough time to do all the things that you want to do if you're that really audacious, have that audacious ambition, but otherwise. You run to the constraint of capital. Sometimes you run into the constraint of people or technical expertise what have you. So can you kind of like talk through those sequence of obstacles and constraints and kind of maybe a little bit of how you came them? Sometimes it's going to be obvious that it's just like the check from Y Combinator. Mayer: Okay. So before even starting the company, the biggest constraint was probably ego and fear. Nobody really talks about this. They sort of assume that it's a high status thing to do a company, but it absolutely was not. I was working as a developer, making a good salary and to sort of quit that and starting a company with no track record, doing companies. Sort of automatically put me into a much lower status level. When you have no customers, no funding and you're a single person doing, you know, the only full-time person working on a company. People sort of put you in the same bucket as somebody who's unemployed. So first of all, you have to be willing to take the status hits and not really care about what people think about you. So I would say that was the initial constraints. I was lucky enough to have my co-founder who funded the company, from her salary and also sort of was involved from the beginning. Definitely helped make it easier to start the company. And frankly, if it was just me by myself, maybe I would have never done it. So that sort of removed some of the very initial funding constraints. Although, I would say, I lived on less than a minimum wage salary for the first, at least year of doing the company. And so that's another thing that a lot of people may find to be a constraint in the beginning Then, in the very beginning, the biggest constraint was can I even build an initial pilot for this? And it sounds crazy. People probably don't think about that, but like, I was a JavaScript developer. Like I had no business making hardware or like, honestly, even like servers or database architecture or, marketing pages or doing marketing or, 95% of the stuff that we did in the bottomless is to get the initial pilot off the ground. And, nobody's going to give you money. If you go in and say, Hey, I have this genius idea to put coffee on scales and reorder. Like, you really have to prove that it works and you can build it. So definitely, just that was sort of a deficit that we had, but I was able to figure it out and build out the initial pilot. And so I wouldn't say that was actually a gating factor that was sort of like a potential gating factor that didn't turn out to be a big problem. And what I would say is, it's surprising what you can figure out using the internet. All of these things, I was able to figure out, even making a hardware device is able to actually figure out how to do the whole thing just by Googling. Just as using the same mentality that I would have taken doing a front end JavaScript thing, looking it up on the internet and like looking up examples. You can just sort of take that exact same philosophy and apply it to pretty much anything, which is pretty cool. Okay. So then we had the initial pilot running, we got like 15 customers using the device. A lot of people also don't know this part of the story. After that, when I had 15 customers, I felt that, I had proved that it was working like of those 15 using very janky stuff that I had had together out of a apartment. You know, 10 of those people bought coffee for like a very long time. And like we're buying almost as much coffee in like month 12 as they were buying in month one. And so, I thought, Hey, we've really proved this out now. Like this actually does work. If you actually look at the sample size, like 10 out of 15, and look at like the confidence in our poll, like, you know hat there's like a 99.9% chance. This is better than a subscription, which would be like two or three people out of 15. So then I went out and tried to fundraise and nobody wanted to give me money. So that was a lesson that I had to learn, which is that investors do not see the same thing that you see everyday. All they see is you talking to them for an hour or more honestly like 30 minutes twice, if you, if you're lucky to impress them enough in the first call. So, you can tell them that, Hey, these 15 customers are all real and all this data is real. And this thing really works. But, that isn't enough, you actually have to prove it. And so there was a little bit of like a gut wrenching period of bottomless his life, where I had quit my job. I sort of bootstrap this with my partner funding it. And then I had proven that it would work sort of like beyond all odds, building out the first version, and then nobody gave us money. Yeah, I was sitting there and I knew that this worked really well. Because I knew that all the customers were real and I hadn't like pressured them to use the product. And they weren't like secretly my friends or you know what I mean? Watson: Your mom and your aunts or something like that. Mayer: Yeah, exactly. What I got like five people that were my friends originally, but I didn't even include them in the data. And then I got 15 people that I didn't know online, but so there was this gut wrenching moment. It's like, do I keep doing this? This thing that appears to be extremely low status and feels extremely low status and low pay. And do we keep, does my partner keep funding this? So also like a big decision for her to really get this to the point where investors are going to actually take this seriously. I remember going on several long walks and just discussing like, Hey, this works so well. Do we keep doing this? We just did it. We decided to do it. It took us another, I think year after that failed initial fundraising to get up to something like 150 customers. And we did all kinds of crazy stuff. Like we bought two 3d printers and put them in a closet and just had them running constantly to crank out like 3d prints of the scale and like turns the apartment into like an assembly line factory. And I listened to the entire history of her own podcast, which is like 150 episodes, like three times just building scales and just doing all this crazy unscalable stuff. But then once we had about 150 customers, we went out to fundraise again and the evidence was just undeniable and we were able to get our first pre-seed funding. So up until that point, manpower and funding was the biggest constraint, right. So this is kind of a good question. I'm sorry, I'm going on, but I can continue. So after Watson: No, I love it. That's it. That's exactly what we're looking for is, is the way this stuff pieces together. Cause people who I've never done something like this never built something like this. There's the like the mistake of what did this one breakthrough and then it'll go. Or like this one, there isn't one. There are moments. But they have to be strung together over a long period of time with each little breakthrough, kind of giving you the, the key to unlock the door, which takes you into the next room, which has another lock door. And so that's kind of, it, it's a really helpful model to hear you talk through this. And it's probably a trip down memory lane as well. Mayer: There were two, there were basically two holy shit moments and neither of them actually resulted in real world progress for the business externally until way later. The first holy shit moment was when I hocked together, the first one of these, and it was terrible. I had to hand deliver it because I didn't believe it would survive the mail. And, the person set it up in their house and like, then I started seeing the data and I saw it go down, down, down. And like I bought a coffee for them online on like some Shopify store. Right. That's like what I did in the beginning to test this out. And then the first, holy shit moment was seeing their weight jump up. Watson: They put the new bag on. Mayer: Yeah. I was like, holy crap. It actually works. And then, the next holyshit moment was those 15 initial customers like looking at the retention. Like spinning up a graph and seeing how much coffee we were selling, like after they'd been on for like six months, that was just like a mind blowing moment. But again, it didn't translate to any real worlds, real-world benchmarks. In a sense, like when you read fundraising announcements or you hear about people having success in a startup, it's a real trailing indicator of the progress that they've made. Watson: Makes sense. So after the funding and also kind of just validation co-signing like even being in Y Combinator immediately. Like, I know that it happens here in Pittsburgh is if any company here has been has sniffed Y Combinator, they're all of a sudden way more relevant to the relatively small angel network and other investors here in town. So, what did that do? And then what became the kind of new constraints? Mayer: Yeah. So we raised the pre-seed like a pre-seed round, right before we went into Y Combinator, but yeah, what can I say? An interesting thing happened when you go through Y Combinator and you raised some money, your idea goes from like this insane thing that nobody believes to like an inevitability almost. So the narrative around the company very quickly shifted from like, I don't like, this is crazy. Wow. This company is doing something really innovative. So, what was the constraint? First I can say a note on Y Combinator people sort of assume getting into Y Combinator means that your company is going to be a success. But in fact, it's like a wild dash. You get into Y Combinator and you need to make this insane amount of progress in order to sort of rise to the top of the pack or at least you don't need to be in the top and you maybe need to be in the top 25 percentile to sort of come out of YC with enough momentum to raise significant follow-on capital. So, during, from the moment we got into YC, until we raise our post splicing money. The only constraint was just the personal energy and time of my co-founder and I, and at that point she had joined full-time after a pre-seed capital. So before we got into it YC. The the biggest constraint by far was just like how much energy can we pour into it? And I think we averaged something like eight or 9% weekly growth during that time. And we were still using like 3d printed hack together hardware. So that was just an insane. That was an insane period of time where we were just like waking up and working nonstop and trying to keep up with the pace. Basically it's a, Y Combinator is a bit of a competition. Even though it's not frequently acknowledged. And so just sort of trying to prove this and take advantage of the opportunity then after we went through YC, we had grown, we were able to raise a decent amount of money. I would say the constraint after we raised that money was essentially hiring. What's a big constraint. Hardware was also a big constraint because we had been sort of like hacking together this hardware manually. And that can, you can scale that to a thousand customers, but you can't scale it to 10,000. So we had to really build out like a real manufacturable product. And then we also, we couldn't do it just the two of us anymore, either again, you can get a company up to a thousand with two people, but not to 10 tasks. And, so just hiring people for an early stage startup can be a bit of a puzzle. And so, yeah, that's been, that was like the year after we got into YC was finding the right people to work with us and getting a manufactured product. We went to Shenzhen, China, we met a guy there that was great. He now works with us full-time and actually helps us produce our hardware and improve it. So, yeah. And then, I don't know what the constraint is now. The constraint is just keeping the machine running as you grow as a company, it's like you don't grow linearly. Like the complexity doesn't grow linearly with size. It's like the surface area of a balloon or something you're pushing out this frontier more and more complexity. So it's just sort of like managing the chaos and writing what sort of feels like a bucking Bronco, I guess. Watson: And I would imagine also like from a decision-making or a prioritization standpoint it becomes. In addition to that complexity, just the list of potential priorities, the list of potential focuses. So like, one of the obvious questions is it's a coffee company right now, the same way Amazon started as a book company, and then they start to diversify out of that and it becomes that balancing act of do we just deepen? Do we add to our bench of copywriters that we partner with, and market exclusively as this, or do we start to branch off into different directions? And that can't be an easy call. Mayer: Yeah. It's one of those things where I feel like we could double our valuation immediately if we were selling more things. Because investors don't want to invest in a coffee company, I guess, they want to invest in the next Amazon. And so it always is a temptation for us, right. To start selling the next stuff. And frankly, like, we didn't start. I should be, I don't want to trash the coffee business because it's actually pretty awesome that people can get freshly roasted coffee shipped to them straight from the roaster. But it is a temptation always to do more things. I think what we, our perspective is really like, do we think that what we're doing right now is as good as it can be? And I don't think it is. We still have the flavor from an early stage company in a lot of ways and an early stage product. And I think, we're only halfway there to really fleshing this out and I'm doing the best we could be doing. And so we just keep that as our north star. And since we're talking a lot about business strategy on this podcast, I would just say that. There's an element of like the person with the most amount of customers is going to win the game. And we want people to experience this sort of service model with us. And so the more people we can get, trying to service model out, the better it's going to be for our company. And it doesn't really matter if they buy two things from us, five things from us, or one thing for them to really trust bottomless as like the best service provider in what I think is going to be a huge market in the long run. So we really want to get as many people on board as we can before we sort of distract ourselves and we want to give them the best experience that we can too. So, that's really our north star. Watson: Yeah. That makes of sense. It's the probably hardest task, but it is also the long-term most beneficial because I knew I'd be tickled if there was like one other thing that I could potentially not have to think about ever ordering ever again, but that'll be there in years to come. Mayer: Yeah, no for sure. And, it's just, it'll be that much more impactful. If we have a hundred times more customers, it's going to be so much more impactful for so many more people. Once we actually decide to do. Watson: It also seems so, so there's a nonprofit here in Pittsburgh, that's focused on food waste. So you basically have this issue of stuff has to be shipped from the farm or wherever to the grocery store and then picked up at the grocery store and brought home. And if it even is the smallest inkling of being past due or a little rotten or whatever, it gets, let go, but then there's also just people that like won't take home a yellow banana. They only take home a green banana because they want it to ripen once they get at home. And their basic thing is they take it from the grocery store and then they deliver it directly to food banks and other people with food insecurity as a kind of solution. To almost a thing that's like fun. It's fundamentally broken. If you take it back to the source of the issue in the way that you'd be addressing. So I would imagine that the opportunity, and this is like when you start pitching a bigger fund one day, like that's also part of it, like from a, like a sustainability standpoint, finding these things that can just be a fundamentally better experience if the supply chain and the logistics of it's delivered to the end consumer becomes more efficient. Mayer: Yeah. I mean, that's exactly right. The fundamental eligibility of consumer demand drives a lot of inefficiencies in the market. Like, there, you can think of like tons of examples, but like the whole, the whole reason, like grocery stores have to have like really stale stuff is because the supply chain needs to be like there for you to pull at any moment. They're not able to sort of know your demand in advance and push it to you more slowly. So I think, when it comes to efficiency and, even like climate change in the long run, in the efficiency of distributing goods, This sort of solution I think is going to make a really good impact because, slow shipping has to be like two or three times less resource intensive than fast shipping. Like you think about like door dash and they have an individual person driving to your burrito and then delivering it to you with one guy. Like if they knew you were going to have a burrito three days in advance. They could literally make the burrito in an extremely efficient manner in like, you know, on an assembly line and then slowly get it to you and like deliver all the burritos to your neighborhood at once, tight. And so that's without going into too much detail, there's the sky sort of the limit in terms of making things cheaper and more efficient with this sort of technology for the consumer and for the world. So that's another thing we're excited about. I think that's kind of like the coolest thing about doing this company is like we can go down so many rabbit holes about the impact of something like this. And it's because we're making something really important available to the internet. Like when smartphones came out, they made all of these things, all of these important pieces of information available to the internet. Like your location, just the visual surrounding around you, like being able to take photos. And then that translates into Instagram and QR codes and all sorts of stuff. So, we don't have the advantage of a whole new computing platform coming up for us, but we sort of created our own by making these scales and putting them out there and getting this one really important piece of information and just fundamentally making it available to the internet. So that's something that really excites us. And I think just the basic level. Like, I hope that we can succeed at least to the point where this sort of technology for rates through the economy in like a commercial settings and industrial settings. I C J M. I know it's not the best handle ever. M I C J M. You can just search Michael Mayer. I don't think I'm the most famous Michael Mayer, but you can scroll down until you find me. Watson: Right on. I'm going to link that in the show notes. It'll be easy for everyone to find how hard was it to get the bottomless URL and a handles. Mayer: Oh, that's a great, that's a great question. I haven't talked much about my co-founder in this, but I'm sort of like head in the clouds type of guy. I'm always coming up with different thoughts and, usually they're terrible, but sometimes they're very good and she's just sort of like the get stuff done, incredible executer type. So we just decided we wanted to get the bottom list.com handle and we didn't have a lot of money and she somehow pulled it off. It's pretty nuts. I don't know if I want to divulge her tactics, but she made it. Watson: Yeah. I have a friend with a potentially similar story that I'll share with you once we're off the recording here, but that'll all be linked, like I said, in the show notes. And before we let Mike go, we're gonna give him the Mike one final time to issue an actionable personal challenge to the audience. Mayer: Okay. So, when one piece of the bottom of the story that I didn't really talk about is I have some pseudonymous, like Twitter accounts that are followed by a lot of people in Silicon valley. And that sort of helped me bootstrap it network to be able to fundraise. And, people always ask me like, how do you come up with things to post? Like how do you have insights? And I always tell them, like, I'm not some sort of super advanced algorithm. Like, I'm not that smart. I really focus heavily on curating my informational inputs. So in a lot of that is pruning. So, during this last election, anyone who post. Posted more than once a day about politics. I just unfollowed them. So I would say like the some political stuff is good, so don't worry. But, anything that you come across. In your social feed or in your just typical information consumption that you think to yourself, this can't possibly be a building block for thought for me, it's like, I can't see this piece of information being a good premise in some argument in my head that I'm gonna build. Just cut it because it's not adding any value to your life. And there is in the modern world, like an infinite plethora of information sources, so it's not scarce. So the actionable thing I would say is the next time you look at your Facebook feed, Instagram feed, Twitter feed, maybe less Instagram. Cause I'm not sure watching somebody eating a burrito or something is going to be a great input for thought. But if you aspire to be. I think they're in any way, just unfollow any, anything that isn't going to be a good building block for you. Watson: Yeah, I would say if you're going to do Instagram curate artists, the art on there can be staggering. And it's not the exact same type of intellectual stimulation, but it is definitely going to take in a better direction than a lot of the other stuff on that. Mayer: Oh, sure. And that might be a good tip for me because bottomless is at an interesting point right now where we have to start developing our visual identity. And brands and I feel really clueless about that sometimes. And so maybe I just don't have enough input of high quality aesthetics. So maybe I'll go and set up my Instagram follow artists. Maybe you can send me a couple. Watson: I'm happy to, but I can tell you as someone whose business partner is much more aesthetically talented than me, it's also a great thing to just find someone else who has that competency. Busted them. But I'm totally with you, unfollow. I use the mute function on Twitter as much as possible for the thoughtless stuff and sign up for bottomless. Mayer: Yeah. Sign for bottomless. Be a part of the future. Watson: Thanks so much for coming on the podcast, man. I really enjoyed talking with you. Mayer: Thanks Aaron. This was a blast. Watson: Hey, I really hope you enjoyed that interview with Michael. If you found it interesting, and you want to try the product, there's a link in the show notes for this episode for you to get your first bag of coffee free from bottomless. You can find it in the show notes here. It is very easy to cancel if it turns out to be something that you're not interested in, but if you're a coffee lover like me, they have a fantastic selection. It is definitely opt my coffee game and it will do the same for you. This is not a paid endorsement. It is just a product and a model that clearly I am a big believer in, and I think you will be as well once you try it. Check it out and hit subscribe. If this is your first time listening, because we have a ton of other great interviews coming down the pipe, including next week's with Pete Dakomo. Dakomo: And, one of the, 180 unique, characteristics of startups, especially, life sciences, startups, is that when you're in the business of innovation. You don't know what you don't know. And a wise old man told me one time. You don't know, if you don't know what you don't know, but you don't know that you're in real trouble. Thanks for listening. Connect with Aaron on Twitter and Instagram at Aaron Watson, 59.And for your bananas and all sorts of stuff is, is really the dream. And whether it's us or somebody else, like, I think it's going to be a dramatic improvement. Watson: I'm rooting for you. I'm going to keep ordering and drinking the coffee and I've got my list here. I don't know if you want to go. Maybe this is taking the eye off the ball here, but I had like a couple of different items and I wanted to see if you would give them a grade for the likelihood or the ease at which they could be converted to this model, because I'm sure that there's functions of like things that people actually do care about. Like you were kind of surprised by the DTC cereal things that they do care about. And that from like a actual shipping standpoint, it would be a disaster or not a disaster. So the first one was eggs. I think that fresh eggs, like what I found, I was like these eggs are treated so that they can sit safely on the shelf versus some egg that was laid within the last couple of days by a chicken. That could be delivered directly to your home. So if you were to start meeting with the grade for a delivery via bottom list, if I had a little scale underneath my eggs, what do you think of that? Mayer: Well, that's a fun one because you can sort of think about reinventing the whole egg supply chain, right? When you travel internationally, they don't actually refrigerate eggs, right. And so I still remember like seeing eggs, like out in a supermarket, like in China, at least. And I was just terrified, like, I wouldn't eat those eggs, but, it has to do with the processing, right? Like, so American industry processes eggs in a certain way, such that it actually lasts longer than the fridge. But if you don't process it that way, it lasts a really long time unrefrigerated so I don't know. Eggs could actually work pretty well, right. Like how much is a dozen eggs, like four or five bucks. If you've really, really care about eggs, you might be willing to pay more for like really good, fresh eggs. So I think I could see it. Watson: Yeah. Yeah. Definitely not, definitely not the next one though. Take a little bit more, more stuff. Go to the egg delivery safely. It would be the biggest variable there. Mayer: And then the science project, it gets me excited because I think it would be really fun to like to design like a USPS mailer for eggs. Milk is harder because this is a very low price point. You kind of have to figure out things that people that cost enough coffee is a beautiful thing because, it's sort of concentrated. It gets it's gets diffused into water. So in a sense, it's like a chem, it's like a concentrated thing already. So, $15 bag of coffee is actually not that expensive on a per cup level, it's like 50 cents per cup. So, milk. Milk is one of those ones where we would have to figure out how to batch it with other items, which it's really something we could do in the long run. But yeah, another, I would expect that in 2030. Watson: And then serial was actually at the top of my list. So it's funny that you came up with DTC serial here on your own. Mayer: I used to tell, like,if you go back and you find somebody that I pitched in. Like the pre-seed or even the failed pre pre-seed round for bottom list. I would have told them we'll probably never do cereal, right. And I was wrong. So, all of these verticals that you can ask me about, like, somebody is gonna figure out how to do it. Bottomless really is a new way to like connect buyers and sellers of repeat stuff. And I think the world hasn't really understood that yet. And somebody will, somebody will figure it out for the people that actually care about it. There are going to be enough weirdos that care about pretty much anything. That they'll want to get it in the mail. Watson: It's almost like the byline of the internet. Mayer: Yeah, it is. I mean, that's the original Amazon thesis, right? Like what kind of weirdos are going to buy things online and like, oh, okay books. Sure. Like books is books. People are going to buy that online because there's a big assortment that you can't get in a bookstore, but nobody's going to buy a microwave online. And now I bet like half of microwaves are sold online. Watson: Yeah, totally. Mike, this has been awesome. I want to aim towards wrapping up and asking our standard last two questions. But before I do that, anything else you were hoping to share today that I didn't give you a chance? Mayer: I don't think so. No, I can't think of anything now. I can't think of any agenda other than just talking and prof preaching the word of bottomless. I think I've been doing that this whole time. So this has served me nicely. Watson: Wonderful. So for the folks that are converted, what digital coordinates can we provide them to learn more follow along and try it out? Mayer: Well, we're at bottomless.com. We also have the bottomless handle on Facebook, Instagram, Twitter, if you want to follow me personally, I'm on Twitter at M
Teresa Whalen is the CEO of CytoAgents, a startup focused on the development of solutions to combat persistent and potentially deadly strains of Influenza, COVID19, and other viruses.
Teresa’s career spans 20 years in the healthcare industry, including health technology executive, life sciences investor, and clinical pharmacist. She has brought multiple successful life-changing healthcare products to market. She currently leads a team of clinical drug development experts and scientific advisory board members aiming to revolutionize treatment for respiratory illnesses and viral epidemics. In this interview, Teresa and Aaron discuss the long process of FDA approval, how Teresa came to lead the company, and the dangers of a cytokine storm. Sign up for a Weekly Email that will Expand Your Mind. Teresa Whalen’s Challenge; Surround yourself with people who are smarter than you. Connect with Teresa Whalen
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CytoAgents Website If you liked this interview, check out episode 338 with Courtney Williamson where we discuss developing a medical device or episode 413 with Dr. Gordon Vanscoy where we discuss his pharmacy that collects drugs for treating rare diseases. Text Me What You Think of This Episode 412-278-7680
Brock Blake is the founder and CEO of Lendio, a marketplace for small business loans. Lendio offers borrowers access to loan options from more lenders than any other marketplace in the industry.
Brock has been building his company for nearly a decade and raised more than $100 million in venture capital. 2020 has stretched his team and tech to new heights, as they’ve facilitated over 100,000 PPP loan approvals and the issue of $8 Billion in funds. In this conversation, Aaron and Blake discuss why Brock pivoted away from his first company, the challenges and constraints of scaling, and the values he’s instilled in his company culture. Sign up for a Weekly Email that will Expand Your Mind. Brock Blake’s Challenge; Identify someone important in your life and go have an experience with them. Connect with Brock Blake
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Lendio Website If you liked this interview, check out episode 434 with Henry Schuck where we discuss his recent dollar IPO and becoming a billionaire. Text Me What You Think of This Episode 412-278-7680
Casey Gauss is the VP of Amazon SEO at Thrasio. Thrasio is one of the most interesting companies I’ve come across in years.
Thrasio was founded in 2018. It has gone on to raise $520.5 million and be valued at over $1 billion. The companies has acquired more than 70 businesses that sell products on Amazon. By bundling the companies together, they aim to build the CPG powerhouse (think Unilever or Procter & Gamble) of the digital age. Casey leads the team’s efforts in optimizing Thrasio’s 6,000+ product pages on Amazon to ensure that they rank high. This translates into lots of sales. Thrasio is profitable ??? In this conversation, Casey and Aaron discuss the Thrasio business model, how the acquire companies in less than 45 days, and the philosophy behind selling online. Sign up for a Weekly Email that will Expand Your Mind. Casey Gauss’s Challenge; Listen to audio books and increase the speed that you read them. Incognito: The Secret Lives of the Brain by David Eagleman On Intelligence by Jeff Hawkins Connect with Casey Gauss
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Thrasio Website If you liked this interview, check out episode 413 with Dr. Gordon Vanscoy where we discuss building a Billion Dollar company selling rare pharmaceuticals, and episode 414 with Glen Meakem where we discuss FreeMarkets being a unicorn during the DotCom boom. Text Me What You Think of This Episode 412-278-7680 451 Wiz Khalifa’s Manager Will Dzombak talks Hotbox by Wiz, Artist Management, and Taylor Gang11/2/2020
Will Dzombak is a Pittsburgh native and one of the entertainment industry’s top music managers. He’s helped guide the career of Grammy-nominated rapper Wiz Khalifa and cofounded Taylor Gang Entertainment.
As a student at Penn State, Will co-founded an events company, where he booked Wiz Khalifa will he was still just a rising Pittsburgh rapper. After the first show’s turnout exceeded expectations, Khalifa sought out Dzombak’s help with booking more shows for him. Within a few years, Dzombak has helped Khalifa create one of the most successful and consistent summer tours for the last 7 years. He’s also been one of the executive producers on Khalifa’s last three full-length releases. Together, Wiz and Will have built Taylor Gang Entertainment, invested in the e-sports team Pittsburgh Knights, and much more. In this conversation, Aaron and Will discuss the early days of Wiz’s career, their new restaurant Hotbox by Wiz, and the marketing strategies that they’ve been early to embrace. Sign up for a Weekly Email that will Expand Your Mind. Will Dzombak’s Challenge; Start a second hustle. Connect with Will Dzombak
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Watson: Alright. Well, thanks for coming in here and being on the podcast, man.
Dzombak: Of course. Thanks for having me. Watson: So I reached out to you because I saw the news. I don't know if it was complex or wherever the headline was, that Wiz is launching a ghost kitchen, Hotbox by Wiz. And Hannah and I have been going crazy for like, just the general idea of ghost kitchens for a while now. It's clever, you know, not having the physical area where people actually come in, but it's all delivery. Tell me about the idea, like when the start of this happened and how long it took to Germany before you guys launched at the beginning of October. Dzombak: So this idea came to us through a friend of mine, and it came up in May of this year, when everything was going on, and we worked on it all the way up through the launch. So, it's just a very interesting idea. We always- Wiz loves being in tech. I love being in tech things and being at the forefront of stuff. And when we were pitched the idea, we had heard about it and done a lot of research on it and how it all works financially. And this deal really made sense and was in a great place, better than a lot of the other ones that we had been talking about. So, our partners Ordermark and NextBite really, really knocked it out of the park. Watson: Yeah. And the brilliance of it to me was not only is it very like tech forward and very like where things are going, as opposed to where things are, particularly in a pandemic, when not everyone's necessarily looking to go into a physical location to eat. But it's the kind of brand alignment where, you know, forever there's been the band, they play their songs, you buy the music and you buy the kind of standard merchants, a t-shirt or something. And that's as far as it goes. But the kind of brand that's been built around Wiz's music, is this, you know, In the cut, like w where, where in high, we're having our munchies and all the kind of names of the food on the menu as well. So it seemed like perfectly aligned. Dzombak: That's what we love doing. And that's a huge part. But behind our strategy is, you know, to make him bigger than just the music, to make them a multifaceted whole business. You know, his app is the second most successful celebrity app ever. And it still crushes. You know, we, we had over 10 million downloads and still have over a million active users. So it's all these different silos add into, you know, the excitement behind him and all the various things he does. And Hotbox was just another great thing to add into the character and everything that kind of goes on with it. Watson: And it seems like there's just no stopping, like from the early mixtapes to Black and Yellow breaking out. And maybe, maybe that's not the framework that you have, but I have this memory of being at the first concert back at stage AE after Black and Yellow blew up, and just like this complete shift, it was just staggering. Like the, you know, the people around the corner for the concert and everything. But you know, there's no real relenting in terms of the business empire you guys are building. Dzombak: That's one of the main things I live my life by and Wiz does is just like, if you ever stop learning, you stop growing. So we never want to be like, ah, we know everything. It's learning and evolving and growing because the guys that think they know it all are the ones that get stuck in. Stop crying. Watson: Yeah. How has the model changed from like the early days when it was still very either a concert centric or album sales centric to streaming centric? Like how has the business of being a music artist changed since you kind of started with Wiz back? Was that 2007? Dzombak: Yeah. It's just faster. It's it's because there's so much access to recording. So it's back in when we started, we were selling and pushing physical compact disc where you had to go print it and wait for it to be printed and make sure it wasn't messed up. And if there's a mess up, it's like a huge screw up. And now it's like, 'Oh, that was the wrong mix. Uploaded to the whole world. Ah, we can just switch it out. No, one's going to know.' And it's just a whole different world of speed and technology being in it and reading and researching and figuring out who are the hype piece and who are the real deal. Because, you know, you get pitched a million ideas every day and you got to know the key questions to ask and what to point out to know if someone's being legit or not. And that's like the Hotbox thing, you know. We had heard other similar pitches similar, but it just didn't make sense. And when we really got in with Order Mark and Next Bite, it was like, okay, you guys really get it and understand how to grow this thing. And that's, that's, that's the biggest change I would say. Watson: I think that's such an interesting filter and I think that the art of filtering the hype beast from the real deal, the ability to discern. Those characters and make that filtering decision. That's almost like one of the universal skills. So whether you're in the restaurant business or the music business, or any other business building that capacity, how have you, I mean, it's reps, but like how else have you honed that ability? Because you need it when you're deciding who to sign to your label. You're using that in every instance. Dzombak: It's just, and I know you would agree with this, it's just, there's so much more data available now is really diving into the data and doing something with it. So many people will pound their chest. I have all this data it's like, yeah, but did you read it? Like, do you understand it? Are you just regurgitating what someone has already told you? And it's that, and I'm a huge believer in team and bouncing other ideas off people and being able to cut through the nonsense and what's real and important and the things to prioritize. Watson: Yeah. And I'd imagine what also makes the speed possible. So it's actually like, kind of crazy. If you think about, like you talking about the speed of the music coming out, we're also talking about like the idea for a restaurant to a card was idea in May to restaurant launched in October that's four months. That's someone who's got a lot of time and like no time at all. So that, that speaks to me, not only the partners that you had that were capable of spinning something up that quickly, how many of you guys launch with 50 locations? Dzombak: Yep. And we're going to keep growing. Watson: Yeah. And that's the capacity is, so can you talk a little bit about how that works? Like actually at the technical execution of a agenda, we have that partner, but like, are they finding the commercial kitchens for you and staffing that on your behalf and then like training them up on your guys' specific recipes? Dzombak: Their software company, that's already in a lot of these restaurants. So a lot of these restaurants use their software. So they're partners and they go out and pitch the idea to all their partners and they have thousands of partners across the country and test it out in key areas they think it'll work the best with. You know, great fulfillment partners that they already know, and they already do business with that they know are legit and then grow it. You know, if you, if you go too wide at first, it'll it'll be too much. Watson: Yeah. Dzombak: So grow it, create a demand, and they have great connections and partners through their other businesses to do that. Watson: And how did you guys come up with the menu? So like, like the names were fantastic, but even just like the specific foods would say your guys' favorite foods, was it stuff that was data tested that like people like wings or? Dzombak: It was a combination of both. So they laid out a huge menu of things that they know work, are easy to do, are easy to replicate and all across the country and we narrowed it. And we had a whole conversation about Wiz's favorite foods. What he likes, what he doesn't like. And so we had a very broad menu and then did a taste test, which was insane. It was like a four-hour taste test. Watson: That sounds like a good day. Dzombak: 15 courses with a couple breaks in between to really get our appetite up. We tried so much food and narrowed it down into what fits and what's easy to, you know, keep quality control on. Watson: And I think that that's such an interesting angle for this, because it is kind of personality centric. And if he didn't like Turkey burgers, it wouldn't make like, forget the margins, forget the, like it sells well. It has to be something that he can authentically, or like even the fact that you guys have so much, you there's all this kind of no knowledge in the public domain about Taylor Gang. That if, there was never a Turkey burger to be seen. Then it would be completely out of place for that to be on the menu. Dzombak: That's goes back to what I was saying. That's how we build our brand and make things believable. It's things Wiz actually enjoys. You know, I'm not out here trying to sell cleaning products cause it's like, that would never make sense. And people would see right through this. Oh, these people clearly paid Wiz for an ad, but if we do things and come up with brands that he actually truly enjoys. It sells itself and makes the process way easier. Watson: So how do you think about that persona then in the line of where everyone's like, multihyphenate? There's a musician or an artist or an entrepreneur or these other things, like, do you, how do you think about trying to bucket the persona in that way? Or are you always looking to kind of push it beyond whatever boundaries have been laid? Dzombak: I think, not to either one of those points. It's just about keep growing. Yeah. Right. Because things are going to change. Like we talked about earlier, like when we first started, we were selling CDs, the MP3 download isn't even a thing anymore. That's how much things have changed, you know? So I think it's just about. Constantly growing and coming up with new ideas and constantly evolving, because if you do the same thing over and over, people are gonna move past that because there is so much data, so many new things coming out constantly, you need to just constantly try different things and not be scared to try different things. Because if you stay in the same box, people will be like, I know you do all that. That's dumb. Watson: Yeah. So tell me about your evolution then. Like, let's go back to the start of you as manager back in 2007. You organized a concert at Penn state? Dzombak: Yeah, so I was in a band in high school, and I was a big pop punk kid and I believed in all that touring that way. And when all my friends decided, 'Hey, about the band thing, let's go to college instead.' I was like, ah, I just went to school, but I knew how to promote shows because I'd been in a band and doing shows and I was like 14. I was like, okay, I could get a real job or do this. And at the time, and at Penn state, the Mr. Smalls of Penn state was this bar called the Crowbar that closed when I was a senior. So the only place to see concerts was at the arena. And I was like, Oh, I'm going to kill it. There's 40,000 kids here. Monday, Tuesday, Wednesdays are days no promoters want. At Penn state kids Thursday, Friday, Saturday want to go to a frat and drink. I'll take all the Monday, Tuesday, Wednesdays, pay a lower rate, and I have a built in audience of 40,000 people. If I can get 500 kids in there, I'm making money. Watson: Yeah. That's a relatively easy ratio. Dzombak: So I know that was a long winded explanation, but that's that. And, I had a fraternity brother I had met with the summer after senior year, between senior year of high school and freshman year of college. And, you know, Pittsburgh, small, everyone meets everyone pretty easily. And it was just in passing, whatever. And I had a frat brother who really liked his music and the frat brother passed away and we did a Memorial concert for him with Wiz. And I was like, I'll reach out and see if they'd be interested. And he ended up coming up to Penn state. We had enough money to pay him, but didn't have enough place for him to stay. So I was like, you can stay at my apartment. Then he ended up hanging out for five days. And we, you know, we just started our relationship there. And I went from being his assistant to road manager, to co manager, to manager, to business partner, and just been trying to grow and, and, you know, keep the wheels turning. Watson: So like manager can mean so many different things. It can mean business strategist. It can mean fixer. It can mean consigliere. It can mean, you know, first critic on like a first track that gets produced. So how has that evolved? Like when your assistant, maybe that's more like run this era and get this task completed. How did that evolve as the business of Wiz evolved? Dzombak: I think a manager's role is subjective and anyone can interpret it differently for the situation they're in. And Wiz is and I are not only, you know, business partners, we're best friends. We lived together for six years. You know, when we go on tour, we still have just share a bus and, you know, and so it's, it's all those things and more, you know. It's covering the whole spectrum and, you know, just supporting each other and being able to have the conversations and do all those various things and, and building a team and having him trust me to build the team around them, to execute, you know, his vision, because ultimately that's the goal is to support your friends and help them execute their vision. I never wanted to be like a rapper. So, you know, I was always intrigued by the business of music, and that's that's my role, you know. And it's interesting in hip hop, you see so many people that have these managers that, I won't say the artist's name, but an artist that, you know, had some success, but it was much smaller than Wiz their manager got on the phone. And I don't know from all status on the podcast, but tried to big dick me. I was like, I'm getting my porsche squashed and blah, blah. I'm like great. I'm calling you about a YouTube algorithm deal. Like what? I don't give a fuck. Oop- Excuse me. Watson: It's all good. Dzombak: But, you know? Watson: Yeah. So, the funny thing about that and, not as long, but Hannah and I have been business partners for about two and a half years. And what I've found is it's, it's a bunch of conversations, but it's actually like just this macro ongoing conversation of this thing that we're building together. And how each conversation was like bleeds into the next, until you reach this depth of number one there's insane trust. Like you don't, you don't start with that great trust, but you, you dive deep into that and you reach it. It's like, okay, I know I can trust you. You're going to go in that direction. Our visions align our missions aligned. And we can roll. Dzombak: Yeah. Watson: And I imagine that's a big part of, is like, just knowing, having the autonomy to make those decisions when things get really big and hairy. Dzombak: Yeah. Yeah. And just being able to navigate all that. And, you know, especially being in the limelight, there's a million other little chirper voices and being able to keep our communication clear, you know, with each other is a super special bond and something I love having with, with him. Watson: Yeah. So tell me about like, was there a 'Oh shit' moment or was there a, a moment where you kind of look back as, I don't even know what the right word is like, like to me watching that crowd at that concert, after Black and Yellow, I was like, 'Oh, it's different.' Like, I remember listening to some of the mix tapes, like we would be driving to our ultimate Frisbee tournaments. And my really good friend Pat, like was like, dude, this guy is the truth. And then it was this enormous concept. It felt like the entire city erupted with specific type energy. So that's, that's kind of like the specific moment for me, but were there moments along the way, in terms of just like this is accelerating beyond our wildest visions, or maybe you saw it all from the jump? Dzombak: It was different for me cause I was just so in it, you know. And to me being a Pittsburgh kid, when we first started playing shows outside of Pittsburgh, to me, it was like, we are fucking lit. Screw these losers. Like we were doing a show in Cleveland and there's 200 people here. So for me, that was the moment. And it was like, we got over you know, $500 for a show. Like no one else in Pittsburgh's doing that. Like in the hip hop world, like young, like us. So to me, that was the moment. And there were all, all types of like, you know, when cushion orange juice came out, that it was already zoomin. You know, one of my most exciting moments was right when flight school came out. Do you remember Club Zoo? Watson: Yeah. Dzombak: Wiz played Club Zoo. And it was so crazy packed, like I'm friends with the former owners now. And he was like, that was our biggest show by far ever. We were way over capacity. He was like, but it didn't matter there. And I remember pulling up and we were late and it was down the block, like almost to the Heinz history center. I was like, there's no way this is real. Like some someone got shot or something bad happened and it wasn't. And it was, I was like, Oh, it's, it's lit lit. And that was in like 2008, you know, like two years before Black and Yellow. So I just saw it through a different lens, but it's so interesting to hear when people caught onto the wave, you know? Cause some people are like I knew was a cushion orange juice. It's like, yeah. But did you know him at this that and the city? And like when, when that was be successful and then some people were like, I I've known whiz since black and yellow. It's like, yeah, but he was doing for five years before that. So for me that was the moment just doing shows outside of Pittsburgh was like, this is crazy. Watson: Was there also, I guess, a period where it's shifted from like yes, to everything versus mostly no. We kind of have to be strategic with this because I'd imagine imagined like the first time someone said, Hey, will you travel to this other city for this show? It's like, hell yeah. Like, like we're doing everything we can, it's the ground game for hustling. And then at some point it's like, there's just an overwhelm of being hit up, DMs, inbound that like, we now have to shift into this, like other posture of strategically filtering? Dzombak: I think right after like the excitement of Black and Yellow was like, cause at that time we were just running, running, running. We weren't saying yes to everything at that point, but like being strategic at that time. And because it was, had had a, had gradual success, we were good at going through things, knowing what he's going to do, what he's going to not want to do. And, but I think when, cause we toured for almost two years straight. When we got off that tour, it was like, okay, let's spend a whole summer where we just camped out, like got our bearings again and like, you know, just tightened it all up. And I think that's when we really got good at, you know, figuring things out and setting up base and growing. Watson: Right on. So what about some of the marketing strategies that you guys employed? Because like there's the famous story of soldier boy going and like uploading, it wasn't cassava, what was the other free file upload? Dzombak: Limewire? Watson: Limewire. Like just uploading other files with the names of like, not his song, but it was his song that was like the file that people were downloading. And all of a sudden it was like familiar, he's making these lists. Like were there moves that you guys made or like strategies that you employed to help fuel the growth to get it going? Dzombak: It was, it was just taking advantage of the internet. I think taking advantage of Twitter and YouTube and MySpace at that time was power thing. And, you know, there were so many kids in New York, you know, that they could be around the labels. And as a kid from Pittsburgh, you're like, I don't know anyone in New York. And being able to really use the internet. I think, you know, Wiz was one of the first ones to do it well along with, you know, like soldier boy, Drake, and in that world was what really changed, changed the game for us, for sure. Watson: When we were talking with Chance from Keep Pittsburgh Dope, he was talking about how he watched the vlogs from the very earliest stages when it was just like a little handheld, whatever. And the amount of loyalty that that inspired from, from that perception of like, I knew him when, like I knew him from the earliest ages. But also just getting a more kind of comprehensive view of the artists that you're really into his life. Like what else are they doing in addition to putting out this amazing track. Yeah, I Dzombak: think that that's super helped. And if you look at everyone's blueprint now, it's... Watson: That's it. Dzombak: That it's, exactly what we were doing at the time. And I think everyone's just trying to duplicate that. Like every kid has their own videographer now and like, everything is captured on everything at this point. And that was, I would say we were one of the, not first to do it, but we were one of the pioneers of recording everything on the internet. Watson: Definitely. Do you know where that idea came from? Do you know like how that started? Dzombak: Wiz was just always into YouTube. And then, one of his former publicists, Artie, had told him, you know, Twitter is going to be the next wave. He crushed Twitter and Wiz is really good on the computers. So back in the day, you know, I would shoot the footage if he was performing and then I'd have to go to school during the day, like back to college. And he would spend the weeks chopping up the footage, putting out day-to-days on his Mac book, editing everything himself. So especially now, you know, when our videographers are editing stuff, he can be like, I know how long it takes to buffer. Like don't give me that excuse, you know? Watson: Yeah. Dzombak: You know, and he has all the knowledge and it was his vision. And I think that's why he's had so much success because he's played all the roles. He's been his own camera, man, you know? All those types of things. Watson: Yeah. I mean, that's a consummate start-up story. It's like, I'm not an accountant, but I kind of have to know basic accounting to keep the lights on. And there's like every single vertical you have eventually wear that hat. Dzombak: Totally, totally. Watson: So another thing amongst the hats that you wear is a co-CEO of Taylor Gang Entertainment, which is the label that you guys developed together. And, so maybe just tell me a little bit about what goes into that. And frankly, I don't really know a ton about the music business. Like we've been trying to cover stuff like, you know, Calvin Harris just selling his music library to like private equity and things like that. But at the kind of base level, starting a label like that and operating it, like what goes into that? How does the business model work? Dzombak: It's just like any other business. There's multiple revenue streams from songwriting, performing, merchandise. And, for Taylor gang, where we offer multiple different services, we, you know, we have an investment vehicle. We have a management company, we have a production management company, and we have a record label along with our other business ventures. And just having a team that services it and delegating out, and everyone doing their job is it's just how, how we run our business. Watson: Yeah. And is that an arena where there's like a lot of inmailing, in terms of people hitting you up and being like, I should be the next person on the label? Dzombak: Every day. Yeah. Every day. Yeah. Watson: So can you tell a story like maybe the times when someone's actually broken through, like what part of the differentiation was as opposed to just spamming you that maybe made that happen? Dzombak: You know, for me, and like how I look at things is things have to be real. Like I was saying earlier, there's so much hype. I have to feel that it's real. So I need to have my own connection or Whitney's to have a connection with someone to feel it. Just everyone can make great music at this point, there's computers can make algorithmically good music that people are going to enjoy. So you need to have a, you need to see a movement going on. You need to have a connection with that person. And I think that's how we get through it. Just like anything and seeing through the hype piece. That's why I love, you know, being in Pittsburgh is you can get a real gauge on thing where people in LA are like, 'this is the next thing,' I go to Pittsburgh. And I asked some of my friends, have you ever heard of this? They were like, 'fuck, no.' You know, that's how you're like, okay, this guy that just told me he's a nationwide star, he's not. Because these people read pop culture things, they're in it. But they're, you know, they don't have access to all the hype beast, LA/New York things. And if they don't know, then I would assume there was some America doesn't know and you're just hyping me up. Watson: Makes sense. So how much of your time do you spend between the two? Dzombak: Before COVID it was like 70% LA 30% Pittsburgh. After, like now, I'm just here and we have an office here, the studios here, everything is on the internet. So as long as I have the internet can, can really work from wherever. Watson: Do you feel like that's going to go back to 70, 30? 50, 50? Like, what do you-? Dzombak: Who knows, especially with what's going on in the world. It's changing every day, all the issues going on in the world. I have no idea, but I'm loving being in Pittsburgh. Watson: Yeah. I would imagine like, so I guess this deal got done for the cloud kitchen with- um, I'm blanking on the company names. Dzombak: Order Mark. Watson: Order Mark and Next Bite. That happened via zoom? Yeah, we Dzombak: had to have meetings, a few in-person meetings. I have to travel a little bit, but nothing that I need to be out there for months and months at a time at just go do, do a few meetings, see who I need to see. Watson: And, but that's part of the filtering though. You still need to kind of get in the room with the same person like that. That's just, I don't see that going away any time. Dzombak: No, but I think it'll be much less intense than what it used to be. Like, I just heard, you know schools there's no more snow days. Watson: Yeah. Dzombak: You heard that, like, it's just the changing of times. And I think, especially after COVID, tons of businesses are going to look like, 'Hey, we spend so much money on overhead and we were pretty much just as like efficient with everyone working on zoom.' I am the number one believer in in-person and that's how you really develop a relationship, but who knows how the world's going to shift. Watson: Are there other things that you guys need to cut out though? Because a lot of like, if you're creating content, if you're uploading something to YouTube, if you're putting out like IP basically it has this, it's very light. The reason that a lot of people aspire to that as a business model is when it works it's a very high margin endeavor, right? Dzombak: It depends. It just depends. Everyone's different, you know, everyone's different. Watson: So another question that I had was associated with, what do people not appreciate about the business that you guys have run? Or what you've built? Like what, what is like a misconception? Dzombak: That everyone just gets drunk and high and hangs out all day. And everything's awesome. Yeah. I push very hard to keep it like any other business. Like I get up early, go to work, you know, have employees, have meetings, everyone needs to do reports. It takes a lot to move a train. And I think, just like anything, you can make anything look good on the internet. And that's the whole point is to make it look like everything's sweet. But people believe that that's just how every single day is. It's like we could put two weeks of footage into, you know, eight minutes and people think that's all one day. It's like, that is not how every day is. Watson: Yeah. That was the highlights of the highlights. Dzombak: This is a highlight reel of the last two weeks. This isn't one day. This is everything that happens in eight minutes. Watson: Yeah. You live in a spreadsheet or in some sort of invoicing software, isn't it? Dzombak: Yeah. People have no idea that accounting exists or lawyers or anything negative in the music industry. 'You just get high and like make music and like enjoy each other's company.' Like yeah. Right. Not that we don't do those things, but like, that's not the one I think we do. Watson: Yeah. And that's, that's also the brand that's being built. And what most of the fans are going to interact with and want to understand. Dzombak: Yes. Yeah. And you know, we know that too, and there, there's definitely a fun side and I am beyond blessed, and we all are, to be able to do what we do. But when people think it's, 'Oh, you guys just got lucky, smoked weed on everything. And it was great.' Like, no way. Watson: Yeah. So what about anything for the future? Like what is next outside of obviously more music inevitably, but what other kinds of projects have you really stoked for next steps? Dzombak: We have a couple of different virtual reality things that we're working on that I'm really excited about. And I think that's a really tough space, and, you know, I'm excited to grow the companies that we have. I'm excited to grow Hotbox and watch it become like a household name. Same with our cannabis company. We're partners in Shop GLD. And I think that's a really fun, cool business. And, and we have a liquor McQueen in the violet fog we're partners in as well. And watching that is like watching an artist career. Like, you know, it goes from small and as, as it gets bigger and bigger, it's like a fun puzzle to figure out. Watson: So on the VR front we've talked to Travis Scott concert in fortnight. Marshmallow did one, like, is that, is that kind of adjacent to what you're talking about? Dzombak: Yeah. Yep. Both of their managers are good friends of mine, and everyone did it a little different. We've already done one. We did it within Oculus, with Oculus in their venues app. Watson: Gotcha. Dzombak: We did one, thug did one, gunna did one. There was like, it was like a seven part series, I forget, who did the rest of them, but, you know, it was really cool to see how we could build out the stage and can make things happen around, you know, in this whole world. And it was really interesting to like, be in an audience where you could talk to other people sitting next to each other, but you weren't actually next to them in real life. There was a crowd though. You could hear other people's conversations. It was, it was really neat. Yeah. And it's just a taste of, 'Oh, it's going to get so much better in the next 10 years.' and I think in, you know, in 10 years, it's going to be ridiculous. Watson: Yeah. I went to South by Southwest, I want to say in 2017, and I tried it and I had had like two drinks. And I put them on and I was literally physically nauseous immediately because the, whatever the pixels are, the processing rate, it just didn't, it didn't work out. And then over the last holiday season, my in-laws had gotten the Oculus and we just like played around with it in the living room. And it was staggering, the amount of improvement that's happened in just that short a time. And I would just imagine, so, where that takes me is like the standard model for a tour is we do this show. And there's little tweaks happening, but like the, the equipment and the staging and everything that gets picked up. And it travels to the next city and that gets picked up and travels to the next city. And we kind of have to pick the cities that we know can sell out venues of a certain size. But it's the same show over and over again. It seems like the potential with VR is that whole business model shifts to, we could create one spectacular show, put the whole budget of all those 30 locations into one show one time, and then sell not just to those markets, but to all the markets everywhere. Dzombak: Yes. That is a possibility. I think, like we said earlier, there's always something to be said about those in-person experiences, which is why I will never go away. But I think that will become more of an option. And I think that option will really grow with DJs in the EDM world and stuff like that. Where, you know, people can feel like they're in a concert and, you know, especially those EDM concerts, like they can put their headset on and just live in this crazy world and be on Molly or shrooms or whatever. And just be like, this is crazy. Watson: Yeah. Because they are already relying on the light because it's not the music. Dzombak: It's not like the music is like some in-depth musical, anything, or even the lyrics matter that much in that world. In that world people are just like, 'mm.' Watson: It's experiential. Dzombak: And like, they want to look at the lights and like be with their friends. And if people can just get drunk and put a headset on, in their living room, Game-changing. Watson: Yeah. What about gaming? What about like the, the persona of like, we're into gaming, we're correlating with some of these like gaming bands, like hundred thieves, ones like that? Dzombak: Yeah. We're partners in the Knights. We were early partners in them. We've been partners with them for a few years and their, their backend is really cool. And I think they're just building, you know, we're building out the brand like anything else. And all those companies, the thieves, faze, clan, all, you know, they, everyone has their strengths and weaknesses and yeah. It'll be interesting to see where the space goes. We did a super cool streaming event with them. It was like eight hours. And we raised like over 65 grand for charity with them in April, or May. I forget, but you know, that world is ever evolving and as much as it is gaming and tournaments, it's content just content in general. Watson: And that, to me, that seems like another arena, very similar to hip hop, or like we can kind of be under the same banner of, of the same level or same team. But we're also like very kind of independent in terms of the expression of how people consume us or people, how people consume these different personas. It seems like there's a lot of similarities there. Dzombak: Definitely, definitely. Watson: Cool. Well, we're close in time limit here. Before we ask the last two questions, anything else you were hoping to share about restaurant? Anything else I didn't give you a chance? Dzombak: Just make sure you try Hotbox by Wiz. Khalifa Kush will be in Pennsylvania soon. Try McQueen in the Violet Fog. It's in wine and spirits. Go check out the Pittsburgh Knights page. Check out the Taylor Gang page. Yeah. All those fun things. Watson: Right on. And If people want to connect with you in the digital world, I don't think I have too many aspiring hip hop artists, so I don't think you necessarily get that spam, but, but where can people find you on there? Dzombak: My Instagram is @wgd6788 and my Twitter is just @realTaylorGang. Watson: Well, so is that, the WGD six, seven - I just said it wrong... Dzombak: Birthday and initials. Watson: Birthday and initials, simple enough. Okay. Cause the first time I saw it, I like saw the account, I was like, ah, this is just like some sort of a spam account, but I was wrong. All right, so let's leave folks. We'll link to all of that stuff, all the brands. If you wanna check those out, and Will's links in the show notes for this episode, you can find it at GoingDeepWithAaron.com/podcast or in the app, where you're probably listening to this right now. But before I let you go, I'm gonna have you issue an actionable personal challenge for the audience. Dzombak: Find a second hustle. If you can't find a second hustle, you're not doing enough because there is so many of them out there, and it doesn't need to be massive. No matter how big or how small, you can always find a second source of income. Watson: So tell me about the ranking of the hustles when you were still at school at Penn state. So you're going to classes, you were promoting the concerts in the first half of the week. And you were also going from personal assistant to co manager to manager for Wiz. Dzombak: Yeah. So at school it would be doing the shows during the week and then Thursday, Friday, Saturday Wiz would usually have shows. I'd have to drive back to Pittsburgh from Penn state. Do the shows, fly out, come back, drive back. Watson: Right on. Dzombak: So that was a pain in the ass, but it works out. Watson: But I mean, that's what it takes for, if you want a special result, that's what it takes. Dzombak: Totally. Two hustles. Watson: Amen. Well thanks for coming on the podcast, man. I appreciate you coming out here. Dzombak: Of course, thanks for having me, I really appreciate it. Watson: We just went deep with Will Dzombak. Hope Everyone out there has a fantastic day.
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YouTube PittMoss Website Text Me What You Think of This Episode 412-278-7680 449 Setting Safety Standards for Driverless Vehicles w/ Michael Wagner, CEO of Edge Case Research10/19/2020
Michael is the CEO and co-founder of Edge Case Research, a company focused on making autonomy safer. Edge Case Research’s ECR’s products and services are geared for customers who build autonomous systems.
The company’s offerings include software that tests for gaps in computer vision systems and consulting focused on prioritizing safety into an engineering department’s culture. Michael’s experience with autonomous vehicles started twenty years ago at Carnegie Mellon University where he built lunar rovers for Red Whittaker, autonomous scientific robots that explored Antarctica, and self-driving technology for tackling harsh off-road terrain. In this episode, Michael and Aaron discuss the origins of the company, how to translate ideas across organizations, and the multitude of industries that will be impacted by autonomous vehicles. Sign up for a Weekly Email that will Expand Your Mind. Michael Wagner’s Challenge; Go see the lunar rover seminar. Connect with Michael Wagner
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Edge Case Research Website If you liked this interview, check out our interview with Argo Ai founder Bryan Salesky about autonomous cars and the episode with Locomation CEO Çetin Meriçli where we discuss self-driving semi-trucks. Text Me What You Think of This Episode 412-278-7680 |
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