Michael Jones of Science Ventures joins Nick to discuss Lessons from Liquid Death and Dollar Shave, Why X’s Super-App Strategy is Flawed, Building Through Influence, and The Power of Observation. In this episode we cover:
Disrupting the Razor and Beverage Industries
Influencer Marketing and E-Commerce Trends
Early Stage Investing, AI, and Startup Landscape
Identifying Successful Founders
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Transcribed with AI: Mike Jones joins us today from Aspen, CO. He is Co-founder and CEO at Science, an early stage venture fund investing in tech-based companies. Michael has invested in companies including Liquid Death, Dollar Shave Club, MeUndies, Rover, and Famebit. Prior to founding Science, he served as the CEO of Myspace. He founded his first successful company in college, and is a long-time entrepreneur. Mike, welcome to the show! 0:25 Well, thanks for having me. 0:27 Yeah, it’s pleasure to have you can we get your quick background like two minutes? Walk us through your path to dessert? 0:33 Yeah, I mean, in college, I started the company at a super young agents that being a software business that I scaled like right outside, like during college and outside of college and eventually sold it. I then went on to start another business that I sold to AOL, I worked at AOL for a few years as a senior vice president, then I joined private equity did a bunch of stuff in the private equity world was recruited into MySpace to be the CEO of Myspace, to longtime kind of operational background from garage level startups to kind of at scale, you know, big companies, and then had been done a lot of angel investing along the way, and ended up starting science about 12 years ago with Peter Pham, Tom Dare and Greg Gilman, and the four of us have kind of built this firm and science, which is very focused on kind of consumer on the consumer products and goods and services, etc. 1:17 Amazing. And, you know, from my recollection, science was one of the early venture funds that was focused on like sort of a foundry or a studio approach. Is that accurate, where you are Kind of CO creating companies with the founders? Yeah. And 1:31 it’s, it remains the same model. Today, there’s some structural changes between our first iteration of science and now we’re deploying our third fund. But yeah, essentially, We staff a pretty heavy operational team, we look to be kind of operational in partnership with early stage founders, we stay heavily engaged the entire journey, when we have a big winner, we deploy substantial dollars into them and try to maintain our position as one of the largest investors. And then we stay engaged up until the point of exit or IPO or whatever the kind of, you know, terminal point is for the business or the next progression that’s for the business. So yeah, we sometimes create our own companies from scratch. But more often than not, we partner with great entrepreneurs. So people pitch us ideas. We fall in love with ideas, we have a certain expertise in the space, we engage with them, and we work with them over long journey. Amazing. 2:17 And is it all pretty early stage stuff? Are we talking precede seed or 2:21 talking PCT? So I mean, sometimes it’s a company that they’re already in the market, maybe they’re selling your product, or have a great app or something. But for the most part, it’s a few people with an idea, come and pitch us the concept. They might have a deck, they might have a rough prototype, where the word the very, very typically first dollars in like maybe they’ve had some friends and family money to kind of get their prototype together. But from an institutional perspective, we’re really first money. 2:44 You know, I noticed that you went to Oregon, and your brand guy, you’ve done a lot of brand type investment is did you get your inspiration from like Phil Knight and the Nike thing? Or is it just that that like? 2:55 So? You know, yeah, when I grew up in Oregon, my stepdad at one period of time was was an excellent big runner. And he would run for Oregon before the Olympics, and he had been friends with Phil Knight. So as a young guy, I had access to like, the Nike employee store, and I was kind of like Nike was in our kind of life. And to your point, like Nike is one of the greatest brands of all time. So I’m sure that, you know, infused its way into my brain in some interesting way. But yeah, and I remember like the Nike concept store when they first opened and Portland and it was just like, marvel of retail genius. And so yeah, I mean, I’ve always loved brands, I mean, for certain, and Nike definitely is one of the brands that I’ve always been a huge fan of. So I never, like interned with them or had any kind of commercial relationship. But yeah, you’re right. I’m sure there’s influence there. 3:38 And is that typically the kind of the investment profile? Is it usually consumer oriented and brand oriented? Or do you guys do b2b as well, we, 3:47 we mainly do things that can reach a million plus people. So that kind of limits itself normally to kind of consumer, you know, I think I get excited when we build products or services that get millions of people doing stuff, I’m sorry. He’s like, literally just around happily. So like, consumer definitely gets me excited. Like, I love to do things. I’m like, Oh, my God, if we get this, right, a million customers are gonna love us a million people use this, etc. So that’s, that’s where we focus. Sometimes that’s products and services. Sometimes it’s mobile apps and media, sometimes it’s marketplaces. But generally, the target has a lot of people. And so it keeps us in that consumer sector. 4:22 I love it. For those of you that are just listening, he’s drinking the liquid death out of the can. He’s got the rover dog in the background, and everything is right on point. Mike, I give you credit. So So talk us through, you know, what are some of these early elements you’re looking for in a business at the point that you get involved? Well, 4:40 first off is we’re looking for consumer behavioral change. They’re going to change you know, how they spend, how they spend their money. And so we’re looking for areas where people have massive dissatisfaction with traditional products, or maybe they don’t realize they have dissatisfaction but if they were given a great alternative, they would have a better consumer experience, right? So we’re looking for markets and Initially, right, then we’re looking for obviously founders that have big visions within those markets. And so they obviously have to have a specific approach on how they want to how they want to like attack the market, why their products would be fundamentally better than other products, how they’re going to differentiate better pricing, all this kind of stuff. And if that comes together, we have a big market and we have a really good visionary founder that has a great product vision, we can simply package that and provide a lot of supporting resources that can get that company to good scale. 5:26 Does that include like cm support, you know, manufacturing, health, transportation, logistics, or you know, what are? What are the some of the things that you guys can offer off the shelf to, 5:36 we’re best at marketing. So whether that means how we’re approaching Tik Tok, whether it’s strategic partnerships with brands or celebrities, whether it’s a specific way that we’re going to position the brand relative to like traditional consumers, that’s probably where we’re most well known. We do have now a lot of connections within manufacturing, distribution, trucking, brokerage, etc, like all the other components that might lead to that. But the reality is, you probably come to us because you want a market breakthrough. And you want really smart marketers kind of work on your side on figuring out how to position this for the audience. And I’d argue that’s a big part of the overall strategy. Right? 6:11 Got it. So you’re looking for companies that can reach more than 1000 consumers? Yeah. Or it’s our million consumers. Yes. My fault. misspoke million. So you’ve invested in CPGs, marketplaces, creator and social economy, you know, how do these key elements that you’re looking for change from, you know, category to the category, or sector to sector? 6:33 I mean, I don’t think about it from the sector sector sectors, like whether we’re thinking about beverage or food, or whether we’re thinking about a mobile app or marketplace. I mean, maybe there’s different parameters and strategies that might be different. If there’s different marketing partnerships are different. I would say that over time, we become smarter just in regards to how we think about these types of companies. So there are certain areas, I think we have more areas where we won’t go than when we started. You know, I think when you start you’re like, I’m open to everything. And then, you know, slowly, you kind of tick off sectors where you’re like, too difficult too slow, too, logistically challenge, too much competition difficult to fundraise for. So the over time, we’ve narrowed our focus, which I think is being healthy for our portfolio, because then we select sectors that just are slept companies that can actually have greater scale and greater ease for us in a certain way. But But sector to sector is different, right? It’s just different strategy approach. 7:23 And then like, as we think about some of your successes that have entered established categories, right, like the red ocean blue ocean thing, we’ve got, like liquid death, we mentioned that before Dollar Shave Club, right on paper, I think a lot of VCs would say, these companies are moving into very large, well established sectors, you know, red oceans, very competitive, right, the portable water segment, or bottled water versus shaving. And both both of these success stories had kind of this heavy, heavy emphasis on brand. And positioning. Some of our older listeners will remember the Dollar Shave video. It’s a classic look it up that Mike you know, what factors helped you get to conviction in these really tough, you know, well covered markets. 8:10 With Dollar Shave Club, there was you know, there’s a very interesting consumer behavior that happened before on razors, which was like, you get some razor, and it would sit in your shower, or sit next to your sink. And you would basically never change this like disposable head of the razor. Because, you know, you just didn’t want have to go buy another one. It was kind of a pain in the butt to buy. They’re expensive. So you ended up basically progressively over time, always having a worse and worse experience shaving, right and like event. gunky, just nasty thing. Sitting on your neck, you’re saying and you’re like, This is disgusting, right? It was a disgusting product. And if I went to you and said, Are you dissatisfied with your traditional, you know, razor, you’d be like, No, you know, but the reality is, you probably were like, you just you are dissatisfied? Because you blame yourself because you’re like, Well, I’m, I know, it’s my fault, because I haven’t like switched the head. So the experience is worse every time. But that’s me. You know what I mean? It’s my problem, right? So you wouldn’t identify dissatisfaction get the experience was poor every time and you probably blame yourself, right? The second story I remember hearing back then was like, oh, did you know that basically, if you go into like a Walmart or Rite Aid, or some or CVS, the razors are in like a locked cabinet. And so in order to buy it, you’re gonna like find some of the works there, and you’re gonna unlock it, and it’s like, so then the second piece was like, wow, that’s really inconvenient. Right? And then I remember someone telling me the story, like this fella that had worked with us worked with the like, what is like the NBA, right? Major, major league baseball Association, right. MLB MLB. Right. And so I was like, he was like, I was like, what was like a surprise there, even though I’d always go down to the locker rooms and I’d use their gym. And every time after I went to the gym, they had like an unlimited supply of disposable razors. And I would get like Like the cleanest shave, like every time I did this, and it made me feel like, like, I was like a baseball player, like I was like, oh my god, like how incredible this experience. I remember thinking about this. And then when Dollar Shave Club knocks on the door, yes, they had, you know, super compelling founder. But it was kind of like, hey, if we send you razors all the time, you’re initially going to build a big stock. And at some point, you’re going to realize you have enough inventory of stock in your in your drawer to like, switch that head all the time. And once you start twisting the head all the time, you just have to get a better shave every single time. Right? And it was about the oversupply. So the first piece was like, Oh my gosh, you’re right, like, we don’t have to beat Gillette at like razor Tech, we just have to convince you to change the head more frequently. And if you even if even if we don’t have their 35 blade like magic razor tech, if you change the head more frequently, we’ll beat them all the time, because you won’t be that DUNKEY razor you’ve been using for six months and never changed, right? Then you pair it with the fact that at that point coming out of Myspace, I had this big belief of content and commerce, like converging. And I just was like, gosh, you know, someone’s going to make YouTube like a commerce on YouTube kind of thing. And I was kind of hunting for it at the end of this meeting with Mike Dube. And he was like, Well, you have this video. It’s not like fully done, but I’m happy to show you the cut. And he showed me and I was like, oh my god, I think this can go crazy on YouTube, right? So you basically have a new product experience that’s maybe not technically a better razor thin Gillette highest and razor but the product experience was fundamentally better. We had disruptive pricing, a better way to sell match with like epic marketing and a great CEO that absolutely understood that brand and consumer and he was the perfect bright guy for it suddenly, like takes off. Love 11:46 it. Similar story for liquid death. Just different circumstances. 11:49 Yeah, I mean, it was it was I mean, I don’t wanna go into the depth of it. Like, I don’t know how much of this you want. 11:55 I mean, give us Yeah, the 22nd overview on the strengths. What were the key standout. 12:03 I mean, there’s, there’s areas that liquid destory that connected to me personally, like I generally choose, I have chosen not to drink alcohol. And somebody basically came and it happened to be that like during the time of liquid death was when the Woolsey fires hit Malibu, and we were in Malibu at the time, and like, I was at this concert, and we were doing like a big fundraiser with like, Red Hot Chili Peppers for the Wolsey, fire victims. And, you know, I’m sitting there holding like, an awkwafina, right? And this plastic water bottle, everyone’s got these like, cool, like, I’m badass drinks, I’m holding this awkwafina. And I remember like, at some point, during the liquid journey, they were like, look, we fundamentally think less people are gonna drink, drink alcohol, we think that there’s an opportunity to do a healthier beverage, but it needs to really bad us brand. And, you know, How stupid are you when you’re sitting inside of a great concert, but you’re holding like a plastic water bottle? Like, don’t you feel stupid, lame, and I was like, oh my god, like, I literally just kind of had this feeling like it was just like, I felt out of place. And they’re like, imagine holding this right. And they have this crazy. And meanwhile, our team is doing all this data on like, well, how you know how many people connect to this, like, skater, like all culture, like just a little bit of a different kind of, you know, you know, attitude. And we basically found that the market was really, really big right parent with an epic founder, who, you know, Mike is probably one of the best founders I’ve ever worked with, from a marketing perspective. They just keep pumping out hits. And he just understands this the understands this audience and it just happens to be this audience isn’t just, you know, badass punk metal people, it’s like, the audience is really broad. And people really connect to it. And they liked it, they like to be part of the journey. So similar, like we found a disruptive idea, like, arguably, the product was better because it’s spring water from mountains. And it’s like, great, cool, and water inside of the camp feels good. But the actual better product for me, which was a little less obvious is from the moment I knew I could drink water out of aluminum kingdom, and I could recycle the can was the moment I felt horrible about myself, every time I picked up a plastic puddle of water, for sure, you know, and now it’s like, if I’m at an airport or something, and I have to buy water, which is, by the way seem so stupid, and they don’t have you know, a liquid death or an aluminum Canned Water and I have to buy a plastic bottle of water and then throw it in the trash can at the airport. I just feel horrible about myself. You know, like I’m like, great, what am I doing? I’m just consciously making a horrible decision for the environment. And so it wasn’t that like previously if I’d asked you do feel dissatisfied with drinking and awkward, you know, whatever our sparkling water body like its water, it feels fine. But now that I’ve told you there’s a better way that’s better environmentally conscious with a higher quality water, you’d be like, Oh, well now I feel bad about that experience. Right? So again, their product change your perspective. 14:46 And I love this point because you’ve zeroed in on something that I’ve thought about but I think you crystallized it better for me which is problems in pain are in pain are not always felt viscerally and it may be subconscious instead of a conscious thing for consumers read Yeah. And back when I was a product manager, I remember I worked on this product that did sort of a new chemistry, compound testing. And I looked at the workflow and it was mixing, timing measuring. There were just like, 10 different steps in this whole thing. Yeah. And I would ask, you know, I’d see people do it wrong. And I’d be like, oh, you know, we got the wrong Oh, no, it was my fault. Right? You know, I screwed it up, right. I said, No, it’s not your fault. That’s a UX issue. You know, it should be solved for you. I agree. And so it’s like the power of observation, instead of just, instead of just asking, you know, doing like talk therapy with customers, yeah, actually watching how they use them. 15:41 I feel great, and how they feel after you’re done. Like, these two examples are interesting ones. Because if we pulled customers, we would have come back with a no investment decision. Right now, people are fine with their razors. No, people are fine with their current water options, like they wouldn’t have. But when when you actually saw the way that we were changing the way that they felt about this experience, and suddenly, you’d be like, oh, there was an opportunity. And those are hard to find, like, to your point, like, not all of our investments have that kind of secondary component of consumer, you know, I don’t know consumer gratitude, like, like, Consumer Perspective adjustment, like, it’s hard to find this. 16:16 I was just, I gotta mention this, I was just talking to this brilliant founder. The other day, he built a company called Go brewing, which is competing with athletic, but his observation was you go to restaurants, people don’t always want booze. And the only other option is like coffee or tea. Yeah. People want to enjoy a drink with their meal. Like, 16:36 that’s right. Yeah, yeah. So consumers are changing, like in their product choices are changing. And if there’s a whole nother generation coming up, that’s completely different, too. So like, a lot, a lot, a lot more change is gonna be happening. Yeah. 16:48 Any anything else on that? Like the future of CPG? Like, what? What are you looking at? So 16:53 much of it, as you can imagine? And now we’ve gone so deep on so many aspects of it like, Yes, we love functional, like products with functional agreements. Yes, we like better for you foods. Yes, we’d like to see the general decline of how much sugar people consume daily, but maybe giving them alternatives than alternative sugars. Like it’s not completely about synthesized compounds. Maybe there’s alternatives there. I think there’s also a potential movement that almost as like an anti consumer movement, kind of swelling up a little bit of like, how do we generally buy less things like that is a huge question. But also say just the logistics of how a takes a product to go from a manufacturing plant to a shelf in a store is a very legacy driven, driven process, that there can be tons of optimization and business ideas inside there that we’re spending time in. And this is like, these are only things that now we’re seeing because we’re so deep into it, that they’re very non obvious problems that I think are adding cost, I think complexity out in carbon impact with kind of the way these legacy systems have have worked. And by the way, the companies are gigantic, right. And they grow through m&a. So from a venture perspective, it’s a really healthy, you know, grounded plan, because then they have these giant businesses that rely on new comers to get to scale in order to buy, right, because they’re typically so large, they’re not really innovating their own p&l, because they don’t really need to. And so I think that’s a great place for us to spend time and so we love investing in that sector. And we’ll probably go deeper into it. 18:17 So the way that these products and things in general get promoted has changed as well, right? digital marketing space has evolved. Influencer Marketing is huge. Now you guys were early to this. Can you walk us through some of the lessons that you took away from FameBit? Yeah, 18:33 I mean, it’s, you know, we we started seeing it really a MySpace where suddenly, there were individuals that had the same breaches like major news outlets, you know, I remember when like, there was an early Twitter competition where Ashton Kutcher was going to be the first to get to whatever, like a million followers and there was all this news around it. Well, I think I really took away from that was like, There’s individuals now that have the reach of major news outlets, right, more or more, right? And so suddenly, people are media, right? They don’t have the credentials. Maybe they don’t the background, but they definitely have the reach. Right. So coming into science, we originally invested in a FameBit, which was basically an influencer network on YouTube. We sold that to Google. We did a segment on Hello society, which was an influencer network on Pinterest. We sold that to the New York Times. Now we have another business that’s obviously as you would imagine, focused on Tik Tok. You know, we look at these individuals basically as media entities and how we can get them to scale, which is super interesting and cool. And when we look at these businesses launching, we definitely consider and honestly prioritize influential oriented marketing to get them out because that’s who’s everyone’s listening to, right. Like my 14 year old son is discovering new products through YouTube, right? He’s discovering through Tik Tok, he’s discovering those platforms. He’s not discovering it through quote unquote, traditional media, which means these brands have to be built for those platforms super effectively. 19:51 So were you involved in those? What are those social media houses that they put out and we weren’t involved 19:55 in those and those came up in a lot of losses so I’m really happy we weren’t net involved in this, not to say that, you know, we would have done it better or worse, maybe we would have done better. But But no, we weren’t involved in this. I mean, I think we’ve always built influencers as a key component, you know, of all of our launch strategies. I’ll tell you one thing we’re spending a lot of time with right now is tick tock, tick tock shops. You know, it’s possible as we all sit here and debate about tic TOCs impact on media and Facebook and Instagram, that tick tock feels to me like they’re moving towards Amazon. So like, I saw some things like at, you know, as like a late 40s. Guy, I spend almost no time on Tech Talk. So I basically had to force myself and look okay, I’m going to use ticker. I saw some stuff today on the tic toc UI around discount codes, coupons and their shops that’s automatically injected in my stream, that’s has to be like a 30 40% conversion tactic. I’ve never seen that before ever. I literally screenshotted them like I can’t believe this is happening right now. And while we and I literally think we’re all thinking about the wrong way, like I think it’s going to be I think it’s commerce, like I think tic TOCs in the goes so deep into commerce, and I’m talking my brand brands, I’m like, Look, we need this. i You need to be playing on tick tock shops, like yesterday on Amazon. Yes, 100. Shopify, but like, lean into this, I think the numbers are bigger than we all expect. 21:17 Amazing. You know, as a Chicago guy, I probably shouldn’t use this example. But like, Groupon was, for a while the fastest growing tech company. And it’s because it kind of flipped the model from search to discoverability. Right through. And like Amazon is primarily, I think it’s the second most popular search engine, right. But a lot of people want to be entertained and want to discover 100%. 21:39 And like, you know, if you’re following, if my son following some guy that mods out PCs, and suddenly, on that channel of Tik Tok, he’s going to be promoting some specific PC, motherboard or video card or something, that’s a very valid promotion for somebody that is a nuanced content creator, in that specific sector. So like, should be extremely high converting, right? It’s hard to weed through the influencer base and find the right people set up the right, you know, positioning and marketing. It’s a whole different skill set of content creation to make make it work. But I think I think the numbers 22:13 we’re gonna find are huge 100%. And it’s so targeted, right? Like, I’ve been disappointed in Twitter, because when Facebook went public, bought some stock made some money, it worked out well. And Twitter went public, I did the same thing, because I thought that they were just going to have such an advanced algorithm for like a profile on the consumer, because they knew so much about your interests, the way you communicate. I agree. And they kind of I mean, Elon may change that, right. But they’ve just done, I think, a pretty terrible job at promoting, you know, more of a commerce engine and an advertising network than it was 22:48 like they leaned really heavy into brand. And that worked really effectively for them. But for us, they never got a performance targeting engine to the point where we could really launch businesses effectively and see great ROI on advertising spend through Twitter. And we tried multiple times. And we still will continue to try because they have so much audience there that if they get it right, I think there’s a bunch of money that can absolutely unlock, but you know, brand dollars at their at their lunchtime was were so plentiful that it was like why do we have to do that effort, right? Like we can take huge checks of the big brands like that. It just works. 23:18 So I guess we should be calling them x. It’s fine. Transition. I agree. Sometimes I don’t know if it’s just an experiment or if it’s like real with Elon, but I think it’s real. 23:29 I think I’ll call like their, their look, you know, I think strategically he they whomever that braintrust says, is really looking at these like super apps out of Asia, and wondering like, why can’t we do everything under a single brand. And it’s really instinct for me to think about that. Because I fundamentally operate from a place where I believe that American consumers like specialty brands, you know, so it’s like, if I’m going to, you know, if I’m going to like, I’m buying hardware from Apple, if Apple is trying to sell me gas tomorrow, I’m like, that feels really weird to me. Like, I don’t know if I believe it. Like, if you know, Nestle was suddenly selling me car tires. I’ve just like, why, like I don’t you know, I think American consumers like specialty. The premise I’ve definitely found in Asia, you have a different approach where consumers have loyalty to big brands. So they fundamentally trust Samsung, and they’d like to go to a Samsung hospital, they want to go to the Samsung products they want to do you know, they like these big umbrella brands that they kind of feel as like part of the, you know, part of the ethos of the country. And a big question here is Ken X moved to a point where we have this broad trust and that as a brand, and we give it the permission to touch so many different aspects of our lives that are not just in this case content. Right. And I feel like that’s the reaching for it’s really worked well in Asia. It’s built beautiful, giant businesses that are great. But do we think the American consumer can take it? It’s interesting question. 24:52 100% like Right, like Matewan and Asia, amongst others. You’ve got ropey in South America. It’s a good Question this Super App thing. But look, I mean, we talked you mentioned Amazon before, right? Yeah. Amazon in a way has done this, right? It works. They’re one medical. It’s true. 25:11 But they’ve ended kept as a separate brands, right. It’s like when I go to the website, I’m not being pushed into one medical. So there’s, so that’s more of a in my mind, it’s a conglomerate approach that individual brands so that we know, that does work, you know, and Amazon also, it’s still like, I guess I’ve kind of been taught by Kirkland or Costco where like, Oh, if I, if I trust the retailer, then I’ll let them sell me rice. Like they can have their own branded rice. That’s okay. Right, like, but it’s funny to walk into like a city market, which is our grocery store, which is probably owned by Kroger and then buying Kroger products. So they’ve still maintained that brand differentiation. It’s a fine line with the consumer, right? Like when you want a singular brand. And at least from my perspective, the Asian approach is really singular, brand solid. But maybe that’s not the approach here, we’ll we’ll kind of see that I’m sure there’s lessons to be learned. Or maybe this would be the first time that happens. Alana has done a lot of things for the first time like he’s very good at first time happens in the US. So like, I don’t know, like, I don’t want to bet against that guy. That’s pretty incredible. 26:09 I love the thought exercise. I’d love to have you back out and like two years to revisit this happens. 26:13 I’m totally intrigued. Like something he was like, oh, you know, you can Samsung, you can be born in the Samsung hospital and be buried in the Samsung funeral home. Like birth to death. Brand loyalty. I’m not sure if that’s like super valid like I never went and searched out for but but at the premise that no marketing campaigns. But it’s like, even for me to remember, like, I remember when Costco started selling gas, and tires. That feels weird to me. Like, it’s like my brain wanted to reject that a little bit. But like, I guess it kind of worked. I don’t know. Like, I’m really I think about this a lot. So I’m really curious 26:50 to see what happens. Yes, Costco is an interesting case study. Did 26:54 you see I saw today that they show that like the dollar 50 Hotdog combo or whatever has hasn’t changed price in like 10 years or something? Pretty incredible. Like it’s amazing. non-inflationary food product. 27:06 Cheese. I don’t want to think that what that means for our healthcare system. Yeah. Mike, I want to transition a bit and get your insights on how your portfolio is incorporating AI, and kind of your general take on investing in the space? 27:23 Let’s see. So I mean, AI for me feels very much like the early days of Amazon Web Services, like I kind of expected everywhere at this point. So if you know, we’re for all our portfolio companies, we’re pushing them to use AI. What does that mean, they’re putting into their customer support flows, they’re using them for document creation, they’re using it for our prototyping all the such engineers using it for code writing. So that’s kind of everywhere. We have two companies that are that only exist because of AI engines, ones and basically the repair space where it’s ingesting large commercial manuals and repair procedures, and then working with commercial and consumer entities to kind of guide them through that. The second is that within social media, where it’s basically taking in the persona of a brand, and then helping craft social, creative AI driven marketing messages around that brand, both are actually super compelling products. On the social media front one, I mean, luckily, I don’t have to repair things all the time. So I don’t need to choose the repair one all the time. But the social media one I find myself using every day and getting really interesting insight for it’s basically a curated platform that now knows me and knows my preferences and actually creating content for me on a daily basis. Automated, super fascinating, right? Like both of those companies only exist because there’s open AI engines, so 100% love that. So we’ve been a little sensitive. We’re not like 30 companies in we’re two companies dedicated. And then we have kind of a general practice, run everything else that I think’s been super effective. And then 28:48 what was the name of the what was the name of the company that helps with the the automated social media? not public yet? 28:53 Oh, yeah. Like, if you email me, I’ll give you an invite. And you can like play it there super early beta, you can free access and play with it. But it’s like we haven’t publicly released it. Amazing. Yeah. Love it. I wouldn’t say that. Personally, though. What would the behavior I think about is like it let’s say I was planning to come visit you. And we were going to put together a bunch of stuff. Instead of me going to Google and searching for hotel, picking up flights, figuring out dinner reservations, figuring out activities, I’m not doing it all through these like elongated prompts. And I’m getting really good travel planning data. And I wonder how many websites I didn’t just visit because of this, how many banner ads that I not see how many paid clicks that I just not click on by using this engine. It’s not trivial. Like it’s really not trivial. And so, where I used to find myself on researching a trip, I’m researching a better credit card. I’m researching how to buy a house. Like how much content I was consuming on an individual website basis. That not to say that goes to zero, but it’s definitely less like now that I’m using these tools. It’s way way less. And I wonder about this. Like the if you think about a corpus of websites that make money off lightweight ad integrations through third party ad networks through Google AdSense, etc. And then you think about all the paid search queries that you click when you’re on those journeys, that is not small, like, that’s a massive amount of revenue, right? For every individual touch on this stuff. And like, like a big portion that’s about to go away. 30:22 It makes you think, like, who’s going to thrive in that environment. And I can imagine all these legacy businesses that do the best job of getting their availability, their data online, make it super easy and stuff for the LLM, just to scrape it and fine, you know, 30:37 I am reservation, like, who’s trying to manipulate the LLM is right now, like, by type show me the best hotel in Chicago, like, who’s like smashing data into that stuff, trying to prove it’s the best? Like, I’m wondering about that, too. Right, like, so I see, I see a lot of businesses that are about to get hurt, like a lot of legacy web businesses that are out to really hurt 31:00 a grid. Yeah. You know, speaking of that, how do you think early stage investing has evolved from when science started to today? It’s been over 10 years? 31:09 Oh, yeah, for sure. I mean, I mean, there’s, there’s obviously, way more of it. I mean, like, the positives, right? There’s way more capital. So if you have good ideas, you know, there’s a lot of people to talk with, like people like us are really ready, ready and available. In a certain sense, there’s very few credentials to get you into early to become an early stage founder, right? Like, you have to have a vision, but we’re not looking for MBAs, like, you know, so I think it’s, I think it’s great democratizes, somewhat the startup landscape with more capital availability, I think that’s super positive. I think with AI, you can flush out or flush out concepts like super effectively, you can pre prototype stuff, you can create visuals, and really, really low cost. So I think the expectations of what you’re coming to investors with early stages higher than it’s ever been, because the tools are available. And we want to see that you can use those tools to come to really good conclusions on strategy. I think the negatives are that you have a lot of people deploying early stage capital that have never built businesses. And just as someone who’s built a business, I just feel like, you know, it’s not just a banking exercise of market size, and, you know, Tam, and customer acquisition strategy, and I don’t think it’s a math exercise. I think there’s a bit of jazz that happens on those early stage moments. And there’s nothing like somebody that’s like, already built a business held a p&l had the fire people had to hire people went through all the difficulties, it doesn’t mean that it’s it doesn’t mean that it’s bad money, it’s all good money, it just means that there might be some bad advice, right. And it also means there might be bad pricing. Right? So early, like new money with low experience, I think price is wrong. And new Acts, you know, no experience with money often gives poor advice, which means that bad ideas can get funded pretty effectively, and then takes them longer to learn. So I think there’s positive and negatives but overall positive, right? Overall, there’s more ideas being explored. There’s more capital, there’s more opportunities. So I think from the overhaul, it’s a complete one. super positive. Yeah, 33:02 it’s funny, you mentioned jazz to at our AGM last week, our metaphorical guests, for a comparison early stage was a jazz trio. 33:11 I think that’s really true. Like, yeah, I named our firm science because I really believe in a scientific process to investing in company creation. But there’s a bunch of magic that happens those early days, right. And there’s nothing like going down a path and then finding a bigger opportunity and adjusting and adjusting and kind of moving to those early months. Yeah, when you in our series BCD. And we’re prepping companies for the market or whatever, it’s going to be different, right. But the early moments, you really have to kind of move with it quickly. And I’d argue good voices around, you make a big difference. And it can speed up that process to kind of finding that, you know, Product Market Fit sooner. 33:47 Agree, couldn’t agree more. Mike, how do you apply lessons from your early stage work to your late stage investing 33:55 in so I’d argue that my my late stage investing, you know, influences my early stage work more, just to be candid, so that if we think about the former, you know, the beauty of early stage work is you have people that don’t know what they don’t know. And so they’re willing to try lots of stuff. Sometimes when this companies become late stage, they don’t want to break it, which means that they are now trying to follow the rules, and they then become slow learners, right? So the early founder, there’s nothing to lose cold call and stop trying stuff. Just just, you know, hopefully unafraid of failure. The late stage founder has something to lose, you know, I find that that mentality shifts and those risks they were the problem solving approach they were previously doing, they kind of they kind of pulled back on it, right. So that’s one thing that like, it’s like, I had a conversation recently with one of my late stage founders. I’m like, Look, you’re approaching this like, you know, like, like, you’re a corporate you know, person like, I want you to go back four years, how would that guy have approached this problem? Like how would have you approach a problem when we first started right, like, oh, I would have just grinded this one. way through it. I’m like, Yeah, well, you need a little of that right now, right? Because sometimes when these companies get late stage, suddenly it gets too polished and too formal one, and I think it’s slow stuff down. 35:10 Interesting, you know, if you can rewind back and talk about kind of the it factor, the, you know, the characteristics that you look for in these founders at the time that you invest, you know, how do you really determine if a founder has what it takes in those early days? 35:25 I mean, I don’t think you’re gonna turn it quickly, like the benefit of our models, we get a lot of FaceTime with these founders. So like, we’re not making decisions off one or two phone calls, like we’re working with them for weeks, if not months, to kind of understand the way they work. And, you know, it’s nothing like either there’s no great greater learning than understanding how somebody approaches a problem and going through a problem with them. Right. And you know, there’s certain founders will, we’ll bring them ideas, or they’ll face problems, and we’ll brainstorm ideas, and they’ll bring back solutions and superfast timeframes, and there’s other ones just can’t do it. Right. So I mean, there’s been no real change for us there. But I’d say that, like, you know, when we’re, when we’re searching for the factor, I want time, right? It’s not as simple as just a few meetings and some personality tests or something like I want to see how they really fight through issues. And that tells a lot about him. And we’ve had founders that on paper look perfect. And they quit like they’ve they quit their journeys, like they just couldn’t make it through proper times. I’ve had people that look totally terrible on paper, and yet they’ve been some of the best founders to work with. So it’s definitely not obvious. Totally 36:26 observation again, right? I just had a founder today emailing me. Yeah, I don’t really want to answer these questions until you know, we have an indication that you’re going to invest, right? And you’re like, Yeah, well, that’s, 36:37 that’s not collapsing. Like, the reality is, we’re all here to win, right? And hopefully, we’re here to help them win, right? If they win, they win, often bigger than us, right? So like, it’s like, either, you need to see me as a partner. And we’re gonna work together on solving this problem taking on big missions. But if I’m an adversary, and I’m just a check, and like, that’s not gonna work. Like that’s just I’ve seen more failure in that kind of approach that 37:02 helped me help you. Yeah, absolutely. All right, Mike, if we can feature anyone here on the show, who do you think we should interview? And what topic? Would you like to hear them speak about? 37:11 Oh, wow, that’s interesting question. And it’s all investor based, right? 37:16 We have founders on too. But typically, like, we’ll invite unicorn founders that are from outside of the Bay Area. 37:26 ought to think about that. It’s funny, like when I like I happen to live right near a Physics Institute. And like the thrill of my month is they have these open forums where they have these physicists talk about, like their new discovery in physics. I think that just like in, like, whenever you’re talking to anybody that’s at the top tier of science describing new scientific principles. For me, it’s just a very big mind opener, you know, and so, I don’t think you need to hear from more founders. You know, I think you need to hear from more scientists. I think scientists and artists have more to tell us than founders, that we’re all talking to an echo chamber about founders and scale that’s fine. But you go talk to an artist about how they’re thinking about art and culture. You go thanks to the science initiatives, like the oh, we’ll we’ll walk away with a different perspective. 38:08 I love it. I love it. artists, musicians. 38:11 Yeah. performers. That’s where the inspiration sits. It’s not with not with billing Darcy Yes. Well, 38:17 Mike what book article or video would you recommend the listeners something in recent memory that you found informative? 38:22 In the spirit of that I was just reading this like the creative that is yeah, I’ve got a Rick Rubin Rick Rubin’s like, I love this. Like, it’s written like a bible of creativity. Like I’m actually reading it. I mean, I love it, like completely different. You know, the I don’t need more business talk. You know any more of that, right? Oh, boy. Yeah, 38:41 man, love it. I have that on my shelf as we speak. And then Mike, do you have any habits, tactics or techniques that are a secret weapon? 38:51 I mean, listen, like my life super simple. You know, like, I’m completely committed to my family work and athletic pursuits. Like there’s three things in my life. It’s basically that so like, my general tactic is thin, you know, look at your time, then the extraneous stuff like focus down and go deep on the things that you love and and find those things and just become experts at them. And that was always worked really well for me. 39:16 Awesome. And then finally, here, what’s the best way for listeners to connect with you and follow along with science? 39:21 I mean, science dash ink.com is our website. Like we respond to most emails that come in? I’m on Twitter and don’t reach out to me anytime. Perfect. 39:29 One of the trailblazers in the studio model he is Mike Jones, the firm’s science Mike, congrats on the success and thanks for joining us today. Thanks for having me.