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Google PodcastsBen Wiener of Jumpspeed Ventures joins Nick to discuss Investing in Jerusalem, Applying Helmer’s 7 Powers to VC, and Writing a Business Murder Mystery. In this episode we cover:
- How difficult was it raising a fund to invest only in Jerusalem-originated startups?
- What do you say to critics who claim that “focusing only one one geo is too limiting?”
- Are there specific sectors or types of tech that are uniquely positioned to thrive in Jerusalem?
- What are the similarities and differences in raising a fund vs. raising funds for a startup?
- You’ve spoken before about the mismatch between supply and demand for early stage capital in Jerusalem. Has it been tough finding reliable and persistent follow-on capital for A or B rounds?
- Since inception ~35% of your investments have been in female-led (female founder/CEO) startups, which is an order of magnitude greater than the 2-3% industry average. Talk about sourcing and what you do on the sourcing side to increase the number of diverse and women led startups you meet with?
- You recently wrote a Murder Mystery novel. It’s a startup fiction based on Hamilton Helmer’s 7 Powers. Why did you write a business strategy murder mystery?
- The book focuses on Addie Morita, a young crime researcher working on a serial killer case with clues buried in Hamilton’s 7 Powers. What similarities can be drawn from 7 Powers and from solving a murder?
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0:00
Ben Wiener joins us today from Jerusalem. Ben is the Founder and Managing Partner at Jumpspeed Ventures. Jumpspeed invest in Jerusalem based founders building the next generation of World Class tech companies, including investments in breeze ometer, auto, lead star and MD go amongst others. He is also the author of Murder at First Principles, the new business strategy murder mystery now available on Amazon. Ben, welcome to the show. Pleasure to be here a longtime listener first time caller. Yeah. It’s been a while we have actually met in person. You’re in Chicago. I don’t remember how many years ago. But it was a good chat. You know, what, what’s up? what’s the latest?
0:44
Everything is good. You know, I, you know, like I said, I’ve been listening to your podcast, how long has it been? I think you started around 2014 2015 2014.
0:52
That’s right.
0:52
Yeah. So I’ve been listening from the very beginning in your podcast has been, you know, we’ll get into my story. But your podcast has been one of the sources that was very formative for me in creating my strategy as a as a VC. So really grateful for you, you know, getting me on the show, and more more grateful for all the great guests and the knowledge that you’ve shared, because it’s made me smarter. Of course, I
1:16
appreciate you saying that. But maybe, maybe if you could take us back, you know, you’ve you’ve walked me through the jump speed story, but it’s been a while since I’ve gotten a refresher. Can you take us back to maybe before the firm, early ideas about Jerusalem as a startup ecosystem and how that led to your firm?
1:33
Sure. So we, my wife and I have lived in Israel in Jerusalem for about 23 years. I grew up in Allentown, Pennsylvania, she grew up in New York City, I went to law school at Columbia, and got an offer to clerk on the Israeli Supreme Court in Jerusalem, the year after law school. So we, we got to come to Israel for a year as young, you know, marrieds after school, and that was, you know, 25 years ago, and we really got bit by the bug of Israel, and we decided that we wanted to, you know, get serious about, you know, raising our kids here, moving here. So went back to New York practice corporate law for a little bit. And then we moved to Israel permanently in 1998. And I joined my first startup in Jerusalem in 1999. So I’ve spent most of my professional career, not as a lawyer, but as like a basically like a deal guy, as you as you would, you know, well, no, Nick, in small companies and big companies, but you know, never as the founder, I was always, you know, part of someone else’s big or small company. In the late 90s, when we moved to Jerusalem, the community here was pretty vibrant, there was a lot of startup activity, there was a lot of money, even more money than startups in Jerusalem. And you know, people that know the story of the startup nation know that this is like a little tiny country, with a lot of startups, most of that activities in the Tel Aviv area, which is only about an hour away on the highway from Jerusalem, like this is a very small country. So it’s very close. In the old days, in the 90s, when we first got here, the gap between Jerusalem and Tel Aviv was non existent, like there was a lot of traffic back and forth, like literal traffic, but also figurative traffic between the startup communities. And that kind of stopped in the late, you know, early 2000s, when the bubble burst in the United States, that reverberated back to Jerusalem. And because the ecosystem in Jerusalem was much smaller, for a whole bunch of reasons. Tel Aviv continue to rocket forward, and Jerusalem is kind of left in the dust. So my career took a very sharp right turn in about 2002. And for about a decade, my 30s, you know, I basically bounced around and worked for a bunch of other companies like not directly in startups. The jump speed story starts in around 2013. So after about a decade, relative and activity in Jerusalem, or Tel Aviv, I just know blossomed. There was a renaissance of sorts in Jerusalem, and I was fortunate enough to kind of fall into it but backwards and realize that for a variety of reasons, the investors that were mostly entrenched in Tel Aviv just didn’t realize that there was kind of a resurgence of small startup activity in Jerusalem. And I felt that there was an opportunity for somebody to exploit, for lack of a better term, the mismatch of supply and demand, or I would say, to capitalize on the lack of capital in the capital. That’s the way I kind of phrased it, if you see what I did there, and raised a really small initial fund of sorts to provide first check funding to the small group of early stage founders that were in Jerusalem and you know, the late 2013, early 2014. So As you can imagine, it was ridiculously difficult. The the idea the thesis was, Hi, my name is Ben, I’ve never managed money before. I’ve never invested before. I want to take your money, Mr. LP or Mrs. LP, and invest it only in one city in the world, which is Jerusalem, not Tel Aviv. We’re nothing good has happened for like a decade. It’s a tough sell. And yeah, and I actually say that to people, because I knew that that’s what they were thinking, and we’ll get that out of the way we would laugh. And then I’d say, Okay, now let me show you the data. Let me show you some examples of investments that I would make tomorrow. And most people still said No, and I knew that they would. My best friends told me, some of my best friends told me not to do it. And that’s those were the kind of things I said to my face. I wonder what they said about me, you know, behind my back, but I felt that I felt that there was a there was enough of an opportunity that, you know, the theme that that goes through my investing even today, which is based on, you know, classic sort of contrarian approach, and I’m sure you’re familiar with the Howard Marks, like four quadrant, you know, consensus, non consensus wrong and right. And he says, you only make money in the quadrant where you’re non consensus, but right, like, if you’re consensus and right, everybody’s there already, and you’re not gonna make a lot of money, even if you’re right. But if you’re right, and it’s not consensus, that that’s where you can make the most money. So I was very comfortable with the idea that jump speed was very non consensus, but I believe that it was right. And
6:27
only the future would prove whether that was correct. And thanks, thankfully, the future prove that I was onto something. And I was able to get into some incredible early stage startups in 2014 2015, that were starting up in Jerusalem that, frankly, nobody else was really looking at. And the rest, as they say, was like, was history.
6:48
So take us through the vintages and you know, how many funds have you raised at this point? And what is the thesis you have stage focus as well as right on the city focus?
6:58
Yeah, so the the focus is very, very bounded. So it’s, you know, strict focus on early early stage pre seed, primarily emceed. So I like to be the first check. I’ve made 25 investments in seven and a half years, so only about three or four a year, the startup has to start in Jerusalem, although some of them afterwards, as they grow will decide to relocate to Tel Aviv or other places. So the two strict focuses are early early stage preferred first check, and it has to originate in Jerusalem in some way. The the rest of it. And so vintage was a tiny, tiny joke fund that started in 2014, which I call jump speed zero, I made 12 investments from that small pocket of capital, over about three and a half years. So again, like three or four per year, out of the few hundreds of startups that were starting up in Jerusalem, so I tried to be at about, you know, 1% of what I said, which I think is a good rule of thumb. And then what I’m currently investing out of, so that first fund fund zero was ridiculously small, it was a $3 million fund, no management fee, all carry, you know, I said to my, you know, my wife was my first partner, I mean, he, she had to agree that we would work without a salary for a while till we could prove that this was something the current fund, what I call jump speed one is a vintage 2018 fund. It’s close to $20 million fund, most of the way through the investment period on that fund. I’ve made 15 investments in the new fund. So again, about three or four per year. And again, all proceeds were seed initially trying to be at the first track into the companies.
8:49
Have you seen? I guess you could call it competition or collaboration. But have you seen other funds emerged that have focused on Jerusalem?
8:58
Yeah, well, nobody’s focused only on Jerusalem. But there definitely have been other funds. I, you know, I knew when I started that, if I was right, then by definition, other people would have to come like you couldn’t be couldn’t be right about Jerusalem, restarting, and continuing to be the only one investing country slump for eight years. So I had to be prepared to shift gears. And like in the first two years, I knew or whatever, until anybody noticed, I knew that my advantage would be being the only one. And founders would come to me and I would say, how did you get to me? And they would say, well, we are the only person in town that we were told to talk to. But I knew that wouldn’t last and there are wonderful, wonderful investors now who live in Jerusalem or come to Jerusalem. But my thesis was to get ahead, number one, so that I would have some sort of advantage, either reputational Lee or just hustle or focus or all three of those, which I think I still have. Again, I don’t need to be I don’t need to be the only game in town. I just need to get enough great opportunities per year to make us in our LPs a lot of money.
9:58
Yeah, I guess I try to be very You’ve also structured the cadence of investments to be slower, right? You’re, you’re not just doing a deal a month, because now like many funds that we got to get the AU m up and we got to be active and we got to have volume, it sounds like you’ve kind of fit the model to the aperture.
10:19
Yeah, it’s also really important in a small town like this to be very collaborative. So I try very, very hard, like not to take the whole deal, there’s almost always something left. jumpseat is almost always leading. But there are other small investors or smaller funds here, or people that are willing to follow. And I love to believe that we’re all pretty close friends, and we get along pretty well. So I’m trying to be very collaborative, rather than being Exclusive OR exclusionary. And I think we have something very special in the ecosystem here where we all know each other for a long time. And even some of the newer investors are our friends, I consider them friends rather than competitors. So we have, you know, one of my friends called Co Op petition rather than competition, where we will tend to collaborate or call each other when we see something rather than trying to block each other out.
11:07
Got it? Got it, you know, how do you respond to the folks that have said? Or do you say that focusing on one gios is just too limiting?
11:15
I try it, I try not to be too negative. And I understand where they’re coming from, like I faced that with LPs, I’ve had some LPs turned me down, because they don’t want to have, you know, a strategy where all the eggs were in one basket, I tried to say that my strength is in my focus that, you know, as you know, like, let’s say you’re focusing on startups between the coasts, right? So there are 1000s of opportunities, probably per year that you could possibly see, that’s just way too many I imagined the process. So you have to have some kind of further focus, right? Otherwise, you’d just be too distracted. So I felt that as long as there was a critical mass of opportunity have at least a couple 100 opportunities in play per year. If I was going to invest in 1% of them, that would be a good business. And if it got lower than that, if there’s a year where we have you know, only 60 startups in Jerusalem, then I’m really in trouble. Because that’s not a that’s not enough of a critical mass. But as long as there was a critical mass to play in, the focus would be getting smarter enough. And agile enough, and all the other things you need to be to win, to identify and then win the 1% or 2%. That were the potential winners. And I think, you know, that’s been my focus. So again, some people don’t believe in it, some people don’t agree with it. That’s fine. It’s a it’s a big world. There’s lots of different strategies. I believe that focus is strengthened. There’s a famous story of Bill Gates and Warren Buffett at the dinner, where they’re asked like what their secret is, and they both say simultaneously focus, right. So focus is really, really important for me, I understand if other people don’t believe in it, but that’s ROM, you know, hopefully making my living,
12:49
then are there specific, I don’t know sectors or types of tech that are uniquely positioned to thrive and in Jerusalem.
12:58
When I raised the current fund, I identified what I felt were five sectors that I felt I was seeing more of than others, and therefore, I wanted to get even smarter about those things. I read a lot in those spaces, so I can have my muscles ready to react to them. When I see them. Those things would be you know, it’s almost all b2b, we don’t see a lot of B to C here, thankfully, because I’m really terrible at b2c. Most of the stuff we see here in Jerusalem would be classic like AI ml, you know, I would say SAS is another category, we do see a bunch of automotive stuff. Because Mobileye, a lot of people don’t realize that mobile is headquartered here in Jerusalem, the largest exit in Israeli history, is a Jerusalem company, not a Tel Aviv company. Wow. But so there’s a there’s a bunch of computer vision and automotive stuff that that we see here. And I would say digital health and like the, the confluence of computer science and medical science, we see a lot of that a lot of it has to do with Hebrew University, which is one of Israel’s premier academic institutions, which is based in Jerusalem, it doesn’t mean that it’s University IP, the place is so big, that there are startups that are external, but that are attracted or that office that Hebrew you or do things with you Hebrew. So I would say about a third of my portfolio has some connection, Hebrew, but it’s rarely the Hebrew IP. So I get to feed off of deal flow from there in different all sorts of different ways. It’s only one channel, but I would say clusters and channels, we have some primary sources of things that we tend to see more more often than not.
14:31
So, you know, historically, the per capita, startup output has been way higher in Israel versus other countries. It’s, it’s quite astonishing. I don’t have the data in front of me, but I’ve seen it over the years. And because of that, there are a number of firms that you know, are based in Tel Aviv and there’s there’s a number of American firms in the valley and otherwise that that focus on is real. You know, what is in the water, I guess, is the question. You know, is it related to, you know, the Israel Defense Forces and like a high degree of technical training at early ages? Or, you know, can you can you give us some of the reasons why you think startup creation and and success is so much higher in your country?
15:17
Well, there’s, there’s a, there’s a great book called startup nation in which I think, you know, Saul singer, and then I think, really, in that book, outlined in much more detail than I could possibly give all the reasons why this thing happened here. It’s more, you know, any great thing is caused by more than one reason. So I think it’s the things that you mentioned, you know, the tiny little country, the immigrant focus, I mean, it’s a great lesson for United States where there’s all sorts of talk about limiting immigration like this, Israel was built by immigrants, and half of my portfolio founders, or people who, like me moved here, or our children of people that moved here, like, we’d be nowhere, or without an immigrant culture, you know, in this country. So I think it’s all those different things, the chutzpah, the the candu, than the necessity to develop technologies, because this country was never going to be big enough to be a pure domestic economy. All those things play into it. That’s a well worn, you know, proven path. What people don’t know is that most of that is happening in Tel Aviv. And for a bunch of years, it wasn’t really happening that much in Jerusalem. And when it started to happen again. You know, I was able to sort of step in and capitalize on that smaller but interesting segment.
16:29
Ben, you mentioned that there’s, there’s a bit of a mismatch between supply and demand, when it comes to capital and startups in Jerusalem. My question for you is, has it been challenging to find the follow on capital, you know, reliable and persistent follow on investors at the A and the B rounds.
16:48
So that’s the coolest thing of the story. The coolest thing about the story is that that mismatch really only happens pre product market fit and pre traction, which is where I play. And then when I’m lucky enough to get one of those incredible founding teams, building an incredible product for an incredible market problem. When they do bring that to market a year or two later, we can true up like really, really, really quickly, both in terms of follow on capital, and in terms of valuations. So I can show some really nice bump ups on paper. Plus, we’ve I’ve gotten to work with like some of the premier VCs in this country, and overseas, who are, you know, more than happy to come into these startups at series A, Series B, series C, there’s not playing at the preceding C level. And they’re more than happy for and I spend a lot of my time networking with those downstream investors. And I’m more than happy to say, hey, Ben, when you got something good, you know, call us and we’ll do the next round. So it’s a win win for everybody. And there is a true up after that initial hurdle of that startup capital. Again, things may change in the future. But for the last seven or eight years, since I’ve started, that’s been the, the, the model. So I have a great roster of like premier VCs in this country and overseas, who have fallen on to some of our portfolio companies, super proud to have them involved. And they’re more than happy that we, you know, we’re the ones who gave the first checks to those companies before they they noticed them.
18:17
That’s great. That’s great. You know, it’s worth mentioning that since inception, 35% of your investments have been in women led businesses, that, you know, that’s a few orders of magnitude above the industry average, is there something in your approach to sourcing, that affects this in in, you know, results in a much higher percentage of women led businesses in the portfolio?
18:47
I, you know, I don’t brag about a lot of things. So that’s one thing I really brag openly about, because I think there needs to be better awareness of, you know, as we all know, most of the VCs are men. So I’m a white male, you know, you know, pretty mainstream guy investing in in a very diverse ecosystem. So I’m proud of the fact that it’s because I have an amazing wife or I have, you know, great kids and a bunch of them are amazing dogs. Are is and I’ve just never doubted whether women can do amazing things. I think a lot of the bias is subconscious. I think most male investors would be horrified if anybody claimed that they were biased. But the fact is that the numbers indicate that that we are like only two to 3% of venture backed companies. At least the United States are led by a woman. Nobody could tell me that only two or 3% of companies seeking funding are led by a woman. So there’s clearly a skewed bias. Jerusalem has an amazingly diverse ecosystem. And I would add that in my portfolio, the women led companies that I’ve invested in are not these are not feminine. And you know, products or consumer products. These are like hardcore PhD technology. You know, Women who are who are just incredibly dynamic and experts in their fields. And I’m just so proud to be backing some of these incredible women, I think it just comes from being a where, first of all, that these biases exist so that when we’re sitting in front of a female founder, are we judging her the same way? Are we being fair about even things like body language or inflection? I forgot if it was Chris, I think was Chris Sacca had this great interview where he like mimics a man speaking in a woman speaking and he kind of makes fun of other investors basically saying, like, they’re just saying the same thing. But the woman is considered weak and the man is considered sensitive, right? So even understanding things like that, like body language, inflection, speech tones, if you can weed out those biases, and just look at the opportunity for what it is, I think we could all do better in terms of being more inclusive. I’m just fortunate to have met some incredibly, incredibly dynamic women running incredibly, you know, dynamic companies, and not letting myself get sucked into any biases that might have caused me to look away. I think anybody can do it.
21:09
Right. 100% and remind me you were raised in the States, or did you split time?
21:16
Yeah, I grew up in Allentown, Pennsylvania. I did all my schooling in high school, college law school in New York City, married in New York, and then we moved to Israel in my late 20s. So I grew up in United States. I
21:32
got I got a, you know, I want to touch on really quick, some of the, you know, the approach to selection. And in the founder journey itself, I guess, maybe, maybe let’s start with selection. Can you walk us through, you know, some of the hallmarks of you know, what you’re looking for in either, you know, the founding team or the business?
21:54
Yeah. So, you know, once that once the startup is originated in Jerusalem, and is early stage, I’m looking for, you know, a bunch of things that I’ve really learned from other investors, like when I started investing, like I said, your podcast was very formative. A bunch of other sources were really critical for me to glean from the knowledge of much wiser investors, which I still do to this day. So all this methodology that I’m going to quickly summarize is all based on stuff that I mostly learned from other VCs. Many of them I still haven’t even met in person. But it’s basically like a five part check down, you know, I want to fall in love with the market problem first, rather than fall in love with the team. In my first fund zero, I found that I fell in love with a couple founding teams before I really got into the market and the problem, and I ended up investing in startups that I shouldn’t have invested in, not because the people were bad, the people were amazing. But I just wasn’t doing enough analysis on the product. So I start off, I want to fall in love with a market problem. And I need that problem to be big. In other words, I’m not not an opportunity investor, I’m not a I’m generally not a b2c investor, I’m not a vitamin in restaurant and aspirin investor just the way my brain works. Number two, I want to see that the current solutions for that problem are grossly inadequate, not just sub optimal, but just the world is broken, and that space for some reason. And number three, that these two or three people sitting in front of me or one, in some cases, have some sort of TEDx order of magnitude game changing, paradigm shifting, completely differentiated approach to that problem, that can potentially Trump all the other current solutions in such a way that it will change market behavior over to their new way. That is rarely found anywhere, but certainly rarely found in one city, I’ll find that maybe two or three times a year or four times a year. And then even if I find that I need to then fall in love with the team. And that’s a no objective criteria. Do they have the skills, the hacker, the hustler, the designer that the full founding team in place to do it. And they have the subjective stuff, the qualities and characteristics of crazy founders that you need to see, curiosity, a little bit of craziness, looking at the world from a different point of view, you know, and evaluate all of that really, really quickly. So I can move fast to write a check and get rolling with them. Every one of those points has lots of tributaries and lots of details, but that would say that’s the basic analysis.
24:21
Got it, got it. And then talk us talk to us a bit about you know, your interaction and your work, you know, post investment startups tend to go on this very challenging journey. You’ve written about it a bit. And even borrowed, I think a concept from from Jeff Jeff bus gang, sort of about, you know, the jungle, and then the dirt road and then the highway. But can you talk to us a bit, you know, what startups a bit about what startups go through how you work with them, and give them sort of the the freedom to operate and sort of Find that path to product market fit.
25:03
Yeah, when I, when I heard or I think read or heard that model from Jeff, I didn’t know him. But that was that made such a big impact on me that I ended up contacting him and we became friendly over that. That metaphor. That’s how important it was to me. So for those that don’t know it, Jeff has this idea that a startup is not a company, right? We all know that. But a startup needs to go through this three stage process to become a company. And every startup needs to go through this process, it’s just a question of how quickly they get through the gates, right. So every startup starts off in the jungle, then it gets to the dirt road, if it’s lucky. And then the really great ones get to the highway, where everything is very, you know, smooth, and there’s revenue and money coming in customers, etc. So, and Jeff says, I believe he says on the interview, I’m a jungle guy, like, I know what the dirt road looks like, I know what the highway looks like. And I need my portfolio companies to get there for us to make a lot of money. But you know, what he says, and what I say is, I’m a jungle guy, so I’m going to fund them, and help them get out of the jungle as quickly as possible. But that means I believe is product market fit. I believe product market fit is the boundary between the jungle and the dirt road. So my whole focus when I, when I invest with them, I’ll say, I’m here to help you get to the dirt road as quickly as possible, we got to get to product market fit. That’s the only thing that matters, according to Marc Andreessen, blah, blah, blah, we’ve all read that article. But that’s true. Like we need to get there as soon as possible, I’m going to be here to guide you as much as I can to get out of the jungle. And then when you get out and get the product market fit, you’re going to get other money from other VCs who are experts at the dirt road stage on the scale stage. And then I’m going to go back into the jungle, we’ll still be friends. And I’ll always be your first investor. And we’ll always talk, but I may not be on the board anymore, I may just be an observer. We may not speak every week, we may speak once a month. And that’s okay, because I’m back in the jungle working with the next set of startups trying to get out of the jungle. So that model became very clear. That helped me clarify what my role was, and helps me clarify or communicate to the companies, what they can expect from me and for how long. And when they’ll get rid of me and graduate into you know, VCs that are bigger, and have more reach into other markets and ability to hire and scale and things like that.
27:23
So Ben, did have a transition here, you wrote murder at first principles. It is startup fiction. And it’s based on another popular book with many VCs, Hamilton Helmer seven powers. Why did you write a business strategy murder mystery? Well,
27:43
I think the option was I had found as many people may be listening to this may have already found it. Homer’s book, seven powers is I believe, like in the canon of like the CIA, and one of the most important, you know, startup business books ever. But you know, zero to one, maybe one Crossing the Chasm might be another. Those are super famous, a lot of people don’t know, seven powers, including a lot of my, the founders that I was meeting with, I would talk to them about it, they’d never heard of it. So one option was to write a blog post, you know, like 1000 words, basically saying, Hamilton homers book is the most important thing and you have to read his book and maybe 10, people would read my blog post cuz I don’t have much of a following. Option two was to write a 60,000 word, murder mystery, where there’s like a serial killer. And the killer is like, clearly using this crazy business strategy book to like, pick victims. And I thought, yeah, that’s what I’ll do. So that’s right. It was it was it was just a story that came into my head. And maybe my head works in a weird way. My wife certainly is convinced of that. But I the the further backstory, just to make it make a little bit of sense, is that I had been researching for years, the structure of storytelling, because I believe that startup pitches are often really terrible. And they can often be much better if the founders just knew like how to tell a story straight. So I was trying to research like the science of storytelling, including a great book called The science of science of storytelling by will store. I had read Joseph Campbell’s, you know, hero with 1000 faces I had read
29:19
you know, a bunch of other books on narrative arc, I had read, you know, save the cat by Blake mass, Blake Snyder. And those things started to come together. And I realized I was learning how to tell a longer story. It wasn’t just about startup pitches, but I, I actually had the structure in place for writing a book. And I had these these two ideas that were stories formed around the idea. So one of them was this crazy murder mystery about Helmers seven powers. Another one, which I hope to publish soon. is a is a different unrelated thriller, about music, chemistry, startup pitching, and the mob. You’re kidding. So it’s just wow, he Another one coming. Yeah, because both of these stories kind of came into my head. And they and they formed in the shape of a classic narrative arc of a full, you know, book or screenplay. And I just felt, I’m gonna live the rest of my life. Having these stories bounce around in my head and go crazy. And I felt both of those I read, I read a lot like I read, you know, 70 to 100 books a year. And I felt both of these were books that I wanted to read myself, even if nobody else wanted to read them, I just wanted to see how they came out. So I just started to write and I was just to end off here, I would say, I was never committed to publishing them. I didn’t talk to anybody about it. And I said, I want to see how they come out. And if they if it comes out, good, then I’ll show it to a couple people. And if they like it, then I’ll hire an editor. And then I’ll go through the process of publishing. And when, when murder, first principles, first principles was ready as a first draft, showed it to my wife, who is not a business person, and not even a big reader, but she loved it. And I showed it to a couple of short term, mostly women, who were not VCs or startup people I wanted to, I wanted to invest a lot in the story, so that the story would carry itself, even for people that weren’t interested in the business content. And the business content would be kind of buried or weaved in. So you kind of picked it up without, you know, through osmosis without really realizing, because you’re so sucked into the story was so electrifying and engaging. And that’s really what happened, the feedback I was getting was great. So I went forward and published it. I guess the only other thing I would add is, among my books that I read over the last couple years, were famous, there are only a few like startup fiction books that are really famous. The most famous one might be the goal by Elie goldratt, who ironically is in Israel. He wasn’t Israeli professor. That’s right. And he wrote, the goal is about of all things like constraint theory in manufacturing and factories. I mean, it’s like the most dry topic ever. Yeah. And he decides, instead of writing a textbook, I’ll write a story about a guy who’s trying to run a factory, and he’s got all these family problems and work problems. And through learning constraint theory, he solves his problems, right? So that the content is great. The book as a story is not something that my wife or your wife, or somebody would pick up and read. It’s just not that gripping. But it gets the job done. It’s like a Trojan horse to teach you about constraint theory. I felt if I could write a story that was was between goldratt and Hemingway like I’m not Hemingway either. But if I could write, like I write a story that was somewhere in between, that the story would carry itself, it might be interesting to people to pick up and read. And I think, I think that’s what murder for first principles does. It’s gotten some great reviews. I showed it to some investors, some authors, some academics, they loved it for the content side, and they told me separately, like, it’s just a great story, like I just was page turning till the very end to see what happened. So that’s how it came to be, I had a tremendous amount of fun writing it. You really do need to learn a lot about you don’t just pick up a pen or a laptop and write or write a novel. I really had to learn a lot, which I did before I started writing about, you know, technique and structure and all the technical sides of writing a novel. But at once I felt that I had some of that pretty well down. I took a shot and I think it came out. I think it came out. Okay.
33:22
I’m excited to read it. I mean, I you know, thank you for the copy. I received it late last week. And of course, haven’t had a chance to get through it yet. But I mean, when when I first saw that you had published it, I think I saw a note on LinkedIn, I thought oh my Ben, you know, or the man or the men in white coats coming for you. You know murder mystery that’s that’s focused on business strategy. But it’s interesting, I assume that the reader is absorbing some of these concepts from from Hamilton Helmer. You know about leverage and long term competitive differentiation as they as they make their way through the story.
34:04
Yeah, certainly anybody who’s in this space as a VC or a startup founder, I think it’s if you haven’t read, the point is not to substitute this for homers book, I hope that people will read my book, and then go out and buy Helmers book. That’s the idea. But it gets you enough of a taste of the importance of his theories, to I think, hopefully drive some some more people. My whole goal was to just get more exposure for his important work. I really put his, his book is really like one of the most important books that I’ve ever read as a VC. So I wanted to, I wanted to help more people get access or exposure to some of his, some of his thinking will get will give
34:45
us some insight there, you know, what are some of the theories or positions from Hamilton Helmer that you know you think have a lot of impact on the way that you invest?
34:57
So Homer, what makes his book amazing There are people that are critical in this. I heard, I heard an interview last week where somebody calls this physics envy, where we try to get too formulaic about things that are complicated, you know, so we try to boil things down into formulas. I don’t think Helmer is boiling things down into a formula. what he’s doing is he’s saying, I’ve spent, this is his life’s work like he has spent. For those of you that don’t know who Hamilton Helmer is, like he taught in the economics department at Stanford, he runs a consulting investment company that, you know, analyzes companies, he, this is his life’s work, he spent decades analyzing mostly technology companies to try to figure out what the common denominators of the most successful companies are like, everyone’s tried to do that. Collins tried to do that in Good to Great, like, all these books try to do that. And I’ve read all of them. And I never felt that any of them were really actionable for me as an investor. Homer’s book was the first one, I said, Oh, my God, I could really work this into my investment memos. And I do like this is a section in every one of my investment memos has a homer section of like, which of the powers does this company potentially have? Because what he does is he says, of all the successful companies, there are only seven potential, differentiating long term sustainable, competitive powers that they can harness to fend off competition, and create above average returns for really a long time. And he just maps them out and explains them pretty clearly. It’s not a long book. So that’s pretty important information to have, I think if it’s out there, right. And, and I think he’s right, like I’ve really thought, and I’ve heard every interview with him. And I’ve heard people talk about him. I haven’t heard anybody yet come up with like an eighth. I think ash Fortuna of zetta, on interview last week mentioned, like a possible Ace, I don’t think he was necessarily referring to Helmer. But like, that’s how comprehensive is his his approaches, like, it’s hard to think of something else that would work other than the seven. So I think you have to pay attention when somebody writes something like that. The thing about Homer is that it sort of picks up and he kind of mentioned this at the end of the book, he says, I’m really picking up on the basis of assumption that the startup has something truly innovative. So he’s not talking about, and that’s why I think this fits in after zero to one like I think zero to one is a great book, about the inception of the idea, like is this a good idea? Is this an innovative idea, but what Helmer is saying is even if you have an innovative idea, you might not be able to keep a sustainable competitive advantage for a really long time. So when I’m looking at an early early stage company in the pre seed stage, I’m already thinking, Okay, if they if the idea really does work, still, will they be able to maintain a competitive advantage? And how? Or will they just get toppled by somebody else afterwards. So we’re trying to figure out which of the seven powers could potentially slot in only two of the seven are Inception stage powers. The other five are things that a successful company kind of picks up or earns, in that middle stage or in the the late stage. So again, I don’t want to like go into a whole lecture about homers book I really just encourage it’s not a long book, I really encourage people to read it. And if you want to get a good taste of it before diving into the economics, read my book to kind of get your no I’m not selling the book, like a funnier, like kind of more clever wackier way of kind of tasting it or nibbling on it before you dive into his his book. The other thing I’ll say just just to be clear, like what you said, you saw my post, Do you wonder like Wi Fi have gone crazy. I also I also wondered if I’d gone crazy, but I just, I just had to get the story out. And to be clear, like, I’m, I’m an investor in one city, I don’t need to be famous around the world. And I’m not going to get rich off of sales of this book. I’ve already agreed to donate the proceeds of the sale of this book and any other books to a nonprofit getting back to to women, a nonprofit called FEM forward, which I’m on the board of which promotes young women in tech. So this is not about making Ben Wiener famous. I even thought for a while about publishing it under a different name. Just because I wasn’t looking to promote myself through the book. I wanted to promote homers theories. And I wanted to make people smile and make people smarter the way books have made me smarter. At the end, I decided to put my own name on it because I wanted to take ownership of it. And I felt, you know, I’m gonna, you know, be judged either way. And I want to want people to judge me for who I am. But it was a last minute decision. I actually thought about using a pen name. Just because it was so weird. Like why is a VC writing a murder mystery book?
39:28
Well, I I’ll say the concert did has grown on me and continues to grow on me. I mean, anytime I see a VC or an investor writing fiction, it’s typically dystopian sci fi, you know, pretty much in a certain category and there’s nothing wrong with that but it’s it’s refreshing to see something new and different and original. So I applaud you for that and certainly will read the book and you know, give you props for cranking it out. I mean, amidst A very busy schedule fundraising, deploying managing a portfolio. It’s difficult to create and be a creator and put stuff out there. I would know I’ve been running a podcast for seven years. And to make the time to do that is is a challenge. Yeah, I
40:18
mean, for me, I read, I read a couple hours a day, like on purpose, like I purposefully read a couple hours a day I worked for myself, I’m a solo GP. I don’t, I don’t travel a lot. So I’m in one city. So I have a lot of control over my own schedule. When I wrote these manuscripts, it basically just was me carving out like not reading for those two months, I didn’t read pretty much any new books. And I just sat down and wrote like a chapter a day. And then once the manuscripts were done, I just went back to my to my reading schedule. So it came at the expense of my reading time, not at the expense of my investment time, or my company time or my fundraising time or anything else.
40:55
Then we could have any guest here on the program, what guests should we feature? And what topic would you like to hear them talk about? Yeah, you know,
41:03
I would say, and you’ve definitely done a good job, you know, having been listening to your podcast for a really long time. I think getting back to diversity, I’m not trying to toot my own horn, like, I don’t think I’m a special, a special person, I think I’m an average normal person, I think more people need to just rate we need to raise awareness of not just talking about it. But what it takes to make the decision to invest in somebody who doesn’t look sound, smell, you know, talk like you. And that means anything, any any kind of racial lines, gender lines, the world is huge. And the customers that these companies need to sell to are very diverse. It’s just completely proven, statistically, that returns go up when when you have a diverse portfolio, like, we need to just keep talking about it, to make it happen in in practice, and I think there are a bunch of people that are on the forefront of doing it, much bigger than me, and much better than me. And I think we just need to build in more discussion about, let’s not just talk about it, let’s talk about how to do it, what is needed in the mindset of those initial meetings of those initial pitches, to make this playing field a little more equitable.
42:24
Anyone in particular, you’d you’d like us to host? Well,
42:28
I think the ones, the ones that really turned me on to it, that made me feel like I wasn’t a strange person, no first round capital put out their 10 year review of their portfolio. And the number one takeaway of their learnings from their portfolio was that female, I believe that the headline was female led startups outperformed the rest of the cohort. And that caused me to like reach out to Howard Morgan, who I’d never met. And I ended up having a meeting with him in New York. And just, he’s like, what he wanted to talk about, I’m like, I just want to thank you for publishing what validates what I’ve been talking about. But without that enough proof. So I think the first round people were on this like super early, and they put their money where their mouth is. So I don’t know when the last time you had somebody from first round, but they could probably talk about it, you know, with an even broader historical perspective than me. Plus, they’re all the diversity focused funds now that are just amazing. Like, unfortunately, we’ve had to create dedicated funds to focus on minority founders and female founders, I look forward to a day when we don’t need to have funds that like that were any fund has a significant portion of their holdings in, you know, founders of color or, you know, women led companies, etc. But until then, maybe those people that are LPs in those funds or actively running those funds can say more about how they do what they do. Again, I’m just a small guy in a small town, doing it at a small scale. There’s some people that are doing this at a much higher, higher level than me,
43:59
then what do you know, you need to get better at?
44:03
Well, we don’t have enough time in your podcast to talk about that. It’s endless. But I would say, you know, I’m just trying to get Smarter Every Day. I think. I don’t want to be critical of other VCs. But you tend when you meet founders all day, and they tell you how smart you are. After a while you start to believe it or you can start to believe it. I never believed that. Like I never went for that. And I forced myself to get try to get Smarter Every Day. I don’t think I’m that smart about a lot of things. And that’s why I read as much as I read and listen to as many podcasts I listen to. I’m just insatiably eager to get smarter on a daily basis. So among all the other things that I need to get better at, I just need to get smarter about lots of different things that relate to technology and investing. There’s so much incredible content out there on a daily basis. That just to keep up with it is incredibly hard. But I try to do the best I can to keep keep that muscle working and You’re getting smarter every single day.
45:02
Well, good. And then finally, what’s the best way for listeners to connect with you and get the book I assume Amazon but I’ll leave it to you.
45:11
The book book is available, actually recommend the audio if you if your audio book listener, we, the book is told from the perspective of a woman in first person, so I could not even if I wanted to, I wouldn’t be able to read the book like it’s, it’s a woman telling the story because she’s the one who’s investigating the murders. And it’s read really well by a professional actress. So that’s, you know, available. It’s just available wide. It’s available in ebook paperback and audiobook, on any of the platforms that you use. Welcome anybody to listen to it, and enjoy it. And again, proceeds go to forward so I’m not looking to get rich off of it or, or get famous. I just wanted to put it out there for people to enjoy that people want to reach me. Super easy. Ben at jump speed.co is my email. I’m still old fashioned. I do. I do read emails. Twitter has been in jlm. And website for the fund is jump speed.co and my author website where I talk a little bit about writing and there’s couple funny videos, some some really great cameos about the two books, which are pretty funny. At Ben Wiener, WI eg ner dotnet.
46:20
Well, the man is Ben Wiener. The firm has jumped speed and the book is murder at first principles, Ben, always a pleasure. I’m glad we had a chance to reconnect and talk a bit about your thesis and the book here on the show. Thank you so much for having me, Nick. It’s a pleasure of course, man.
Transcribed by https://otter.ai
