Trust the Process, Prove the Product
Show Me The Money!
Always loved that line from the Jerry McGuire movie. It looks like that idea continues in venture land with the WeWork fiasco. It’s hard to understand how a company can believe it will go public and a few weeks later take a bail-out package from one of its major owners. It’s a good example of the public markets getting it right: show me the earnings might be the right tag-line.
Venture firms on the East Coast tend to like a model of funding that starts with the idea and a seed with great founders. Then, we want price and product testing in the market so we know there is a willing buyer before pushing for growth. We like following this pattern at Vestigo. Sometimes we run across West Coast influenced deals where the money is shown upfront instead, so the company experiences no capital scarcity. We believe it’s out of scarcity that great entrepreneurs rise to the challenge to build amazing companies.
We want to back entrepreneurs who establish a path to profitability in their business model. This key factor was missing at WeWork. Our favorite founders iterate on and deploy their product regularly to get market feedback as they go. We think this approach is better than investing heavily in the ‘perfect product’ and hoping the market loves it as-is. WeWork swung for the fences, hoping to reinvent the corporate leasing industry, but experimented little and wound up with an unsustainable business. Ouch.
Helping entrepreneurs get this right is our calling. We understand the first product may not work. We understand that pricing needs to be experimented with in a company’s early days. We are here to help fund the experiments that build great business models over time. While it’s wonderful if that happens the first time (and it’s a massive success), most of the time it’s hard work and lots of experimenting to learn what the market wants and at what price. We are all about that learning which builds great, valuable companies.
—Dave & Mark
Interview with Zack Smith and John Siracusa
Every week our friend John Siracusa interviews an impressive leader in FinTech. We are often lucky enough to have him sit down with one of our portfolio company CEOs or even a Vestigo GP (see Mark Casady's most recent interview here). John recently spoke with Zack Smith, CEO of Jobble, about the amazing work he and his team are doing to bring financial stability to the gig economy workforce (aka "Jobblers"). Check out the episode webpage here or listen on your favorite platform.
Interviewing the Interviewer
Networking is vital in the VC industry. Introductions and relationships with potential strategic partners, hires, and customers can make or break a start-up regardless of the strength of their concept. Part of that networking is John Siracusa and his two podcasts: "Bank On It" and "Before The A". Both spread the word about great companies and founders to the investing world, helping them along their road to success. After John interviewed so many of our portfolio companies (Vault, Cushion, Jobble, Micronotes, and Alloy), we thought it would be nice to interview the interviewer and learn about the man who does so much to help startups. I emailed back and forth with John over a few days (he’s busy with his podcasts after all) and learned a bit about the guy: read from our selected questions below.
Bank On It & Before the A are the places for a FinTech founder to be interviewed. How did the journey start, and why do you think it's turned out so well?
Ok, let’s start with how the journey started. Actually, the origin story is why it turned out so well. Let me explain. I created Bank On It in 2015 after having brain surgery. I started podcasting before it was an app on an iPhone. I started it because I needed a framework to do speech therapy. After my surgery in 2014 I needed to learn how to walk and talk again. My young daughter at the time was learning to walk for the first time as I was re-learning to walk at 37 years old. She had this intrinsic focus, regardless of how many times she’d fall over, she’d get right back up again, every single time. On the other hand, I colored every one of my tumbles with words of frustration. A few months later, she made progress, while I made little, if any. I realized that my attitude sucked and if it didn’t change I would never walk again. So I decided that I would adopt her framework and practice all day while removing my frustrated responses. I’d fall over and get back up, again and again. Within 4 months I went from a wheelchair to a walker, to a cane, to no assistance at all. It was the hardest thing I ever did, overcoming my negative mindset and self talk.
Now that I made some progress on walking I needed to make progress on the talking. I had a bad slur that I needed to overcome and I needed to do therapy everyday to overcome it. I didn’t want to give a negative mindset the chance to surface so I needed to build a framework for therapy in a way I enjoyed. That’s why I created Bank On It. If I had a guest scheduled for the next day I had to spend the whole day before doing therapy. It pushed me hard and focused me.
Funny thing, I did over 140 interviews last year in my studio with later stage FinTech founders and the VCs that fund them. Almost everyone asked me, “why did you start the podcast?” So I’d tell them why and that’s when the dynamics of the interview changed. Everyone would open up because in their eyes I was no longer just a media personality, I was a living breathing human being who’s been through a struggle just as they have. Everyone who’s sat in the interviewee chair in my studio is successful in business by all means. But now they could be themselves and I could be myself as well, asking questions in which I had authentic curiosity, on how they’ve accomplished what they have. It is truly a magical experience. There was no master plan, the moons aligned and the magic happened.
What makes you want to interview one founder over another?
I always interview people who know the people I know. Everyone I interview is successful and accomplishing amazing things. I like to interview people that have a story I can uncover through questions and help tell the story of this person as it relates to the booming of the FinTech ecosystem.
What do you get up to when you aren't busy interviewing?
I’m always building new shows and brands that help tell the whole global FinTech story from person to person. If you follow me on LinkedIn, Twitter or Medium, I announce new projects and interviews every week.
There you have it folks, an interviewer who is driven like an entrepreneur with a powerful story to boot. Vestigo tips its cap to John for all the hard work he does for us, our portfolio companies, and the FinTech industry as a whole. Thanks for everything John!
—Eben Clark
Team Vestigo Goes to the Gala
It’s been a busy time for team Vestigo inside the office (and out). September saw Vestigo hosting two major events, our Annual General Meeting and a panel discussion at Boston’s FinTech Week. After all the hard work of putting on a show Mike, Frazer, and Eben decided to relax and be entertained instead at the Invest in Others 2019 Awards Gala.
Invest in Others is closer to Vestigo than a mere sponsorship of the event. In fact, Mark’s daughter Margaret came up with the name! On a long road trip 14 years ago, Mark was driving with his family and discussing a new foundation he was helping to create. Excited about the mission to empower others, everything was ready to go except for one thing: a name.
Without any hesitation, Margaret offered her suggestion: Invest in Others. Caught by surprise (and quite pleased) with the suggestion, Mark asked how she came to think of the name. “It’s simple dad, investing in others is what the charity does, so just name it that!” Occam’s razor in action folks.
Invest in Others recognizes the charitable works of financial advisors across the country who actively support a charity of their own. It was great to see so many passionate advocates and learn about the good work they are doing. We’d like to give a shoutout to Mike Mayernick, recipient of the 2019 Global Impact Award, for his astounding work at Love One International in particular.
Thanks again Invest in Others, Vestigo looks forward to seeing you again next year!
—Eben Clark
Portfolio Updates
LifeYield Wins 2019 MMI/ Barron's Industry Award in the Solutions Provider Category
Retirement planning isn’t easy. Unfortunately, it isn’t as simple as squirreling money away and taking it out later. There are many tax implications to consider, which if not properly accounted for, are expensive (and unpleasant). LifeYield’s solution — Income Advantage — addresses this issue so well that it’s award worthy! Congratulations LifeYield, keep up the good work!
PRESS RELEASE PR Newswire
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