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from Hammond I'm working with personal training office and I was
raising my second round in Silicon Valley and a phone call that's where my
wife called me that I don't need to go back to home so I lost my wife and
I got depressed and that's how I lost my money and I was five months
homeless and during that time I was told many times that I should fail my first
startup like everybody else should I? - I want to make sure I
understand the question during that time you were told by people that you should
that you should let that first startup fail?
- yeah because many many people say your first startup will fail
usually it's rare go hard is it rare to what we are associated
with the first time -- no it's not rare at all it's rare in Silicon Valley where
everybody over valuates companies and forces, VCS have a business model it's
called raise a fund try to make a bet on 10 20 30 companies and push all of them
very hard because if one can actually get through it will pay for all the
others but it doesn't care about the 29 *** that didn't make it so everybody
gets the same advice because they're being selfish then one of the reasons
I've pushed back very heavily on Silicon Valley culture over the last five years
or so and stopped kind of investing the same way I did was I didn't want to put
once I understood I'm like wait a minute this system sounds great at first I
don't think I don't think it's rare at all I think there's a ton of small
businesses that succeed on their first one but I think they look a lot more
like the guy here in the yellow shirt who says I'm gonna take a 20-year
perspective and not a 20-week perspective right so many people here if
you're funded or you're part of Silicon Valley you're not actually building a
business you're building a financial arbitrage machine based on metrics that
VCS want to see and growth you're not building a company you know for me so
look I mean you obviously I've dealt with you know you're young dude and I've
already dealt with real life *** you know you have other emotions tied into
that because it represents other things than
just a company I think it's always a bad idea to raise more capital than you need
to based on everybody's just overextending
themselves it's like bad credit and I think that everybody's dreaming you know
everybody gets seduced by Instagram or ways or Shopify but when you look at the
math yeah most first companies fail because people don't know what they're
actually signing up for when they start raising capital they lose their business
they get caught up right you were raising your second round that
means most of the behavior that your company was doing after your first round
was more predicated towards the things that the market needed to see for a
second round than what the customers needed the reason I've never raised
money or even you know you know I brought a company from the day I left
school twenty-two so twenty years I've been running a company every day of my
life and every day of my life I've raised no capital and every day in my
life I had to make payroll every two weeks so you know when I started
vaynermedia I was already successful and I started it in a conference room of
another company for nine months and then another year of free rent in exchange
for my time because I didn't want the expense so you know I think that you
what you need to do is make sure that the company doesn't represent
something above and beyond the company back to some of the themes my partner in
crime here was saying you need to make sure there's not baggage in that company
that you say to yourself this has to succeed because if it doesn't I lost my
wife I was hung like it'll you know you need to be very careful that this thing
doesn't have some deep emotional baggage in it because one of the most important
things for entrepreneurs to do is know when to not run the company anymore
it's very you know which is very tough so I would focus on that more than the
ideological fail-fast that guys let's make pretend you know nothing about
technology in Silicon Valley how the *** does fail fast makes sense
it starts with fail so I think there's a culture that needs to be reset in the
startup ecosystem and that VCS need to be scrutinized more for what they're
actually up to by the way this is capitalism you took their money like I
if you listen to this whole episode I've talked out of both sides of my mouth
I've been on the side of giving $300,000 and the founder *** *** the bed and
like *** you so it goes both ways this is not like ooh vc sucks like there's a
bunch of kids running around with stupid *** ideas raising two million
dollars and then throwing it directly in the garbage by buying $50,000 ***
squeaky tables right so I think that um I think that we as a whole need to be
more thoughtful and I would say that's the theme of the episode so thank you
guys for being here my friend.