Brian Luerssen of Long Jump joins Nick to discuss The Rise of Low-Code/No-Code, How Tech is Changing Developer Roles, and the Launch of Founder-Led Venture Funds. In this episode we cover:
- Walk us through your background and path to Draftbit.
- Tell us about the customer market and who you’re targeting with Draftbit.
- Are there good comps or parallels in the non-mobile space?
- Will the user of Draftbit still be a developer, or do you have cases where it’s the application product manager or others?
- Is it just web apps and native apps covering the spectrum?
- There’s this principled group of developers, that don’t want to use App builders. They want to build the ground up themselves. How do you deal with that objection?
- Have you guys achieved product-market fit? Yes or no?
- What’s the biggest challenge to getting product-market fit and hitting huge growth numbers?
- Where do you go now? How do you see the business evolve? What’s the end-all large market opportunity for Draftbit?
- Does it stay a platform that you build on and it exports code or does it end up becoming kind of its own place you build within, like a WordPress, or maybe even a Webflow?
- Any thoughts or advice for founders out there that are early-stage builders taking on something ambitious?
- Tell us about the origin story of Long Jump and why was this fund founded?
- So $100k, across the board for all investments is or is there some discretion to move up or down?
- Is this kind of like an application accelerator program?
- What happens if you come upon an opportunity where they’re raising an early round. It’s coming together quickly. It’s something that hits home with one of the GPs. Can you jump into that or does it have to go through your formalized process?
- I imagine a lot of the LPs are founders, former founders that have been through this. Is that a bad assumption?
- Do you have some back office or operations support or somebody that’s kind of focused on connecting these dots?
- How have you thought about other established models and kind of taken best practices?
- Why not direct them to an accelerator program?
- How do you handle the criticism from investors that claim you should focus on the business Draftbit and not running a fund?
- What is the future look like for Long Jump?
- YC vs TechStars. Go.
- I’m curious as YC is scaling, I think it’s like 700 companies a year now, the density and power of the network, is it the same as it once was? I don’t know, does the signal decline or not?
- Have they architected a hub and spoke network or a mesh network? Can the spokes or the nodes get a lot of value out of each other as it expands, or is it overly reliant on the hub for value?
- I’d be curious to get your comparison advantages, disadvantages, to the Bay Area versus a second-tier ecosystem and how you’ve seen that change over time.
- What do you know, you need to get better at?
- What’s the best way for the founders out there to get in touch with Long Jump? What are you looking for? What should they come with to get accepted?
The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in the exceptions.
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Transcribed with AI:
Brian Luerssen joins us today from Chicago. He is cofounder and CEO of Draftbit, which creates a new way to build cross platform native iOS and Android apps in minutes instead of months. He is also General Partner of Long Jump, first check, founder-led fund based in Chicago. Previously, Brian was a serial entrepreneur and investor spending time at OkCupid in the managing director of TechStars Chicago. Brian, welcome to the show.
Thank you, thank you for having me. It’s fun.
Good to see you, as always. So um, I’ve heard the story, but the audience hasn’t, you know, walk us through the path, I guess, the path to Draftbit, you know, if you can do that in three minutes.
Yeah, the path from from nothing to Draftbit. Yeah. So you know, I’ve been an entrepreneur since since I was in high school, when I started my first business, many successes, failures, everything in between, moved to Chicago, in 2007 2008, went to business school, got to meet a bunch of people around the creation of Excelerate Labs, which Excelerate Labs eventually became TechStars Chicago. And through that, I got to know my friend, Sam Yagan, who then after Business School, recruited me, he had just sold OkCupid to Match. And I went and worked for him for a little bit and ran this thing called OkCupid. Labs in San Francisco, which is essentially at the time was the innovation arm of match.com, which is basically creating new businesses from the ground up inside of the big Match company. After that, in about 2015, moved back to Chicago, came back to that organization Excelerate Labs, which was now TechStars, Chicago, and ran that for two years with my friend Troy Henikoff, comanaging director and left after left at the end of 2016, early 2017, with wanting to get back into operating, wanting to start another business, and so formed a team kind of early in 2017. And we started building this, this business called Orchard which is, which is what you invested in
I know Orchard. No, rather I invested in you.
Yeah, of course, of course. Um, but a really cool business idea that I had, we started building it, started trying to test it, iterate and get out there. And then you realize, you know, like any, like any founder, you you run into roadblocks, and you have to figure out whether those roadblocks are fixable or not fixable. And some of the things we ran into, we didn’t feel like were very fixable. And at the same time, what was happening is we had gotten accepted into Y Combinator. And so we were out in San Francisco. And we were, you know, working on Orchard iterating, building new versions of Orchard sharing it getting test users all those fun things. And we would sort of show versions of Orchard to people. And they would sort of be like, yeah, that’s neat, but like, how did you actually build this app in a week in two weeks in three weeks. And so we were just moving at this really fast, iterative pace on building our apps. But we weren’t seeing the rewards of doing that. And all the founders inside of YC, just wanted to know how we were building the app so quickly. So by the end of YC, we were sort of realizing that there are a bunch of structural problems with Orchard. But we might be, we might have a good take on like, how do we do mobile app development? And how can we turn that into something that other people can use. And that’s what led us to Draftbit. And so the idea behind Draftbit is to build a platform that enables really anyone but focusing on sort of semi technical teams to really move a lot faster than you would if you were doing traditional software development around mobile apps. And so that’s, that’s the secret sauce behind what we were doing at Orchard, right, which is, it wasn’t just engineers who were building it was engineers and designers and me and product people, and everyone was building the app collaboratively. And that’s what we now that’s the vision for Draftbit, which is to unlock the ability for non engineers to actually build apps alongside of engineers. And that’s what that’s what we’re doing today.
Got it tell us more about the customer market and who you’re targeting with, with Draftbit
yeah, it’s it’s, it’s super interesting. We’ve had we’ve had so many people sign up for Draftbit from all walks of life all over the globe, all technical levels, from I’ve never built a build anything and software to like, you know, people who’ve been building mobile apps for 20 years. And our sweet spot is we’re finding our sweet spot is not the people that have never built anything but our suites. But we were very much a power user tool. We are the tool that’s used by startups and by agencies and by dev shops. So those are our sweet spot customers. We are getting pulled up into innovation teams and, and skunkworks teams in enterprise as well. But I think right now, we really we do really well at helping small agencies who are building apps for their clients. And what they need to do is move really fast and produce really high quality code and Draftbit enables them to do that.
Are there good comps or parallels, you know, in the non mobile space? You know, the website builders are
the best is Webflow for sure. And Vlad from Vlad’s, the CEO of Webflow. I’m a big fan of his and he’s an investor in Draftbit and you know, Webflow is like you’re in the in the website building space. There’s obviously the likes of Wix and Squarespace and those guys which are very, very big. But if you look at Webflow and how they differ It’s they are the power user tool. And they let you build pretty much anything that the HTML and CSS spec require, like allow you to do, they have a tool built around doing that. And so because of that the things that come out of Webflow, you can pretty much build whatever you want. And people build all kinds of amazing, powerful websites. You know, in the earlier versions of Wix and Squarespace, those are great businesses, by the way, but you tend to, those tend to be really template driven things where you kind of take a template, change three things, get it live, because you’re getting a website live for a pizza restaurant, you kind of don’t care. But in the world that Webflow operates in, you’re building truly bespoke websites. And that’s really the we get called that by our users. And we like it, we kind of are called the Webflow for apps. And we like that
it’s kind of amazing to me that the Webflow for apps doesn’t exist at scale, yet, there’s this opportunity for Draftbit and I know there’s some others that are trying to do it, we looked at a bunch of them, and very thankful that we’re Draftfit. But it’s kind of amazing, because mobile apps, they’ve been around for a bit. And often they occupy more eyeball time than the websites themselves.
Mm hmm. Yeah, it’s, you know, you know, what’s interesting about applications separate from websites is that in application land, usually what you actually need to build is kind of unique and bespoke and different. And so there are predecessor businesses around building templatized apps. But it turns out, you don’t really want to be the 100th app in the app store that looks and feels like the 99 before. And it doesn’t really make sense. Unlike websites where like, if you’re a pizza restaurant, you need a website, you don’t really care what your website does. So you can be the 1000s, or the 100, or whatever website with that template. But in applications, everything is idiosyncratic and bespoke. And so that’s one of the reasons it’s been so hard to go from templates to building full scope things because basically our job, our product, we productizing things of computing part of parts of computer science, like we don’t, we can’t just start with a template, we do use templates as a starting point. But like, we have to worry about state management and logic and security. And like all these really complicated things that we’d figure out how to build product around it. And that’s just a really enormous This is this I really enormous undertaking. This is by far, I’ve built a lot of crazy big products in my life. This is like 10x, the complexity, we don’t we have to build code that writes code for other people’s products, we have to build our product to build other people’s products. And like, so it’s just a real, really kind of crazy thing. And that’s, that’s really hard to do. There are companies as well who’ve done it in the enterprise full stack, like fully inclusive of the back end and the front end the server. The difference between us and them is those platforms are nearly unusable unless you’ve been trained for years to use them. And so we are trying to we’re trying to find that happy medium between something that is powerful, but also usable by kind of normal people
love it. Yeah, we actually the very first product I was ever Product Manager, oh, it was a product called Mechaware. And I worked for this company that was advanced robotics. So very low latency motion control, like high speed stuff, printed circuit board manufacturing, wafer handling robots. And the code was so complex, we could only sell into the highest end sectors. But we had the best stuff, right, we had combination software hardware. And so we built this front end, which was just blocks, it was blocks that represented each of the major components. And you could connect them in in a visual way, you could then put together these high, low latency, high performance motion systems. And so it opened up the market, I mean, that the TAM really exploded. Once we had a front end and a way for many different folks to create something that previously was so complex.
Yeah, yeah. I mean, that’s, that’s a pattern that we’re doing is one that I think that’s also what’s nice about most we get asked a lot like Why aren’t you guys doing web applications? Well, one of the nice things that we get from working on mobile is we get the constraint of there are standard ways that you kind of do navigation, right? Like a lot of apps have tabs at the bottom. And there are standard ways you do authentication. You everyone signs in and you get a token or you like their standard things that we’re able to turn into those standard blocks. Web applications are sort of like the wild, like anything goes in app in web applications. And so it’s nice that we can turn things into block reusable blocks, and do that. That’s one of the ways we do it. But it’s still, it’s still tricky, because so much of like I said building an idiosyncratic app, is the logic is also idiosyncratic. And the business rules around building app are idiosyncratic. And so we have to build something that is both able to move quickly able to be built quickly, but also customizable, so that if you need to dig into the weeds, you can do different things. Because your app is different. And everyone’s app, everyone’s building an app is building something different.
So the user will still be a dev or do you have cases where it’s like the the app application product manager or others?
Yeah, we’d like to, we’d like to describe our use As like on the spectrum of semi technical to very technical. We have many people that are like if you’re building things in Zapier and Airtable and doing some of these sort of advanced, more advanced recently, like if you built a website and Webflow, and you’ve hooked up the content management system to Zapier, and that, like doing some advanced things like that, that’s, that’s advanced enough to work in Draftbit. And so we have many people that are building at that who are semi technical, they’re not full scale developers, we also have many developers, it’s funny, it’s funny to talk to developers who are using Draftbit because their initial they come into it, they’re like, I’m not gonna like this. Like, I’ve tried these code generation tools, and like, the code never works, and it doesn’t look good. And then I’m like, I have to recreate it. And what’s so funny is like, they always have the same sort of front and then like, about 50% of them still, some persist with that, because you can always have people that have strong opinions, but many people who are devs come out and they’re like, Okay, wow, what you look, you used to take me hours to kind of get my navigation stack working with Draftbit, but I did it in 10 minutes. Like, okay, yeah, I am trading off a little bit like I don’t have full control like I do in pure code. But Wow, what a savings of time. And and how much easier was it I have to go look up Doc’s and reference all those things. Especially we find that’s tradition, too, for developers who their bread and butter isn’t mobile development. Like they are developers, they’re doing something on the back end. And they they’re like, I don’t really want to learn React Native, I don’t want to learn mobile paradigms, I just want to like build, and I want to get the source code out. That’s one of the things that Draftbit is very different from everyone else’s, we build high quality source code that you can export and read and maintain, you can drop it into GitHub or GetLab and like, you can do all those fun things. And so a lot of developers actually like that, because then they can actually see what they get.
And is it just web apps, native apps, you know, you covering the spectrum?
We do so we’re because we’re building and React Native, we actually, we hit three kind of destinations, it’s iOS and Android native apps, that’s our primary focus. We also do publish PWAs. And so PWAs are kind of the way that mobile is moving into the web spaces through this thing called a PWA progressive web application. And so if you ever use Twitter, on either the desktop actually or on your phone, you’re running a PWA and that’s kind of that we’re able to put out a PWA. So we do have some people that have built something for iOS and Android, and then they’re using it outside in the browser in the desktop. That’s also actually really useful in foreign countries. When you’re trying to create an app that avoids government censorship, you use a PWA.
Oh, interesting. Okay. And then, you know, I was gonna ask this question about I mean, I’ve, I was a dev, I grew up as a dev I used to code it’s been over a decade, but there’s no there’s there’s this resistance, right? There’s this principled sorta group of devs, that they don’t want to use App builders, they don’t want to use low code solutions, or no code solutions. They want to build the ground up themselves, you know, how do you deal with that objection?
Yeah, you know, you know, what’s funny is two things, one in Draftbit, but you can export your code at any time. So we have a whole class of users that actually come in, and they they use Draftbit for bits and pieces, and they just take the code out, and they drop it into their like, I’m gonna use Draftbit for the for the parts that I find annoying or obnoxious. And then I’m going to take that code and put it where everyone I’m going to keep building on myself, that’s the first thing. So we do allow kind of this hybrid state, although we don’t allow you to import code back end. So you sort of it’s sort of a do things and export out kind of only mode. The second thing though, is we find that when you apply a business lens to it, like if you are purely trying to create the highest quality source code, go the deepest into you have the most bespoke control, then you of course, coding it by hand will give you the most control. It will also take you orders of magnitude, more time and more cost. And so I think whenever you apply a business lens of Should I spend eight hours custom coding my own login flow? Or does that actually important to the business that I actually have that be bespoke? You know, when you apply any sort of business lens, you’re usually like, Okay, well, I can do it in 12 minutes and Draftbit or I can do it in four hours or eight hours outside of it. Like, why would I want to do that. And so most of the most of the developers that I think get caught up in that trade off aren’t thinking about the the other side of the trade off, which is time spent or cost, which is where we’re really powerful.
So have you guys achieved product market fit? Yes or no? And, you know, what’s the biggest challenge to getting there and hitting, you know, huge growth numbers.
We’re working our way there. We’re definitely not we don’t feel like we’ve hit it fully yet. It’s so strange to be building a business where it sort of feels like after two or three years now, we still don’t have like, we’re still we actually talked about this a lot of Draftbit, we’re still kind of building our MVP. And that’s a such a crazy thing to say after building it for years, because it sort of feels like there’s one version of that where you’re like, these guys don’t know what they’re doing. They don’t have any idea how to build product. It’s not that it’s that the MVP in the space is so all encompassing, because to actually build an app from nothing to a fully App Store ready app, including data and, you know, API’s and navigation And state management and all these fun things. It’s just such a big thing to build. We’re getting there, and we’re starting to see some really exciting results. I think it feels like we’re we’re very close, but we’re not there yet. And I think that’s what the next six to 12 months for us probably looks like.
Good. talk a bit about the roadmap, you know, where do you go from there? How do you see the business evolve? what’s the what’s the end all large market opportunity for Draftbit?
Oh, well, I mean, you know, this market is enormous.
Like, think about how many dev shops and agencies there are in the world? And how many clients are asking them to build apps or build, you know, we can move into web applications? At some point, we’re aren’t doing it because we’re focused from a product perspective on
especially with talent shortages. I mean, it’s like, every company I know, is trying to hire, you know, good engineers. Yes.
Yeah. And here’s the funny thing about that is that, like, people used to say the same things about websites, like, Oh, I want my website to be built by this great developer. And like, I’ve got to do it in this right way. But like now, 80 90% of websites are built on platforms with WordPress, and swix, and Webflow, and you know, Shopify, all these things like, and so we think that’ll be true of application building in the future, you will still need to hire engineers, as it turns out, you will need engineers for the hard things you won’t need engineers for like, I want to put a purple button on this screen and make it go to the next page. That’s not like worthy of an engineer’s time. But frankly, if you ask the average engineer, what do they spend time on a lot of what they spend time on or things like that. There are many other roles in a business that can be taken care of that, or even things that should just take 10 minutes, that should currently take three hours, right. And so that’s how we think we think about that opportunities being so enormous there are, I think there’s something like, you know, one of the stats we used to talk about is how there’s, there’s more than a billion people that have grown up using software every day in their lives, but only 80… 60 to 80 million of them can actually create software. And so there’s 900 plus million people that have been using software for their whole life, and know the benefits of it. But it’s can’t can’t build that themselves. It’s almost like imagine, like, if I told you like, you know, we have this access to this thing called fire, but only at like, only, you know, 1% or 2% of the people know how to start fires, like what we should all be able to create software, that’s that’s really the fundamental opportunity that we’re tackling is the ability for non engineers to have a say and be able to affect change in creating software. Right. And that’s the fundamental premise and that, that that premise is trillions of dollars, frankly. So I think a little part of that is, is it’s kind of how we think about it,
does it stay a platform that you build on and it exports code, you use that code? Or does it end up becoming kind of its own place you build within like a WordPress, or maybe even a Webflow, or
I think we actually think it a little differently. So so the future of Draftbit, because we care so much about high quality source code, that’s like the lifeblood of how we think about being good in the space and, and being successful. Because we believe fundamentally that you have to get to a state where you have non engineers working with engineers that most most no code platforms live in this, like land where they say, you’re never going to be engineers again, and they sort of wave their hands, that’s just really not true, there’s going to be no product that actually scales that doesn’t need engineers, I’ve never, I can’t I can’t imagine what that are, at least not anytime soon. And so you have to get to a state where you have engineers and engineers working together, that fundamentally relies on having high quality source code. So the future of Draftbit is actually allowing the source code to leave Draftbit, but you can still use draft. So the source code can live in GitHub or Gitlab and Draftbit for people to pull down. And you’ll be able to make changes just like you would in a text editor. But you’ll be doing it visually. And you’ll be doing with this tool set. And so one of the ways we describe our business is a visual ID for non developers, it’s a way for a non developer to actually participate in the development process, creating source code, just like a developer would do. But they use a tool to generate it. the only the only problem I have with that analogy I just said is that it’s not just non developers, it’ll be developers to because they see the value in it. So it’s really like just a way to build source code faster. And so that’s how we think about the future.
Cool. Love it. Any thoughts or advice for founders out there that early stage builders taken on something ambitious? Whether it be something like Draftbit or, you know, just starting there?
Yeah. I was talking to another entry. But look, the funny thing about the no code locker space is a lot of founders. We don’t talk to us, we’re all trying to conquer the same problems at the same time. Like everyone’s like, how do you deal with state management? Yeah, it’s really hard. It’s funny, I was talking to another founding team in Texas, it’s starting down the path of building kind of a different no code ish tool, and I was like, just be prepared, like your product is going to be it’s so big, like so hard to build in this space. And they, they sort of like okay, they you have to kind of mentally prepare yourself for for a long product developments, like so much. So much of what we talked about in startup land is like, yeah, I’m gonna build an MVP in a weekend and then I’m going to be focused on growth. And like, that sounds really great. I would love that. But that’s not the space that Draftbit or no code platforms live in. We live in the space of like, have our investors Tell me the story of Figma? Like Figma is a similar thing took them like four and a half, five years to get Figma. Right. And then they’re growing. I’m not saying we’re Figma I don’t believe I don’t know that we have any evidence to prove that yet. But like
Video collaboration, and yeah,
it’s online design, and you can design like sketching, and it just took these platforms to actually, to reach the level of fidelity of all these things you need to do, they’re just really big. And so my first advice to most startup founders building in this space is like, be prepared for a multi year slog, because it’s gonna take some time. You know, the other. The other thing that I coach entrepreneurs all the time on is like, I talked, I still talk to way too many entrepreneurs who are like, yeah, I need to raise money, so I can build my first version of my product. And that, that reasoning is like, out the door these days, like, that is just not an acceptable, it wasn’t like simple reason a couple years ago, but it’s becoming even more like there are so many platforms, not just Draftbit, but 10s, dozens of other platforms, if you have no idea, you should be able to build it, you don’t need $100,000, you don’t need $50,000, you don’t even need $10,000, you can build an MVP, hobbled together in some form. And you should be able to get it out there using one of these tools and like that excuse of like, I need money to build my first version, my product is just not true anymore.
in so many cases,
especially when it’s a straightforward software project. Right. I mean, we have mutual friends like John Renaldi Jiobit, you know, it’s, it’s a different thing when it’s deep tech or capital intensive, or, or hard, right. But when you can spin up an MVP and start letting some customers use it and expand from there, it capital should not be the tall pole in the tent. For those projects.
No, I think I think you know, I think that’s right. Like if your core, if the core problem you’re solving is not fundamentally the software offering, if it’s like access to the products, or the marketplace, or the services or the, you know, whatever you’re doing, then you should be able to build something very quickly. So if your core offering is hardware and software, then you probably have some time before no code tools will be able to be building that level of sophistication for sure.
All right, sir. So I want to talk a bit about Long Jump. So Long Jump is a new FIRST Tech fund based in Chicago pre-seed and Angel, you are a general partner or managing director. Tell us about the origin story of Long Jump, why was this fund founded?
Yeah, it’s something that’s really important. So it’s so it’s, it’s it’s super fun. We have six partners, and we’re all doing this. We’re all venture backed founders, we are all doing this kind of part time nights and weekends in between running are running our full time 80 plus hour a week startups but but the neat The reason we’re doing that, like that’s a really hard thing to do, we don’t have time we were doing things 8am on Saturday mornings. But the reason we’re doing is because we think it’s so important and and we look around, especially in the Midwest, I love all my Midwest friend investors, but what we see in the Midwest is the level you have to get to in terms of team and product and traction and credibility to raise your first $250,000 here is just so high. And what that means is it just creates this really unfortunate survivorship bias that, frankly, the people that are able to do it tend to look like me, middle aged white men. And that just is ridiculous. Like, for whatever you think, however good or bad. You think of me as an entrepreneur, it’s not my whiteness, or my maleness, that makes me good or bad, right? It’s, it’s it’s the fact that I have a particular passion and a skill set and an idea that I’m focused on in a work ethic of doing it. And that’s when we look around, we just, we see so many founders that are not able to get that first $100,000 in the door, and we just see it is so critical. So that’s what we’re doing. We are we are trying to take the place of kind of the in between the the the friends and family round, and the very first Angel kind of venture checks, like that’s where we live trying to be a first check fund for people that we call it underrepresented founders and underrepresented ideas, but but in reality, it’s just anyone who’s kind of being who’s being overlooked by the fact that you often need to have just personal wealth to get started in startups.
Yeah, very true. So 100k, across the board for all investments is or is there some discretion to move up or down?
Yeah, since we’re still freezing the fund. I can’t actually talk about how much we’ve raised but the the high level idea is our first version of spawn is really a proof of concept fun, like how we think about it is we want to deploy out and really test this theory and see if we can make this work not just as a we know that it will work from a community and social perspective. But but that’s not our belief here is that this is we can do well and do good at the same time. We believe we can have a top returning fund. We need to prove that out before we can raise more capital but yeah, we are focused on kind of having 40, 50 ish companies in the portfolio. And right now that means you know, 100k bets
and are you running them through a process is this kind of like a application accelerator program or
it’s it’s so funny, we are not an accelerator. We do not have curriculum, or we don’t like we don’t have anything like that, but we do kind of appear like One from the outside. Because of our process, we have an open application. And we do things in kind of quarterly cohorts. Mostly we do all that, frankly, the application is open. Because we don’t have open access, you really think you should need a direct introduction to us, you shouldn’t need to know us to talk to us about capital. But the the quarterly process is actually just about time management for us. Because we’re so strapped for time. We can’t afford to take one off meetings here and there and be opportunistic, we have to push everything into a funnel, manage the funnel like we do founders.
Got it? Got it. And what happens if you come upon on an opportunity? they’re raising an early round? It’s coming together quick. It’s something that hits home with one of the the GPS, can you jump into that? Or does it have to go through your your formalized process?
we don’t we don’t have any, we don’t have any reason why we couldn’t, but I think we probably won’t, in most cases. And I think what we’re finding so far, so in our last, our first applications, like we have over 170, some companies apply. And some of them don’t need us, they want us, right, like they already have some capital they’ve already put together a round there that it’s super interesting, we came into the market thinking we’re gonna focus on those entrepreneurs that are struggling to raise capital. That’s actually we’re seeing that, and that’s great. That proves our thesis one, we’re also seeing founders that actually want to support the mission of Long Jump as well. And so they’re coming to us and say, Listen, I’ve been in those shoes before, I want to make sure that Long Jump is successful. So I’m going to give you extra time to look at this deal, because I feel like the mission of Long Jump is so important. And that’s also really interesting to us. And so you know, because we’re three months, like, I think in most cases, if we had to wait, if we were a TechStars, like you had to wait a whole year. Yeah, we would miss a lot of deals, but a quarterly basis, I think, and our goal over time is actually to get to like two months as a turnaround time. I think we don’t worry about missing deals. As much as we worry about creating… we worry a lot about creating bias, right? Because that’s like part of what our mission is.
I imagine a lot of the LPs or founders, former founders that have been through this. I mean, is that a bad assumption?
No, that’s a greatest. It’s actually part of how we’ve decided to form the fund. So we’re forming under this angel fund guidance that’s used by a lot of angel lists things as well now, but allows us to have 249 LPs. So we have a well, I can’t I don’t know if I’m, I don’t know what the rules are anymore. But we have hundreds of people involved in Long Jump, many of them, our current founders, former founders, founders who have scaled failed founders who have exited operators at scaled startups. So people who are in strategy roles, CTO roles, design operations, roles at bigger, fast growing startups. And a lot of those people actually don’t, they don’t get a lot of a chance to invest in venture funds. And, and they like the idea of, of kind of being part of something where they can help founders at the earliest stages. And so that’s, that’s actually the core value, one of the core value props is because we don’t have time to help you. We’re all running our own businesses. So the way we help our founders is by connecting you to this amazing network of people. And all the people who have backed Long Jump have also said to us, like, Hey, I’m willing to like, take some introductions and help these companies when I can
Got it. So do you have some back office or operations supporters or somebody that’s kind of focused on connecting these dots?
I wish I could say yes, our goal is to get there. We all see that need and need to get there. And you, you know, we feel like, like we’re quite bad at operating our fund is the best, right? I mean, from an from an operations friend, I think, Well, I think we’re very good at selecting companies, I think we’ll be good at helping connect them but like, we’re not the best yet. operationalizing our, our fund and it’s because we’re all doing this part time with like, shoestring budget shoestring amount of time and like we’re doing the best we can, but over time, we’ll build that out that infrastructure,
you’re preaching to the choir, my friend. So, you know, we’ve seen similar amount, not the same, but we’ve seen some similar models in other geographies. I think New York has a group called The Fund and there’s a few others. Are you kind of taken a page from these or are you guys helping each other in different geos? Or, you know, how have you How have you thought about other established models and kind of taking best practices?
Yeah, I mean, there are some Jenny who runs the fund is I’m I love her. I’m a big fan of for, or one of the people who runs the front end of many, but she, I got to know her for my TechStars time. And she’s Managing Director of TechStars in New York now, and she’s phenomenal. We’ve actually talked a lot about the the while they were getting they had they had gotten going with the fund in New York, and now they’ve expanded the of the fund mid Western fund. But we actually, I mean, two years ago, we were actually talking with Jenny about Long Jump, we were just getting going. It’s funny, because because we are full time founders just took us a lot longer to get this thing going, as you might imagine, we have our own fundraising to do and our own business milestones to get to and so it just took us longer, but we have been in taught chats with a lot of them and, and we are trying to use best practices. We’re also trying to, we’re starting to try to find a way of how we share deals in like a collaborative way. But you know, we’re all just making progress and and what’s so interesting is I think there’s I think there’s so much opportunity to uncover founders that aren’t being kind of, like, you know, we have a lot of friends in the investment community, it doesn’t make sense for them to try to change their fund models to attack this pre seed friends and family round, right. But they’re all supportive of it. And so that’s the, that’s the idea is that everyone in the venture community wants us to be successful. And so everyone’s trying to help us figure it out. And we’re making progress because of that.
Good. So I gotta ask, why not send, folks, the folks that you’re backing? Why not direct them to an accelerator program? Right, used to be MD of TechStars? formerly Excelerate Labs? I mean, that was a huge catalyst for…
…things in Chicago, you know, why not? Why not send some of these folks to an accelerator? Why is Long Jump sort of a better option? Well,
I think we, we love accelerators, we will send our companies to accelerators. And we also have a number of applicants who are coming. We’re post accelerator in the Long Jump, one of the there’s kind of two things we’ve seen, first of all, accelerators are very competitive these days, as you might imagine, that, you know, for TechStars, Chicago, there’s only 10 slots, and Neil is amazing. But like, there’s only going to take 10 companies out of however many hundreds and hundreds apply. And so there are often like competitive dynamics there where you, you need to make more progress, you need to have more traction, you’d have more team put together, you need to have all these things on like, you know, for a lot of founders, that if what if, what if your company number 11? Like does that mean you’re not good? No, it means you’re still great, you need help. The other thing we’re seeing, though, is that there are companies coming out of accelerators, that it takes them some time to figure out their model, right, like, and this, you know, again, if you look at the story of Draftbit and Orchard, like we went into Y Combinator with the orchard, but that was the wrong business where we came out of it. And we were still kind of figuring out what we wanted. Now, when we Draftbit take some time, that happens to TechStars companies and other accelerator companies too. And sometimes they need some help along the way. And so we see ourselves as a highly complimentary to accelerators not competitive at all. So I think we will send and we’ll send people to accelerators, and we will invest in companies have already gone through accelerators.
So as an investor in in you to town, so I’ve got to ask this question. I think it’s on on a lot of investors mind, you know, how do you handle the criticism from investors that claim you should focus on the business Draftbit and not running a fund?
Yeah, it’s it’s a, I understand why that’s the reaction. I think the real secret is that I’m better at running Draftbit that because I’m doing this and, and I felt that way for a long time, because I’ve been an angel investor and kind of startup founder mentor for now. 5 6 7 years, I have, I think, 30 some angel investments 30 30 active angel investments I’m, so I’m already spending the time talking to founders and helping them and figuring that stuff out. And I didn’t, the reason I do that is because I just love working with startups and companies and helping people but but more than that is I find myself giving advice to other founders that I should be taking myself. And so when you’re when you’re as an operator, as a founder, when you’re facing these problems head on, you sometimes get lost in the weeds. And there’s something nice about being able to talk to a founder who’s experiencing something similar, and say, You know what, you just got to cut through this noise? What if you just did this? or what have you thought about this? Or what if you talked about this? Or what if you tried this approach? And I can’t tell you how many times I come away from a conversation with an entrepreneur, and think like, yeah, I should do that too. And, and it’s like self counseling in an interesting way. It’s like a way to step out of the immediate problems, and kind of be an advisor to yourself. And, and I think that’s enormously valuable. And frankly, I think it’s a secret weapon for founders who can find time to advise other other founders. Yeah, the other the other meaningful thing is that, like, it’s, this is such an important effort. We believe that like, again, like, you know, we all will do better if the, if the ecosystem around us is doing better than having more diverse founders and all those things like I think it is a it is a rising tides, you know, raise all boats kind of thing
yet. I mean, to the former point, I think it’s it’s valid. I even on our team, we have this fellowship program of young undergrads, right, that are going through this VC training with us at New Stack. We have about 20 20 some odd young folks that are just brilliant, young people, but it’s amazing how the leader of that program on our team Austin, the fact that he has to teach our whole toolset, toolset, and walk through everything soup to nuts, from sourcing, to selection to winning deals, he’s become better at it. So he says, like, when I have to teach them and get into the weeds on all this stuff, I have to you know, think about it more deeply.
Yeah, I think I’ve you know, we’ve done some leadership training, or and, and what’s super interesting is one of the one of the tools that the leadership coaches use, is they will ask you to teach a concept to someone else. And it’s a way to fully fully engrossed that concept in your own brain. Right. And I think that’s what you just said is totally right. And it’s a tool that that people use as a it’s a teaching tool. You teach yourself by teaching others super interesting to me as a sort of mental model of how you can get better at things.
You know, things go well here, what is the future look like for Long Jump.
Our goal with long jump is actually you know a lot. A lot of times when you when you start a venture fund, I’m not experienced in this, but I have a lot of friends who are venture capitalists, you you grow the fund, you want to like get from a $10 million fund to a $25 million to a $50 million fund to 100 million to fund that that may be true for Long Jump in some trajectory. But it’s not about writing bigger checks. Like if Long Jump gets bigger over time, it’s actually about scaling to more geographies, we think it’s so important to be investing at the very, very earliest stages, because we think that’s how we actually both de risk the playing that sort of level the playing field for many these founders, but also how we uncover and get involved in the best and brightest new companies that are being formed. And so our goal with Long Jump is to create an infrastructure layer, especially here in Chicago, but that will scale over time. And to do it as much as we can part time. And that’s always first being operators,
Always first checks, are you gonna do you know, later stage pro rata s.
So we will we will have, right now in our current fund, we don’t have any reserves for pro rata will likely do well, I’d like to figure out a mechanism for that using spvs or something, but, but I think we will have funds in that we’ve already been offered more fun, super interesting. We’re like running this part time. And we get we have had people offer more capital to do more in this space. But we don’t just like founders, like we sort of feel like, we kind of got to build and test the MVP before we try to scale it. And like, that’s how we kind of think about this fun, too, we kind of want to like, prove that we can find the founders we want to find and help them and make help them make progress. Before we try to go bigger. And all of us want, we actually none of us want to be fullt. Like we’re not doing this as like a path like start a bigger and better venture fund, we actually don’t want to our goal is actually to invite in more partners over time, not for us to become more full time, we want to have 10 20 30 part time partners, we’re all founder operators, because that’s kind of how we we see the organization growing. And we get asked that a lot too. Like, is this just a stepping stone to like, your next thing? And like no, like, if I this is not gonna happen. The Draftbit was shut down tomorrow morning, I would start another business, I would not i’m not my goal. I love being a founder operator. That’s what I want to keep doing.
Well, unsolicited advice. If if you can keep it operationally, not super intensive, that would be best as somebody that runs a very operationally intensive investment firm. With all these spvs. And everything we do, it’s
we need to hire, we need to hire a team of people that can do the upside for sure. And we do have fund administrators who are great, and some of these other things. But like, that’s not nearly enough. Like we need full time ops people to really make Long Jumps sitting in the long run. But you know, we’re just getting into it, I think, next year, this time, hopefully, we’ll have some of that infrastructure built out.
Alright, so my surprise question, I’m going to put you on the spot.
YC vs TechStars. Go
Oh, man, I love both. And I think they’re different. Frankly, I think I don’t think anyone would debate with me the fact that that the fundraising halo around YC is just really hard to compete with, there’s just so much capital that wants to flow into YC Companies, just for the sake of it’s like, it’s like a little bit like you get the Harvard badge. You know, like, if you go to Harvard, you can raise money, because you went to Harvard, right? Like, and you’re probably a very smart, good person, too. But like, the halo does a lot of the work for you. I think TechStars, you know, in TechStars in different locations, the fundraising is not as good as YC, let’s all be honest about that. But that doesn’t mean that it’s not a great program, I think YC or I think if you look at TechStars, you have this ability to be one of 10 companies working very closely with the managing director. And you can really figure out some hard problems, you can really, you know, one of things we talk about a tech stars is you can like, you can sort of shake your company and stress, test it and figure out where the weak parts are. And like YC is, is a really phenomenal organization. But there are 2, 3, 400 companies going through the cohort at any time. So you don’t get quite the personalized attention that you would add at TechStars. And so I think it’s really different. Like I talked to founders all the time who are going through both application processes. They talked to me, they’re like you, you’re the one person I’ve talked to that’s been through both or know about both. And I sort of said, like, tell me what you want to do. Tell me what your goals are. And then I can recommend, which one I think is better for your company based on where you’re at right now. And I think it’s just different. It’s different for every company. I know, that’s maybe not the controversial answer you’re hoping for. But
yeah, well, I you know, I’m curious as YC is scaling, you know, I think it’s like 700 companies a year now, the density and power of the network, the same as it once was, I mean, I don’t not to criticize or anything, a great program out there as Kauffman you went through Kaufman many years ago. They have scaled and, you know, I don’t know, does the signal decline or not? I don’t know. But I know as YC is scaling, there’s probably, you know, you think about access to the Sam Altmans And Paul Graham’s of the world, I would imagine the access goes down when they’re dealing with 1000s upon 1000s of companies.
I mean, I think it’s a hard problem that all businesses that have scaling network effects have to deal with. Right. And so like, it’s funny, because like, I’ve heard the same criticism be applied to, you know, like network driven businesses, you know, like, the most recent one is the odd. What’s the audio chat app? I’m now blanking on the
but clubhouse right? So Clubhouse at the very beginning, people were like, Oh, the network is so great. And then there was a period of time where people like, oh, there’s so many new people, and it’s, the quality is really gone down. And then it’s just this is a thing that you have to deal with as it as you scale an organization. I actually think like, you know, it’s not clear to me why, especially when it comes to TechStars and Y Combinator, like people always talk about, well, is the network getting diluted? It’s not clear to me that that matters. Like it, we’re still talking about, like, we’re still such an a small scale like of companies and people, in my opinion, that like, sure, if they’ve led an incrementally more companies like maybe from an investment perspective, it makes it harder to sort through. But like from a founders perspective, I’d rather have a wider set of people like one of the one really good reason to go through either of the programs, is you now have a great tool to reach out to other companies that might buy your services. And in that mode, potential customers, I want more companies, I want more founders that I can go pitch, not less. Right. And certainly, I’ve never had trouble with either network. If I knew if I wanted to go find help. I think both networks are full of people, that and founders and teams that really want to help you. And so it’s like, I’ve never really understood the the dynamics of the network is being diluted, like what way is that is that demonstrably true? I’ve never experienced it, because whenever I’ve needed to get something from the network, I’ve gotten it. And to me, a bigger, wider network is right now sure, if YC had 10 million startups, okay, then it’s really hard to find the right people. But I think we’re still so nascent. And I feel the same thing about coffin fellows, coffin fellows has been transformative for my life and the eye, they have 1000 investors in the network now, like, to me, that’s better, because that means like, if I need to talk to an investor who knows really specifically about some area, or some geography or some topic, I can find that person and they’ll they’ll chat with me about it. And that’s really amazing. If they had to the point where they had 200,000, would I start to worry? Yeah, but right now, I don’t worry. I think it’s all good.
I guess, part of the question is, have they architected you know, a hub and spoke network or a mesh network? Right? Is the mesh network, can the the spokes so to speak, or the nodes rather get a lot of value out of each other as it expands? Or is it overly reliant on the hub for value?
I think I think that’s a fair thing to say, I think it’s, you know, at yc, the early days, you hear all these stories of the founders who got to know each other really well got to form those bonds and got to do that. And I think TechStars does replicate that process, obviously, in each city. But like, if you went through Chicago versus New York, you don’t have the same kind of close bonds that you do with with the people you went through your cohort with. But I think that’s okay. I think, again, like I think people always worry about these things. But I’ve never seen much downside of them, like you sort of you sort of worry about these things on the periphery. But like, the reality is that a lot of times founders don’t have a lot of time anyways to do. Like, you want to close out a friend’s and you want some peers you go talk to but like, do I really need 200 companies I can talk to about when I need like, Well, you know what I mean? And so I think there’s like, it’s I think as long as you get some of those core and inside of YC, they figured out ways to group similar companies together to have sort of a inside the program, semi cohort model. And obviously TechStars has city programs and different places. They they figured out versions of this that I think are really helpful.
And just, I guess, loosely related to that question, you spent time in the valley over many years, right? You were there with OkCupid labs. And yeah, you’ve been back with YC. And you spent a lot of time in Chicago. It’s home and you did the MD TechStars thing. Now you’re back in Chicago building Draftbit. I’d be curious to get your comparison advantages, disadvantages, to the Bay Area versus maybe a second tier ecosystem and how you’ve seen that change over time? Because you’ve really, I mean, you’ve been in Chicago during really a huge boom period for for the city from a tech standpoint.
Yeah. I mean, I think I grew up I mean, I’m, I’m from the Midwest originally and moved to Chicago and grew to love it. And like many people, like I moved back to Chicago because of things that I wanted that that weren’t really available in San Francisco, like I wanted to be close to friends and family. I wanted to have access to property and I wanted to be able to, you know, buy a house and some of these other things that are just much harder in San Francisco still even today and or even maybe worse today. I don’t know what it’s been like post COVID or whatever. But But I think like a lot of friends in San Francisco and I love San Francisco too. I think I don’t really I don’t really think People for doing one or the other, I think it’s sort of like you got to find your stride in life and you got to figure it out. And you get to choose what makes you happy in the life, like, you know so much about startup life is you spend 5 10 years working on this business. And it’s sort of like a daily grind. And like, you should definitely probably enjoy the place you live in. Because like otherwise, like your average, like people think of startups, it’s like this really fun environment, like most startup days are really hard. And so you have to, you have to find some ecosystem or some place in this world where you can just enjoy the journey of being in a startup. And part of that’s like enjoying the life around working in a startup. And so I think wherever that works for you is fine. And but I think as far as ecosystem development goes, like, in San Francisco, one of the reasons I like Chicago is that I felt like I could have an impact here, I didn’t really feel like I could have an impact in San Francisco, not because of me or anything, but just because it’s like, it’s your, you’re a tiny fish in an enormous sea of people. And you have to become Elon Musk, or Peter Thiel, to have to change the world of San Francisco. Whereas I felt like if I came back to Chicago, I felt like I can have an impact. And I could not just Could I enjoy my own life and my do things I want. But I felt like I could have an impact and create things here that were beyond just my personal stuff. And I feel like that’s what we’re doing with Long Jump now and other things that I’m involved with. And that’s gives me a lot of personal satisfaction personally. So that’s that’s sort of what it’s about for me.
Yes, good point. I mean, Long Jump would not be necessary in the Bay Area. But it’s, I mean, there’s a big gap in Chicago, so it makes a lot of sense.
yeah. And on top of that, you know, we’ve got the UI, UC mafia, the Andriessens and the legends of the world. And it’s nice that they don’t, it’s nice that you, for instance, you’re not required to be in San Francisco, in order to be a part of tech, really, you don’t have to leave there. It’s viable to stay in Chicago, or Atlanta, or some of these other places, Seattle, and build a transformative tech company, because it can be done now.
Yeah, I mean, I think you know, people, people, different different sides, depending on who you talk to, if you talk to people in the valley, they’re like, oh, building a company outside the valley is just so much hard. How are you going to hire people? How are you going to raise capital quickly? How are you going to do on and you talk to people outside the valley? Everyone’s like, Oh, my gosh, the cost of living? How are you gonna afford the engineers in San Francisco, I’m like, it’s sort of like, you just got to pick and choose your battles kind of game. And like, there are good reasons to be in either place that there’s certainly businesses that I think I can only build in San Francisco or LA or New York. And there’s also certain businesses that you can only build in Chicago or other Midwest cities. And I think beyond that, I think, especially post COVID, like the world is becoming distributed, right, like and, and the idea even of companies based anywhere is like, flittering away, like our Draftbit. Sure. Are we Draftbit? Are we based in Chicago, sort of, but like, a big chunk of our team is not in Chicago. So like, what does that mean? Like, it doesn’t mean anything, it means we’re, we, we care about our customers, right? Like, that’s, that’s what Draftbit cares about. And we care about making our customers happy. And, and, you know, we the people who the part of Draftbit’s team who lives in Chicago gives a shit about Chicago, but the people like, you know, we have a we have a great, amazing product managers in Boston couldn’t give a shit about Chicago, and he shouldn’t he should give about Boston, right? And like, so like, that’s great. I love that.
Brian, what do you know, you need to get better at?
Oh, I mean, I think inherently in my personality. One thing I’ve learned is I am a, I have that perfect perfectionist streak and everything I do, I want to do it really well. But so much of, you know, executing in all things in life is, is being able to make trade offs between the perfect and the good enough, and I constantly am coaching myself on this is good enough, this is good enough. And this is you know, getting it out the door. It’s It’s a hard thing. But I live in a world of perfectionist. And so trying to find that balance. Sometimes it’s a strength. Sometimes holding quality at a high bar is important thing, but sometimes it’s not. And that’s my concept of work on.
And then finally here, what’s the best way for the founders out there to get in touch with LongJump? What are you looking for? What should they come with in order to get accepted?
Yeah, that’s a good question. So so obviously you can you can check us out LongJump.VC, you can email me Brian at Draftbit.com or Brian at LongJump.vc, we have an open application. So you go to Longjump.vc/apply and fill out the application. Our next application closes the end of July. So you know, a little under 60 days from now. What I really care about for the startups that we invest in or look at, are the people and how you think about your business. And so I talked to two different types of founders, the founders, they’re like, Oh, this is a really good way for me to make some money. And I talked to other founders that are like, I, this is like my life’s work, or this is what I believe can make a big impact or this is what I’m passionate about. And I’ve been working on it for years trying to make it a reality. Those are the kinds of the second group is the kind of founders that we are most likely to fund at long jump because those are the founders that have the passion and the grit and the resiliency to make it through startup life. And I think so much of being successful and startup life is surviving. Like just live Moving through the world of startups if you can, Sir, I am Paul Graham has this quote like if you can survive long enough, you can’t lose, which is like makes total sense to me in my brain. And so that’s what we’re looking for people that survive. And that’s that’s what we invest in.
Well, good. well, founders out there stay default alive. If you don’t know what that is Google it. But Brian, this is a pleasure, man. It’s always good to catch up. Congrats on the successes with Draftbit of course you have some very notable investors coming in after New Stack. Gotta get gotta throw that out there. But…
Yeah, you know, wish you the best. Best of luck with LongJump as well. And thanks for joining us today.
Thank you, thank you. Really appreciate it.
Transcribed by https://otter.ai