Partner at Real Ventures
Isaac Souweine | Partner at Real Ventures

"It doesn't matter. If they're first or second-time founders, there are always biases out there. At the end of the day, it really comes down to the tenacity and the drive that the founder is going to carry."

- Isaac Souweine

Isaac Souweine on the importance of distribution.

Talk Takeaways

Isaac Souweine, Partner at Real Ventures shared how he started in New York, explored Southeast Asia while working with Yahoo, and later on set up a venture capital firm in Ontario.

Through his exposure to a broad range of consumers, he further developed his skills in the field of Product Development. He stressed the importance of Product Relevance — putting oneself in the shoes of the audience. In addition, he mentioned that the importance of creating and maintaining a community is essential for startups.

Isaac also shared how his company, Real Ventures, had phenomenal resilience and grit to survive through COVID and come out stronger than ever.

About

Product manager turned early-stage investor. I’m passionate about working with world changing companies and building thriving startup ecosystems.

Specialties: Venture capital, Pre-seed investing, Seed investing, Startups, Startup Ecosystems, Product Management, Product Marketing, Startups, Entrepreneurship, Lean Startup, Lean Analytics, Customer Acquisition, Retention Marketing, Leadership, Project Management, Agile, Go-to-Market, E-Commerce, Social Media, Digital Media, Web Analytics, Mobile, Educational Technology, Email, Instant Messaging, Online Gaming, Product Launches, Product Positioning, Southeast Asia, Singapore, Philippines, Indonesia, and Market Entry.

The full #OPNAskAnAngel talk

Jeffery: Welcome to the Supporters Fund Ask An Angel. I’m your host, Jeffery Potvin. And today let’s welcome Isaac. How are you today?
Isaac: Sir, I am doing great. Thank you for having me.
Jeffery: We’re super excited. I’ve been following your journey for a couple years now because the real venture world is always out there, talking and making things happen. you and I have crossed paths a few times so I was super excited that I got the opportunity to have you on today. And the best way to start is if you can share a little bit about your background. all the way from those days at Yahoo, all the way through. And then one thing about you that nobody would know.
Isaac: Okay, super. Yeah. I am very glad to be here and love that you’re doing this to share people’s different voices. So, really, nice to be a part of it. I’ll go all the way back to the beginning, I guess, to just set up the story. because I’m a bit of an odd duck in tech, being that I was not studying engineering or even business, I was actually studying religion and philosophy in undergrad at Columbia. I’m from the US, from Massachusetts, and I was going to school in New York. So, I was very much a Humanities guy, reading books and trying to figure out the meaning of life. And some guy in one of my classes said, hey, this was during the “dot-com boom,” and he said hey, we got the startup going, you want to come check it out? And so I got involved in this project with these three entrepreneurs who had known each other and we actually moved to New Jersey for a while and lived in their basement. And I dropped out of school for a while and we were doing Ed Tech, a startup during the dot-com boom which did not go anywhere. So, it really fell flat in the end. But we went on this crazy journey together as really young people trying to build a company. So, that exposed me to the technology world which I hadn’t been heavily exposed to before and really planted a seed in my brain. I went back to school. I finished my degree. I kept studying. I traveled and did some other stuff after school but I had this tech experience and year plus in startup land. So, when it came time to start building a career for myself, I went back to that and became a product manager. I found a job in a publishing company. This was in New York at Scholastic through some family connections. And I was like, I said, they didn’t even call it product manager then. It was so long ago. They called it a producer. But I was the low man on the totem pole, helping developers and designers and business people build educational technology and worked my way up into what is now called Product Management where you help guide the development of technology which has become really central in the technology world over these years. So, I started at Scholastic. I was there in New York for quite a few years learning how to become a product manager or what they call the producer, and ended up getting married. So, my wife is this awesome professor. She’s now at McGill which is why we’re here. But at the time, she was a graduate student. She finished and got a job in Singapore. So, she brought us to Singapore, just on the other side of the world, completely different. And what an eye opener. I could give a whole podcast just on Singapore. But that’s not the point. So, I used that time. I went to business school. I got a business degree at Insead, which was a really great experience and turned that into doing more Product Management and Product Marketing work at Yahoo and spent a bunch of years out there. Singapore is a very developed country. But you’re working the scene in Southeast Asia, so really developing markets, a very different environment for technology, and a very different consumer base. So, I really just learned a lot about how diverse the world is. And at the same time how unifying technology is and everybody wants these cell phones and they want the cloud and they want the internet and they want to do commerce. And so, the things that consumer technology, religion and revolution and all of the technology revolutions that we’re living in were totally relevant out there, but just in a different way.
Jeffery: So, awesome experience. being a part of that and also awesome experience working at a big technology company Yahoo where you learn how things are done at scale. they had more than half a billion users at the time. And it was even growing. So, a real education about what it looks like when a company gets big, also a slow-moving large corporation, who to be frank was a little bit on the way down.
Isaac: So, at some point it was like, I I think if I felt very strongly pulled back to the startup world. whereas anyone involved, knows just a lot more fast-moving, agile.
Jeffery: exciting. you have more impact. you are more able to influence the projects that you’re working on.
Isaac: So, I made that transition when I was still in Singapore by going to work for a venture capital startup studio called Pollinizer which was a great experience. Then my awesome wife got an awesome job at McGill and so it was time for us to move back to North America. She’s from Ontario. So, we’ve been here in Montreal which is halfway between where the two of us grew up. And we had two kids in Singapore. So, we brought our family back here. And I’ve been in Montreal for eight years. And because I knew how to do product management, and liked it that’s what I did in Montreal. I introduced myself around and met some people that say, I’d love to. I’m looking for companies, looking for fast-moving, fast-growing startups where I can work and I was lucky to connect to the guys at Frank and Oak. Ethan and Hisham, while they were, I think, they’d raise the series A, so they were. But early in their growth, I came on as the first product manager and director of product and built out the product management function there. And I did that for a couple of years. I went to Saunders which is another fast-moving consumer-focused tech powered company in Montreal. same thing. First, the product manager built the product management function. So, that was my experience entering the market in Montreal. Those companies were backed by real ventures. So, I met the real ventures team in lots of different ways. I was mentoring in Founder Fuel, the real ventures accelerator. I was helping out at Nottman house, which is a Real Ventures backed non-profit. So, everywhere, I was crossing paths with this group. And they really shared their values which were around supporting technology and getting involved in backing startups but also building ecosystems, building community, bringing people closer together. Those were the two things that I was passionate about. So, we really were singing the same tune. And when I left Saunders, they said, hey, do you want to come try investing? And I was like, I mean, at that point, I knew a little bit about what venture capital was. But to be honest, not that much. But I could see that it would be an opportunity for me to learn, to have impact, to interact with this community in a different way. So, I was like, absolutely. Let me give it a chance. So, that’s what I’ve been doing for the past five years. I came on and ended up becoming a partner, running founder, field the accelerator for a few years but also doing lots and lots of very early stage investing, pre-seed and early seed investing as part of a fund that’s really focused on the Quebec startups but backed by pension funds and the government that want to see this growth in the Quebec economy. And that brings us to today. So, I’m five years in. So, I still remember what it’s to work in these startups and companies. But now I’m very squarely on the investor side and learning that craft and the way that investors add value. And still doing a lot of community building. I started a big product management or helped start a big product management meetup when I moved to Montreal called Product Tank Montreal. And now I’m involved in another product management collective learning group called APM Montreal which is still doing community building and bringing people together working as an early stage VC and loving being in Canada which is just as I think Americans underestimate how awesome Canada is in just many ways. And we see that it scores number one in quality of life on these things but I don’t think we don’t get it because that’s how Americans are, a little bit thick headed. But it has been delightful to live in this country, specifically Montreal which is in Quebec, which is such a unique and unusual place, a complicated place where I’ve just learned a lot. So, that brings us to today. That’s a little bit of background. And I was supposed to say one thing people don’t know. So, I’ll just say because I was having this conversation with someone and I gave them this fact and they go, oh, I didn’t really know that about you. So, I’ll use it again here. So, as I said, I studied religion and philosophy in undergrad and I really did it as a way to study Asian philosophy and get into eastern religion. And in addition to reading these books and studying, I also got into meditation. And I was doing meditation retreats and volunteering at the meditation center and running the Buddhist meditation club at Columbia. So, it was a big part. it’s not as big a part of my life today but I was reminded of that the other day. And it’s something that I still call on in different ways. So, there it is. I was heavy into that stuff. There’s a little fact.
Jeffery: I love it. That’s awesome. And to peel back a little bit, the way that you got brought into this world of tech, it’s quite fascinating. And I’m sure that if we dive into different conversations with different people in VC world and everything else, there’s always one trigger point that brought you into something that changed your day or your year or now your entire career and you went from being at Columbia for something completely different, and you were brought into that energized working group in a basement switching cities and really diving in and learning. that is probably the best learning you probably had compared to anything else you’ve done today which was that grind, that hustle figuring out what it took to be a startup. is there any memorable moment that you had that you want to share that you could just say was the best thing you got out of that one and a half year that you were working on the grind and figuring this startup out?
Isaac: It was very memorable. The whole experience is almost cliched, but we literally moved into these people’s basement and we lived there for a while and just tried to. So, we were around each other all this time as the three founders and a few people who hopped on for the ride. So, that whole incredible cohesion and really being part of the founding team. And it’s all very scrappy, you don’t even, after we got money. It’s very scrappy. you don’t really know what you’re doing. So, that whole experience of being very tightly knit with those people and going through all the ups and downs was very memorable. I would say getting the funding was certainly you couldn’t believe really someone’s going to give us all this money to do this. So, that was that moment I’m paging through my mind of the moments I really remember. But for sure that meeting where the guy says yes. I remember that. And we were in the basement for quite a while and then we moved into offices on Wall Street, a proper office. probably maybe in retrospect, we should not have been in an office on wall street. But we certainly were there. So, that juxtaposition and having gone from studying philosophy to living in this basement to getting on the train every day. I got an apartment in Brooklyn and got on the train every day and popped out at Wall Street with all the other workers. And I’m old going into this office and having a job and getting a paycheck. That was crazy and very exhilarating. It felt very cool. So, a bunch of memories pop up from that time.
Jeffery: Yeah, that’s awesome. And what I think when you look at what you’re doing, that’s a really big example of being able to really work with founders and being able to share that you’ve gone through the ringer and you’ve done the same things and maybe you said, you advanced quickly. And we’re on wall street. well that’s the same perspective that the young startups that you guys are working with. or other VCs out there are working with it. they’re looking for that. they’re looking for somebody to have, hey, what it takes. I’ve been through the pains and you can relate to that. And it sounds like you had some great experiences that carried you through to these new founders.
Isaac: Oh yeah! And I think there’s many paths to investment. And some people only do the investment. And they did not operate. And they can be amazing investors. So, it’s not at all required. however having been on the front lines there, and Frank and Oak and Saunder and even experience that, all the operating experience in different ways you can call on and build empathy. And that’s important.
Jeffery: Hopefully you’re giving good advice. But hopefully you’re doing so in a way where you are able to put yourself in the other person’s shoes a little bit. it certainly makes you a better partner to them, a better supporter. So, yeah, I’m happy to have had those experiences. And they come into play all of the time. And when you were taking some of this experience from this early company and you started to move into other businesses, and of course getting at Yahoo and working your way through Singapore in that ecosystem, did you just find that there were some differences there that that popped out from being in a totally different environment that you had to learn and again? This stuff sounds pretty impactful again being in Asia versus the US or Canada. There’s got to be some great learning, some great networking, and some good communication. things that have been built out along those sides and jumping into big business. I don’t think, as you said earlier, that’s not really important. What’s important is that you had to go into the grind and figure out how to make something better especially when it was on its way out and reshape that whole product view. But you’re working in a totally different environment. So, was there again a lot of great learnings there that helped build you up for where you are today?
Isaac: Oh yeah! A couple absolutely and a couple sticks out. One is about working in big tech or working in a big corporation. And on the one hand these are battleships. they’re actually fleets of battleships. they’re incredibly powerful and you’re like, how do they operate this ship, this armada. And you go, oh wow. I see it’s an incredibly complex organization required to funnel information down and get decisions made. And oh, if we’re going to turn in a new direction. It’s quite difficult. And from that, you go, oh, I get it. They are powerful. But they’re always vulnerable because they have so many wars that they’re fighting. they’re doing all this different stuff. They can’t change direction easily. It’s by working in a big company you get why they win. And also, why do they lose all of these opportunities? Why do startups exist, but how do they succeed? And take over massive new markets that are right in front of the incumbent’s eyes. And Yahoo is easy to beat up on. I always have some love for my alumni company, but Yahoo is the preeminent example. They booted up a number of opportunities that were sitting right in front of them, messaging, search , social or whatever, but when you work inside of these companies, you go, oh I get it. That’s why it’s very hard to jump on the next big thing. So, that was one big insight. the power of these big companies, but also the vulnerability of them working in Asia, I tipped it a little bit when I said it before. But not all consumers are the same, not all businesses are the same. First of all, there’s cultural differences. There’s also just stages of economic development and stages of maturity working in that ecosystem. yeah we used to. For example, one thing you could do in the Southeast Asian ecosystem which you can still do today is you can wait for companies to get started in North America. see what’s going on and then you can start that company in Southeast Asia and probably sell it to the North American company when they’re looking to expand. that doesn’t work here. So, that’s a totally different pattern that’s specific to the stage of development of that ecosystem where it’s always going to be a little bit behind. But the way the venture worked was different there. So, the world is not just one way. There are groupings that are similar. But it’s not just one way. So, that was a great reminder of that. I think we all know that but at the same time, if you spend your whole time in North America, it’s hard. it’s a little bit hard to remember that not everybody has those experiences. Now the flip side is, the other thing that I mentioned earlier which is okay, everybody is different. And the world is not just one way. But these powerful secular trends we’re riding on the power of the internet to connect people to mobile devices to be ubiquitous in that connection. the power of AI and the new software stack to make predictions and to increase efficiency in people’s lives and in the lives of businesses as we see the future technology waves that I could talk about whether it’s quant or bio or whatever. they are universally relevant at some level. they may be applied differently but these things it’s you go over there. you go, oh you guys. You want that too. So, these are powerful global trends that are relevant around the world. And you see that more and more and this world we have today is one where at one level it’s completely interconnected and global. And global brands are everywhere and communication technology is everywhere. On the other hand, there’s still tons and tons of diversity. especially when you go up and down the economic ladder. So, that is that. that won’t change. There will be iPhones everywhere but at the same time there will be people living on the street and people living for less than a dollar a day. So, there’s a lot of diversity in the world and that really came through. It’s been nice to come back to North America where the speed and pace, the sophistication, the access to capital, the types of products and services you can build here are on the cutting edge because this is a very mature economy and a mature technological culture. So, I had fun there too. But it has been fun to come back and see what you can do building and in an ecosystem that is a little bit more culturally familiar to me as well for sure.
Jeffery: The line where you say that there’s cultural differences in the areas that you’re going to go into. I think sometimes we forget that even in our own domain, we have to pay attention to the consumer and understand them well enough so that we can sell through. And that is the primary piece to any business. I think that falls back into your product side of what you do and what you’ve been doing for the last years. Are there a couple of tips or things that you can share on the product side that you can say are the three things that you really should pay attention to when you are building out a product and you’re going to go to market fit? you mentioned one being cultural differences. your product’s going to be sold maybe in Montreal but your goal is that it’s going to sell across Canada and North America. maybe you’re going to push it into other countries. Are there a few things that really do pop out of all of this that you can share it’s product management?
Isaac: I just love it. first of all, I loved the role and I think it’s very cool to have seen the importance of the role grow and grow as this coordinating role, helping to direct all of this incredible creative energy, all these amazing engineers, data scientists, designers and incredible creative people and product managers were these enablers of those creative. Hey, look over here. let’s go try this. Let’s try to solve this problem in this way. So, I think it’s a super fun job and I’m still very connected to the product community and I’m very grateful that I backed my way into that work. And in the same way now that I’m grateful to do VC. It is hard to make a product that people really want. What I mean is it’s not easy and I think there’s a lot of survivorship bias when we read about great companies and great products. And you hear about the ones that are really successful and they filter down to you and you use them for every calendar app. there’s a hundred that got trashed for anything you use. if you go on product con or whatever, if you get down into the weeds of it, a lot of people are trying to do this and it’s not easy to buy. And why is it not easy? it’s often subtle. What makes the products something that they really want? Sometimes it’s not subtle. And you have this new invention. you’re, hey, we have a new fuel or something that’s just so obviously better so people will use it. But a lot of the products we use, it’s the iPhone, this incredibly widespread product. it was subtle why it was so much better than the other things that were around. it wasn’t immediately obvious and then it became obvious. So, product. one thing is just that building great products is hard and you’ll find people who have a hit game or a hit product. This was my attempt to build something. what I mean, it’s not easy and therefore having these, not just the heavyweight skills of coding and designing, and actually being able to do it. But the subtler connective tissue of all of that, the empathy for the end user, the feeling for user experience and how this product is going to fit into their lives you need a little bit of that special sauce often. one antidote to getting that right product is just keep trying and it’s a little bit of luck and whatever. But another antidote is cultivating a customer’s empathy subtlety. When are they going to use the product? How are they going to use the product? it’s really getting down in their shoes. It’s not just that product managers do that. Everyone should do that, engineers, designers or whatever, cultivating that mindset is really important. And I guess another one that pops to mind is the importance of distribution. So, when I started in product management, especially as a producer, I didn’t really think about selling the product. I was much more internally focused tracking bugs and getting feature schedules and road maps. But true product management thinks about the success of the product. not just, oh I’m going to ship these features. These features have to be successful. This product has to be successful. people need to buy it and then you get into the marketing side which is not exactly the same thing. But there is a lot of interface between product management and product marketing and I’ve done both. And it’s going to sell that product. you need distribution and a great product with no great distribution or marketing strategy or sales strategy. now it’s not going to work. a great distribution in fact is more likely to sell a shitty product to people than a great product is going to win just without any distribution. So, really balancing and often, all of us are better at one thing than the other. So, you’ll have these product geniuses out there who don’t think enough about distribution. then you have to say, well, hey, you either need to learn that or you need to get someone on your team who really thinks about getting this product out to the masses in whatever way is appropriate in your industry. On the flip side, you’ll have people who can market and sell forever and don’t have much of a product system. then you need to help them be. Hey, who can you pair with who can really build great stuff that will last? so those are a couple of things that come to mind. It’s hard. you have to have customer empathy. And don’t forget about how to distribute the product, so on that note, when you’re talking about the distribution of the product, what is it that the investor is looking for in order to make an investment into a product company. because the company has taken a beating over the years because for every thousand product companies, one is a hit. So, it seems that investors don’t seem to have the same appetite because they’re worried about the overhead costs, resourcing their supply chain distribution.
Jeffery: You were talking about so many elements to tie into the product side. Is there somewhere where you say is the best way to go to market? take this product. you’re going to build. chop it down at the most bare minimum. you mentioned the iPhone where it came out and it was pre Blackberry. So, you couldn’t even copy and paste on your iPhone. This is amazing. And you can’t even do the basic functions that any other phone could do at the time. How amazing is this? But again, you’re right. it changed the world because of one feature which was all glass and that really just opened up the whole market for them. So, is there something that you can share on that side? Because I think that’s important because investors really, if you’re going to pull them into it, what makes them want to invest, well that’s a great segue into the whole investment side.
Isaac: And the first thing I’ll say, it’s been interesting to me. I’m a part of a lot of accelerators. I do a lot of mentoring. Obviously, look at a lot of investment opportunities and look at them alongside other people. And one, when you do all of that stuff over time, you realize investors don’t have the same perspective on these topics. Some really lean into distribution and go to market plans for whatever the company. And they’re super interested. How are you going to sell this product? How are you going to make money and those investors if they ask? you ask them what’s important to you and what should we focus on. They’ll show me the go to market plan and how we’re going to sell this thing. you might have other investors with a more of a product or engineering background who are much more interested in talking about how the product works and how it creates value. So, not every investor sees it that way. And for a founder who is listening to this, it’s thinking about fundraising or getting people involved with that understanding that the other person on the table, they’re going to have some perspectives. they’re going to have some things that they think are important. they’re going to have some things that seem less important. it’s good to suss that out. if you don’t, if it’s obvious, great. if it’s not, try to tease it out from them because not everybody thinks the same things are important. for sure, for me on the product, I am a long time product manager. So, I probably spend more time on the products than some other investors, and when I think about products, we do a lot of different investing, so understanding the product could be a microchip that would go inside of a headphone. the company that you and I invested in, it could be software. It could be an enterprise. We do a lot of different stuff. But on the product side, I’m definitely looking for x better. if you make a product that’s just a little bit better than the competition, even if it’s measurably a little bit better, that is a hard place to start with. because usually you’re in some market where there are a lot of other options and getting people to switch over to what you have, if it’s just marginally better is very difficult. So, I’m obsessively asking the founders how much better this is. And specifically, on what key metrics. So, it’s either going to make it cheaper for them to do their thing. it’s going to be way faster. it’s going to make them tons more money. it’s going to save them tons of time. There’s only so many things that a product can do. or it’s going to create some lovely enjoyment for them that they never had. So, there’s only so many things that these products can do. you say, how do you measure customer value? is it speed? is it savings? or whatever? And how is this not just a little bit better but a lot better? And for the venture capital model in particular, where we’re looking for these very fast growing companies that can grow very big, we really want to have a lot of differentiation. if you’re selling, if you’re looking for lower returns and more steady growth or whatever, just coming out with a slightly better product could be a great strategy. you’ll go win some business or whatever. But we want really big winners. So, definitely looking for a measure for customer value. And you are way better than the competition. that’s on the product side. on the distribution side, it really matters for the company. I was spending some time earlier today doing some work on one of our companies that builds a quant computer, Nord Quantic out in Sherbrooke. We are not very concerned about distribution right now. it’s just that’s not all they’re doing is building the product. It’s not a question of distribution when I think about a company, Wisconsin Solutions, which we invested in which is software for bars and restaurants to help them manage their inventory. Yeah, I’m very interested in distribution. What is your CAC? What markets do you sell into? How long is the sales cycle? because the thing costs a few hundred dollars. And I got to believe that you’re going to get lots and lots of customers. I want to know what your plan is to sell. And can you sell to large chains? And so it really depends on the technology that you’re investing in. Sometimes distribution is really paramount. SMB SAS is a good example. how are you going to really sell this e-commerce or whatever other stuff? distribution is not as big of a deal. So, I’ll stop there. But that’s a little bit how I think about product and distribution from the investment side.
Jeffery: And of course, there’s going to be a lot of those points that you mentioned that you guys are going to scrutinize against. because the other day, if you’re going to invest and want this company to be able to take off, be able to get some good traction as you mentioned on the quant computing side. you’re pretty pre-that market launch. So, you’re just working for them to get to a stabilized product and then you’re going to be in there, KPL and coming up with the CAC, configuring all of those real elements on how that company is going to actually expand. So, I think it’s very valuable to understand how an investor thinks and when they’re looking at your product. they’re not looking at it from this amazing gadget. This is so cool. we should invest. you’re looking at where this product is going to be in four years. Where is this product going to be in six? And does this product have the legs and scalability from a distribution through a supply chain to get that product to be very successful in the next four to six years? And will it still be relevant? or are they going to be? And I can’t even think of the name now that other phone that used to compete against Apple was that I don’t know. not Blackberry. I know Nokia had a tough run there for a few years. Yeah, there’s a few that just couldn’t handle it because they couldn’t adapt to the new change and it’s interesting that products do take a shift in look and feel. homes are being renovated. they’re taking a new look. everything has to be somewhat created at some point in time. And then that new web. all those things are changing because we decide that we need to change the look and feel. So, what is this product going to look like in six years? And will it scale and be able to be purchased and bought? And all of these elements have to come into your thinking as an investor. But on the product side for the startup, they have to be looking at these things too. if they’re going to be looking for big money.
Isaac: Oh yeah! Absolutely. And on the topic of assessing deals, we talked about products. We talked about going to the market. But we probably especially cede and precede where we’re investing. we’re probably putting the heaviest weight on the team. you’re really thinking, well what have you done? And based on what I know of you, I think that you can navigate all of those things because it’s mostly in the future. As you say, we can’t really predict how the product’s going to transform, how competitors will respond, how the market will develop, what other technologies will come in. it is not possible to predict those things. It’s also not possible to predict how the team will behave. But you can use their track record and your own assessment of their skills and expertise and whatever to say, hey, I think you all have what it takes to navigate all of that to go with the ups and downs. And when a company has done some stuff, before they’ve come to us, they built an MVP or they’ve got something going on. we also use that and say, well, okay how long did it take you to do that, how much capital was required. And if it seems, whoa, they’re really making good use of their funds. they’re moving quickly. they’re executing well. you take whatever data you’re given, whether it’s a year or two of stuff, they’ve already accomplished. not to mention all the things that they might have done earlier in their career. And then you project that out. So, we put a heavy weight on that because that’s the thing. at least we can see in front of us. As you can see from that description, this is one of the reasons why there ends up being a bias towards repeat founders and people with more experience. it’s because there’s more stuff for us to measure and look at and it’s a bit of an ironic thing. because a lot of the great companies will be created by first-time founders who have no track record. just because who knew what they were capable of. Think about Francis from Saunder, who is about to go public. And I worked there and saw him operate as a very young guy. And you could see, well, this guy is really something special. On the other hand, it’s hard to take a risk on someone that’s young and people put a lot of money bravely behind such a young team. And obviously, he surrounded himself with lots of great people to support him. So, there’s a bias against first-time founders because there’s a small data set. On the other hand, a lot of Mark Zuckerberg, the list goes on and on. So, there’s lots of people who have done it from a very young age. So, if one in our portfolio, because I’ve been focusing on precedent, we did back a lot of first-time founders and it’s been great to see that it’s not just the people with experience that can do it. And often, the first time founders bring so much energy and ambition and charge to it. I’m thinking of a company I work with a lot lately called Axio that we invested in very young guys. But the energy that they bring the learning curve that quickly they take things on how fast they want to level up as team members, that the energy of youth. And when you’re on the upward curve of your career, it’s very powerful. So, it takes all kinds as venture capital. you place a bunch of bets and some of them turn out incredibly well. And others not as much. And sometimes it shocks you which are the ones that turn. And some of it is luck. And that the market forces there’s a lot of things at play. So, I’ve been impressed by how difficult it is, not totally surprised. But I think product management has its own challenges. But that you’re trying to ship something for the next quarter or the next year. So, it’s a little bit closer in distance to what you’re trying to achieve. Venture capital bets as we call them take years and years to play out.
Jeffery: I love it. very thorough. And there’s many points that I took down there. But well shared. I think the biggest one is that you got to look at it. you said it’s going to be something that can really take off. They support it. How strong is the team? It doesn’t matter. if they’re first or second time founders, there’s always biases out there. At the end of the day, it really comes down to the tenacity and drive that that founder is going to carry. And can they really take this further than day one? call it the first day of university. And are they able to make their way through and graduate? And that’s what you’re really looking for. So, it’s pretty amazing and great to share a couple of things that I want to ask about. And we’ll just quickly do it before we transition. but you mentioned community. you built some communities. you’re very strong and passionate about the product community. How important is that to a business? And for your view of wanting to invest in an early stage pre-seed company about a community that they may or may not be building. That’s a great question. And this is a big trend now. I think I would have answered this question five years ago, a little bit differently. But now I think a lot of companies are proving the power of community as an incredibly authentic form of marketing, as a way of de-risking the early phases of growth in a company, as a way of capturing people’s attention. And creating those virtuous circles even if it’s small groups that everybody’s into this thing. so it depends on what product you sell. obviously consumer products. I think community is likely to be more relevant. but you can see it in B as well. And I’m thinking. even for example, we have a company that we’ve invested in through our accelerator. Helio Sleep or Helio Clinic which says sleep. They do sleep therapy. so it’s digital therapy. but focus on helping people sleep better and dealing with insomnia. And this week, they’re going to hold their first national conference because they have enough people using this product that they’re going to bring everybody together and talk about sleep, therapy and employee health. So, this is a B product. but of course, you bring this community together. And now people see at another level what they’re involved in why it matters. they create connections and now I mean look at all the big technology companies, that now basically throw their own conferences just to announce their products. What are they trying to do? they’re probably trying to build community and build affiliation. so I think it’s extra relevant these days. There’s a lot of very noisy and complex worlds. There are a lot of messages out there on a lot of different platforms trying to get us to do something or pay attention to stuff. And also in some ways, we have less community than we ever had. We live much more individualistic lives, especially urban dwellers. so I think that leaves a little bit of people overwhelmed by these messages. And they’re looking for things to connect to and that really raises the importance of finding community. even in the products that you buy or the stuff you do in your business life. so I think it’s very relevant these days. it’s something that we now say, what’s your community strategy where we wouldn’t have said that? And I’m even thinking of it. I’ll stop after this. but one company that’s done very well for us which is an open source tool set for building conversational flows in the enterprise. so building little chat bots, to request a ticket from it or get your time off from HR, this is what and this is an open source software that has built a big community around building the software and distributing it and using it. And that’s how they get customers now. they have other ways but that was their source to all their initial customers. It was through this open source community. so it can be for some companies. It’s their main form of marketing. its community and that shows you how powerful it can be.
Jeffery: I love it. I wholeheartedly agree with that. I think it’s something that you really have to think about when you’re building your business. It’s how I can outreach, where are all the areas I’m going to connect with people, but how do I get people to really be part of the journey. And I think if you can tie that community in, they can live, learn social investing, all those things are becoming pertinent to that community. because people do want to invest in the companies that they use their products from. And that all goes back to the community that group builds. so I think it’s really relevant today in the investment world. so I love that. we’re going to shift now into rapid-fire questions. I have one question. And it’s geared around any story that you have that really shows what it takes to be an entrepreneur. you’ve shared lots of great stories of founders that you guys have invested in. Is there any story that you really thought would take to be a founder? And this is what’s going to get somebody excited to decide tomorrow, that they’re not going to quit their jobs and they’re going to take and build their own company.
Isaac: Well, sure. I mean so many. But when we prepared for this one and you were talking about resilience, we’ve mentioned it here in conversation, grit and resilience, which is one of these personality traits or behavioral traits that is really essential to the entrepreneurial path. You can almost say it’s defined by resilience and grit because it’s so difficult, especially at the early stages. so that is something. I knew that from working in these companies. so I’ve always been aware of it. but have taken on a new level of awareness and appreciation being an investor because I’ve gotten to back so many companies and therefore have really seen people go up against it and come through down to the last day of cash flow or closing that sale. We’ve just seen incredible determination. we just see it all the time. it is the essence of the entrepreneurial path and especially during COVID-19 which was just a sucker punch for now. For some companies, it was really great. Ironically, a lot of companies that didn’t really affect one way or the other. but a few companies, if you were in food and beverage or hospitality stuff that relied on big people, big groups of people. meaning it was just absolute devastation to the core business. so I had a few of those companies. And one that comes to mind who has now really turned the corner on the other side is Steve Andrew. He is the CEO. And first of all watching him, we invested in through Founder Fuel, and he became the CEO during the program. So just watching a guy mature into an amazing CEO has been so phenomenal. He has a very high growth curve. so he’s growing and growing and becoming this awesome CEO. And then he just gets smashed by COVID-19. And you see, well what was he going to do now? He would lose the revenue within only a couple of months. And just as cool as a cucumber making the decisions, applying for the grants, making hard decisions and cuts where he had to cut, cutting down the team, but always doing it in a conscious authentic way, not really fear-based, responding to the scenario, turning the company into survival mode for a whole year. How do we just survive, maintain our cash? And this is not going to last forever. we can get through this. In fact, how do we use it as an advantage? rebuild the product. fix this change that changes our cash cycle. And now the market has come back. they’re totally the market leader in what they do, which is this affiliate where you’re able to drive traffic off of a ticketing website or a media site into travel purchases and they are the affiliate interface. so they’re just killing it now. And just so happy to see someone that got what they really deserved. And also just stunning to see the resilience, the grit, the coolness under fire to respond to all of these things, where it’s hey, this is not my fault. Why is this happening? no complaining. just making it happen. so that’s one. And I could sub out Andrew’s story with five other entrepreneurs who also got hit hard by COVID, and have also adjusted in every way possible to come out the other side. so it’s been a real proving ground for people and just incredible how they step up.
Jeffery: I love it. great story. And kudos to Andrew and the team for being able to work their way through that. but very exciting. And as you mentioned, it’s always interesting how a CEO will approach something. And he obviously looked at it as cool as a cucumber, as you mentioned. but taking everything that they needed to do and shift in the right direction and work through it. so that’s a great story. we’re going to shift now into the rapid fire questions. so the way they work is one or the other, ready to roll?
Isaac: I’m ready.
Jeffery: alright. business questions first. Would you rather invest in a founder or co-founder?
Isaac: a founder.
Jeffery: unicorn or four-year x exit?
Isaac: unicorn.
Jeffery: tech or cpg?
Isaac: tech.
Jeffery: brand or tech?
Isaac: brand.
Jeffery: ai or blockchain?
Isaac: ai.
Jeffery: first time founder or second or third time founder?
Isaac: second or third time founder.
Jeffery: first money in or series A?
Isaac: first money in.
Jeffery: angel or VC?
Isaac: VC.
Jeffery: board seat or observer?
Isaac: observer.
Jeffery: safe or convertible note?
Isaac: safe.
Jeffery: lead or follow?
Isaac: lead.
Jeffery: equity or interest payments?
Isaac: equity.
Jeffery: favorite part of investing?
Isaac: just getting to work with entrepreneurs. they’re incredible. We hardly agree.
Jeffery: number of companies invested per year?
Isaac: We were doing about a year a little slower this year as we pull together our next one.
Jeffery: brilliant. any preferred terms?
Isaac: fair terms where everyone succeeds together.
Jeffery: verticals of focus?
Isaac: We’re broad-based, but I’m especially interested in deep tech and IP first companies.
Jeffery: Okay, two things that stand out for you if you’re going to invest in a startup.
Isaac: founder and the market opportunity.
Jeffery: perfect. Alright. we’re going to know the personal questions. book or movie?
Isaac: book.
Jeffery: pizza pop or ice cream bar?
Isaac: pizza.
Jeffery: five minutes of Bezos or Oprah?
Isaac: five minutes of Bezos.
Jeffery: Arsenal or Manchester United?
Isaac: Arsenal.
Isaac: Yeah, they’re fans. Brilliant. I’m assuming you’re a fan, right.
Jeffery: I have no love for Manchester United. Let me put it that way. Okay, well at least you’re thinking about being an Arsenal fan. That’s good. Alright. Big Mac or Chicken McNuggets?
Isaac: Big Mac.
Jeffery: trophy or money?
Isaac: money.
Jeffery: alarm clock or mobile phone?
Isaac: alarm clock. no phones in the bedroom.
Jeffery: oh, nice. hotel or hostel?
Isaac: hotel.
Jeffery: king or rich?
Isaac: rich.
Jeffery: concert or amusement park?
Isaac: hmm, concert.
Jeffery: fortune cookie or birthday cake?
Isaac: birthday cake.
Jeffery: ted talk or book reading?
Isaac: book reading.
Jeffery: Has it been boring without Trump?
Isaac: just fine. [Laughter] Jeffery: Hey, you’re also an American so I’m just making sure I know you’re becoming completely Canadian. And being that you grew up where you have, you’re almost Canadian. Anyhow, so basically true. Alright, so favorite sports team? [Music] Isaac: I’ll go with the Celtics.
Jeffery: Oh nice, little Larry Bird days. favorite movie and what character would you play in the movie?
Isaac: I’ll say ‘The Godfather.’ Who could I play? That’s a good question. I think I’d probably play Tom Hagan.
Jeffery: Which character was Tom Hagan?
Isaac: he’s the conciliary. he’s not the star. I don’t think I can. I don’t think I can pull off Michael. Maybe he was pretty good. maybe sunny, the hot-headed guy. but he gets shot pretty early.
Jeffery: alright, I actually was just watching that whole series about eight months ago. I haven’t got through it all. I think I did the first and second. Yeah, but a great series. favorite book?
Isaac: favorite book? Infinite Jest, David Foster Wallace. It’s doozy, but recommended.
Jeffery: alright, done. Perfect. Good recommendation. Alright, the first brand that pops into your mind?
Isaac: Coca-Cola.
Jeffery: most famous person that pops into your mind?
Isaac: Barack Obama.
Jeffery: nice. Alright, last question, what is your superpower?
Isaac: interesting. I would say connecting people and talking to those are two good sets to have.
Jeffery: It’s brilliant. Well, Isaac. I’m going to say that you shared a lot. it was brilliant. I enjoyed the entire conversation as I do I took a ton of notes. I’m old school on that side of it. but again thank you very much for all of the things you shared today. it’s been great to get to learn more about yourself and of course the rapid fire questions were great. I find it’s a big science project. so I get to learn lots, but the rest of the world gets to learn a lot as well. And we’re happy that you were able to jump in today and share a little bit about yourself. And of course what you guys are doing at Real Ventures. And I hope that in the future, we’ll get to have you come back and talk and share more stories because you’ve got some great founders and some great companies that you’ve been working with. And the way we like to end our show is we would like to give you the last word. so anything that you want to share to investors or to the startups, we turn it over to you. And thank you again for all your time today.
Isaac: well thank you. It’s just a treat. It’s a really fun conversation. my last words, it depends on who’s listening, but for the founders, as I’ve said, it is all about the entrepreneurs. so much respect to what you’re doing. And it’s just incredible how the world changes due to the will of people to see it in another way. so keep doing that thing. And for those who are watching who are trying to maybe think about getting more involved into the startup ecosystem. this is where it’s at. I’m so happy to have devoted my career to this community. I think we’re doing awesome stuff, making the world better, safer, more efficient in all sorts of ways. So, now’s the time. If you’re not already involved, get involved because there’s lots of great stuff going on. Thank you for putting this together and for doing this work. I think it’s really cool.
Jeffery: Again, Isaac thanks for all your time today. Awesome. Thank you. have a good one. Okay, that was awesome Isaac. just pulling all the punches there, but shared a lot of detail around the product side. I think that was pretty valuable talking about building a community which is huge for your business when they’re diving in and looking at what it takes to invest in a founder. they’ve got to look five six years out. They’ve got to look at this product’s relevance, what does it look like, are people going to use it, can they use it. There are a lot of great things. There’s awesome background of course from the Yahoo days, all the way to Saunders and Franken, all these great businesses that he was part of. And being able to take what he knew in the product marketing side and really help these companies take over and grow. And now looking at what they’re doing at Real Ventures, just phenomenal resilience and grit. That’s what it takes to be a founder and what it takes to win. And again thank you very much for that deep dive in everything around the product. It was brilliant. So thank you for joining us today. If you enjoyed the conversation, please subscribe to our YouTube channel. Follow us on Spotify, Apple podcast and or Stitcher please and comment. It always helps everybody else. find us as well. You can also check us out at supportersfund.com, or for startup events, visit opn.ninja. Thank you and have a great day.
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