YouSaid · the spoken record

Alex Mittal

lines on the record: 68
first: 2019-01-29
most recent: 2019-01-29
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Yeah, and that was like A was very eye-opening, but I think it was very kind. And I'll never forget it. And I actually, that just only made me really respect that person that much more.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“As the investor, you're used to being the professor. You're used to being, you should do this or whatever. And obviously we try not to be like overly dogmatic and listen and try to learn as much as we can. But I think it's an incredibly kind thing for somebody who's in the position of being the entrepreneur to be like, hey, I care about you. You should invest in this thing.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, without taking absolutes because you're putting me on the spot and people have done so many kind things for me, I'm basically indebted for life to those who've been close to me, right? And I don't want to avoid acknowledging accidentally acknowledge people who have been so kind. But one of the kindest things that's happened recently is one of our own entrepreneurs actually took me aside or it was actually over a text message and we have a great relationship, right? And maybe that's what enabled them to do this. But they're like, you know, I think that in certain contexts and conversations, when you have a lot of pre-existing insights and you get like somewhat excited and I noticed that you're not asking the question or pausing and you could really, you should take a look at active listening. I was just like.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And so, like, I don't think it's a coincidence that that founder has been so successful because he has a combination of all three of those traits that I just mentioned. So I do think like for sure it's important. I also think for sure it's important to recognize that as strong as one could be, you could be really, you could be perfect basically, whatever that means, and still fail if the market's not there.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Raw relentlessness with amazing market. But there are also other character traits that I think are immensely important. So Brian Armstrong, who is the co-founder and CEO of Coinbase, as you get to know him, I've had the pleasure of being both a friend and also investor in the company, but he has like a next level ability to soak up like a sponge things that he reads and implement them and also to ask questions of everyone he meets in a very inquisitive way where it's not small talk. It's actually, you can tell that it is being incorporated, blogged, put in the library for later pulling out. And what I would call that is ability to learn, basically, and to be curious.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Knowing when to quit, but it's more to emphasize that, like, hey, here are two examples of true relentlessness. Like they could have easily given up and instead decided to keep going and trudging along no matter how hard it got to ultimate success. And that's really, really important. And I think that might even be the most important character trait of what makes founders who are successful, that successful.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Example would be like Wonders Skull in our portfolio, like Chris Bennett actually started that business together with his co founder, R.L. originally in a completely different field and industry. They were actually helping merchants sell through Instagram and refused to give up and refused to stop following where the heat was in the market and ended up in a completely different ancillary field of sort of Airbnb for preschools and daycare. And that was over the course of years. And you see that also like in Slack, I was mentioning Slack earlier. I mean, this is a company that started off as like a gaming company and then failed at that, realized they failed, and then decided to like launch Slack, which is not a game. Although, you know, they would. Yeah, yeah, they would say, yeah, there's plenty of small examples of where you can see, oh, yeah, that kind of makes sense with all the emojis and stuff. But the reason I cite those is not because I'm against, say, like a founder calling it quits, because I think there's Fred Wilson wrote a recent post about I thought was good about like.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“And some other investors will agree or disagree with this. But in the spirit of trying to help my fellow entrepreneurs, what I will, especially first-time entrepreneurs, is what I will say is the market can make a team that maybe is lacking in many dimensions of, say, like being the perfect founder or something. It can make that kind of a team incredibly successful because the market is on fire. And then the converse is true as well. You can have the perfect team battling a market. And so the force of the market is so strong that what you really want to do if you're an entrepreneur is be very thoughtful about what market you're attaching yourself to and your company to because that'll like lift your strengths and where you're weak and seek to complement yourself at least it'll be a little bit less hard and so i'll start with that but like going into i think the number one trait that matters the most is relentlessness and so good”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, I mean, like, first of all, as founders ourselves, we have a lot of empathy for the founder. And we've sought to be as thoughtful as possible about that. And our model keeps getting updated as we collect more data on character traits, personalities, et cetera about founder. However, what I'll start with by answering that question is almost like an anti-answer, which is that”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Commonality between people. But there is like a short brief training thing, but it's very brief. That's the other impressive thing. It's like a minute to get it acquainted with yourself and to be able to have that then refine itself over time, obviously, is very powerful. And so I would say that something like 70% of our portfolio is strictly pure software. Maybe another like 10% is basically software, but it touches the real world or 15% or something. So it's only like 10% that's like this kind of hard science first thing. So we're very, very careful where we decide to partner there. But obviously a lot of this sounds like almost impossible or like on the cusp of sounding like just sci-fi, but a lot of this, the future.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so, and that's the other remarkable thing is I think that you would think that something like that would have to really get to know your specific brain. But we're kind of all there's the statistics about we're like 95% of our DNA is like overlaps with the gorilla or something like that. Well, within people, there's even more overlap. And so actually there's a lot of common”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, like, you know, some of this is like super stealth, but as far as what's publicly disclosable, it's a combination of, let's call it proprietary technology and just like traditional fact that there's signals that are discernible from outside of your head that your brain emits, right? And that combination paired with a different type of algorithm than has traditionally been used is leading them to have 20-fold faster speed or like 20-fold lower latency in responding. So in other words, your brain, like if you were to think right now like a word or if you were to color or something. Yeah, like there's a latency there to pick that up and to like do something with it. And there's plenty of like academic researchers that are showing these really cool but like really impractical implementations of stuff like this. And so what's amazing is this thing actually works. Like, you know, you can play like a little standard demo as you go around and it's like a first person shooter game and you can just like”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is magic. Yeah. And this is different from wearables that go on your wrist or something as a separate sensor. This is meant to be invisible technology that is integrated into. You wouldn't know it's there, basically. So how's it work?”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of combinations of drugs, some approved for the illness, others not to derive therapies both for industry and also for patients that people didn't realize were even possible, right? At a scale that wasn't possible before. So a lot of our hard science investments, they're still implementing some of the tools that the last, I don't know, 10 years of innovation around machine learning and data has brought us and implementing it. So another really fascinating one we're investors in a company called Neuroblow that, I mean, you should demo this at some point, but you have to try it to believe it because other, you know, there's many companies that have tried doing brain computer interfaces, but few have built ones where you try and you're like, wow, like this.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“The algorithms and to execute them to do that. And so there are certain companies on the cutting edge now that are like saying, wait for the first time, like we actually can do that. The reason I reference them in particular is they're not just a pure software company. They're actually introducing innovative lighting and display technology to the world. They're partnered with like Fortune 500 companies for delivering those to the world. And so they're applying fundamentals of material science, applying like the tools of like machine learning and even quantum computing to then actually implementing in the hard sciences realm in their labs and their pilot lines in collaboration with industry and delivering working devices. So that's like super exciting to see that end-to-end happening. In the life sciences realm where investors in companies that are similarly applying sort of the tools of software but in a hard sciences fashion, so just coming at notable labs that is able to effectively test out.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“At least you have the theory. And so there's basically certain ways that people have known for a long time that one could apply that computation to material science. But we just didn't have the compute power going back to the need for compute and what's happening there.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. You tell me if this answer makes sense, it responds to it because we absolutely have backed truly like hard science out there companies. And so one that comes to mind is actually, I mean, going directly off of material science was a company called OTI Lumionics that's applying quantum computing and just also non-quantum algorithms to materials discovery. And so as the founder of a material science startup myself, I know that like this may be almost the opposite of what we were talking about, but bear with me for a second. The history of a lot of material science is more empirical based. It's like, all right, let's try this. Let's see what happened, observe, and then refine versus the way things typically work in like mathematics or physics or computer science, where it's like, these are the laws of the world. And like, let's compute this. And so obviously progress is orders of magnitude faster in that realm than in the realm. In theory, yeah, yeah, in the theory realm than in the on the bench realm. And obviously theory has to be checked with reality.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's swinging back. It's swinging back to specialized hardware. So that's one shift that we're seeing the swing back to hardware that is designed to really just execute one function really, really well, really, really fast. There's obviously risks to that. Like if you invest in hardware and the algorithm goes out of fashion, it seems like you're kind of screwed, right? So can you create custom hardware designed to execute an algorithm and shift really quickly as the algorithms changes? Is that even possible? So that's one area. The other is just because of the growing volumes of data and data sets getting really, really big, just being able to process and compute huge data sets really, really fast is another avenue that's opening in that space.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of compute because Bitcoin was like this petri dish of what happens when there's just this crazy amount of demand for the most efficient compute possible. And when you look at what's happening in, okay, we're in business is compute demanded the most right now. It seems like it's in machine learning. It seems like it's in AI and these fields. And that's a very, that application of compute bears a lot of analogies to the application of compute for Bitcoin. And so what is happening is In the old days we had mainframes, they did one thing. They ran one application. Then we got like the personal computer ran”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, with chip and electronic design, it's funny because I keep referencing pendulum shifting, but there's certainly been like this pendulum swinging that's happened in that field as well. And so my personal lens into this came actually as a consequence of being very close to some of the cutting-edge blockchain compute initiatives that have been happening. And so in the very, very early days, in other words, so Bitcoin is secured by proof of work, which basically means fancy computer computations to secure the network and run it. And so there's been this race basically for compute. And so it started with CPU. Then it was just totally not profitable to compute with CPU. So then it became GPU. And then ASICs, which are like basically highly specialized hardware that's just designed to do one algorithm and sort of somewhere either before that or ahead of that as FPGAs, which is like kind of like an ASIC but sort of programmable. And I believe that there's a window into the future.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Or coal power plant, there's boilers that once a year have to be shut down and people put up scaffolding and climb them and inspect the walls by hand. And this is both very expensive and very dangerous. Again, people die every year from doing that. And this company was like, hey, we're going to make like little robots that climb the walls of these things so people don't have to set up multi-story scaffolding and risk their lives. And so we don't have to literally shut down the entire power plant for like a week to do these inspections. And so these are boring, seeming, but actually very exciting opportunities. as well”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, like it's one of the most dangerous jobs. Also, is what I was going to say, the fatality rate is actually really high. And so from a societal standpoint, there's something to be said for there are certain jobs that humans are currently executing that maybe they shouldn't be. And I'm not saying I'm not saying there's not a room for very skilled truck drivers to continue doing their thing. In fact, with Embark, it's enabling them to focus on that skill set. So once the truck reaches the city, a human driver takes over because technology is absolutely not there today to enable that, to drive an 18-wheeler around a city, right? So that's a human job currently. And even riffing off of that idea of like boring sounding, but actually like really great companies, gecko robotics is another one that comes to mind where people may not realize this, but like the power that lights our lights and powers our gadgets and stuff, that comes from power plants, obviously. And inside of every power plant that like, say, is like a gas or”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Data plus freight forwarding logistics, air, ocean. And this goes all the way. I mean, like embark trucks, for example, where we were, I believe their first or one of their first investors at the time, like when it was sort of what was very popular maybe like five years ago was about like self-driving trucks, right? And sorry, self-driving cars, I should say. But what's interesting about self-driving trucks is the bulk of the trip and the value of the trip happens on a pretty linear route, like the freeways, the highways, on pretty predictable patterns like highway traffic is a lot easier to navigate than city traffic. In a strange way, there was all this focus on the hardest possible problem at the earliest stages of the technology when in fact the lower hanging fruit with like a very real tangible value there. And I mean even societally. The trucking industry is one of the huge.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Market for mid market, e commerce players, and the whole lack of infrastructure for them. And it was just very eye-opening process. And through that, realized, wow, there's like a whole, like going back to how product leaves the port and that whole thing with like our investment in Flexport, which earlier you're talking about, you guys seem to have a bias for our preference for crazy sounding things. And I was like, well, actually, we like boring things too. And like Flexport, until later on was really boring, you know, of a sounding company. But that's cool. And Ryan has acknowledged that as well. Their whole thing is like trying to make logistics sexy, right? And exciting.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a multi-billion dollar business opportunity for multiple businesses in each of those categories. And we didn't, almost without exception, we've never anticipated these trends before the data told us that they were happening. And like, so as a consequence, we first invested in blockchain in 2012 and we basically stopped when everybody else jumped in in 2017 and 2018. And similarly with e-commerce and logistics, this shift. I think that in 2000, like I said, it was actually seemed like a bad idea back then. But we started seeing some really weird things like, for instance, there's a company called Chippo, which was seeing some pretty eye popping numbers on their growth week over week, double digit, like growth basically in short, they help e-commerce companies manage their shipping and returns reverse logistics processes. And what is going on here? And we kind of threw that lens realized, you know, the platform of Shopify and the whole.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“To how it then is stored there at the port, to how that makes its way from the port to this store, from how it's actually bought and purchased in the store itself to if it's in an e-commerce setting, like how it's actually sold to the consumer. That whole business.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Working right, and so, and there's different ways to tell the story of e commerce, but I'll use the Amazon lens, which is basically like, all right, it's working for them. And it's kind of terrorizing everybody in their path. They need tools to keep up with that because like basically Amazon at the time, especially was one of the few entities that really was ignoring the noise and just doing their thing and winning because of it. And so that was like a pressure, a forcing function for who cares what the VCs were thinking. It was a forcing function for everyone in the industry to like do something. And you could also say, okay, it had nothing to do with Amazon. It's just like modernization of tech and like the consumer population growing and more people buying things online, all that stuff is equally as possible as a forcing function. But what it led to is end-to-end everybody in the supply chain from how product leaves its country of origin and reaches the shores of its country of consumption.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“When we first came to the market as investors, we had been for almost a decade as entrepreneurs. But when we came there, it was almost on the tail end of this e-commerce pendulum swing to the bull side. And I'll refrain from naming specific names, but like long story short, there was a lot of money that went at these branded e-commerce companies that like many went under. And so the prevailing wisdom was like e-commerce plus tech is bad. And it's like not a good place to put your money. Meanwhile, Amazon just was destroying everything, right? in its path and growing and scaling. So clearly e-commerce plus tech.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Able to serve on time, good service, good tasting food that's priced right, that in and of itself is hard. So couple that with the on-demand thing, that's really, really, really, really hard. And so that's an example of something where it's like consumer, you know, like NPS off the charts, right? Like people love that, but the nuances of it, it took some experimentation live in the market to really figure out that, yeah, you know, despite mobile and all this other stuff, it's really freaking hard.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“And it helps us also do our own analysis and say, okay, like what went wrong? And it was a company that I was actually personally like a huge customer for. It was on demand hot food delivery, right? And this is in the era when right before on-demand got hot. Again, another pendulum swinging thing where first it was like nobody liked it, then Uber came around, everyone totally threw their money at it. And then they were like, wait, this is hard. People ran away from it. And so people were learning lessons in real time about that. And one of the lessons that was learned is it's incredibly difficult to the point where you need a computer science degree and a mastery of algorithms and data to get the unit economics correct on on-demand delivery. That was one learning lesson that was learned the hard way. The other is just like food is hard launching a restaurant. If you talk to any chef, like they'll probably agree with this or anyone who's tried to invest in a restaurant business.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of some investors going to be those later outliers, I would say that's becoming less true with the influx of capital, like into venture at later rounds, especially at the growth stages. But yeah, it's fascinating. So there's a lot of, and I'll say, by the way, it doesn't always work. I gave three examples that all at the time were seed stage companies that we invested in, in some cases, it was a one-person company when we invested and that later became multi-billion dollar companies, right? So when it works, it's amazing, but the power law dictates that frequently, most of the time, in fact, it doesn't always end up that way. And, you know, I can recall, and these are actually some of the data points that teach ourselves and also I think the founders come away learning from those experiences. And it really helps the whole ecosystem develop. So one of the things I love is when founders are open on what went wrong and if they understand that.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“You can tell from our discussion earlier is pretty algorithmic. It's meant to be so. It's meant to almost erase all emotion from, I say almost only because we can't possibly do all of it. I wish we could. But it's meant to really distill it to as much of a science as possible. And we had reached a know, but that was one where Boris couldn't sleep that night and got a phone call from him. We talked about it. We changed our decision. And the other thing about this company is even at the later rounds. So at the Series A and B, we were able to actually increase our ownership at the B round, which is almost unprecedented in that kind of a company where people are fighting for allocation. And part of it was just the relationship driven with the company. But part of it was actually just, yeah, like the best companies even at that stage sometimes are still not very obviously in the minds.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like, what? Wait, you could just give it out, and like people can fork it. Someone could start another company around it. You did all the hard work. Yeah, it sounds absolutely bonkers. So that was one really crazy thing that the founder was espousing at the time. Another really crazy thing was this was a completely remote company. And by the way, today, this is a billion dollar business that has hundreds of employees that still completely remote. And so either both of those things would be good reasons to just be like, sorry, like this, you're a cool founder and all, but like this, and the market's interesting, but like we don't believe that giving away your code to your competitors and customers makes sense. And because like, why was that the prevailing wisdom? Well, like cloud SaaS, proprietary SaaS, that was what was in and what was cool. And just to show how difficult this is, this was like the one across 300 investments we've done. This was the one investment where we reversed our decision. We will almost never do this, but it was a case where we ran our process, which again”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's much more. At the time, they were espousing two things that were super unsexy. One was open source, which at that time, so that things have totally changed now. The pendulum is completely shifted where suddenly that's attractive because I believe SAP acquired open source project for a very high premium. And now people are excited about open source all of a sudden. So anyways, one was open source. So GitLab is an open source code repository. And so if you wanted to, you could fork GitLab. You could host it on your own servers, all this stuff.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“The origin story is awesome. Like Instacart, we already brushed on earlier, but the idea that okay, really you're going to take another go at Cosmo and WebBan, which failed and raised a billion bucks and failed in on-demand delivery. That's crazy. Failing to understand the nuance of actually totally different business model, totally different asset structure, like lack of assets, actually pure software business, and thus potential for much stronger business. And in fact, that's what played out. There's a great podcast actually with Aporva on how I built this where he talks about the story where a VC drops the business plan on a floppy disk for web band be like, you don't know what you're doing, you got to read this thing. So it's nothing much more to be said there. It's obviously they're doing phenomenal and it's great to see play out that way. And there's a company called GitLab, which most engineers who are tuning in, and I hope there are plenty of engineers tuning in would have heard of. And at the time, so this is a company that's kind of in the vein of GitHub for lack of just for being brief.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“I've never publicly shared this before, but our peak of investing in the blockchain space, and we've never, by the way, we've never purchased tokens. We don't own any cryptocurrency. We've only ever invested in equity, like in companies like Coinbase, Chain Analysis, and others. The peak was like in 2016 for us. We did zero blockchain investments this year. We did zero new blockchain investments last year. We did one follow-on. It was a co-investment with Benchmark and Chain Analysis. And so there was a moment where there was just crazy amounts of speculation where it almost didn't matter if one was bullish about it as an investor, we took a pause. And so having publicly shared that before, but I do think it's an interesting insight. And it goes along with this almost duality, like earlier I was talking about the intersection of ideas that seem bad that are actually good, that little sliver. It's sort of like, yes, I'm bullish on this technology, but I'm going to like stand aside and not invest because the price is crazy.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“We were in like a crypto winter. It's a pretty bad one. And yet, projects that have been around forever like Gollum, the decentralized compute network usage has 5x in last year despite the drop in price, you know, like 90% or whatever it has been. You see real adoption from blockchain, from real companies, I believe, announced integration with the Ethereum blockchain for e-signing as a ledger for that. There's many other examples. I would say it's still experimental phase, but you're starting to see that. And so that's really the uniqueness of the technology, the theoretical utility of it, and the early signs that it's actually being adopted by credible people and the early use cases that people are actually using these things for gives me a lot of hope and confidence in that somehow inside”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's completely novel, and is there any precedent for that? Yes, it's completely novel, and there's no precedent for that. And I think that's amazing. So that's why I'm bullish on it. It's just clearly, and then when you look at, I actually have a newspaper clipping from the Financial Times from like six months ago when the recent crypto winter hit, where it said something like, I'm going to ruin the title here, but it's something like questions over the utility of Ethereum rise as price plummets. And I just love that title because it captures the inability to decouple price from utility in the mainstream press's mind. And I'll fault any particular person. I think it's very easy to fall into that bias. But going back to the Coinbase example, one of the things that we really got us bullish is like no matter what the price was doing, their usage was growing week over week. That was phenomenal. It told us that this is a real thing that people get utility from and it doesn't matter which way the price is going. And then when you look within the current space.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Personally, I'm most excited about Ethereum is its ability to truly be a decentralized trust list form of interaction, which has applications to all sorts of things. And I could point to specific examples of like maybe early experiments that look really interesting. Yeah, that would be helpful, yeah. Yeah. And I think these projects have subsequently got some traction. And so it's somewhat becoming more mainstream, but like the maker DAO project, right, sort of the idea of a decentralized stablecoin with DAI, DAO, their first major token to get adoption, which, and they'll be introducing multilateral DAI soon. And that's really interesting. That's like an entire financial institution, basically, that's completely self-running, decentralized, trustless. And will that still be here X years from now? I have no idea.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the phase of the industry is in its infancy still. And so I think what you're seeing when you look out of the landscape is tons of parallel experiments that are all playing out, some that are just atrocious and others that are interesting and others that may very well be like the future Google. And what I think is like, this is an opinion, but what I think is one of the strongest, most interesting aspects of blockchain, and other people have said this, I don't think this is a shocking insight, is the fact that with blockchain technology, you can actually have trustless transactions, trustless computations. That's like, I'm getting like goosebumps when I'm saying that in the sense that that is a foundational technology that literally did not exist before blockchain. And how will that be leveraged and used will be defined within our lifetime? Is it going to be like all these things that got a lot of buzz over the last year? Who knows, right? Like it's too early to say. But that's actually specifically.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the whole black market globally, right? Yeah. And so we're like, okay, well, from just an objective viewpoint, that's irrelevant. The fact that the Silk Road exists is completely irrelevant to this decision of like, is this industry, is this technology potentially foundational for the future? And so it took that kind of thinking to put blinders on basically for the seems bad factors in order to understand and dig a little deeper at what people often call like first principles analysis. I almost hesitate to reference first principles though because I see it thrown around, especially in this town, as a precursor to an opinion. It's like from first principles, blah, blah, blah. And it's just like someone's opinion. So I think it's very, very difficult to truly be first principles. But if you can do it, you might just see the future, right? And so that was one piece. Can we pause?”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Most people, when they did their due diligence on the market around say like Coinbase would find that no one's using, it seems like no one's talking about this. And also it seems like the only thing I can find about it is that people are using it to buy drugs and weapons. And that's bad, right? That's not a good thing. When you step back and think about, okay, well, there's like US dollars. And in fact, I don't know this for a fact, but I wouldn't be surprised if the number one currency used for drugs and weapons is US dollars.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“I completely agree. We love things that seem crazy. I will say we love things that seem boring also, which almost sounds like the opposite. But in its own way, it can often end up being somewhat contrarian as well. And therein lies opportunity as well. But just to walk through some quick examples, and we'll start with Coinbase, but we'll go to some other less well-known examples as well. But Coinbase is just such an epic one in the sense that in 2012, the price of Bitcoin was like $6. Most people did not know what Bitcoin was, had never even heard of it. And if they had, they knew of like the Silk Road, which was at the time of a black market that was associated with illicit drugs and weapons and this kind of thing. And so.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“With respect to one's discipline of trying to invest in the future outliers, you kind of have to ignore that noise and sort of the supposed wisdom of experts. And it's so challenging because almost you could ask yourself, like, who are you or who am I to cast a vote when there's experts in the field who've dedicated their entire career to this thing? So it's very abnormal to even engage with that. So that's just sort of a mentality thing. I think it's important to embrace that.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. Okay. So, like, I mentioned PG earlier, and he had recently tweeted about if Darwin had published the origin of species today, he would probably be fired from his job because that's how controversial it was at the time. And now, at least within scientific circles, the idea of evolution is very accepted. And it's actually what's behind a lot of our advancements in science. And so behind that simple observation is just the idea that I was referencing earlier around like the top 40 hits. It's just we live in a society that your brain is just hardwired to assume that consensus is good. And for many things, it is. But if specifically for this idea of pushing the edge, the boundary of what's possible next, it's bad. And so it's just reminding yourself that just because consensus says this is bad doesn't mean anything.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Creator of Ethereum, along with the community of developers behind Ethereum early on in 2016 sold 25% of his stake of Ethereum at $10 per Ether. And clearly he was very public about that. He said, as a very young, I think he might have still been in his teens. Like he needed diversification. There's no fault on him for that. But if he had just waited 18 months, it would have been 30 times more of value. And so, and I should point out I'm a strong bull on Ethereum. But my point in sharing this is actually that if the innovators themselves cannot exactly quantify the future value, how can investors even do that, right? It's a very, very non-obvious and challenging skill set. And one of the answers that we seek to teach ourselves in doing this, in mastering this, is basically deprogramming a lot of the heuristics that we've been taught by society over our lifetimes.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. Search engines that I'm just barely old enough to remember using, but like, and they actually reached a deal to sell it for $750,000. The numbers are all over the place. I think the Google founders remember it as $1.6 million. And it doesn't matter whether it was $750K or $1.6 million. But the reason I think this is powerful is it's the innovators themselves even that misjudged the future value of that technology. And to their credit, I should say one of the reasons other than Price that I think a deal didn't happen is it feels like maybe like the technology itself was misjudged even by the buyer. So even at that price point, they were just, it was like an aqua hire. It was like, all right, cool. Like we got two smart people. We're just going to throw that algorithm in the closet. It doesn't actually work as well as ours or better at least. And you see that even like today in the blockchain space.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“And ideas, if you go back to, I guess by our Silicon Valley PACE standards of time, the old days of Google, when it was first starting, this is like Larry and Sergei as researchers. Not a lot of people know this, but like they actually shopped the technology around to excite and Lycos and all that.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“It took me like six and a half. I've been on the entrepreneur side and the investor side for over a decade. I've been investing for six and a half years now. And it took that long to realize like one of the more non-obvious parts of this Venn diagram is that the level to which the intersection grows or the level to which basically like as the company progresses and gets older, the level to which it becomes obvious isn't that much. Put another way, like when Facebook had a market cap with $2 billion, like if you go look at the press from that time, most people did not think it was worth that much. And there were actually like reporters. I remember an article that it was like dear, Mark, please accept the acquisition offer from Yahoo for $2 billion. Like, please, please, you're too young to know what you have. And this kind of thing. And so it's so misjudged, basically, even as time goes on. And just to put it in like sort of other terms of like how easy it is to misjudge true outlier businesses.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source
“Or, like Paul Graham, Peter Thiel, that kind of mentality. And so we consulted with PG and actually Josh at First Run Capital, Josh Koppelman, and many others. And so what we realized is that that sort of seems weird because we live in a society where if you think about the top 40 list for music or on Instagram in your feed, you get whoever's popular or even take like machine learning algorithms, like by definition, they're basically, it's a consensus-driven type of a model, a type of an algorithm. And so we live in a world where almost everything is telling us that actually the good thing is what seems like the good thing. And actually what this Venn diagram is saying in a very contrarian way is the very best things do not at all look like the very best things in the very early days. The most unobvious thing, I think some people, some of your listeners have probably kind of heard this concept before to some level.”
2019-01-29 · Invest Like the Best · Alex Mittal – Early Stage Investing - [Invest Like the Best, EP.119] · IDENTIFIED FROM THE TRANSCRIPT · source