Jeffery: Welcome to the Supporters Fund Ask An Investor. I’m your host Jeffery Potvin. And let’s please welcome Av Utukuri as our investor for today. Welcome Av. How are you today?
Av: Hey, I’m doing great. Thank you so much. Thanks for reading.
Jeffery: Such a real pleasure having you join us. super excited to talk with you. And I know we were chatting just before we jumped into everything, but there’s so many great things with your background and even today with what you guys are doing and I can’t wait to jump in and unpack this for the audience. And maybe the best way for us to start is maybe you can give us a little bit about your background all the way from the days when you first started Nytric, all these great things, from your engineering background in University of Toronto. just share a little bit about that journey and then one thing about you that nobody would know.
Av: okay. So, I started my career as an engineer. to be honest, I always wanted to be an engineer since I was a little kid. I had my first Commodore 64 and I started hacking on it. So, don’t tell anyone I used to go ahead and hack calling cards to try and hook up with my friends in Europe back in the day so that you could trade hacking. This is before the internet. So, I always knew that I wanted to take things apart. I got into a program called Engineering Science at University of Toronto which is very research heavy and did my first startup right out of there. In the second year, we had an engineering design project course and we invented this Virtual Reality system. We made this headset pretty well. what oculus has now, we did in 94. And I needed to get some games. I went out to this little company called ID software who gave me source code for a bunch of games like Quake, and we hacked a 3DFX card back in the day into stereoscopic Virtual Reality and we started selling this product. It was incredible jumping into this entire Virtual Reality and it’s quite interesting as to what’s happening now because I lived that in the previous cycle. Unfortunately that market died and I was licking my wounds as to what to do next. And some of my VC partners came to me and said, we loved your tech team, that’s why we invested. We would like to hire you guys as a technology team because here’s a problem VC’s have. We can fire CEOs, we can fire sales people, but we can never fire engineers. like if they say the product is not working, it needs more money. it needs to be redone. we’re stuck. We would like to have a technology practice inside our VC fund. that way you’re going to be the CTO in residence. And unlike the CEO in residence, that was a fascinating idea. they asked us to move to New York and we said, look, where none of my team wanted to and they basically said why don’t you start a practice in Toronto and we’ll give you business and you can co-invest with us. That’s how Nytric got started. So, for dozens of years, I reached out to investors and funds and we put anywhere between 50 to 250,000 of our own money and we called ourselves the technologists in residence. So, we held engineers accountable, just like VCs hold salespeople accountable. It was an amazing partnership. We had multiple exits. I got to have a front stage seat at product strategy. product launches the issues that happen scaling manufacturing in Asia trying to meet regulatory and customer requirements because inventors all the time come up and say I have a widget. Canadian Tar is going to buy 20,000 of them. we’re going to make it for 19. our gross margins are 40 and investors look at that and say awesome. That makes sense. but they have no idea. Can you make it? Can you deliver it? what type of technical challenges will you have? is the amount of money that you’re spending on technology enough? and they always are wrong. And I’m the one that comes in going, hold on. you’re saying you want to make 25,000 units and you want to get FCC certification with this chip. you can’t do that in six months. there’s no way you’re going to hit the Christmas rush. like the money that you’re spending is not realistic right. And suddenly that’s where investors get a lot of value from working with Nytric. So, I did that for years and years. we had some. And in 2008, a dramatic thing happened with the great recession. our deal flow went from four million dollars’ worth of NREs and deal flow that we were doing with dozens of companies we were investing in down to zero because we’re a product development new product launch type company. That’s what we were focused on. Nobody was doing that in 2008. So, very quickly, we pivoted. we had a bunch of money in the bank based on some of our exits and we’re like why can’t we do this ourselves. So, I started a few companies. We all put our own money in. We decided to make an incubator out of Nytric. We decided to put anywhere between 250 to 250,000 to 2 million, developed ideas internally, spun them out with patents and commercially ready products and brought investors to the table based on everything that we learned. So, Baanto was one of my first companies we invented. a new type of touchscreen technology put 86 patents behind it, innovated the modern touch screen, got that out into the market. Right now, that touchscreen is actually flying inside the F-35 as a cockpit. The entire cockpit instrumentation by Lockheed Martin is driven by our touchscreen. So, some really cool stuff out there started Vizietto Inc. And then I started serially investing as an angel investor on the side as well. So, that’s my journey here. I’m a serial entrepreneur with a deep engineering background. millions of lines of code that I’ve written and managed, but at the end of the day I understand what VC inventors and sales people need. So, that’s my superpower. It is bridging that gap. something that very few people know about me. It was 50-50 about getting into engineering. I got into OCAD for drawing and painting and I wanted to be a professional artist. And I’m colorblind. So, I did not pursue that career and I went to engineering. And recently with Covid, I started my online gallery and sold a bunch of paintings to support charity. So, I’m looking to connect art and technology together with the charitable cause and it’s been very fulfilling to go after that side of the mind.
Jeffery: For me, that’s brilliant. And what an amazing journey and story there are so many exciting parts of this that I’m just dying to jump in and chat too. but the first one I’m going to say is that on this skill that you have for the painting side, there is technology today that they’re actually exploring right now that a lot of people that are color blind or perhaps if they close their eyes, they can actually not know where they are. they lose that cognitive ability to actually figure out how to step forward. So, the same thing is true when they see in black and white. So, they’ve been trying to figure out how the brain actually can articulate around this and there are a few artists that have come out of the mix, that being in this colorblind world, they’re actually being able to listen and put sound to the color. And now that they built this headset, they can actually take placement of a cloth up to that. And it’ll say green, and then that will allow them to understand based off of the vibration that’s coming off of the cloth. So, there are so many cool things that are coming about this space. try some of that. There are some incredible things. So, I think on this innovation technology curve, there are so many cool things that are being learned about and shared and they can enhance your ability to be able to continue to be amazing at your skill which is great. Those are all great things to support it. to go back a little bit, one of the things that you mentioned and this got me excited is that, when you decided to jump into this space and work with emerging companies and building out the technology you’re taking which is really an amazing opportunity, is that you were able to step into the shoes of what these businesses were going through. So, you’re on the technology side which just is a piece of it. but they’re planning. they’re strategizing. they’re trying to figure out how they’re going to market. And what you’re coming in with, this is more of a construct of how things have to be done. This is how they’re going to move forward. you’re trying to peel outside the box and these things may not work. So, there could be some deception there. It could be some areas of making things up because they’re trying to fit into a space that they really don’t have a choice or chance of getting into and you’re able to repave that road while still being innovative and helping them cross that threshold of innovation and move that business forward. So, in that time when you were spending not just time and money investing in these companies, but you were testing technology, there were a couple of learnings that really stood out on how you’re able to shape founders and shape the direction of where they were trying to go versus where they could go.
Av: absolutely. So, number one, I realized that there’s three different languages that people speak. Okay. it’s like what they say, Portuguese and Spanish sound almost the same for someone who doesn’t speak either. but they’re completely different. So, sales people always want something red. investors are CEOs who are selling yellow to the investors and engineers are designing blue. That’s how I always put it. Okay, the engineers are going to the CTO, find something cool that he or she thinks is important. That’s where the business is going. the CEO is looking at it going hey, this is the investment trend, this is where we have to be and the sales people could have already sold red. I have so many great stories along that part of it. Just listening to all three people understanding that the engineer thinks differently, then the sales person wants to go ahead and sell whatever is fastest to market, whatever they can get value for. And it happens a lot of times. A great example of a story is I’ll come into a company and I’ll start interviewing. I go through a lot of deep interviews to understand where the technical challenges are. For example, we don’t have a product yet. we need a million more. Why? because Samsung changed the chip or Intel changed the chip and we have to design for the new generation. hold on. but Intel would not change the chip and completely drop it. they’ll give you 10 years to go buy the old chip right. And suddenly the engineers are looking at it going, yeah, but we should be ahead and the CEO goes hold on. What do you mean? you can get the chip for 10 years. you told me this chip was changed and I had no idea that you can still get it for 10 years. So, what’s the real reason? Well, sooner or later, we have to actually switch the new chip. might as well do it now without actually. And everybody’s looking around going, I’m like, why don’t you get to market now with what you’ve already designed. what’s the real reason you want to change it to the new chip? and once you start going through this counseling type session. Well, we want to have two blinking leds on our product. And the sales person is like, dude, I can sell with one blinking led. I don’t need the second one. And before it, you always have the solution. but the egos are stopping everyone from communicating because they’re not understanding what’s actually going to happen now. Sometimes it’s also scary. a CTO will come in and go. I can make 18,000 units for Canadian tires for Christmas. no problem. And I’m looking at it going, it’s June right now. What’s your lead time for your chips? Oh, I’m sure we can get it overnight. No, you can’t. 18,000 chips mean 16 week lead time in the best of conditions, blah blah blah blah blah. there’s no way you’re going to go ahead and hit that mark. but somebody doesn’t want to come out and say that they’re afraid of saying that, right. Oh my god! the CEO’s going to blow up and well supply chain is supply chain. This is how you go ahead and do it. This is how you mitigate the strategies. So, a huge amount of this type of stuff that we do is understanding the problems that they have and breaking down the barriers to go ahead and make sure everybody’s communicating. And what actually happens is because my superpower is the ability to jump into code or look at a schematic or look at a mechanical engineering drawing and understand what they’re trying to do from a mathematical analysis point of view. but I also know how. So, I always say that the best engineer is a lazy engineer. Okay, someone who is able to take the path of least resistance to get to the end goal and sometimes those goals are not crystal clear articulated. the CEO is changing their mind. the sales people are going after the lowest price. they’re going after the path of least resistance. So, there’s just a whole bunch of experience that I bring to the table where I navigate through to try and understand that feature. It’s really critical. In that process, we are not trying to kill innovation. but we want to show that there’s a path that gets you to the end goal without you bankrupting the company or investors coming in and saying here’s a down round because you failed because of these reasons. And a lot of times it’s technology problems, not really a sales problems. it looks like a sales problem but it’s a bad technology strategy. So, one of the key things I say is you do marketing sales strategy. you do a business plan. you do a financial strategy. where is your technology strategy document? show me a document. just like a go to market strategy, where’s your technology strategy document? not one company ever develops that. as an example, I’m sure you’ve never seen one as an investor. it varies. it does vary. it’s everything. its like that. here’s a bug list. here’s a road map. it’s just high level. but when you drill into numbers and you drill into a business plan and you drill into a marketing and sales strategy, man, the level of detail and articulation is completely different than what an engineer gets. isn’t it?
Jeffery: Always. I think those are very well shared. And there’s a couple of things that I’m going to fill in for there too. It sounds like a lot of the time in these early teams, there’s a lack of inexperience of being able to figure out how to bring a product to market. Yes, and this lack of experience comes from either an early stage founder, first time founder, maybe even second time or experiencing how to move a product to market. they haven’t actually done that in its entirety because I think the way people are built is, you do a role inside of a business inside of a job. So, when you’re inside of a company, you’re not the full person that goes from beginning to end. And then when you move that into a startup, you become that, full-rounded beginning to end person. And now, you may miss things along the way. And you’re not taking input because the communication trail may have been broken. As you mentioned, ego’s place plays a big role in this. And that is the execution of how I get this to market. And one thing that I really caught on, that I really liked about what you said when you first started was designers are blue, sales are red. And what’s exciting about what you shared there is that, there’s Thomas Erickson. he wrote a few books and one of his books or two of them are called ‘Surrounded By Psychotic Psychopaths And Idiots’ and he actually defines these color palettes because his goal is to understand what the differences are of how to interact with all of these different people. So, it comes out as a coaching mechanism. because a lot of times, you’ll combat. So, usually blue are your engineers. engineers are very data oriented, very process oriented. And like you said, they do a lot of work to make sure that they’re not the fault point. but they will beat that up to make sure of it. And everybody else becomes that loosey-goosey space. And a lot of the time, when you’re loosey-goosey, it’s hard for you to dive into that level of detail and come to the conclusion that we’re both on the engineering side. It’s quite funny because when you need to break this process, it’s hard for people to understand. Why do I need that? Why? What’s this for? this isn’t required. And the engineer side is, how can I do the least amount of everything to get what I need out to market and then iterate? How do I build everything into this sucker and get that out to market? and it’s tough for business people to understand that less is always more. So, now you’ve built out this schematic with your startups and the business model and trying to educate them on this, you must have had a million battles that you had to go into to help people through this. Can you share a few things on how to shape a product person’s mind and how they can collaborate more? Because I think there’s a lot of communication breakdown here. And I’m sure that you can elaborate on that.
Av: absolutely. So, part of the biggest challenge that happens is, there’s a book that I’m reading. it’s on the tip of my head. And the articulated great products are like a three-legged stool, right. like pick the three most important things that are going to differentiate you and what your business is built on. everything else is fluff, right. I like to understand your product life cycle. Hey, why are you designing something for 20 years when in 18 months something will be upgraded right? there’s a whole bunch of things that you have to know what to bail on and what to double down on and where and that thesis of these are the most important things. So, I always tell people to look at a business, you’re going to have three different variables. you can have all the features that you want but then so there’s three buckets. there’s their features, there’s the time to market, and there’s the price you’re willing to pay, right. unless you have them, there’s no way you’re going to get control of all three things. So, if you’re a company that is based on feature richness because of competitive advantages, then you better. So, I basically tell everyone this. Okay, your engineer picks CEO, the engineer picks the other one and the third one is going to be floating free. you cannot control it. So, it’s like a three. It’s a multi-variable problem that if you try to pin all three, it’s impossible. you’re not going to get the cheapest price with everything in the time to market. If time to market is important, then that’s your deciding goal. That’s your guiding light. I know how to get that to market by November. Then, sacrifice on features or performance, or sacrifice and cost you can’t get it both ways. So, once you articulate the key features and break things down into different buckets and understand that you as a CEO and the management team have control on one, maybe you can guide the second and then the third is completely free-flowing. It sets a different perspective because everyone has this idea. I got control of all three and you don’t. It’s the triangle. pick two because three never works. it never works.
Jeffery: I totally agree with that. Right. So, you tell me what the key focus for this company is and sometimes we actually have a very wide green field opportunity. the features are not important. Time to market is critical. Okay. If that’s the case, what are the top things that you’re going to give away until you meet the time to market? and guess what, the price is going to be what the price is going to be right. or so that changes the whole conversation. when I go in and start articulating it from that perspective, that’s what my advisory and board roles used to be. I’m always on board to bring that type of logic to the company, especially if I’m an investor. if you think, in taking that knowledge and what you’ve gone through, if I was to cut this down into a nice refined process or case study, would you look at it and say, this goes for software or hardware?
Av: If you’re going to release any product, the first thing you need to do is trim it down and go to market like the iPhone did. the first iPhone that went in, you couldn’t cut and paste. you couldn’t do 90 of what the rest of the market did. but your technology was advanced enough that you would have new people trying it. but they went in with such a basic phone. So, people complained. I can’t do all these features. but they were like, they’re coming. What matters is that you got this device in your hand. what it can do, it does it well.
Jeffery: Exactly. bang on. compared to our palm pilots and Windows CE devices, remember those things and blackberry.
Av: Yes, absolutely. I did not understand where people wanted to go, how people wanted to move. They tried to do a whole bunch of things that were horrible. And I remember that I just kept thinking the iPhone is a gimmick, and I have a great story there. There’s a lead investor that was looking to invest in Baanto. It was a critical meeting and I went to Waterloo to meet them, but I got lost and I had my Blackberry Pearl. I’m like, look, I need the keyboard. I need these features. And remember how they had the Blackberry maps. you’d go to the website. it was all text, hypertext. you have to scroll through all the garbage and click on the map. And the map would come up. It was completely cryptic. And my buddy in my car turned to me and went Av, I thought you’re a technology guy. you’re an idiot. Let me show you how it’s done. He pulled out his iPhone, went to a beautiful graphical website, clicked on the link, popped up in google maps and I realized I was on North Wellington South versus West or whatever it was. And I got there. And I’m like, that’s it. That’s all I need. Why am I complaining about everything else? That was a beautiful experience, right? Then, I never looked back. Absolutely. you don’t know how people are going to interact with your products. you don’t know why they’re going to go ahead and want it, your software, hardware, mechanical engineering. So, what happens Jeff, as an engineer, hey, my product is overheating. there’s three different ways you can attack it. Oh, I can redesign the case and put a big fan in. Okay, I can modulate the power supply through my firmware and control the heat. I can change the electronics and make it more efficient. There’s no easy answer here. it’s there, right. What is it that you do? When and how? That’s the critical success between companies that succeed and fail. And the other thing is, a lot of times people in management, even if they’re serial entrepreneurs, have never really managed technology. Very few entrepreneurs are engineering and technology-minded. And they’re operational and business-minded. a lot of times, you get people who are business-minded that don’t understand even if they’ve launched x as a technology, y is completely different again. And that’s the problem. And it makes a big difference. And I think, if you start to train your teams, and in our case, we approach it this way. This was from my experiences when I worked at blah blah as a large retailer. My experience was that I was a technologist engineer. all these great things. but I also had a business background on functionality of how these businesses move forward. So, I slotted in the middle of meetings. I would call out IT for making things up. And on the business side, be able to help them navigate through to get what they needed done quicker. So, I think when you start to build out your business model, it’s really important especially with the fact that only three percent of company projects ever actually go to market. they usually fail. projects don’t always succeed. So, in order to get those projects to succeed, to get those startups moving forward, you have to align things better. And maybe there is a real fit for that technologist, that innovator, that business analyst. it’s not a 100 percent coder. And they’re not 100 % a product manager. they fit right in. And they can balance out the level of both of those teams to enable that business to be able to refine their product and their go to market strategy and simplify that to move forward.
Jeffery: [Music] absolutely. And there’s a whole process for that. And there’s no management coaching on this. There’s no training on this. there’s none. Everybody focuses on operation and culture. And I find that the engineers are given the least amount of coaching or guidance to go ahead and make that happen. I’ve never seen it, heard of it, never experienced it right. So, it’s all from the marketing sales point of view. but this is where I think there’s a massive blinder for most companies on technology strategy. And today with the world being so technology inclined and built on tech, like if you turn the power off. Let’s use Loblaw’s as an example. it’s down and out. Starbucks. I remember being in a Starbucks and the system shut down. And they were like, we can’t serve you coffee. why not? the system’s down. there’s no power, but this is working. And this is working just because your POS is down. can’t you process this? No, we don’t have any other way to transact money. So, if they start to build these in-between solutions or understand better on how you can adapt, I guess that’s going to allow you to move forward. but from an engineer perspective, I think they need to put a lot more emphasis on those types of roles to keep things moving forward. but take the knowledge from everybody at all levels of business. it is going to be valuable for you as a founder or as an investor learning what’s going to be worth jumping into from a technology standpoint.
Av: Absolutely, yeah. There’s a lot of value. there’s a lot of problems and resistance that they can pave out by having that perspective and asking the questions and getting them from all levels. Well, I think you also have to have the personality to realize that. My experiences have paid me to be able to do that. but it’s very difficult to get into that headset. Otherwise, what seems natural does not come naturally for a lot of people. And that’s why I think people like you and me exist. And that’s where we can make some smart investments and guidance and advisory roles right.
Jeffery: no, I love that. And one thing that I noticed from the businesses, not just the ones you invest in but the ones you work with and the one you’re actually building. And this is really big that the number one thing that I see across everything you do is communication. it seems like it’s very important on how you operate, run a business and grow. And now you’ve got a new company that is really built around changing the way communication works. How important do you see in the time that you spend investing in companies? was there a lack of communication, a lack of understanding on how to sell or work within other organizations or within their own organization? and how much of that have you seen change over the last 10 years? especially now, that you’ve built your company, the new one. How important is communication inside the business?
Av: I haven’t necessarily made that connection as a thread. but you’re right. I mean, almost a lot of the things are based on communication. So, for me, what excites me is someone doing something completely different. I was part of the accelerator course the other day. I was just checking it out and they said 99% of companies and startups service a need that’s already there. one percent of the companies are actually creating a new market. And they just said, if you’re part of that one percent, good luck. I mean you’re going to need it. but there is a challenge. I have always been excited about that one percent. I have never, when I graduated from UFT, got into them. A lot of my friends went to web 1.0, and if you did Micromedia and HTML, you could make 50,000 a month. And I’m looking at it going this is not real code. I’m not excited by it. I’m going to start a Virtual Reality company and then when web 2.0 comes out, and all the PHPs and databases, I’m looking at a lot of this stuff. It never excited me. Unfortunately, I’ve always taken the path that was about inventing something new. And when we got into touchscreen technology as an example, that was a heavy lift, invent a new type of touchscreen technology competing against BASF and Microsoft and 3M and come up with a new mechanism. 89 patents and it works even today better than most technologies out there. to the point that we’re flight certified for a cockpit. So, what’s interesting to me is, in order to launch companies like that, communication was always key from day one. I had this engineering mindset. Look, these are the features. why this is going to go ahead and work and instantly customers would say actually you mean this and I learned the hard way. By no means did it come naturally to me. I tell people all the time, I’m an engineer. I’m not the salesperson or the communicator. I do that as a secondary job. Hopefully, I do it well. but my passion still is about the engineering right. So, in most companies I find today, they still struggle to understand why and how to articulate. And what I’m realizing these days is, when I got into Vizietto and Reactive, about 60% of my effort was not about the software. It’s about sales coaching. it’s like hold on. What’s the critical message on that slide? How do you want to go ahead and emphasize it? How are you going to reinforce the individual to differentiate yourself? Let me teach you the trick. And I’ve just realized now people spend tens and tens of thousands of dollars to get this type of sales coaching. like I know people who pay 10,000 a quarter for people to come in and facilitate sales trading. And I’m like, actually I can do that. I can do that better because of what I’m doing these days. I roll into a 30 software package worth 10 thousand dollars’ worth of sales training and I can guarantee you better results. So, yes, communication has been critical. And I’m still finding it to be very lacking. nothing has changed. actually it’s gotten worse. At least we knew the rules, face to face. but now in the remote world, all the rules are gone. People, just like you and I, tell people this all the time. Think about remote communication today. Let’s say I showed up to you at your office, Jeff. I had a paper bag on my head and I went, sorry Jeff, I didn’t brush my hair today. I’m not going to take my paper bag off. I sit down at your boardroom table, put up a 35-page deck that has a whole bunch of technical features and I talk through it without ever even looking at you. I get up and I leave and I go, do you have any questions? Was that a good meeting? But if it’s not, why do we do that every single day? every one of your meetings today is like that right. So, it’s interesting that people don’t make those connections. So, I’d say it’s actually gotten worse.
Jeffery: That’s a valid point. but you can see from this interaction how important communication is and how much it drives the business forward. And I would think that the companies that are looking to cross the chasm for success, they’re probably trying to tackle these problems internally by adding in different tools from Slack and other channels they can chat on, but it goes deeper than that. And this goes all the way through how you’re interacting with, say boards, and how you’re building out a product and how the teams are collaborating. because there are many teams in a product that goes to market these days. Even if you’re a small startup, all the way to a big conglomerate, you can have many divisions and groups and people that all have to collaborate inside of that engine to make it move forward. And if you’ve got egos and you’ve got people that don’t want to share the good or the bad inside of a product, this can spin wheels and take forever. And maybe this is the reason why large footprints never get put to market. because they just really can’t get past the line because there’s too many people and not enough communication, proper communication absolutely. And part of that is actually getting buy-in, seeing in consensus and building that culture in the team. And there’s so much to that communication which is, look I’m the expert when it comes to x y and z on my tech in my company. Now you’re asking me why it is not working. How’s it going to work for me to be able to communicate effectively? I actually have to not only convince you that I know what I’m doing and the problems are legit, but I also have to get buy-in and consensus from you so you feel comfortable that I’m actually answering your questions right. And that type of communication is practically impossible to do and there’s a lot of neurological and psychological reasons for that to happen. So, I think we’re naturally progressing into my next company. So, I don’t want to go into it unless that’s where you want us to go. but if you have questions, keep asking. but I can definitely dive into that.
Jeffery: oh, perfect. Well, I think one last question that I want to dive into. And this goes back to the process side again. as you built out your companies and you started to invest in in companies along the way, there’s scaling teams and there’s building up and trying to get these companies into that scale space when you’re investing in these companies, were there are a few things that you look for that created a great scaling opportunity for market fit size of team? Was there something that created a sweet spot for you that other investors can learn from when you were making your investments? And I know people fit in at different layers when they want to invest, but is there some critical information that you learned? ask these questions when you’re talking to the tech founder or dive into these areas because they’re important for success. like did they learn anything around the exits? and there are other things you were doing.
Av: Yeah, the funny thing is, after being such an operator, being involved in dozens of technology startups, investing all over the place running through Nytric, I’ve realized, at the end of the day, none of us have any level of control. It is such a game of craps. It’s insane. you kill yourself to go down a particular path. Boom. a new opportunity just opens up without you even trying. like I never went down that path. I didn’t even care about it. And that suddenly becomes survival. like I mean, I have stories like that all day and long. like in banter, when we launched the touch screens, we wanted to get into consumer electronics. we wanted to be the touchscreen of choice into laptops. we blew our brains. And before it, a lead comes in from a company like I3 Harris that just says, we would love to evaluate your touchscreens for cockpit avionics. it’s like, what? That’s not even our core market. we’re not interested in going for it. Have fun. come back to us. And they sold us. Constantly, they came back and said this. What do we have to do? Here’s a check on the table. This is what we’re willing to go ahead and do. This is how important it is. it took us years to say what, maybe we should pay attention here because these guys are big companies, because you always have this mindset that says, that’s not a lot of scale. That’s not a lot of dollars. that’s not a lot of, like I told my investors, it’s going to be 850 million units a quarter. we’re going to go ship. we’re going to go into x y and z and suddenly, it’s like wow, what the consumer markets. you’re going to make a million units per month. but you make one penny as a margin because people like Apple are going to just grind you down to absolutely no margin. but you could sell five touchscreens in that other market and actually make more money right. So, there’s a whole bunch of things that actually happen. So, what I always tell investors that I join from an advisory role point of view is also look at the numbers. No matter if they’re good guidance. That’s what they are. the plans don’t matter. they’re good guidance. What I care about is a tech strategy because I’m always involved in tech companies. So, to me, if this text strategy is not sound, nothing else matters right. If you’re building something that has value because you’re solving a complex problem and you’ve got a core innovation around it, you will always find something because we’re all entrepreneurs. but if it’s a marketing play, it’s a sales play, it’s a gimmick, I’m not in valuation. So, I like heavy lifting. number two, I don’t focus on the numbers as much as I focus on that market fit. Are five people using your product right? forget all the other numbers. I know you couldn’t get to 50,000. But are five people using it? Do you understand why those five people are using it? have you gotten involved to try and make sure that that is completely understood? so there’s a whole bunch of things that I operate on that a lot of investors who have not done this don’t get. They keep looking at what’s in the pipeline. Well, okay. I can show you a pipeline. but how are you going to determine the quality of the pipeline? like how are you going to come in and talk to the pilot and just say things like the passenger in the plane coming in asking the pilot, is everything going well? everything is fine and you walk away like you just want to hear the right answer right. So, to me, I’ve learned the hard way that I look for the right type of management team that understands that they’re going to grind it to make it happen. So, there’s a whole bunch of gut instincts I’m also looking for. And I also come pragmatically knowing that even all of the best things still result in failure. The thing is you have to survive long enough that you can answer enough doors of opportunity. And over and over again, my friends who succeeded said, we had to grind it out for three or four years. And suddenly, that opportunity door opened not because we were trying to make the door happen, or it happened organically right. every one of the opportunities I’ve ever had and successes and exits I’ve had in my life happened organically without any control of my life. like I didn’t game the system to make it happen. other than try really hard, what I mean I think in that process, you’re opening doors. So, the more times you’re trying new things, you’re meeting new people and you have to do those things in order to have that one day and four years to have that opportunity appear in front of you. These things come because you’re out there. you’re marketing yourself. you’re testing things. you’re failing things. you have to do a lot of different tactful things that some of them, you don’t even believe you’re doing or why you’re doing them that can come up with a better positive result. Yeah. I’ll give you an example. We closed one of our biggest Japanese deals that resulted in millions of dollars of revenue and got Baanto to profitability. it was just the CEO, he just happened to walk by, saw the booth, saw my presentation, was captivated and for four days, kept bringing everybody by and didn’t even know it. And boom, we got a deal. I could not have cold called him. I could not have knocked on the door. every door would have been blocked for me to get to that CEO level. same thing I went to. there’s a partner of mine doing a big event in Asia and he said you got to come in. I’m like, what? This is going to be tens of thousands of dollars. I know I’m supporting my partner, but am I really going to go get value? and in the end, my salesperson basically said, you committed to him. don’t you dare back out. it’s going to look bad on us. I don’t care if it’s going to cost 10 grand. I flew over there, did this event, and did a talk for him. It turned out that again, a CEO of a strategic partner loved what we were doing. I didn’t even know that they existed. they put a million dollars into the company. they did a bundle deal with us, like just the return of investment of that particular trip or some of these types of events. you can’t even measure. but at the same time, I was eight tenths out of the door saying I didn’t even want to do this one because my cold calling efforts didn’t help. We didn’t book enough meetings before going. I don’t know if the value is there and where you think there’s a lot of value because there’s a ton of interest in meeting you at the show or the event. it doesn’t pan out to anything right. just do enough and survive. I think to summarize what we’ve gone through and talked about is that it really understands your problem and your product fit. Yes, understand the technology and how the technology is going to develop over your business cycles or your life cycle of your business. learn to communicate more effectively across all of your teams, small or large, and if there’s an opportunity that’s thrown into the palm of your hand, you think it’s wrong because it’s not going to bring you into the right spot. think again. because every opportunity that you can get in front of you, you never know who you’re going to meet. there’s always something at the end of the rainbow. but if you don’t go, you’ll never find the rainbow. And how many times have you heard of those stories where companies just barely survived and they somehow figured out a way to keep the doors open and suddenly they become big right. like I mean Apple is a great example. like we’ve all known the story. weren’t they a week away from bankruptcy with no sales? like how many times did that happen? they just survived, didn’t they? I think there’s good omens that surround the hard-working teams that can figure out how to build that product fit. And once they do what you can, just learn as much as you can about everything. but it’s the strong that survive and these sayings are all approved for a reason right. And if you’re a survivor, you should. If your team is a survivor, you should be investing. That’s all that matters to me at the end of the day, right. like I love it. if you’re going to boil it down, I’d rather pick a survivor versus all sorts of other things.
Jeffery: no, I agree with you. And I love it. It’s very insightful. we’re going to pivot a little bit now. we’re going to jump in and I would love for you to share a use case around an experience that you’ve gone through with a founder and that she or he has done or went through the battle of being an entrepreneur and what it really takes to be an entrepreneur. And it could be any experience that you or any other businesses that you’ve invested or gone through. just something that really exemplifies what it takes to be a real founder and entrepreneur.
Av: Man, there’s so many. but obviously, everyone hears the same things. the tenacity and willingness to fail and not never giving up. All those types of things are critical. but I think the mental toll that it takes on entrepreneurs is something that people never talk about. it is absolutely the hottest boiling water that you’re ever going to be in constantly with the weight of your world on it. So, the cons and the funny thing is, I find that I always tell this to anyone that listens, the universe is very sarcastic. I find that song, you’ll never get what you want, but if you try, maybe you’ll get what you need. It’s a great song because it sums it all up. And it always sounds like you’re ready to close the doors and something will happen. I remember the number of times, I’m like Christmas time. we’re out of money. Hey, everyone. I don’t know if this deal will close. The lead investor is just dragging their feet. They don’t like these terms. we’re walking away because I can’t come back from the Christmas holidays. there’s a good chance that the doors are closed. I’m at the airport going off to go visit my parents and see them for family dinner and suddenly the attorney will say, they just wired the money. And I’m like what? They were walking away. How did this happen? you just have to constantly not give up. And one thing I’ve also learned as an entrepreneur is don’t compromise. every time I’ve compromised a deal or compromised a situation going, oh my god, I’m desperate. I need to cave on those terms to make it happen. it has never worked out for me. It’s the fundamental reason as to why a compromise leads to a cultural problem in which the fit was never there to begin with. Look, compromising on little things is fine, but when fundamentally someone says, like recently, we’ve had an offer where this big shot wannabe came in with all sorts of attitudes. And he was just tearing the business apart. And he gave me a deal in which he said, if you compromise, you’ll survive. And I looked at it going, do I want to work with this individual? Is this the culture? Is this what it’s going to be every time something goes wrong? He’s going to come back and tell me how I was right or wrong and compromise. Money is not important. I’m happy to walk away with my sanity. but I will not become insane in order to go ahead and make something work. So, I think most of the stories are, don’t be afraid to walk away. And somehow, the universe will give you what you need and survive long enough. you’ll get exactly what you want. Then, I don’t know if that makes sense. well it totally does. And I’m going to say that every entrepreneur that has spent five to ten years in the business has lived this moment a million times. And what I would say to support that is, as a founder, draw your line. It’s tough to do at the beginning because you want to help everything and you want to be everything, but draw your line and don’t go below the line and you’ll find that everybody will step up to your line eventually and the right people will start to work with you. the right people will start right. but obviously, if you put that line to an aspirational line that you can’t reach, then you better work hard to go get that. Then, you’re going to go then and again. If you’re the survivor, you can go ahead and do it right. like it all is up to you if you’re willing to go deep into debt and not make a payment and don’t earn and live in your parents basement and you’re willing to do it to get your line.
Jeffery: awesome. That’s the type of people that I’m more than willing to invest in right. I love it. well said. well shared. Brilliant. we’re going to dive into the rapid fire questions okay. All right. here we go. So, the way this works is, I’m going to share the question and pick one or the other. We’ll start on the business side and then we’ll jump into the personal side.
Av: yep.
Jeffery: Okay, perfect. Okay. first one coming in as an investor, founder or co-founder?
Av: founder.
Jeffery: unicorn or a four-year 10x exit?
Av: four-year 10x exit.
Jeffery: tech or cpg?
Av: tech.
Jeffery: nft or web 3.0.
Av: Or neither. [Laughter] web 3.0. okay, maybe web 4.0 because we got to be way more advanced.
Jeffery: I love it. ai or blockchain?
Av: Say that again.
Jeffery: ai or blockchain?
Av: Ai all day long.
Jeffery: first time founder or a second third time founder?
Av: second third time founder.
Jeffery: first money in or series a?
Av: First money in. I don’t have a problem with that.
Jeffery: angel or VC?
Av: angel.
Jeffery: board seat or observer?
Av: board seat.
Jeffery: safe or convertible note?
Av: Neither. It’s fine for me. No preference.
Jeffery: Okay, lead or follow?
Av: follow. Generally, I don’t have the time to generally lead.
Jeffery: equity or interest payments?
Av: equity.
Jeffery: I love it. favorite part of investing?
Av: people.
Jeffery: number of companies invested per year?
Av: three.
Jeffery: brilliant. preferred terms?
Av: I’m a pretty strong believer in common. I believe everybody should be equal. I don’t think that anybody’s money or time is worth more than others. but there’s balance both ways.
Jeffery: Okay, perfect. verticals of focus?
Av: Say that again.
Jeffery: verticals of focus?
Av: tech. I’m all tech. I’m always tech. That’s why I understand it.
Jeffery: I love it. and we talked a little bit about this, but just to reiterate, two qualities a startup needs in order to stand out in your eyes.
Av: the innovation on tech and the ability to survive, willingness to survive.
Jeffery: I love it. Okay, we’re going to jump into the personal questions. book or movie?
Av: book.
Jeffery: Superman or batman? restaurant or picnic?
Av: restaurant.
Jeffery: five minutes with Bezos or Oprah?
Av: Oprah.
Jeffery: All right. beach or mountain?
Av: I need a mix of both. don’t you have to make me pick? I’m going to pick a mountain.
Jeffery: perfect. Bike or run?
Av: bike.
Jeffery: Big Mac or Chicken McNuggets?
Av: Vegan Chicken McNuggets. I’m vegan.
Jeffery: different answer. I like that. trophy or money?
Av: trophy.
Jeffery: camera or mobile phone?
Av: oh, camera.
Jeffery: king or rich?
Av: king or rich and the equivalent. Okay, I’ll go. I don’t want to be king. Being rich is good.
Jeffery: concert or amusement park? fortune cookie or birthday cake?
Av: Birthday cake.
Jeffery: Ted Talk or book reading?
Av: book reading.
Jeffery: I love it. the most famous person that pops into your mind?
Av: most famous person? Einstein.
Jeffery: perfect. favorite book?
Av: favorite book? Oh, jeez. so many popped up immediately. [Laughter] I’m going to say Handmaid’s Tale.
Jeffery: done. All right. That’s good. very cool. I’m just building a list for myself of books I need to read so I will remember if I’ve downloaded that one or if I have bought it yet. I’m going to have to check. but that one, I did remember looking and reading about it. but I don’t think I actually ever read that one.
Av: Check it out all right.
Jeffery: I like it. the first brand that pops into your mind?
Av: first? Friend, suddenly everything popped in. I’m going to say Microsoft.
Jeffery: Okay, I’m going to say that we’re probably sitting around eighty percent pick Apple. so it’s an interesting case study going on here.
Av: Interesting.
Jeffery: okay. Favorites. favorite sports team?
Av: favorite sports team? I don’t follow many sports teams at all anymore. But, I used to love the Edmonton Oilers, back in the day when I was a kid.
Jeffery: a really favorite app that you’re using today on your phone.
Av: favorite app? I live in my email. But an app outside? I am playing this game called Homescapes because it keeps me busy when I commute or when I’m on the plane.
Jeffery: How about that? Homescapes. I’ll tell you the game I’m playing, all right. That’s cool. That’s all I’m trying to learn a bit about what everybody does. so that’s cool. favorite movie and character you would play?
Av: favorite movie and character I would play? Oh, wow! I’m such a bad actor. so I don’t know if I’d want to play any. But my favorite movie? like Saving Private Ryan or like Schindler’s List. I love movies like that.
Jeffery: Which character would you play in that one? Say, Schindler’s List.
Av: I guess I’d love to play Schindler.
Jeffery: What’s interesting is that, I don’t have the full stats, but I’m sure if I go through it, 30 is my guess, or investors have picked Schindler’s List as their favorite movie.
Av: No way. you’re kidding.
Jeffery: That’s it. and 98% of people pick, I don’t know if I should be throwing out these stats because then people will start answering them this way, but I think 98% of people pick Batman.
Av: wow!
Jeffery: so, yes. That’s right. See, I told you. This is why I love this data. It’s pretty cool right now.
Av: I have no idea.
Jeffery: yeah, Superman has come this close is too sugary like in Batman is the underdog. He doesn’t. He’s not born with any. It’s such a cool character right?
Av: exactly. so there’s so much to it right. So yes, I like the dark.
Jeffery: What is the meaning of success to you?
Av: freedom to do what you want to do.
Jeffery: I love it. I’m taking these notes down so that they don’t ever get missed. and last question, what is your superpower?
Av: my superpower, I would say it’s the ability to communicate and simplify complicated things regardless of the audience. That’s what’s been making me successful.
Jeffery: Well, I’m going to say that based on our interactions, I feel that you are an amazing communicator. high energy and can help people solve problems. and I would agree that that is your superpower you’re very good at probably creating the ease in the room and getting people to understand both languages, which is techie versus business. and I think that’s super valuable. and I think that communication skill is obviously a huge thing that the world needs. so I appreciate all of your time. you have delivered me so many notes. I’m going to share. I like doing this. I’m old school. I just write like crazy. this way, I’ll never forget it. but there’s so much valuable information that you’ve shared today. I want to appreciate all of your time and thank you again for everything that you’ve shared today.
Av: My pleasure. Thanks again Jeff. I’m looking forward to it.
Jeffery: and the way we like to end the show is we like to give you the last word. so anything you want to share to startups or investors, I turn it over to you. But again, thank you for all your time today.
Av: To startups, I’d say, yeah, dive in. you’ve got nothing to lose. you’ll only come out better. and for investors, especially Canadian investors, is to take more chances. all the analysis and paralysis in the world is not going to help you. You’ve got to go with your instinct which is what our American counterparts do a much better job of. so if they’re serious about the ecosystem, they gotta take chances. Valuations don’t matter when the company fails.
Jeffery: well shared. well said. and you’re right, take some more chances. Life is short. go for it. Thank you again Av. thank you everybody. Bye. Hey, that was fantastic getting the opportunity to dive in with Av, really and obviously an impressive background being that he was part of venture firm investing in lots of companies and just the learning on building companies and what it takes working with founders. and then of course, going above and beyond and creating its own startups along the way. Phenomenal. and lots of great insight there. I really enjoyed diving into that. we did do a wraparound on going to markets, simplifying your product communications, finding out ways to make sure that all the layers of the business communicate together, dive in, get things done, be a doer, be a survivor. and just work every angle, get in front of as many people as you can. all of these things are going to bring value to you at some point in time. and that time when things aren’t working, you never know who’s going to come out of the woodwork to help you grow and get into the right people. so don’t compromise. draw your line and find where your fit is and make it all happen. so just great conversation. So thank you for all of that. and thank you for joining us today. If you enjoy this conversation, please feel free to share it with your friends or subscribe to our YouTube channel, follow us on Spotify, Apple podcast and or Stitcher. Your support and comments are truly appreciated. You can also check us out at supportersfund.com, or for startup events visit opn.ninja. Thank you and have a fantastic day.