The Return of Camp Hustle

Today is a big day for my team. We’re announcing the return of Camp Hustle.

But first, I want to talk a bit about what is top of mind for me going into the new year. One thing I think deeply about a lot is how can we get a lot more great startups funded.

Part of this answer is through our Hustle Fund pre-seed fund. Part of this answer is through our 1000+ member global angel club called Angel Squad.

But the vast majority of this answer lies in helping more investors — whether they are new VCs or angels — in their journey. We need to help more people jump into the startup-investing game AND become successful.

This effort starts with community — connecting more great budding investors together to level up everyone’s investing through capital, knowledge, and networks.

We started resuming live events last year with Camp Hustle 2022 and we’re back this year to help connect more investors.

My colleague Haley Bryant interviewed Sequoia VC Jess Lee at last year’s Camp Hustle

What is Camp Hustle?

Camp Hustle is an in-person event exclusively for investors. (Now, if you’re a founder, I’ll get to why you may care about this in a minute…hang tight and read on…)

It’s a full day of networking (a lot), talks (a few) and live pitches (with real-time pitch analysis). It’s taking place on May 17, 2023 in the Bay Area.

What’s the point?

We write a lot of free content and throw free online events on startup investing. But I’m also a big believer that attending events where you can meet people to help you level up is life-changing.

The purpose of Camp Hustle is to help you meet other investors.

Why would you want to meet other investors? Well, for starters…

  1. to learn about great companies / improve dealflow
  2. to help your existing portfolio companies by building key connections
  3. to help your own VC fund’s fundraising efforts
  4. to grow your angel investing syndicate
  5. to meet kind, creative, successful investors who love the same things you do

What happens at Camp Hustle?

In addition to structured and unstructured networking opportunities, Camp Hustle will also feature:

  • talks from founders with multi-millions in revenue
  • a Shark Tank-style pitch event
  • small group discussions on hot-button topics
  • ample time to chat with 200 other investors
  • great food (and s’mores)
Shiyan and I kicking off last year’s Camp Hustle

If you’re a founder, do you want to pitch your business at Camp Hustle?

One of the most requested online events that we’ve often done are pitch-feedback events. This year, at Camp Hustle 2023, you can apply to pitch your startup live (by April 15). And if you’re selected, you’ll get to pitch in front of 200 investors and will receive live feedback on your pitch as well.

Let’s get more great startups funded!

I look forward to seeing you at the event. Grab your ticket here and use the code EYLIST to knock down the price. FYI, that discount code expires on Jan 31.

Regardless, I’d love your help in amplifying this so that we can connect more investors to get more great startups funded.

Hope to see you in person at Camp Hustle!

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My first trip to Vietnam

Happy new year!

I’ve been meaning to post this for a while now and my hope is to write more this year.

Last fall, I took a trip to Vietnam, my first time traveling there. I was really impressed with the people and the country! The energy in Ho Chi Minh was incredible. Construction and buildings are popping up left and right. You can feel the rise of the city and the country as a whole. Being there felt a lot like how I remember feeling when I visited China in 2005. The excitement of fast growth. It’s so hard to believe that this was the same country that the US left in shambles less than 50 years ago. In fact, while the US is suffering from inflation and declining growth, Vietnam’s inflation today is only ~3% and their GDP is expected to grow 6-8% per year in the near term. Remarkable.

We took our Hustle Fund team there because, we have invested in a LOT of startups in Vietnam, almost all of whom we invested in via video conference — even pre-pandemic! In meeting many of our founders for the first time, I was really impressed with the level of passion and hustle. And what so many of them have achieved with their companies in such a short period of time is mindblowing.

Celebrating Eric’s birthday w/ our portfolio founders at CTY Kitchen, which had great food and is owned by one of our founders (check it out in Ho Chi Minh!)

Vietnam reminded me of why we invest in so many companies in emerging markets. My trip reinforced my belief that growth is so much faster in green field markets. Although ⅔ of our startups are still going after the United States market, the myriad of opportunities in emerging markets to build huge companies is so much larger.

A lot of our portfolio companies in Vietnam are on a tear. And, one such company whom we visited was Dat Bike, an electric motor bike company. The founder Son Nguyen, has an amazing story and background. He grew up in a beach town called Da Nang and was able to get scholarships to study computer science in the United States. After graduation, he worked as a software engineer in the US, but he always felt like there was something he could be doing for his home country. He realize that in Vietnam (which has ~100 million people) most people ride motorbikes, but few people ride electric motorbikes. Existing specs for electric motorbikes are too poor (not enough power and not enough distance at the right price). So he decided to start an electric bike company to make Vietnam greener.

Our team visiting Dat Bike and gearing up to ride

But Son didn’t actually know anything about electrical engineering or building a motorbike! So he learned everything he could on YouTube in order to build his first prototype!

Then he also convinced two of his American friends to move from Silicon Valley to Vietnam with him to build this company even though neither had roots in or any connection to Vietnam. He debuted his bike on a Shark Tank-equivalent show in Vietnam from which he was able to find supplier-contacts and future hires for the company. Today, they employ hundreds of people, and they are just getting started. You can see their bikes on the road when you visit Vietnam.

Janel, Jamie, and Chloe gearing up to ride in the streets of Ho Chi Minh

The bike is so smooth and quiet. In part, it’s because they threw all design assumptions out the window and started from first principles in building a new bike for the Vietnamese market from the ground up.

Maybe not the smartest decision to ride an electric motorbike in the rain with flip flops

Founding stories like Son’s — and most of our founders — is why I feel so privileged and lucky to be able to invest in inspiring startups.

Beyond meeting with our portfolio founders and potential investors / co-investors in Vietnam, in true Hustle Fund form – we also got everyone outside hiking during a torrential rain storm to see a totally different perspective of Vietnam.

Part of the Hustle Fund team from a lookout on a mountain completely drenched

I always love traveling with the Hustle Fund team. But, Vietnam was particularly fantastic — the entrepreneurial spirit, the startup community in Ho Chi Minh, the countryside, and the FOOD! I’m excited to see how things have changed in another five years.

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Happy 5th birthday Hustle Fund!

Wow, it’s hard to believe it’s been 5 years since we started Hustle Fund! In the last 5 years, we have: 

  • Raised and deployed ~$130m
  • Brought on 25 team members at Hustle Fund
  • Built a community of nearly ~1000 Angel Squad members
  • Funded ~400 portfolio companies
  • Worked with ~300 LPs
  • Grown to 100k+ followers on my Twitter acct

I’ll let you know how it’s going in about another 5 years! 😀

For all of this, I am so grateful. All that we have achieved has been a community team effort. Hustle Fund is so much more than a VC fund. It has become a movement.

I say this because movements are about values. Movements are about being mission-aligned. When we started Hustle Fund, we didn’t set out to build a VC fund per se. We set out to solve a problem that we personally understood well that we could work on solving over the rest of our careers of 30+ years. The mission that we are on is to democratize wealth via startups by helping startups with capital, knowledge, and networks.

In our first inning of Hustle Fund, we focused just on the capital problem. Specifically, how can we help more fantastic startups who may not have a rich uncle get capital at the pre-revenue stage? Without a warm intro and without needing to be in Silicon Valley. 

This is the hardest stage to raise money, and five years ago, there were only a handful of VCs addressing this stage. Fast forward to today, we have raised 3 funds. The latest one we are announcing today is a $46m fund to continue to address the pre-seed stage.

But perhaps, something I’m even more proud of is the informal influence we’ve had on so many other funds and angels who now invest at pre-seed, especially those who are willing to make a bet on founders they don’t know. Pre-seed funding is far from being solved, but I’m proud of the work we have done — the work we all have done — in making a dent in this problem in just the last 5 years. And, we will all continue to keep working on improving capital at this pre-seed stage.

Giving thanks

I’m particularly thankful to our LPs and founders. It took us 700+ meetings to raise our Fund 1, and I will never forget those early believers. Thank you for saying yes to us. Without you – literally without our founders and LPs – we would not be here. We have been so fortunate to be able to work with a ton of amazing founders around the globe.

When Eric and I started Hustle Fund, we thought that we might just form a small team of people in the Bay Area. That idea went out the window immediately when we realized we really wanted to bring Shiyan onto the team (and she was moving back to Singapore)! From there, we have recruited a phenomenal team of entrepreneurial, sharp, and also kind people. Special thanks to Jason, Thenuka, George, Kera, Tam, Haley, Will, Lidia, Chloe, Hung, Susan, Ha, Brian, Janel, Jamie, Nicole, Kabe, Andy, Todd, EJ, Erica, Mike, Jasmin, Maria, Karuna, Melanie, Amelia, Audrey, Anthony, Kenn, Davyn, Joseph, Wilson, Christine, Cjin and Chels for getting this off the ground. There was very little reason to join this ship when it was just a dream, so thank you for joining.

One of my early lessons in starting a company years ago was that you don’t start a company with a co-founder. You start a company with a co-founder AND his/her entire family. Thank you Eric and Shiyan — I couldn’t have asked for better co-founders in this journey. And, also to our families, too, who have been so patient and supportive of us. Special thanks to B, K, and JJJS who aren’t in the limelight but have been so critical to Hustle Fund becoming reality.

The next inning of Hustle Fund that we started last year was to address capital in other ways as well as to make an impact on spreading startup knowledge and increasing networking opportunities for great founders. While my partners and I have been focused on our fund, last January, Brian Nichols, who is the General Manager for Angel Squad assembled an amazing community of angel investors from all over the world. Many of these wonderful people were completely new to angel investing, bringing new capital and expertise into startup ecosystems. These people come from large tech companies and their own startups but also many other professions. We have doctors, lawyers, professional athletes, a poker player, a professional chef, and many other occupations represented from all over the globe. This diverse group of nearly 1000 angel investors are active, engaged, and want to help startups. They move quickly, are smart, and have conviction. I’m biased, but this is probably the best angel investing community you will find anywhere — all because of the amazing, humble, and kind angel investors who have joined. I’m so proud of this community because of who the people are.

What has surprised me most about Angel Squad is though it’s less than 2 years old, they have deployed way more capital than our Fund 1! So while many people are fixated on trying to raise VC funds or raise money from VC funds, sometimes the better solution to mobilize capital is by empowering angel investors and cultivating new ones. There is so much money in the world — it just needs to be catalyzed. Beyond capital, I am also thankful that many people within Angel Squad have provided our startups with valuable advice in areas like design, engineering, hiring, sales, and business development. I’m floored and thankful that there are such helpful people in the world who are so generous with their time.

Beyond Angel Squad, we’ve also been partnering with other General Managers on our team who have launched initiatives that are also trying to make a big impact on capital, knowledge, and networks in startups in other ways. More to come. The next few years will be exciting.

I think many people think that being a VC is easy. But, truth be told, being an emerging fund manager is akin to starting a company. You have to raise money with nothing to show. And you have to market yourself like crazy. In the last 5 years, in order to get to this point, we’ve burned the midnight oil so many nights. But if effecting change were easy, it wouldn’t be worth doing. So for those of you who have “hustled hard” on a startup or a new fund, I see you. I know it’s a tough road of ups and downs (and honestly, mostly downs). But, if you cut out all the noise of who is becoming a unicorn or who raised what funding and really dig deep as to why you’re doing what you do, I hope you find the courage to keep going and wish you tremendous success.

It has been a privilege and a dream to be able to do this work and work on a mission that means a lot to mean, and I look forward to the next 25 years. Thank you so much, Hustle Fund fam!

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Some reflections on turning 40

Last week, I celebrated my 40th birthday with my family (which is pretty amusing since my birthday was last November).

When I think back about the last few decades, a few stories from my professional life come to mind that I thought I would share here.

1) Serendipity and luck trump everything.

Certainly hard work and skills are important, but luck and being at the right place at the right time is so critical.

I wasn’t born into a family of entrepreneurs or even tech. I got into startups, because of a couple of key events that happened to me. One event that got me into startups happened in 1996 growing up in the SF Bay Area during my freshman year of high school. My best friend Jennifer told me one day that her cousin Tony was building an internet startup. And she asked me if I wanted to help him and their startup over winter break. I didn’t know what a startup was, but I also had nothing major going on during winter break. So, we took the Caltrain up to San Francisco to “help” Tony. When we showed up, the place was honestly a bit of a mess and chaotic. But it was exciting! Tony and his friends were working together on all kinds of projects. They didn’t have to dress up in “grownup-work-clothing”. And they could eat all the pizza they wanted. It was the dream.

I wasn’t any help to their company. But I knew from that day on, *that* was what I wanted to do when I grew up. I didn’t even know how they made money or that there was even money to be made. But, even from that early day, it was inspiring to see a group of friends come together to build something bigger than themselves. A couple years later that company LinkExchange was acquired by Microsoft for a reported ~$200m. Tony — who was Tony Hsieh — would go on to become an active angel investor in many startups and become CEO of Zappos. And while I didn’t know it that day, he would also later have a bigger impact on my life as well as my startup LaunchBit and Hustle Fund, as I’ve written about before here. I’m incredibly grateful for the path he set me on, and that was entirely serendipitous.

2) Failure leads to success.

One of the things I’ve noticed is that most successful people have had *a lot* of failures as well. But people only talk about the successes.

For me, failure and success are oddly connected. When I was nearing the end of college, I thought I wanted to go to business school, and I applied to a few business schools in the fall of my senior year. Throughout this process, I had wanted to visit a couple of business schools I was applying to in Boston, but my money was tight, and I didn’t want to pay for a plane ticket to Boston from California.

Coincidentally, around that time, I saw an ad for a contest, in which the prize was a free trip to Boston from anywhere in the US. I immediately entered the contest on a whim, and amazingly, I won!

The contest was sponsored by the DISCO career forum, which was/is one of the largest job fairs for jobs in Japan. And oddly enough, it was and still is held in Boston every year. In fact, at the job fair, I met tons of people from Japan who flew to Boston just to apply for jobs back home!

I didn’t care about the job fair. I was merely excited to fly to Boston, see my friends, and visit a couple of schools for a couple of days. But, in order to get my reimbursement for my plane ticket, I had to attend the DISCO career forum for 2 days. While there, I met a ton of companies and even interviewed on the spot for various jobs. Although I wasn’t actually looking for a job, by the end of the weekend, I got a job offer!

I soon learned that I didn’t get accepted into any business school, but at this point, I was very excited about the job offer I received and accepted it.

About a year later, I packed my bags and moved to Tokyo. But, a month into it, I was told that I couldn’t stay in that role, because my Japanese was not good enough. Wow, was I getting fired? After just a month into my first job?? That night, I sobbed my eyes out.

To their credit, my former employer was extremely helpful in this situation. They gave me a few choices and told me that I could still stay at the company for about a year if I moved into marketing (so that I wouldn’t have to talk with customers with my poor Japanese 🙂 ). But they didn’t have budget to pay for me much beyond that, so I had to find something else to do.

I decided to re-apply to business school. But this time, I only had time to apply to one school – so I chose to re-apply to MIT which was the school I liked best after visiting. And, fortunately, the entire application was the same except for one question: “What have you done in the last year?” a topic on which I had a lot to say from my experiences in working in Japan. A mere few weeks later, I received an email saying there was a decision ready. I had not even received an opportunity interview this time, so I was pretty certain it was a fast rejection, but it turns out, I had gotten in!

Looking back, failure and success were so well coupled together. I failed to get into business school so I got a job. I failed to keep the job, so I went to business school.

3) Frugality and portfolio construction are keys to wealth. Wealth is freedom. 

I am a huge fan of the FIRE (Financial Independence, Retire Early) movement and was an avid reader of Mr. Money Mustache. I think when most people aspire to become wealthy, they think they need to be super successful with building a hit company or something like that so that they can buy all the stuff they want.

In truth, when you get there, many people realize that the stuff isn’t interesting. Wealth is about the ability to be free. Free from ever having to work at a job or on a project you don’t like again. Free from feeling pressure to work with bad people. Free to work on the things you do actually like or find worthwhile. Free to spend your time however you like. 

And it actually doesn’t take a life-changing event to become wealthy. Even if you never have a hit company, you can still become wealthy — with frugality and strategic investing. 

In my 20s, I quit my job to start a company. My husband was a post-doc (read: paid pretty much nothing). I took odd and end gigs to make ends meet and scrimped like crazy. This was pre-gig-economy, so random jobs I did included being followed around by a researcher from Xerox Parc, categorizing whiskeys, and critiquing MBA resumes for international students. I remember on the rare occasion we would go out to eat, I would get very nervous if we exceeded spending $25 in total. 

In looking back on that, most people – especially in my peer group of tech friends – think about $25 as “Oh, it’s just $25.” I have many friends who believe that saving $6 here and there on SBUX lattes and avocado toast is meaningless. It’s just $6. And as a millennial, I do believe there are systemic issues with our financial system and incentives, I also do believe that investing the equivalent of one latte a day can make you a millionaire.

The right way to think about spending decisions is in its compounded value. You take $6 a day and throw on a 7% annual interest rate in the public stock market or 12% annual rate or higher(!) in the private markets. That $6 daily latte is actually worth over $350k+ in your 40s if you take the money and invest it. Just from *investing* your latte money daily, your average person who invests in standard index funds available to everyone and lives an average lifespan *will become a millionaire*.

That’s pretty remarkable. 

But I think the topic of portfolio construction for investments is incredibly confusing. And frankly speaking, I think most people find the topic boring and honestly scary – you could lose all your money! Loss aversion is probably one of the biggest roadblocks to more people investing – even in index funds.

I, too, have thought for many years that investing was scary. But I read somewhere when I was very young that putting your money in a savings account actually *loses* you money due to inflation (which today stands at 8%+ annually!). And, I have been investing in index funds ever since my first job in high school. In other words, I was motivated to invest by the idea that I was losing money by merely saving it!

Now at 40, and having seen even some of the meager earnings I had in my teens compound, I still believe index funds are a fantastic place to put your money. You can passively compound and grow it reliably, because it’s diversified and rides on the economic growth of the world.

But, the one thing I do regret about my investment choices was not investing earlier in *private markets*. I didn’t know anything about investing in startups until the last few years. In fact, for many years, the thought had never even crossed my mind to become an angel investor. I always thought you needed to be super loaded to do that.

And then when I was in my 30s, one of my entrepreneur-friends, who at the time had not yet had an exit, told me that he had been angel-investing into friends’ startups with $1k each. This surprised me. How could you invest $1k checks into startups? Why would anyone take that kind of money? I also didn’t understand how he was accredited to be able to do this (I have since learned that his own startup was valued above a certain amount, and his net worth on paper made him accredited). The world of startup investing was utterly unfamiliar to me even though I was a founder myself at the time!

And, it was very inaccessible — there was no information online anywhere on how to get into any of this. Friends learned from friends how to angel invest. I had wished there were an accessible way to get into small check startup investing once I had some level of a portfolio with my index fund investing. I wanted to be able to add some additional risk/higher reward to my portfolio in an educated and balanced way.

And, this is why my colleague Brian Nichols started a program called Angel Squad at Hustle Fund – to empower small angel investors to learn, invest alongside us for even as small as $1k checks, and network with each other as they start and further their angel investing endeavors. We now have almost 1000 angel investors in this community and the next cohort beings soon if you want to apply to join Angel Squad.

4) Family balance is challenging. Take all the help you can get. 

Being an entrepreneur is about doing a lot of sprints while running a marathon. I think the only way I’ve made things work is to rely a lot on help and to not attempt or even care about perfection.

How my child perceives me. I would love a gravity-defying computer like that.

Throughout the pandemic, things were tough for just about everyone. I remember this one day that summed up my life: my husband was working at his lab. I had tons of back-to-back meetings as sh*t hit the fan with everything. My older child who didn’t know how to use a computer needed help logging on to an online class. And my younger one wasn’t quite potty trained and had just pooped on the floor and then stepped in it and ran around from room to room. All at the same time. 

After that happened, my parents who live a few miles away from me, so graciously offered to take the kids to live with them for the *next several months*. That was huge. And I’m incredibly grateful. I don’t know how we would’ve pulled through without that help.

I recently listened to Indra Nooyi’s memoir My Life in Full: Work, Family, and Our Future about how her career progressed through Pepsi, and the multi-generational help she received from family resonated with me. As much as we’ve progressed and moved forward with society, there’s still a lot of burdens or asks that fall on the mom. Don’t get me wrong, I think my husband is a phenomenal dad, and many of my friends are amazing dads as well. Many dads do so much for their kids and childcare these days.

But society still puts a lot of little burdens on moms in unsuspecting ways. And, it’s the little things that add up. For example, during the pandemic, some of the moms in my kid’s class sent out emails asking folks to submit a page for the school yearbook. Thinking those were mass emails, I just completely ignored them. Eventually, those emails turned into a personal one sent directly to me.

You can bet my husband never received those emails even though he is on the parent list and certainly didn’t receive the direct personal one. I politely responded that unfortunately I didn’t have the bandwidth to do a class yearbook page for my first grader. (I mean…who does a yearbook page for first grade??) You might think, “well, it’s just someone asking you to do a yearbook page – sheesh. No biggie.” But it’s all the hundreds of little requests that happen everyday that compound and particularly on moms.

My child created this sign for my office

As it turned out, the mother who emailed me ended up taking on the task to do the yearbook page *herself* for my first grader. I never saw the yearbook page, because I didn’t order the school yearbook (see #3 on frugality). (Also, did anything interesting even happen during the remote school year?)  

Family balance continues to be a struggle, and honestly, I think this is an area that is still being pioneered. After years of getting unhelpful advice from people who have never been in a similar situation before, I think I’ve learned to just embrace the situation. You do the best you can. And that’s ok. Say yes to help. It will work out.

5) Adventures spark inspiration. Routine makes you better. There’s a balance.

Because I grew up the SF Bay Area my whole life, after college graduation, I decided I would go far far away. Even though I knew I wanted to start a company someday, I first wanted to see the world (on someone else’s dime of course — see point #3 on frugality).

So, I left the Bay Area in 2004. I interned at CERN in Switzerland. I worked in Japan in the middle of nowhere (in a town called Suwa in the Nagano prefecture) and also in downtown Tokyo (see point #2 on basically getting fired). I interned in India at Infosys. I briefly worked on a project in New Zealand. I did everything I could to not come back to the Bay Area (until I had my first kid). 

Although none of these trips were for the purpose of entrepreneurship or starting a business, oddly enough, I ended up meeting so many people who would end up becoming successful entrepreneurs. For example, in my intern group in India, one person noticed that a lot of food was served on leaves there. He later started a company in the US to make high end disposable plates made out of leaves, and that company is doing really well. 

I often hear that one of the best ways to figure out how to start a company is by working at other startups or by trying lots of different business ideas. That certainly is one path. But, sometimes, I think the most off-the-beaten path ideas — the ones with most opportunity — are where others are not looking. And that means also exploring or being an adventurer in paths that others are not taking. 

That could mean pursuing an unusual career path. Or living somewhere others are not.

I have been investing in global companies for the past several years now, and while I’m no expert in any and all problems, many of the problems that international entrepreneurs describe to me — at least on some level — are familiar because of my time abroad.

At the same time, running around from place to place and going from one new project to another has its limits. Entrepreneurial skills are honed by doing the same boring thing day in and day out. Just like practicing a sport or a musical instrument, it’s the repetitive mundane that makes you get better. And of course your role changes as your company grows — going from individual contributor to manager to CEO of a large company. But, working on the same problem day in and day out is mundane to many people. And to grow something big is work across a decade or more by doing the same mundane thing better and better everyday.

My thinking about entrepreneurship changed after my company LaunchBit was acquired by BuySellAds in 2014. The CEO and co-founder Todd Garland bootstrapped BuySellAds, and they have quietly become a behemoth. They have grown their ad network tremendously, and they answer to no one. Approaching 15 years, they just continue to hone their supply side and demand side, and that’s how you grow — there are no shortcuts to honing your skills year in and year out. 

Most people, including my younger self, don’t have the discipline to do that. But after many years of doing the same thing over and over, eventually you get really good, and a business does well enough to become really exciting. And BuySellAds has been able to push into new initiatives while keeping their cash cow afloat. They’ve gone into other areas beyond ads, building out a portfolio of other businesses, working with great people. This is the kind of stuff you can do when you own your own destiny and don’t need to answer to investors. And it’s the kind of thing you can do when you’ve got a flywheel going. I’m convinced Todd will be one of the first bootstrapped billionaires — AND most people probably won’t ever know it. 

I think too many entrepreneurs, including my younger myself, are enamored with getting acquired, because they don’t have the patience and the fortitude to do the same thing day in and day out. (And as a VC, of course, I like exits too). But, as trite as this may sound — my lesson from BuySellAds is that the journey is the reward. Getting better at honing your skills everyday is the goal. Being able to do cool stuff with cool people, work on interesting problems, and make money *is* the dream. 

I probably have about 30 — if I’m lucky 40 — good working years left. And, Hustle Fund is my last job. Our mission at Hustle Fund is to democratize wealth via startups by increasing capital, knowledge, and networks in startup ecosystems everywhere. It’s a company I won’t ever sell, because it’s what I want to work on forever. And though not everyday is easy in building Hustle Fund, over the years, I’ve learned to thoroughly enjoy the entrepreneurial journey of embracing all the ups and downs. It’s a joy and a privilege to be able to work on this problem with an amazing team. 

These are just a handful of learnings I’ve had over the last couple of decades. I look forward to learning so much more between now and age 50. 

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The New Era of Media Companies

For many years now, VCs have absolutely “hated” investing in media companies. If you were starting a blog or a newsletter, it would be very challenging to raise money from traditional VCs unless you had proven out a ton of traction (with a fast growth trajectory).

But I think it’s important to understand why, because we’re starting to see an inflection point that will shift the entire industry.

Side note: my view on this topic is fairly strong and comes from working with a lot of newsletter companies over the years in running my startup, which was an email ad network.

What’s wrong with media companies?

VCs typically have not liked these criteria about media companies:

Low exit multiples on ad revenue (often 1-2x on annual revenue)
Hard to acquire users quickly & scalably (CAC is too high at scale)
In a recession, companies reduce ad spend – especially brand advertising

All of these things have been traditionally true — especially if you’re looking to sell your business in 5 years.

But what if you thought more long-term? Not a 5 year horizon but 10-20 years or even 20-30 years out? How would you think about your business differently? What would your strategy be?

Regardless of your business, you might do something like:

Gather an audience – maybe start a newsletter to get loyal fans
Launch a product to that audience
Launch many products to that audience to upsell them etc..

And maybe you sell ads or event tickets in the beginning to provide cash flow and keep your company afloat, but eventually you start selling other products and services to a loyal group of people… Maybe you even start a fund that gets layered on top of that.

people having a concert
Photo by Wendy Wei on Pexels.com

Oddly enough, that playbook looks like starting a media company!! This is what is happening now — you see creators and influencers starting media companies with long-term goals in mind.

People like Mario Gabriele with The Generalist and Packy Mccormick with Not Boring (full disclosure: am a small investor in his fund) are layering on lots of programs and monetization mechanisms that all work in tandem. E.g. content about companies can also be investments and vice versa. When you align community engagement with monetization, this allows for incredible scale. I would bet that Alexis Grant’s new company They Got Acquired could very easily follow the same playbook with a similar audience.

Why now?

Now you may be saying, “Well media companies have always tried to mesh together different monetization methods to try to increase value. Why is now any different?” For example, Thrillist acquired e-commerce company JackThreads to try to increase monetization.

I think now there is just so much more infrastructure available to media companies to enable them to quickly plug into new monetization methods and tools. For example, Angellist’s rolling fund allows creators such as Packy to quickly spin up a fund without doing the time-consuming backops work and fundraising required for a traditional fund. This didn’t exist even 2 years ago.

Or other wildcards — like crypto. Mario created NFTs — without third party tools to do that quickly and without hassle would make this near-impossible for a media company with limited resources to do at scale. You can envision community tokens coming in a big way to incentivize audience members to get more engaged and contribute.

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In other words, there are now many ways to monetize quickly that have much lower COGs than creating new physical products to sell.

I think there has never been a better time to start building a media company and we will see many billion dollar media companies coming out of this era — perhaps even run by just a handful of people. Long gone are the days of just ads and events — the bigger monetization mechanisms are just getting started.

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The Rise of the Decentralized Startup

I think we’re seeing a very big shift right now in how startups are created and operate. But before we dig into that, I want to spend some time talking about work.

For centuries, work has been incredibly inefficient. In the “barter era”, one person would do work in exchange for someone else’s work. E.g. I’ll make you a silver fork in exchange for salt and spices. There were many things challenging about this type of economy. 1) There was no common currency to transact and understand value, and 2) on a macro level, it was hard to know whether your good or service was really needed and whether it was going up or down in value. E.g. Is there a surplus of spices? Should I be spending time in spices or something else this year?

Money came along and solved the first part of that problem. Tribes and groups of people adopted currencies that are the predecessors to modern day money. You could carry around some form of fiat and use it to buy things. You could sell your goods and services for fiat. This helped standardize commerce.

Eventually, the Medici family in Europe established ledger-based banking so that you could take your goods and services to one location in Europe and it would be good for a credit that could be used at another Medici bank. Coincidentally, around the same era, the Yap money system in Polynesia had similarities where money was actually represented by large stones, and there was a record of who paid with which stones. The large stones were too heavy to be moved, so the pointers of who owned those stones did were written down on a similar ledger-based system.

Money solved fungibility issues. But it never really solved the latter problem of understanding where your good or service fit into the broader landscape of what is actually needed in society and how it was valued.

And for centuries after establishing complex monetary and lending systems, this problem still came to a head often. In 2000, during the dot com bust, it became clear that tons of people built out companies and products that no one wanted. Overnight, many of these companies went to zero and many people in the internet industry were laid off. Time and again, we’ve seen companies hire up the wazoo only to do massive layoffs of employees who gave their whole lives to a given company.

In fact, as an individual worker, you often don’t know if a layoff is coming. You often don’t know if things are going well / not going well within your own company. Management typically doesn’t tell you. As an individual, you also don’t know if you should be taking this job or this other job, because beyond the salary, you don’t really know what it’s like to work at a given company until you start working there. And traditionally, you’ve only really been able to work at one company at a given time.

This brings us to today. As of writing this in 2021, mobilizing money isn’t the number 1 issue for companies. It’s attracting and retaining talent. Now you may be thinking, “Well that’s nice and all but I’m still having trouble raising money for my startup.” I have 300+ portfolio companies at Hustle Fund – all with varying degrees of fundraising troubles. But all of them — even once they have the money — are in a war for talent. Even the most well-funded companies who are no longer startups are having trouble finding and retaining talent.

Folks, the current way that startups are being created is starting to break. Under the current way of building startups, you have to figure out what potential users want and will pay for by doing customer development, pitch investors who are not your customers / don’t get it / are traditionally slow, fight in this war for talent against Google, and lastly, as a founder, get burnt out and combat personal mental health issues in the process. Does that sound like the best way to deploy resources for our society?

But what if we flipped startup-creation on its head? What if you start with a mission and values — not founders? For example, at my company Hustle Fund, our mission is to democratize wealth through startups. And to that end, we are furthering capital, networks, and knowledge in startup ecosystems. Even though I’m a founder of the company, it doesn’t matter if I personally work at Hustle Fund or not. It’s the mission that’s important and the people who want to work on that mission. And if no one cares about the mission, then the organization shouldn’t exist regardless of what I, as a founder, think about it.

And if you start companies with missions instead of with founders, then you start to attract people who have lived and breathed that mission before. Those people really get it. And those people are also would-be customers or users. And maybe these same people are not only working on this problem together in a cooperative way but are also investors in the problem — both through work and capital.

When you start with organizations that are centered on missions, then you start to chip away at existing startup problems. Such as understanding whether you’re building something people want – your colleagues are also your customers. They are also your investors and are more value-add through their feedback and network. You also solve for mental health issues. Founders often feel like they *have* to stay at their own company because there is often no one else to lead in the early days.

For all of these reasons, this is why I think we’ll see the rise in the decentralized startup. In fact, we already see many Decentralized Autonomous Organizations (DAOs) in play — this is not a new concept and DAOs are precisely what I described above.

Magdalena Kala tweeted a few articles on DAOs that I think are really good and are all worth reading if you’re not that familiar with DAOs:

DAOs, of course, are not immune to the fight-for-talent problem. But, unlike at a traditional company, often you’ll see various people working on goals or milestones for DAOs in a part-time way. Traditional companies often require their workers to sell their soul to their organizations. But, DAOs mostly just care about getting stuff done. And the transparency around what is happening in the organization gives everyone a clear picture of where a project stands, what is happening, and who is doing what (and getting paid what). In a traditional company, most of this is opaque. You can see if a DAO is going well, but in contrast, you really don’t have a clue with a traditional company.

A DAO that I think is really interesting is the Friends with Benefits DAO (h/t to my business partner Shiyan Koh for showing me this). It’s basically a membership club of inclusive thinkers and creators. They list their values upfront, and people who resonate with the mission can pay (invest) to join the group. This in turn becomes a community that funds the mission, and over time, as they build and monetize, the community who is also their customer base, will benefit. This is the ultimate — having your investors and customers wrapped up as one.

I think we will see many more DAOs formed in the coming years, and reiterating what I mentioned in 2018, I do think that some form of crypto will disrupt traditional VCs over time. But I also think decentralized startups will start to appear even without “typical crypto components”. There will be startups formed around missions that don’t start with founders nor involve crypto but have radical transparency. There may also be decentralized startups formed without Discord channels (personally, I’m unclear how anyone, myself included, can do deep work anymore with so many Discord channels) and just rely on wikis / Notion pages / Mirror / etc to document what work is being done without minute-by-minute chatter. I think we will see startups formed with people who work at multiple places simultaneously or are all contractors – such as how Gumroad is set up. And in that scenario, the need to raise so much money for the company actually becomes *less important*, because you don’t always need funds to cover someone full time and compete with much crazier full-time offers from FAANG companies. This mitigates the fight for talent issue.

At my own company Hustle Fund, some of these concepts are things we’ve thought about and have experimented with a bit. We’re not quite a DAO, but we are a bit DAO-like. We have a number of talented people who are part-time because they believe in our mission, and we are excited to be able to work with them in any capacity. Our GMs also have a ton of autonomy with their business lines that align with our mission — I often don’t have the foggiest clue what is happening with the day-to-day on their businesses, and that’s ok. In fact, that’s great. So at Hustle Fund, which is completely distributed, we have leaders of different facets of our mission who reap strong upside when their particular projects go well. In many ways, a structure like this requires working solely with entrepreneurial people – people who enjoy running with things without centralized instruction or authority.

Ultimately, the most ideal working environment for an individual is to be able to work on a mission (or many missions) you love with people you enjoy. You’re happy with your compensation and feel like you have strong autonomy to be able to have an impact. You get crystal clear transparency get be able to make good decisions for both the organization you work for as well as for yourself personally. This is what I think most people want for themselves and their families, and why I think we’ll see the rise in decentralized startups in the years to come.

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