196. Creating Unfair Advantages, Surviving Founder Burnout and Driving Successful Exits (Courtney Reum)

196. Creating Unfair Advantages, Surviving Founder Burnout and Driving Successful Exits (Courtney Reum)
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Courtney Reum of M13 joins Nick to discuss Creating Unfair Advantages, Surviving Founder Burnout and Driving Successful Exits. In this episode, we cover:

  • Backstory/path to venture
  • Tell us about your experience being an investor at Goldman Sachs and working with brands like Procter & Gamble, Under Armour and Vitamin water. What are some takeaways you got from that experience that influence you today? 
  • You and your brother founded VEEV Spirits which became the first line of organic ready-to-drink cocktails. VEEV received the Technomic Fast 50 Award and was named an Inc. Magazine 500 Fastest-Growing Companies in the U.S. What are some key factors that helped you establish such a successful brand? Tips for founders?
  • Tell us about the approach you used to raise capital for Veev?
  • Tell us the story behind founding M13. What was your vision for the firm early on? 
  • What is your current focus/thesis at M13? Tell us about your “repeatable playbook” approach. 
  • You took some big risks investing early in companies like Lyft, Ring, and Slack, which of course has paid off. Can you share with us some key points as to why you invested and how you were able to get conviction so early on?  
  • I want to switch gears and talk a bit about your book that you and your brother, Carter, wrote “Shortcut Your Startup.” The book is focused on separating yourself from the pack and flipping traditional startup advice on its head to provide an empowering toolkit for founders. Can you dive into that toolkit and a brief summary of the book? 
  • The benefits and biggest challenges to working with your brother?
  • One of the topics in the book I thought was interesting was “obsessively take advantage of your unfair advantages” tell us about what this means and how founders can implement it. 
  • Another topic I want to ask you about was “Success doesn’t equate to a successful exit” – What does lead to a successful exit and how do you gauge that you’re on the right track? 
  • You also talk about “getting into the trenches” and “knowing if you’re a speedboat or a sailboat” in the book. Can you give us some insight on these topics and why they’re important? 
  • From your experience, what do you think contributes most to founder burnout and how do you avoid it? 
  • What advice would you give CEOs or other C-suite executives to keep employee morale high and help their employees thrive? 
  • What are some of the biggest challenges you’ve faced as a founder and that you commonly see founders face today?
  • You have a passion for startups that are thinking about what consumers don’t even know they want — maybe for 10-20 years. Yet, in the future can’t imagine living without. How do you vet a startup investment with such nascent consumer demand?

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Key Takeaways:

  1. The idea behind founding Veev Spirits was to do something unique as a product while focusing on drinkability and sustainability, which differentiated them from many other companies in the spirits industry.
  2. M13 was founded to create a platform to institutionalize the relatable behaviors that go into building a consumer tech brand. 
  3. There are 3 main components that make up M13 – Their brand development studio also known as the “launchpad.” Their consumer tech focused venture capital fund. Lastly, the “propulsion” arm which is their secret sauce around data and analytics to productize knowledge on how you can save time and capital in terms of repeatable behaviors. 
  4. At M13 they accelerate their companies by using this idea of productized knowledge; utilizing a digital repository to capture best practices in a way that’s usable and effective.
  5. M13 is series A focused however, they are open to later stage opportunities if they have a proprietary relationship or a company that they know well. In addition, they also do some seed and series seed investments.
  6. One of their missions at M13 is to be at the forefront of understanding consumer behavior and what the world will look like in a decade. Their investments focus on a combination of both consumer tech that will revolutionize how we do things in the future, along with companies that will impact us today. 
  7. The idea behind writing “Shortcut your Startup” was to debunk common myths around the difficulties of building startups and give readers the confidence to do it by providing a playbook. 
  8. Working alongside his brother, Carter, has been a great partnership because they have a better understanding of each other that you can’t always quantify or articulate to someone else. Of course, along with the implicit love and trust they have as brothers, Courtney states “what’s the point of success if you don’t have anyone to share it with.” 
  9. The biggest challenge to working with his brother is navigating on the fine line between work and personal life to maintain that balance together. 
  10. Courtney is involved with the group Defy Ventures that provides an entrepreneurship program to incarcerated individuals. He shares how impactful the program has been for all parties involved and how powerful of a reform tool it has been, being able to provide knowledge, opportunity and ultimately a second chance to these individuals. 
  11. The chapter in his book titled “Do What You Do Best & Outsource The Rest” is about obsessively figuring out what your unfair advantages are. Everyone has an unfair advantage, the key is figuring it out and truly harnessing it.  
  12. Courtney shares his “sailboat or speedboat” analogy representing the reality that growth is often non linear.
  13. Almost every company starts out as a sailboat, sometimes the wind or momentum picks ups and sometimes it dies down. Then you reach a point where all the key elements of your business align, you’re ready to turn on the engine and convert to a speedboat.  
  14. The best founders are the ones that know what they know, and know what they don’t know. Courtney believes that you don’t need to be the founder that can do it all and take on everything, because very few people can sustain that long term. 
  15. We tend to glorify founders that are rock stars and can do it all however, founder burnout is real and it needs to be talked about more so we can proactively work with founders to prevent it and keep morale high. 

Transcribed with AI:

0:03
welcome to the podcast about investing in startups, where existing investors can learn how to get the best deal possible. And those that have never before invested in startups can learn the keys to success from the venture experts. Your host is Nick Moran and this is the full ratchet

0:23
Welcome back to TFR today Courtney Reum joins us Courtney is the co founder and partner at m 13, an LA based brand development and venture capital firm investing in early stage consumer products technology and media companies. In today’s interview, we discuss Courtney’s experience working as an investor at Goldman Sachs, founding vive spirits and his experience exiting that business. The story behind the founding of M 13. Their investment focus the importance of an unfair advantage as a startup founder. Why he carves out time to work with incarcerated entrepreneurs through defy ventures, the difference between quote speedboat and sailboat startups and we wrap up with a discussion on burnout and depression and how that is affecting startup founders. Here’s the interview with Courtney ream of M 13.

Courtney ream joins us today from LA according is co founder and partner at m 13. And 13 is an LA based brand development and venture capital firm with investments in Pinterest lifts snap and ring among others. Courtney along with his brother Carter is author of the best selling book short cut your startup previous to m 13. Courtney was recognized as Goldman Sachs 100 most intriguing entrepreneurs for years in a row, and his entrepreneurial venture vive earned him a place on inks to 50 fastest growing companies. Courtney, welcome to the program.

1:58
Thanks so much for having me, Nick. Great to be here.

2:01
Yeah, always good to have a Midwesterner despite, you know, your new home in LA. But tell us about vive the spirits company. What’s the background there? How did you start it? You know, what are some sort of the key elements for success for the business? Sure,

2:14
well, probably not unlike a lot of people after college, my brother and I went to school out east at Columbia in New York, and you do when you don’t know what you’re going to do. After that I ended up working on Wall Street. We were investment bankers at Goldman Sachs, I in particular was in the Consumer Products Group. So I was fortunate enough to work with a lot of really interesting brands. You know, I worked on Procter and Gamble, Gillette’s merger, helped take Under Armour, Republic, things like that, and then got involved in one spirits deal that I didn’t end up seeing the fruition but got really interested by, you know, just that market, how, how little innovation, there was, in some ways how, you know, some of the exit multiples awards, and how if someone built a brand like a Grey Goose, as an example, To the victor goes the spoils. So we got pretty interested in that. Plus, when you’re at someplace like Goldman Sachs, you get a great experience and finance and certain other skill sets. But we really wanted to broaden it out and do a little more in terms of branding, brand building marketing strategy, and so vivos a great, great way to do that. And then, in terms of the actual proposition, we really wanted to create something that we thought was easy to drink, and relatable, yet was a little bit different than what existed. So I wouldn’t go so far as to say we want to create our own category, but we kind of want to create our own subcategory, if you will. So vive was not technically a vodka for most of its existence, but it kind of mixed and drank like a vodka gin. And it was infused with ice Berry, which not many people knew about at the time to give it really interesting flavor profile. Other organic ingredients like prickly pear and and also Rolla cherry to give it a bit of a unique taste almost the way you drink a wine where you’d get something on the front palate, maybe something else on the side palate, something else on the finish. Compare that with most vodkas, where it’s one kind of flavor and usually a synthetic flavor note throughout, we thought Viva would have a more interesting flavor profile, therefore, more sippable more mixable, or more drinkable on the rocks. So that was kind of premise for starting at along with the fact that we felt like people in the spirits industry really weren’t doing much around sustainability. So we thought, if we could do something unique as a product in the bottom as a company, I would really have a shot. So we had, you know, we were made by the first distilleries powered by renewable wind energy. We were members of 1% for the planet, I could go on but that’s what made us kind of create something differentiated both both as a product and Company.

4:30
Have you invested in a spirits company since your vive exit? closely?

4:34
No, despite obviously being asked a lot and there has been one investment in a company called empirical spirits. I think it’s really interesting. It’s the founders of Noma, which is out of Denmark out of Copenhagen. It’s been you know, voted one of the best restaurants in the world several years in the last decade. They’re just super outside the box thinkers and they’ve created these spirits that are literally, you know, vif to the nth degree and that they’re not really care grises anything they they have one that tastes like a tequila but is not a tequila they have something that tastes like a vodka but is not. And these things are made from barley and quince and other things like that. But they’re phenomenal, not exaggerated probably had 100 100 requests to invest in people’s spirits brands. And this is the only one we’ve done just because I thought it was so innovative. But overall, we’re we’ve moved fast spirits.

5:21
Very cool. Yeah, coincidentally, we made a food tech investment, and their head chef is a former chef from Noma. So a couple things in common here, but tell us about the founding of em 13. You know, when why, why did you do it? And how are you structured?

5:36
Sure. So, M 13, kind of came about a little bit out of necessity, and just kind of, so I guess, like any entrepreneurial journey, the first, I don’t know, three, four years, we did vive. That’s all we did, because that’s what you have to do heads down everything else. And the last couple years, we started to realize that one V was opening a lot of interesting doors, and we were getting other interesting opportunities to do other things. And we wanted to make sure we didn’t, you know, didn’t say no to those unequivocally. So by the time we sold Vive, we had served on some other boards, been advisors to other companies, a couple of which that had done very well done better than we’ve even. And then we had done some angel investing, we probably had a portfolio of at the time, couple dozen angel investments across consumer and tech. So it was a little bit of that. Okay, what do we want to do? When you wake up the day after you’ve sold Vive, we felt like we really had this interesting place in the world in terms of, as I said, Goldman background, everything else, entrepreneurs and operators, advisors, board members, and then, you know, this pattern recognition of the investments in that whole thing. And so, m 13 really came about because we looked at what was going on the landscape. And we said, Okay, we could try to start the next, you know, XYZ consumer brand, that’s hard enough. But we thought there’s a lot more repeatability, there’s go that goes into building these consumer tech brands than people give credit for. And so rather than start the next brand, or only start the next brand, if we could start a platform to institutionalize or you know, kind of institutionalize the repeatable behaviors that go into building a consumer tech brand, and we did that successfully, we could build both a platform. And then all the kinds of companies offer that, whether that be through investment or through us, starting brands from scratch. So that’s our mission, maybe a little bit what Ray Dalio did for humbly, I would say what Ray Dalio did for Bridgewater and hedge funds, we wanted to kind of endeavor to do something like that in consumer tech. So we started on 13 as a kind of a holding company or platform, whereby we both create our own brands, we call it our Launchpad, but it’s kind of a Brand Studio, then we have a consumer tech focused venture capital fund that we’re just finishing raising. And then we have this arm that we call propulsion, which is really that secret sauce around data and analytics, which we just hired a partner for this kind of productize knowledge of how you can save time and capital in terms of the repeatable behaviors, and then certainly, hiring great folks and probably over hiring compared to most other people in our shoes, to be able to have, you know, resources to, to support these companies. So that’s kind of how we’re set up and how am 13 came to be?

8:14
Yeah, you know, I’ve read about the fund, and then also Launchpad, as well as propulsion. Can you kind of break down the difference between the three?

8:24
Yep, absolutely. So the fund is the fund. We don’t have a clever name for that. But I think it’s pretty self explanatory. And then Launchpad is what we call, basically our brand development studio. So we call that Launchpad launch and brands have it and then propulsion is the gasoline, if you will, that we hopefully pour on both our portfolio companies from our fund and the brands, we start on the launchpad and so that that is our secret sauce.

8:52
Yeah, tell us more about the gasoline. What does that mean? How are you, you know, accelerating these companies? Yeah,

8:57
so it’s kind of around these three pillars I mentioned, it’s around the idea of productize knowledge, it’s around the idea that if we can actually have a digital repository to capture all these best practices, whether it’s go to market strategy, whether it’s relationships, whether it’s, Hey, I need help with paid social, I don’t know where to start. And just resources, I think, just capturing those in a way that’s usable, and a living, breathing thing that’s literally getting updated on a daily basis. I think that’s different than what anyone that I’m aware of really done, you know, we have dedicated resources that are just in charge of updating our playbook and digital repository. You know, the productize knowledge is really that, yes, there’s no one size fits all. But I you know, we’re seeing businesses that have 50% in common with each other, and I’ve yet to find one that doesn’t have, I don’t know, just to pick a number out of thin air 10%. And if I can save you 10%, especially in that first, I don’t know, six months, 12 months, the earlier days, that’s a huge savings. And so it’s really just kind of chronically in that and have it be in a way that’s really used are friendly. And the last piece of propulsion is that we’re hiring a lot of what we think are really best in class and hopefully a world class folks to work in the propulsion arm. And what’s getting these people excited. These are these are successful founders or C suite people or marketing ninjas or growth hackers, where I think if I said to him, Hey, do you want to work on a bunch of early startup brands out of our launch pad? They would say, maybe, but I don’t know if that really gets their attention. If I said, Hey, do you want to work on a bunch of portfolio companies for us, again, might get their attention, but I’m not sure it would really keep their attention. When I say hey, would you like to work cross functionally across the 13 platform and have economics and equity in the whole thing and get to work on this diversity of brands, that’s got a lot of people pretty excited about what it could become. So you know, people is for sure, a big part of that propulsion.

10:49
But, you know, I’m reading through a number of the brands that you have worked with, in some capacity, you know, Pinterest and Lyft, and snap and ring and SpaceX and headspace FanDuel, but Obos. I mean, it’s an impressive list, are these investments that you guys made, you know, early stage seed series, a investments? Are these people that are going through the, you know, propulsion are the branding side of the business? Yeah,

11:15
great question. So, you know, we’ve we’ve kind of, we’ve kind of called it m 13 1.0, and M 13 2.0, m 13 2.0. Meaning, the emergence of really formalizing this propulsion team, that’s only been in effect, less than a year, you know, more than six months, less than a year. So brands that we invest in now are really kind of starting to experience and getting on board and everything else. Most of the brands you just mentioned, were already further along, by the time we got involved, or we certainly didn’t have a resources way we do now. So I’d like to think that if you know, ring, which we put some of the first million dollars to start it tomorrow, they would absolutely, you know, we would be able to impact them in some positive way if they started today. But what what kind of happened with brands like that, back then was that we were doing a lot of the same things we were doing now, honestly, it was, it wasn’t as big an effort or as formalized an effort. And it was mostly doing it by hand, if you will, meaning, it wasn’t really a scalable approach. And part of what we’re trying to do now is almost have a collective brain where even if I’m not available, someone else, remember their team can help the portfolio companies or the brands, we’re starting with what they need. So it’s all about this kind of shared brain and how we can make that available to everyone. Got

12:29
it, this repeatable playbook that you guys are, are well known for, is that sort of one in the same or related to the Propulsion Program? Or is that a different sort of exercise and toolkit?

12:43
No, that’s, that’s similar. I mean, the propulsion is, I think, what sets us apart, because we’re spending a huge amount of money and resources to over index on how we can, you know, one of our our big mantras is that I we believe and hope that, you know, I think venture The world doesn’t need another venture capital firm, I think the world does need another another venture firm, we kind of coined ourselves a venture engine, in terms of figuring out different ways to add value. And I think venture ventures and industry will have to figure out new ways to add value over the next decade. So our whole mantra is, can we move along the spectrum of trying to be helpful, you know, in picking winners to actually helping impact things and help make winners. And so that’s the goal of M. 13, in general, but certainly the propulsion arm is tasked with with a large part of that.

13:31
Got it got it one more house cleaning question before we jump into the fun stuff. So check size and and desired stage at an entry point for him. 13? Yeah,

13:42
great question. So our funds not closed yet. We haven’t announced all the particulars, but let’s just say our original soft target was of $150 million fund, we were lucky enough to blow past that. So we’ll, you know, end up somewhere between somewhere probably closer to 200 million. And, you know, we’re, I would say we’re series a focused, I guess that means that, you know, let’s call it a $5 million, check, give or take probably 334 million at the low end, seven or 8 million at the high end series, a focused doesn’t mean we won’t do some select later stage stuff. If we have a proprietary relationship or a company we know well. And then certainly, you know, we do have to do some seed and series seed investments, because I think the whole world is starting to go upstream in the sense that they’re getting into deals earlier. So they have a wedge. So we have to, you know, follow that and do that. So, you know, we’re looking at a myriad of things. But I would say series A is the sweet spot.

14:33
Very good. So, Courtney, you know, you’ve talked in the past about your passion for startups that are thinking about things that consumers don’t even know they want yet, you know, maybe not for 10 to 20 years, yet, at some point in the future, you know, these consumers maybe can’t imagine themselves living without these things. How do you even think about that, and how do you begin to that that from a startup investment standpoint, When this consumer demand is so nascent and hasn’t yet materialized?

15:05
Yeah, it’s a great question for us, one of our missions at m 13, is to really be at the forefront of understanding consumer behavior and what the world will look like in a decade, you know, call it 2030, we definitely are making a mix of investments and things that I think people will see coming here. And now in the not too distant future. And other things that are definitely a little ways out. As an example, we are finalizing an investment leading around and a company called emerge, that is a technology around tactile touch. So if we were doing this interview, we could each have some kind of device where actually reach out to shake your hand and you actually feel some sensation, what that kind of emits and what kind of emotions it creates. And now start to think about a future where I really want to go get a new pair of shoes, and I kind of want to feel them, I can have this device where I might be able to touch the shoes and kind of get a feel for him, and I don’t even need to go into the store. Now, I wouldn’t call that a moonshot. But that’s also not happening tomorrow. And so we’re definitely making investments on things that are further down the line like that, as well as things that are closer to home. You know, that might be okay, how you buy and sell your house or a car or things like that, that you know, are changing quickly. But people will see these things in the next 12 to 24 months. Love

16:24
it. Love it. So let’s talk a little bit about the book that you and your brother wrote, shortcut your startup, why’d you read it?

16:33
We wrote it, I think because we felt like we are living in this place of I think it’s what I said earlier. Well, I think people were not totally, you know, cognizant of how much repeatability goes into building these brands. And I also think that we’re living in a world where I’ll never forget the publisher, a publisher, Simon and Schuster said, well, we need to know who your books for. And I said, I don’t know what you see out there. But you know, who has a business idea, they want to maybe action? Pretty much everybody. So I think we felt like if we could write a bit of a blueprint for what we’re trying to do with them. 13, but also, we called the chapters in the book startup switch ups. So it was a lot around things where people might have said, Oh, this is how you start a business. And whether it’s because of technology, or speed of innovation, or whatever industry you’re in, that’s not really the case anymore. So it was a lot about trying to kind of debunk myths and give people hope that anyone can do this. And here’s a little bit of a playbook to do. So.

17:36
You know, out of curiosity, it’s no big secret. My my big brother came and join me at the venture firm earlier this year. I’m curious what you think are sort of the best, the best things, and also the biggest challenges about working with your brother?

17:51
Well, as I’m sure you can relate the the list is not short. But I think for us, we’ve been doing it for over a decade now. So there’s ups and downs in any relationship, but I think at the very least I can I think we have a good sense of where each other’s hot buttons will be. What’s great about doing something with my brother is, of course, there’s implicit love their implicit trust, I think, an understanding of each other that you can’t always, you know, quantify or articulate to someone else. And you know, then on good days, what’s what’s the point of having success if you don’t have anyone to share it with and have that fulfillment. So it’s been fun to be on the journey with my brother. But I think the biggest things we’ve learned from from the jump, because we’ve now done it, and I’m 13 and Vive and, you know, we actually both worked at Goldman and went to the same schools, although that’s a very different experience, because you don’t see each other all day every day, is just to know when like, when it’s too much, or where you need when you need to kind of not let the personal bleed into the professional or vice versa. And so that’s always a challenge, because we’ll have these fluid conversations where we’re like, okay, we’re going out tonight for a social dinner. And of course, work is going to come up at some point or vice versa. And so just navigating that, I think is probably the biggest challenge. But overall, I think we have a really good relationship.

19:03
When you finished up at Vive, was there ever a thought that you guys might do your own thing separately, before you launch them? 13

19:11
I think potentially, but it was never really discussed. And we kind of like I said, it wasn’t like we woke up one day. And so we want to do em 13 It was kind of this evolution of the pattern recognition of what was going on in the world. And so it was like, Okay, let’s try to test some of these theories about affecting outcomes. Let’s get involved in this brand. And my brother and I both have, we’re both doers and are trying to work on simplifying. So it was a lot of saying yes to things. And before you know, the cup runneth over again or the plate was was full. And so I don’t know that we ever took a big break. But now I think I think what we’re trying to build with them. 13 is also something where there’s unlimited opportunity and a good degree of flexibility. So what’s nice is we can both be working for the good of em 13 and the good of our employees and the good of our founders that we’ve invested in everything else, yet still be doing somewhat different things. And so it’s nice to have autonomy and freedom within the within the bigger organization.

20:10
Love it. Well, I’ll buy you and your brother, a Vive cocktail when you close the fund, that’ll be good day.

20:17
Indeed it will be I look forward to that.

20:19
So something I really liked in the book was this point that you made about obsessively taking advantage of unfair advantages. You know, we talked about that at our firm with regards to customer acquisition, mostly. So startups that have an unfair advantage with regards to acquiring customers. We call it our BD innovation theme. We were just talking about this the other day, I’d be curious to hear more about, you know, your approach here in in your thought process on unfair advantages.

20:48
Yeah, you know, I’m a believer that everyone has one or, you know, unfortunately, everyone’s what I say is, and I just gave a talk largely around this to a group of folks who are who are incarcerated, but doing an entrepreneurship program in or, you know, hopefully, getting out in the not too distant future. And they all have business ideas. So I’ve been going through this business curriculum, a great, great group called defy ventures. And yeah, great, great group. And I’ve gotten involved with them. And, you know, what I said is, look, I’m not gonna sit up here and pretend like I know your circumstances, or, you know, mine. I’m not gonna sit up here and pretend like, you know, I had, I didn’t have advantages probably over over you. But I said, I’ve yet to meet someone that doesn’t, that doesn’t have an unfair advantage, you have to figure out what your unfair advantages, it’s not always easy. And unfortunately, the reality is all unfair advantages are not created equal. So my unfair advantages might be more or less than someone else’s. But we all have some right. And so it was really interesting to talk to some of these folks about their business ideas, because, again, some of them were a struggle. But even if this guy who wanted to start a restaurant, he wasn’t he, of course, it was like his grandma’s recipes, and this and that. But it turned out, she had a recipe for something that he thought was the linchpin dish that no one else that he knew have ever done that way. And I said, Great, there’s, there’s your unfair advantage if this dish, or it was actually a guacamole recipe that I will say tasted quite different, you know that that might be your unfair advantage. And so everyone has one. And so it’s just really pushing yourself. As you probably saw in the book, there’s finger obsessively figured out your unfair advantages leads to a bunch of other things. We have a chapter it’s called, do what you do best and outsource the rest, or know whether you’re a sailboat or speedboat. But that all comes out of figuring out what your unfair advantage is, and a bunch of dominoes fall from there.

22:35
Yeah, you know, when Mark susur was on the program, we we touched on defy and I was just talking to a good friend and Phil investor out in Colorado, Kevin Clough, he’s he’s involved with the FBI in Colorado, but we haven’t talked about it much. Can you tell us a bit about the program? And why? Why do you think it’s important? Why? Why spend time working on entrepreneurial endeavors with incarcerated folks?

22:59
You know, for me, it is something where I’m not gonna lie, I think I get as much out of it or more than they do. And hopefully they get they get something meaningful out of it. It’s, you know, weird to be at a point in life where maybe I’m not young, but I’m also not old. But I do spend a lot of time thinking about legacy and trying to do more no impact other folks, and it is rewarding. And so it’s just led to, you know, that beginning other other things like it, and the first time I went to a program with defy was actually to judge their business, competition pitch, and then you get to see a graduation ceremony. And it’s just pretty moving. I mean, starting with, with the folks there, you know, shame on me for having preconceived notions, but I’m guessing a lot of other people did, too. But you meet people in there who are very intelligent, very articulate, very charming, very funny, some who have like, great strategic vision, I mean, all types, you know, without judging anything, I think, in general, I believe that people deserve second chances, as long as you’re not going to, you know, hurt someone. And it was just great to be around these people who really were just yearning for the knowledge, obviously, it’s a group that doesn’t have access to all the things we have in terms of, you know, just Google searches and whatnot. And then from the human side of it to go to this business competition and watch some people get emotional, just giving their business pitches because they’ve never done anything like that. And then transfer that to a graduation ceremony. And again, most of these folks, if I had overgeneralize, didn’t graduate high school, they’ve never graduated from anything, they’ve never been acknowledged, you know, for anything that they’ve done or achieved. And so to see, you know, that level of recognition getting choked up thinking about it was really was really powerful.

24:45
Unbelievable. Well, yeah.

24:47
And it zooms out to an even bigger thing that we don’t have to discuss, but just around you know, I can only speak in California in areas I know better, but like there’s not an ability to put 1000s more people in incarceration. You know, we if we You can find a way to, you know, help help people kind of reintegrate into society, or hopefully not make the mistakes that would get you in there were gonna be in a much better place as a society. So that’s a big motivation to,

25:12
you know, that was really impactful for me when I, when I was talking with Kevin about this a couple weeks ago, he was given to me, he was giving me some of the stats and the metrics on the program, and how, you know, this is a great reform tool, right. So even if you don’t believe in the mission, if you look at the numbers, and how this really, you know, helps folks make improvements and not be stuck in the correctional system and not be a consumer of tax dollars and to become productive members of society. And the low the low rate at which they commit a crime and end up back and back in jail. The stats are staggering.

25:54
Yeah, I think I don’t want to get the stat. I want to get the stats wrong, because my my friend Andrew, who runs that, would you kill me. But I think he told me that people that do their program and get out the recidivism rate. Yeah, the tough word. But the rate at which people end up back in incarceration is well, less than 10%. In one year, I think he said it was about 7%, which, when you consider that at least the types of plays I’ve gone through that’s, that’s pretty incredible, that, you know, seven out of 100 people are ending up back there and not not something much higher. So I think it’s really working.

26:26
Well, props to you for giving your time, you know, to a cause into folks that a lot of people have have given up on clearly you haven’t in, you know, you’re spending a lot of time and mental energy on something that’s really productive. So, you know, thank you for doing that.

26:42
Yeah, like I said, I’m positive, I’m getting more out of it than they do. But it feels good to give and feels good when it’s a two way street.

26:50
So, you know, back to your point, you made this really good point about being self aware, knowing your strengths, knowing your unfair advantages. I think this connects to your point about the speedboat or the sailboat that you mentioned. What does that mean?

27:05
Yeah, at a high level, it means if you’re starting a business, I mean, success can be measured all different sorts of ways. But you know, we live in this society now where you read about the companies that are worth a billion dollars in five years, or this or that. And I mean, I don’t have the exact percentage offhand. You might, but I mean, it is point 000 1% Or something like that. And but that’s what captures an outsized share of headlines. So I think people just have to keep in mind what’s realistic. And either way, even if companies are that successful, you know, it’s getting up the J curve. It doesn’t. It’s not this linear growth anymore. It’s kind of this, what you learn what you learn, maybe not much growth, maybe not much growth, and then all of a sudden, it hockey sticks. And so that’s a big part of it. And so sailboat or speedboat means, in essence, that all the companies you read about are speedboats, whereas in reality, almost every company starts as a sailboat. You know, you’re out there, you’re testing things. Sometimes the wind picks up, sometimes it dies down. Sometimes you get a little gust, aka success and momentum, then it dies down again and you feel like you’ve lost momentum. But it’s about having to stick with the sailboat or speedboat analogy, it’s about, you know, continually heading to the North Star, even though it’s not a perfect line, catching those gusts of wind when you have them. And then eventually, as we say, if you feel like the time is now and you found your product market fit and the macro conditions are right, and you have funding and all those other factors. Then at some point, it’s time to put down the mast of your sailboat and turn on turn on the motor and convert from a sailboat to a speedboat. But what I think is worth noting is that once you convert that sailboat to speedboat, right, a sailboat could work off the wind, that’s, that’s free or very cheap. a speedboat works off gasoline, that’s very expensive. And once you convert to being a speedboat, for the most part, I’ve seen very few companies be able to kind of reverse that and go back to being a sailboat. And so it’s just, you know, challenging people to be mindful of what kind of company you have. And as I said, hint, almost everyone sets out as a sailboat, and almost everyone wants to divert to speedboat prematurely. So that’s, that’s the focus of that chapter.

29:22
Got it? Well, you know, while we’re talking about sort of psychology, you know, a major issue is founder burnout. We’ve all seen it even investor burnout. I mean, people go through lots of peaks and valleys in this business, from your experience, what do you think contributes most to it? And do you have any advice on how to prevent it?

29:45
I don’t know that I have advice on how to prevent it. I’m always kind of looking for on balance myself. I think. You know, the bet my favorite founders are the ones that kind of know what they know and know what they don’t know. I think the days of being the founder that says I can do it all and take on everything Even if you can, which very few people do, but there are those examples of founders, like an Elon Musk, who seemingly can, you know, put an idea or company on their back at least for a time? Yeah. You know, I mean, Elon, who knows what he’ll say, as he looks back, if that was if that was good. But I’m pretty sure most people agree that Elon sleeping under his desk for three hours. Yeah, you could happen every now and again, but happening regularly cannot be a good idea, both for Elon for his companies, and then the greater society because I think he’s an incredible force for change with his vision. I think the biggest thing is that it needs to be talked about more, right, we talked about we glorify these founders that are rockstars everything else. But without going into details. Unfortunately, two companies that we’ve we’ve invested in out of, you know, roughly 100 founders have committed suicide. And it’s a very, very real thing. But you know, you don’t hear that side of it. I don’t think you hear about the pressure and the loneliness as much as you should. I think the conversation is starting to head that way. But that’s why we’re involved with some companies like a Thrive global, which is Arianna Huffington is company that I recently joined, joined the board of, because I think she’s really starting to hold space for the conversation around balance and burnout. And hey, maybe you give it whatever it is 1012 hours a day of your best. And that’s, that’s better than giving it 14 hours of mediocre notice.

31:20
Yeah, yeah. What about the employee side? You know, any thoughts on what CEOs what Startup leadership should be doing to kind of keep employee morale high and create an environment where employees can can thrive?

31:34
Yeah, you know, I mean, I think culture has just always been a fascinating thing to me, because starting at Goldman Sachs, when it was a much smaller place, I think I got to see the benefits of having a really strong culture, you know, I haven’t worked there in over a decade. So I can’t speak to what it’s like now, but I just know, it was strong, then it was palpable. And it was understood throughout the organization, meaning I felt it when I was talking to an assistant, or an IT guy, just like I would a senior partner. So I’ve always been intrigued by culture, I think you can, it can change so fast. And it takes so few people to kind of change the culture, positively or negatively, especially negatively meaning, you know, one or two bad apples can shift morale quickly. So you can just never be too comfortable that the culture is good and get complacent in it. I think there’s just this new movement of we looked at a business this week that was around this idea of like, I’ve had coaching for years now, whatever you kind of want to call an executive coach, a business coach. And traditionally, that’s been something that’s been done for founders or people couldn’t afford it or C suites. This company is focused on coaching for like the for everybody, right? Coaches for coaching for mid level employees in bigger companies, and maybe even up and coming employees. And, you know, I think stuff like that is a great concept. Because the more someone who’s in charge can show someone, especially at a big company, it can feel a little faceless that they care, you know, the better you’ll be because it will really, those are the things I think the days of the ping pong tables and whatever. Yeah, we do free lunch like everyone else. And that’s nice to have. But that’s not culture, culture is nobody cares what you say until they know that you care. And so it’s continuing to reinforce those thoughts are to reference Ariana Huffington again. She I remember, one of the first times I met her she said, You know, I have two rules for people that I hire people who work for me, she said, The first rule is, if I ever catch you saying something about someone behind their back, you’re fired. And I can’t remember the second rule. But it was a you know, but she said that I’m paraphrasing, but it’s, you know, I think it’s so true. Because the minute you have people saying things and not being transparent with people or not having honest conversations, that’s that’s the minute culture starts to take a turn.

33:52
Or there’s specific things or tactics activities that you do on an M 13. to sort of build that culture now at the firm.

34:00
I think it’s all the stuff I just said. I mean, we’re growing quickly. So it’s, it’s striking the right balance between consensus and making sure everyone feels like they have a voice with moving fast and trying to be progressive and have first mover advantage, a lot of things we’re doing, you know, I think the better you hire, the easier it always makes it, obviously but we work on culture. You know, I don’t want to say on a daily basis, but it’s very intentional. So just one example that will hopefully be a little more specific to your question is we have a pretty distributed company, one of our other managing partners named Carl Allah Mark came from DigitalOcean, which is kind of like a Andreessen backed Amazon Web Services Company of sorts. Yeah, yeah. They were a distributed company. So he started when there was, I don’t know, 10 employees, but that time he left a COO there was 500. And, you know, less than half of those people came to the office on a daily basis. And so if you’re gonna have remote culture, you really have to do a lot of things. Right now as it stands, you know, we have six partners and M 13. Well, actually, it’s probably up to eight or so about half of them are in LA, but we have one in San Francisco. And now we have three about to be four in New York. So without good communication and good culture, it can go south, or sideways quickly. And so one thing we do is we say, hey, we can, we can have a remote friendly culture, both geographically or even, you know, if someone’s in LA, they don’t necessarily have to be in the office every day, but be smart about it. But what we do do is these things called darken week, where once a month, the whole company gets together to usually in Los Angeles, but we’re doing one in New York for the first time coming up here. So everyone gets together once a week, a month. And so even for someone that travels or someone that works remotely, you know, you’ll see the vast majority of people in the company once a month, and it’s a great way to kind of do things face to face and keep up keep a pulse on what’s going on.

35:48
Courtney, if we could cover any topic here on the program? What topic do you think should be addressed? And who would you like to hear speak about it?

35:55
Oh, that’s a great question. You know, I don’t know who I’d like to hear speak about it. Because there’s gonna be a couple of people but I I’m just really interested in, you know, policymaking and how that’s relating to the future of not just venture capital, but you know, the future of innovation, because there are these situations you’re starting to hear about now, whether it’s monopolies and duopoly, or whether it’s, you know, user privacy. And I just think we’re at a really interesting time and in the history of civilization, in terms of kind of the individual versus the group. privacy versus protection, you know, control versus security. Those are the things that I think are very, very tough decisions. And any chance I get to talk to someone who seems well versed on those topics I’ve been jumping at.

36:43
Awesome, I’ve got a start up for y’all send it your way. It’s it’s Chicago based

36:48
love that they’re off to a good start.

36:50
Cool, Courtney, what’s one thing you know, you need to improve?

36:54
I think, biggest thing I can I think I’m someone that I like to talk, I sometimes believe that you don’t know what you think until you actually say it or write it down. But I just think, you know, I try to improve my listening a lot. But I think that’s still an area where, you know, we all get kind of caught up in our own stuff in terms of like, oh, I want to say this, and then someone moves the conversation along, but you’re still stuck in the point you want to make or just making sure you’re I think active and passive listening are very different things. And I, it wasn’t until again fairly recently that I realized that yeah, I listened. But I didn’t always hear everything that people had to say. And so, you know, there’s manifestations of that, like always being better at taking critical feedback and taking in the spirit that’s given and things like that. But I think it starts with listening. And

37:42
then finally, what’s the best way for listeners to connect with you?

37:46
Well, we always love to hear from anyone doing anything interesting at m 13. So my, my email is pretty easy. It’s just coordinate M thirteen.co. And now I won’t say all the time I checked that myself, but let’s say 90 something percent of the time. So anyone who has something they want to chat about it ideal, feel free to reach out to me and we’ll go from there.

38:04
Well, Courtney, I really appreciate you coming on the program today spending your time with us. And I applaud the fact that you’re not just cutting passive checks as an investor, but you’re also getting involved rolling up your sleeves and using your your experience to help accelerate these companies to much greater successes. So thank you. Thanks.

38:24
Thanks so much for having me and really great to spend time with a fellow fellow Illinois, Ian, likewise.

38:35
That will wrap up today’s episode. Thanks for joining us here on the show. And if you’d like to get involved further, you can join our investment group for free on AngelList. Head over to angel.co and search for new stack ventures. There you can back the syndicate to see our deal flow. See how we choose startups to invest in and read our thesis on investment in each startup we choose. As always show notes and links for the interview are at full ratchet.net And until next time, remember to over prepare, choose carefully and invest confidently thanks for joining us