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Ezra Galston

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29
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2015-08-17
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2015-08-17
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1
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  1. “A year that's right, but once a charge once a lifetime, I look at everything in terms of how many times have people purchase a year, right? So you only die once a lifetime, but there's a lot of consistency. And that company, so both companies like attendant was founded by Alex Kruger, who we got to know really, really well. He used to be the VP of sales at Spothero, which is a company where we led their Series A. And he did an unbelievable job there. And when he left the CEO of Spothero, just said to us, like, you got to invest in this guy. He's one of the best people who've ever worked for us. And, you know, it was just such an easy investment to make. And on luxury garage sale as well, the two founders there, Lindsay and Brielle, you know, they just over-executed with minimal resources at every stage of their business. And you meet people like that and you think like, what could they accomplish? With a million and a half dollars. And both founders are proving us right so far. So it's exciting, really exciting.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Yeah, exactly right. So when you talk about frequency, I mean, I guess you can only die once a year, but like, you know. There's consistency, right?”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “So I'm trying to remember the exact timeline. We had two that I helped lead that we did kind of the same time. One was luxury garage sale, which was a kind of platform for luxury consignment of goods. And the other is a company called Attendant. So I guess the latter was probably more recent. So Attendant is a company that's building a suite of tools for the death and funeral industry. So we spoke about differentiation earlier. So I invested in that one because it's different. It's just completely new. There's been no innovation in the debt.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Got it. Yeah, so I think he's brilliant. I actually, I'm getting to meet him tomorrow night because he's in Chicago for a meetup. And I'm literally geeking out as if someone was meeting Brad Pitt or something. I'm completely excited to meet Ben Thompson. I actually, I sent him a cold email. I've been extra ticket for. I had an extra ticket to do a Cubs game and I just sent him, you know, I tried to invite him to a Cubs game. He turned me down and I was a little bit heartbroken, but I think he's completely brilliant. And then I guess the other thing I would say that I look at is, you know, my friend John Triest at Ludlow has CARP.vc that you just got to watch. There is just, this is a stress-filled industry and it's pretty cutthroat. Just have some comedy sometimes is awesome.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “So I use reportive pretty regularly. I think people chatted about them before on your show. I mean, reportive is just the Google plugin, the Gmail plugin. And then, you know, honestly, I use a lot of emoji through bitmoji and then GIFIs through Rifsey to communicate with people. And I would say that my founders appreciate the fact that I'm not sending the same text messages as everyone else. So I'd say that those are productivity apps.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “You know what I have no idea I'm trying to think government really scares me but at the same time I see so much opportunity in government so I can't give you a great answer there I don't know yet ask me again in two years”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “My favorite book ever is probably The Little Prince. I think that this is a business where you've got to have a lot of imagination and I think that any book which has its kind of core idea to imagine great experiences around the world, I think that's probably a reason I ended up in V”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Love Bitcoin. I spent a lot of time looking into it. I'll take Ben Horowitz aside of the Felix Salmon bet. I think it'll fly long term.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “A good question. So, you know, the truth is, I've only been in this business for three and a half years, and it's the greatest bull market in the history of basically the history of the world. So to measure it only on a returns basis would both be inadequate as well as I'd just be lying to myself because it's just too early. So I'd say that I'd say that if I'm really fulfilled with the success that I define internally of the companies that I'm working with, as well as the people that I'm working with, both on my team here at Chicago Ventures and the founders that we've invested. And so I'd say fulfillment overall.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Leagues ahead of the other people your kind of age or of your position in the industry. So that was kind of my story and that's how I'd be thinking about it if you're interested in breaking in.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Actually, had a huge response rate. And I give a lot of those firms a lot of credit for actually responding, getting on the phone with me. And to this day, those are a lot of the relationships where I still feel really comfortable pinging someone for just feedback and advice. And when I got ultimately with my job with Chicago Ventures, that actually came out of an internship through my business school where it went really, really well and they asked me to stay on full time and I got promoted and moved up a few times. But I guess what I'll say is that because I had that existing network of people in VC that I could kind of ping with a question or, hey, you know, we're looking at this company, right? It made me even as an intern just a lot better. And so for you, Harry, if you choose to get into VC at some point, I give you complete permission. You can ping me. I'm sure you can, you know, ping my friends who I mentioned before. And when you're looking at a company, say, you know, hey, Ezra, how would you think about this? And I may not be right, but at least you'll be thinking about it, you know.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “And so you said yourself, how can I completely consume myself with that and just envelop myself in it? And so for other people, you've just got to find your own strength. So my story was, I told you before, you know, I had a mentor who said you should really go to VC. So my background was in gaming. And so what I did is I never sent a resume to a single VC and I had no network. I'm really not good at asking for favors, getting warm intros. But my background was in online gaming. I had consulted for all the major billion dollar operators. I had two startups in the space. I knew it cold. And so I put together just like what I did is I created like this interest or this relationship graph where I put myself in the middle and I put all the different players in the gaming world around me and showed who I knew, like what executive level, how the relationships developed. And then I just sent it to VCs with a short note, which was like, hey, know you're looking at gaming. You know, I'd love to chat with you about it, you know, give you some thoughts.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Yeah, it's like on demand food, right? So, no, I mean, Harry, the truth is that you're brilliant, and I don't mean that in like, I don't mean that in the British pedestrian usage of brilliant where your food comes on time and, oh, that's brilliant. I mean it in the American literal version of Brilliant where you at, I think you told me you're 19 years old, at 19, you now have a Rolodex of, I don't know, at this point, what episode is this going to be like 70 something, right? Where you now have a Rolodex of 70 growing, you know, either up and coming VCs or top VCs you've interviewed a lot of my friends and you've impressed them, Joe Floyd and Emergence, John Trius at Ludlow, Guy at Hyde Park, you know, like you've got all these people now who both know you and you built your own brand equity. So for people who want to break in, what I would say is, you know, you discovered about yourself, Harry, that you love venture capital and technology, right? That's just what you love.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Could stay fresh in your fridge for two weeks, right? All these things you put it together. And at the end of the day, frozen foods is a much smaller space than delivery. But it's still a $200 billion space. It's still massive, right? And that's why investors are attracted to food, because frozen foods is the smallest space kind of in the food space and still $200 billion. So it's just a good place to be.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “It's just a matter of time. But I'll tell Ben that we got to get across the pond already. But yeah, so just for people who are only listening to this one, I guess I'll just spit out the thesis real quick, which is that there has been an enormous amount of innovation in delivery, right, food delivery, but basically no innovation in frozen foods. And so you look at our generation, and our generation is still purchasing a fair amount of frozen foods. Why? Because it's convenient, because it's nice to have something in the freezer. But you look at the options and it's like, you know, disgusting food, brands that don't connect with our generation in any way. And so the thesis was, what if we, you know, Ben's thesis was, what if you could create an effectively frozen foods company that appealed to 18 to 18 to 40 set had farm-to-table food actually wasn't even frozen, but was just kind of uniquely sealed.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Which also comes into play, which is that there's kind of being amongst our generation there is an entire reimagination or changing expectation of what food looks like, how it's developed, what level of transparency there is behind it. And so while the vast majority of food in this country, and probably most countries actually, is still kind of big ag tech, you know, not as transparent. There are major shifts underway, especially in urban areas to a new style of eating. So, you know, I think that, right, so you put those three things together, which are changing food habits, massive space in high frequency, and it starts to make it really interesting. However, as you said, so we like to joke internally that about four months ago, there was a single week where we were introduced inbound. These aren't companies we reached out to, but inbound for on demand.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, so good question. So we've made a few investments in food and then I've personally made a couple of angel investments in food tech as well. You were right. It is extraordinarily difficult, but it's attractive because it's basically a trillion dollar space. And remember, we spoke about frequency before. It's one where you do need to eat three times a day every day for the rest of your life. So it is conceivable, theoretical, again, but conceivable that you could build a platform where someone would purchase on it three times a day every day for the rest of their life. So we've got Grubhub here in Chicago and we're very close with the team there. I think one of their goals is can we have customers purchase from us three times a day every day for the rest of our lives, right? So it's kind of like the holy grail, right? Massive trillion dollar space and a huge amount of engagement. So I think that you nailed it as kind of why it is so interesting. I think that there's one other aspect which”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Yeah, I mean, you know, I think that's always the concern, and I think that's just a much larger conversation where you really need to invest in founders who are very much focused on their customers. And in the case of the marketplace, whether it's two or three-sided, you have either two sets of customers or three sets of customers. And it's just having a really good sense of are they happy? Are they being driven enough business? Are the economics good enough for your purchasers? Whatever it is. So I'd say that, yeah, I mean, obviously, you know, chicken and egg is always something you need to be concerned of. But, you know, you invest in the right people who are completely obsessive about keeping their customers happy. And I think they'll figure it out.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “undercut but I guess I care what the theoretical is even if that ultimately ends up happening and then one thing that I look a lot at is the ability for kind of the economics on both sides of the marketplace so for instance with like Bloom Nation is there an opportunity for our merchants to earn a living on the platform with Zipmins like how are couriers doing on the Zipmans platform as opposed to working for a messenger agency where do they make more money and if they're making double then that's great news and that starts to really excite me because then I just know they're going to be sticky”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Oh, yeah, that'd be great. I mean, again, yeah, that's just a prerequisite, just an absolute prerequisite. It's like pre-kindergarten. Which isn't to say that it's the level of free kindergarten, it's an absolutely high level, very, very brilliant post. But I guess for me personally, and again, we look at a lot of them. So I care a lot about frequency of purchase. How often can something is a consumer going to repurchase something? So what's interesting is that even if you look at some of the investments we've made, like Kappel events, which is an events booking marketplace, you might think, how often is a company throwing a party? But if you think about Deloitte or BCG or Google, they're throwing, you know, they're hosting clients every single night 365 days of the year, right? So there's actually huge amount of frequency potential even in B2B marketplaces. So I care a lot about frequency. I do care about margins. There are good investors who will tell you that margins will ultimately”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Yeah, I mean, so we're investors in a lot of marketplaces. Spothero, which is kind of like an on-demand parking platform, Capel events, which is like an open table for booking corporate and client entertainment, curbside shift gig. There's a huge bunch. So listen, the Bible here, which I'm sure you've read the Bible here, is Bill Gurley's kind of 10 marketplace drivers blog post that he wrote in like 2013. It's the absolute Bible. And if you want to even have a working knowledge of digital marketplace businesses, you've got to read that and internalize it. I think for me.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “We think it's pretty important to be in touch regularly with our companies. I think, you know, listen, I go to LA to visit our investments there a couple of times a year. But again, for kind of our investments in SF or LA, we're traditionally not the lead investor because we do like to leave that to someone who is a little bit closer, can be a little bit more hands-on. Again, I text message with those founders on a daily basis. It's not about communication, but there is something to be said for being very close. So the majority of investments that we lead are based here in the Midwest”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Totally. So We are, I mean, we're startup ourselves. Like a lot of the microVC funds out there, we're only three and a half years old. We started in December of 2011. And so the first fund was $40 million. We made 39 investments out of that fund. Average ticket size, like first check-in around $500,000, maybe slightly under that. And the basic thesis of the fund is that there is a lot of untapped talent and resources in the Midwest. And while it may be slightly counterintuitive, what a lot of people don't realize is that a third of the entire Fortune 500 is right here in the Midwest. People who are literally in our backyard. So in the same way that a Silicon Valley VC is regularly hanging out with executives from Salesforce and Dropbox and Zendesk or whatever it is, I'm regularly hanging out with executives from Walgreens and All State and places like that, right? So it provides a huge amount of value for companies that are”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Listen, Ezra, I think you've got a really good mind for VC and you should really, really pursue it. So happy to kind of, you know, walk you through how I caught my foot in the door itself. But that was kind of just kind of the high level.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “A big kind of company. Because if you looked at my resume, it was like poker, you know, these two smart startups no one ever heard of. It kind of looked like a joke. And so I really wanted to just put a big logo on my resume, sacrificed two years of my life, and just show everyone that logo, and then go do what I wanted to do. And so I went to a few recruiting sessions at business school and I realized that I was just completely miserable that that would never work. What I realized is that I actually started making angel investments without knowing that I was an angel investor. I had taken a lot of the money that I had from the poker world and a lot of my friends as they kind of churned out from the world of professional poker, they would start up companies and I invested in some of them, not all of them, but maybe three or four here and there. And so I had a friend and mentor at business school at Chicago Booth named John Tuff. He was at the time at Kleiner Perkins and he is now the COO of a Kleiner Perkins-backed company. And he just said,”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Like a software analytics company for poker players and also grew that. I don't know, they were both kind of good small digital businesses. They were not venture-backed businesses, but they were good digital small businesses. So I did that for a couple of years all in. And then I actually made kind of a crazy move. Again, there's no one path. And I went to Israel and went to rabbinical school for two years. And I didn't come out a rabbi, but I did come out a lot smarter about myself, hopefully a little bit more self-aware. And I had a kind of a refined vision of what I wanted to do, which was that even though Taylor and Andrew, who were my old business partners, some card runners, even though they were starting their third business, which was Draft Day, which was a daily fantasy sports company before kind of DraftKings got big, I think we were right after Fanduel. And we did raise venture money for that business. I realized what I wanted to do, which was go to business school and go to craft or procter and gamble.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “So, you know, I know you've had other people on your show. There's no one path to VC. So, you know, for my first few years out of college, I was playing poker for a living. And again, I kind of got burnt out on that. But I had a close friend of the time named Taylor Kby who had started an online poker training site. So think like Coursera or Udemy, but just for poker players. And so he had maybe like he started it when I joined him, I think he was like the second employee. He had maybe 500 customers and like $500,000 a year in revenue, like a very small startup. And 18 months later, we had 15,000 paying customers. So it was just, we kind of rode the kind of the poker boom in some sense. And we also did a lot of really, really smart marketing. So I did that for a couple of years. We took our free cash flow. So we were just kind of printing money at the time and acquired another company called Holdem Manager that was”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “To go to NYU, I had been connected with a marketing agency called Buzz Marketing Group, and they were doing a lot of work with kind of online communities and forums for big clients like Sony, Verizon, and a few others. And so they basically hired me, even though I was just a freshman in college at the time, to be their director of interactive marketing. So I worked full-time during college, basically as like effectively a product manager for these consulting projects. And it was an amazing experience. I learned a lot, but what I realized is that because I was 17 years old, I burnt out really quickly. So by the time I was 19 or 20, I just had no interest in a full-time job. But I'd made all this money. I was getting paid more than I know to do because I was in college at the time. And so I started playing a lot of online poker. And so when I graduated college, it was either go get, you know, kind of run-of-the-mill marketing job in New York City or continue playing high-stakes poker games and travel the world playing poker.”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Yeah, so I'll try to go as quickly as I can. I know you've got a lot to pack into 20 minutes. But so from, I guess from a very young age, I taught myself visual basic. Like I taught myself how to code when I was maybe eight or nine years old and I taught myself HTML when I was 10 or 11. So my parents got me a computer at a very young age. I was always begging them for a laptop. They wouldn't give me a laptop. But so I had to use the family computer, but I was just kind of obsessive. And so I did that from a very, very young age. So I did my first startup when I was like 12 called Get Access.com. I was just a rebundler of services and I was like a reseller. And during the dot-com bust, a lot of those services that I had pre-sold when bankrupt and belly up and I just couldn't service my customers. So that company didn't work out. But just overall, I've always loved technology. So actually, so when I moved to New York City at age 17,”

    2015-08-17 · The Twenty Minute VC · 20 VC 063: What It Takes To Standout In A Crowded Market with Ezra Galston @ Chicago Ventures · IDENTIFIED FROM THE TRANSCRIPT · source