Transcript

00:00:00 - Speaker 1: I view my job here is to essentially aggregate this group of entrepreneurs that a lot of the world is overlooking, aggregate them in some way, listen to them, and then build what they want.

00:00:19 - Speaker 2: Hello and welcome to Meta Muse. Muse is a tool for thought on iPad, but this podcast isn’t about Muse the product. It’s about Muse the company and the small team behind it. I’m Adam Wiggins here with my colleague Mark McGranaghan. Hey Adam, and our guest Tyler Trius of the Calm Fund. Hey guys. And one thing we talk about on this podcast with surprising frequency is cities and in particular that remote work and all these lovely cloud tools make it possible for knowledge workers such as ourselves to choose where we want to live based on quality of life rather than where your employer happens to be. And Tyler, I know you live in Mexico City. Tell me about that decision.

00:01:01 - Speaker 1: Yeah, I mean, Mexico City is great. The decision is not that interesting.

I’ve been working remotely and building remote companies for probably the last 10 years. I spent a lot of time as a digital nomad and then kind of like a slow mad, sort of, you know, slowly traveling to different places.

But Mexico City, we’re here because my wife works for the State Department and she’s got a job at the embassy. So since I’ve been running what we used to call Earnest Capital, and now the call company fund. I’ve been sort of just tagging along with my wife. We were in Brazil and Rio de Janeiro. We launched it. We’re there for about 2 years and now we’re here in Mexico City. So the decision wasn’t really mine to come here, but I will say I’m very, very pleased to be here. It’s an awesome city. It’s really becoming like the hub of pretty much everything to do with startups up and down Latin America, amazing food, awesome weather, pretty unbeatable quality of life. I’m not gonna lie. So folks should definitely come down and visit us. We throw a conference here and hoping to see a bunch more entrepreneurs down here. So, yeah, it’s good.

00:02:04 - Speaker 2: Interesting, I guess I just assumed because I’ve just visited Mexico City once, we did an I can switch summit there, but I found it such a lovely place.

I could very much imagine a person who was working remotely and has any choice they want might well choose it. But you actually highlight another good benefit of remote work, which is then you can go where your partner needs to go for their employment. So I know that it can be a source of great contention in relationships, long term relationships, when it turns out that one person’s school or work needs take them one place and another person needs to go to the other place and someone has to decide who’s gonna make the sacrifice.

So here you’re not faced with that decision.

00:02:41 - Speaker 1: Yeah, we see that all the time. Obviously now knowing a bunch of people living the foreign service life and it is a big source of tension. Yeah, I mean it’s phenomenal to have sort of built this company in a way that’s fully distributed from day one. So it’s like I tell people when we moved from Brazil to Mexico, if I didn’t tell my team, they wouldn’t have noticed basically, which is, you know, super helpful. The one thing I think remote work hasn’t quite solved it is time zones.

00:03:09 - Speaker 2: That’s the last frontier, you know, that’s definitely a challenge for us between Europe and West Coast US although again, you have kind of a nice benefit of being fairly central, at least among those western places.

00:03:19 - Speaker 1: Yeah, Mexico City is hard to beat. I mean, I think if you’re able to work remotely, you should seriously come and check it out and give it a shot. It’s really a world class city, just as easy to get anywhere, like if you’re sort of US centric, it’s as easy to get to New York or LA as it is from anywhere else in the country inside the US. Yeah, super good amenities, everything just works hard to beat.

00:03:41 - Speaker 2: Nice. Well, before this turns into a veiled advertisement from the Mexico City Tourism Board, we can transition to hearing a bit about your background and especially what is the alm fund.

00:03:53 - Speaker 1: Yeah, so the Cound some folks may have heard of us as Earnest Capital, who recently rebranded this year or so, same exact company, same people, same idea.

Really, it’s one of those scratch your own itch companies, essentially my kind of personal history involved.

Experiencing kind of both sides of the venture capital and bootstrapped world kind of communities, at one point in my life, you know, had a business that I was working on. It was sort of a clean tech software business in a time when VCs were really, really not funding clean tech businesses. It’s like a little over a decade ago. And so I kind of deeply experienced the possibility of having like a really good business idea that just isn’t a fit for the comparatively small universe, you know, hundreds of people that do early stage venture financing and realizing that there wasn’t a sort of 1 to 1 overlap there that you could have a good idea that probably should use some early stage capital. But just as for one reason or another, not a fit for venture and that if you’re building a software company, there’s really no plan B, right? You basically have to either fund it with rich friends, credit cards, or VCs and kind of really explore that, hey, there’s a big gap in the market here in terms of early stage support for a lot of entrepreneurs. Then I went the other direction and said, OK, I’m not gonna ask anyone’s permission to get started on my next business and completely bootstrapped it, which worked out really well. I was just a straightforward kind of niche B2B sass business, ran it for about 5 years, built a remote team and sold it to a private equity shop, which was a great outcome, super fun, but when I was launching that, I had to launch it with credit card debt. It worked out in the end, you know, that was a positive experience, but those first two years with mounting amounts of debt on my personal credit cards was Really not the ideal way to launch a business, both from this capital perspective and also just a complete lack of any other kind of support. And so those two things kind of combined when I sold the company, I said, look, you know, I would like to sort of build the fund or the partner that I would have liked to have worked with on frankly, both of these businesses. So that’s what we do. We’re. Early stage funding, community and mentorship for entrepreneurs building what we call calm companies. And I think there’s a lot of ambiguity over exactly what that means and things like that. But if you think of yourself as like a bootstrapper or an indie hacker or those kinds of things, you know, we’re trying to build the kind of partner for those kinds of entrepreneurs either who have like Different ways of wanting to run their company that aren’t aligned with the traditional venture model or that are building products that just wouldn’t be a fit, right in the sense of, you know, they have perfectly good market and they can build a company that does millions, tens of millions, maybe $100 million in revenue, but it’s really never going to be like a $10 billion dollar company, you know, we’re trying to build the partner from the earliest stages for that whole swath of companies basically.

00:06:54 - Speaker 3: Yeah, and Tyler, I’ve been watching your journey with Ernest and then calm for some time now. I forget when exactly I found you online, but you’ve been doing this thing where you’re building in public, and I saw your work quite early, and I was really intrigued by it. It did feel like a closer fit for what we’re trying to do at Muse and what I’m trying to do with my career and some of the other options out there, and I’m encouraged to see that it’s doing quite well.

00:07:16 - Speaker 1: Yeah, thanks.

00:07:17 - Speaker 2: Yeah, and I’ve also been, I guess, following slash part of the earnest community for a little while, but part of why I thought this rebrand would be a great time to invite you on the podcast is that calm companies, I think, match up a lot with something we talk about in the type of business we’re trying to build with Muse.

We talked about this. In our Small giants episode, I’ll like that in the show notes, but is a little bit of a reaction, I guess, to, again, startups and venture capital, which Mark and I have been both down that road, and we think there’s huge value to a lot of that, most notably not bootstrapping, yeah, getting investors who help you share the risk.

And then Also ties in well with what we talk about on this podcast, also because in general funding models for different kinds of things that could or should exist in the world, things that could improve humanity, make us all more prosperous collectively, there’s kind of a narrow number of ways we get stuff funded. There’s government funding, there’s nonprofits, there’s bootstrapping, there’s venture capital is kind of a relatively recent, but obviously now increasingly high profile way to do it. But if you draw the map of all the things that we might want to build and what the right funding is for them, you find that there’s really a lot of gaps in that map, it feels like, and part of what I liked about what I discovered when you were doing that is it fills in one of those gaps potentially.

00:08:40 - Speaker 1: Yeah, I mean, I think there’s gaps all over the place. It feels like we’re not anywhere near having sort of comprehensive coverage, especially at the early stage. I think once you have a mature anything, usually your options do start to multiply, but We’ve sort of found ourselves in this strange moment where I think the internet and software and stuff has just started to dominate everything. I think that the software is eating the world, you know, thesis is largely correct and it’s playing out before us.

And what’s happened is just through kind of process of elimination, if you go back like maybe 15 to 20. years, venture capital, which traditionally was this thing designed to fund like really high risk, high capital intensive R&D intensive ventures in building CPUs and aerospace and stuff like that, was also just the only people who would take bets on software companies when you had to spend $10 million to rack servers before you could even launch your website. And so there’s become this sort of 1 to 1 convergence with this like very narrowly defined asset class and all of this exploding universe of opportunities from everything from indie game developers to online communities and all that sort of stuff. It’s basically like, oh, well, if you’re going to fund them, you have to use this really narrowly defined form of funding, which is venture capital, which has all these like. Constraints and expectations from the people who invest in venture capital funds and all that sort of stuff. And we’ve just sort of backed our way into this world where everybody thinks that they need to raise venture capital or nothing, and there’s sort of no other option and I don’t think we’re going to be the only addition to this space. I think there needs to be dozens of different permutations of ways to solve this because we’re essentially refilling the entire economy. With software and software enabled new variations, and the main driver of this is that most of the world of funding businesses is based around credit models, right, where you’re underwriting against assets and things like that. And all of this stuff has this one thing in common, which is there’s no tangible assets, right? We’re all just a bunch of people with laptops, essentially remote working with no offices and no equipment and all that sort of stuff and so. There needs to be this really broad-based rethink of, OK, how do we support these kinds of companies, organizations, nonprofits, co-ops, etc. from the early stage in a way that can leverage the benefits of capitalism, right? You can access large pools of capital and convince people to sort of continue giving you that money. So, yeah, I think it’s still very, very early days and there’s a lot of work to do for sure.

00:11:24 - Speaker 2: So our topic today is calm companies, and part of why I thought the earnest to calm rebrand was a perfect chance to talk with you about this and connect it to small giants and how we think about news and others that might like to build companies in this way, is there’s the mechanical. of how your fund works, and what kind of companies you invest in, and at what stage. We talk about those potentially, but I’m more interested maybe in the philosophical elements. Even the name gives you a sense right off the bat, which implies it’s a good brand. I’ll also like our episode on brand. At this point we’ve got enough back catalog, I guess, we’ve sort of always have something to reference. But yeah, can you define for me separately from what you invest in, what is a calm company just philosophically speaking?

00:12:10 - Speaker 1: It’s actually like a really tough question, in part I think because it’s kind of a call back to just historical normalcy or historical equilibrium of how people build businesses. Like I was at kind of a family reunion thing, bunch of family members, mostly from my wife’s side where I either hadn’t met them or hadn’t had the opportunity to like explain what do you do. So I was explaining what we do, and when you explain it to someone who’s outside of tech, it just sounds incredibly boring and straightforward.

They’re like, oh, OK, you invest in these entrepreneurs and They build businesses and they become profitable and they give you some of those profits, or they sell their company and you get a piece of that and then you do it again. It’s like, well, yeah, but it’s actually kind of weird in this day and age, and it kind of harkens back to the idea that like we’ve actually ended up in this weird spot where the kind of default assumption in tech is that you’re going to build this ultra high growth sort of thing that’s gonna raise a ton of capital and move as quickly as you can and then either IPO or kind of flame out trying. So cal companies are kind of a way to position ourselves first as not that.

So what that means is basically growing more sustainably, raising capitals sort of a byproduct, not the actual goal, you’re really optimizing for the long term in terms of team retention, in terms of making sure that folks can work on a sustainable schedule and continue to have high quality output. For decades, not just years or quarters, all that sort of stuff. And the reason why we’ve sort of settled on calm is to sort of affirmatively stand for something, rather than kind of just only positioning ourselves as not this, not that, not that other thing, right? Because that was never the right way to think about it. And so as we kind of Aggregated more and more entrepreneurs that we’re all just kind of picking up the same vibe, right? Everything from folks who are investors and mentors to the portfolio companies that we’ve invested in to the many other folks that are all kind of picking up the same wavelength that for various reasons we haven’t been able to invest in, they’re too far along, too early or whatever. And we sort of said, well, OK, what’s the affirmative version of this that says like, this is actually what we stand for and calm was far and away the winner of what resonated with folks there. So it’s basically about being patient and long-term focused and sustainable and operating and Way where you can be what I call long term ambitious, basically. It’s not like the lifestyle business of kickback and passive income and then sit on the beach in Thailand. It’s about, we want to do something important, we want to do it in a way that allows us to stay in the game for the long run. So, yeah, that’s a calm company. I’m still working on the really pithy answer, but that’s the explanation.

00:15:02 - Speaker 3: I think that makes sense.

To me, these companies also have this element of more degrees of freedom, and Tyler, I’m curious if this resonates with you.

I think it was you who originally pointed out that when you enter onto the VC track, you’re basically going on this very narrow path that has 5 or 6 steps in the last 10 years, and you basically have to take each of those steps, which by the way, is going to be with a different actor or firm potentially, and they’re all different shapes.

And so you really crunch down your degrees of freedom, whereas with a com company I see because you’re profitable and thinking in the long term in other ways, you have the option to do stuff kind of your own way on your own terms in your own time.

So if you want to go all remote, you can do that. If you want to stop growing for a year, you can do that. If you want to, I don’t know, pay out dividends or something, you can do that, but you just have more degrees of freedom and flexibility, and to me that’s an important aspect to these companies.

00:15:54 - Speaker 1: Yeah, I wrote a blog post a while ago, I think it was called like the Founder’s path of maximum Optionality, which essentially just talks about how you can sort of move through some of these phases of reducing uncertainty, de-risking, running experiments, learning about the market, learning about your customers, learning about what’s technologically possible, that sort of thing, without kind of fully opting into the one-way ratchet that can be really getting on the venture roller coaster and I think More and more opportunities right now merit that, right? In the sense of there’s a lot of talk around like pivots and things like that, but I just think that there’s a lot of stuff right now where, as we’re starting to see less just true green field opportunities in the world of software and software enabled stuff where it’s like, OK. Nobody is doing anything remotely like this, right? There’s various things that are adjacent or solving the problem in a different way, but we still see a big opportunity here. You kind of need to keep that optionality open to sort of figure out, OK, what is the scope of the opportunity here, how are we going to fill this, how we’re going to build the company that serves this opportunity. And building stuff that has that optionality baked in, I think is probably the right strategy for most entrepreneurs is to really kind of keep your options open.

00:17:17 - Speaker 2: And there’s two parts of that, both of which connect really well to the Muse story.

One is just niche software, so part of the venture box is you need to be able to get to a certain size, but not everything that could or should exist in the world necessarily can get to that size, and we don’t know how big the opportunity is for Muse, but we do know or we expect it to be a niche thing. And we want that. We don’t want to have to switch gears into thinking, how do we make this more mainstream, because we think that would cause us to lose a lot of the soul in what we set out to do.

And then the other part of it is, call it the experience for the entrepreneur, which is if you are a person that is a tech person, particularly once you have a solid CV as Mark and I and a lot of our colleagues here do, we have a lot of options, and that’s really lovely, that’s a wonderful thing, it’s a wonderful privilege. Then you think, OK, how do I wanna use that and what kind of lifestyle do I want to live, what kind of products do I want to make, what kind of team do I want to be on. And so in thinking through that, we realized, yeah, that intense one-way ratchet adventure is not quite the right fit, at least for what I want out of my life right now. But then to kind of position against some other things as well, you mentioned lifestyle businesses, you mentioned bootstrapping, you mentioned indie hackers.

Something we see a lot of in the iOS haps world is, yeah, I would call it in the IOS. Developers where they make a single app or maybe they have a small portfolio of apps, but they’re sort of solo developers or maybe two, something like that. I think of someone like the maker of Agenda, who we had on the podcast a little while back, and that works really well, but you really have to start from nothing. You often are funding on credit cards, or maybe you have a little money in the bank from past success or maybe you have a family member that’s lending you some money. It seems really silly to have to scrape into doing it.

And of course, not even everyone can do that when there’s so much investment money out there, but all the investment money is flowing into this one very kind of narrow box.

And so you end up with, I think the two sides of the spectrum is ambitious to the point of absurdity sometimes, huge amount of money, narrow constraints, you’re really locking yourself into a certain kind of lifestyle, getting on that roller coaster, adrenaline fueled, whatever. And then the other side is slow and sleepy, small, one person, two people, you just can’t be very ambitious, at least not on the time scale of some decades, and it just feels weird that there isn’t either a middle choice or just other choices. Yeah.

00:19:47 - Speaker 1: And it’s not just that there’s a middle choice and there’s a distribution of, you know, 13, 3, 1/3 between those options. It’s like the middle choice is 99% of every entrepreneur and every opportunity out there.

I think what you see is two different ways that people sort of arrive at wanting to build a calm company and both are sort of valid.

Often it’s a mix of the two, but it’s kind of a blend of what you were just talking about, which is One is just thinking through the lifestyle that they want to live as founders, the kind of team that they want to build. They want to be able to bring like really top talent who maybe now they have kids and a family and they’re still equally as talented or more so because they’re more experienced than they were when they were willing to like hard charge into a venture back thing in their twenties. But now if you want that person, you got to bring them into a different environment. So there’s that one element of just kind of like, I don’t want to create a company and a life around that kind of approach. And the second thing is just like matching to the opportunity, right? We’re in a moment now where there are just so many opportunities like you talked about that are just not perfectly reasonable, maybe sometimes incredibly sized businesses, especially if you just don’t raise too much money to begin with. So you still own the majority of the company, but they’re not going to reach the kind of billion, 10 billion kind of scale that venture capital kind of narrowly needs. So it’s a bit silly. And one thing I see a lot, there’s like two failure modes that you avoid. One is that I think burnout kills a ton of companies, right? And so that’s where the lifestyle aspects comes into, of like, hey, we’re actually being long term ambitious here. We’re going to try and bring this incredible team together that we know can go the distance, rather than burning out, which I think kills a lot of really good companies. And the second one is trying to continuously expand the idea to the point that it sort of collapses on itself. And I see this all the time from really early stage founders who have clearly been on the sort of pitch train where they’ve been speaking to 50 or 100 VCs recently. And then we started with this idea, and the idea they describe is like great. It’s like the software for this particular industry sucks. There’s still hundreds of thousands of these businesses and we could charge them $400 a month each. We could build this incredible $90 million a year business that we own most of. We started with that idea. But now what we’re going to do is build a platform for like all the adjacent industries that are related. And of course, we’re not going to sell the software because that would limit how fast we grow, you know, it’s like, OK, wow, you’ve just expanded into the realm of, now you’re competing with Amazon and you have no customers yet. It’s like, just go with the good idea. You have this background in this industry, you can build great software for them. You know, they want to pay for it. Just do. that idea. And I think that kills a ton of companies now where you actually have a really good insight into a market need and there is the opportunity there. And nowadays, you have this thing I call the peace dividend of the Sass Wars, which is it’s so much cheaper, easier, faster to start a software company than it was even 10 years ago, that you can bring together a small team with relatively small amounts of capital, like hundreds of thousands, not 10s of millions, and you can launch a product for This market and it can be the best product they’ve ever seen. You can build an incredible company and you don’t have to just like continuously expand the scope to where, you know, you’re explaining how you’re basically going to take over the world. You can just build a great company. And I think that’s another appeal of com companies is you can sometimes just do the straightforward thing. You don’t have to be the all in one fintech omni platform for a particular industry. You can just build good products and sell them to customers. Can still do that these days.

00:23:37 - Speaker 2: Yeah, which again comes back to why explaining it to your family members, where you say, well, we invest in businesses that make good products, sell them to customers, hopefully at a profit.

It’s good business, but the software world has these unusual dynamics because of its history, and so it’s in some ways, getting back to the basics of business fundamentals and how capitalism could and should work, but within the new framing of this software and internet world we live in.

You mentioned briefly there one thing that was, I don’t know how much it was, probably was reading some of your earlier writings and be exposed to folks in your community, but also it was just something I think was already in my mind, which as I had experienced that don’t charge money too early, you’ll get locked into the wrong revenue, or you’ll actually hurt your fundraiser.

Valuations because once there’s an actual number, instead of the investor being able to sort of imagine how much money you’re going to make, they can look at your profit and loss statement and the reality is all companies, no matter how amazing they seem at the start or how much hype they build, the numbers always start small, or I shouldn’t say always, they very frequently start small and they just take time.

It takes years to build your revenue, and I’ve been part of startups that do kind of delay charging money and I think there is a discipline of the market, or perhaps it’s just that the product validation you get when someone is willing to pay versus you’re giving them free stuff, you know, here you go, here’s a piece of software that costs millions to develop and we’ve poured our hearts and souls into it and it’s got design and brand and engineering and all these other things, and it’s free.

Yeah, you say you like it and yeah, you’re using it, but how do you really know for sure the value of that in someone’s life.

We went through this a little bit at Hiroki where we were giving away a lot of free stuff effectively through the way the premium product was set up because we didn’t get the pricing right early on or perhaps. Ever, and what that meant is it was hard to separate people who were getting a huge amount of value over other competing things versus people that just were getting something cheap or free, and they liked that, and that hides the signal of what the value of what you’re creating in the world is.

And so that idea of charge as early as you can before you’re really comfortable with it, is something we brought into Muse, and I think we’ve talked about this in past episodes, but basically, when I started pushing for this, when we were 9 months out of the research lab or something like that, at that point we had a pretty solid product in some ways, but when I said we should start charging money for this, Folks on the team, kind of like, wow, I don’t know, you know, I’m used to working on these products for years and you polish, polish, polish, and need to have every feature in the world. Partially, this is a sense of craftspersonship, but frankly, it was kind of a shocking idea if you do come from the tech and software world, but I’m glad we did that because it changed our relationship with our now customers as soon as we did that.

You know, if you screw up and there’s a bug and you mess up someone’s data, When it’s free, yeah, people are more forgiving in a certain way, but when they’re paying, they get really angry, and that’s as it should be, I think. So it creates this filter for people that really find value in what you’re doing and force you to sort of get real about the cold hard numbers.

00:26:54 - Speaker 1: Yeah, so it’s interesting, in part, I feel like the building blocks of our overall worldview are just kind of The non galaxy brain take on all of these things, right? What if we just ask the dumb questions and have simple answers to them, essentially it’s kind of the basic components of this, which is, yeah, like what should we do with these products? We should charge money for them. Yeah, that’s probably it, you know, but I’m curious, how do you think about that now in retrospect? Because I think we’re right to be kind of asking the dumb questions and sometimes proposing straightforward answer, you know, what should evaluations be? Well, they should matter. We should think about like, will we ever make money on this, you know, that sort of thing.

But I’m not sure we’re always right. I do think it’s worth actually comparing them rather than what you often see as folks just sort of dogmatically assuming like, wow, no, we don’t charge for our products, sort of thing. Where have you landed right now with Muse in terms of What would be different if you were polishing and polishing polishing for several years, potentially in a positive way, like, what’s the case for not charging right now?

00:27:58 - Speaker 2: Yeah, if I’m to play devil’s advocate to my own position, maybe play debate team, right? Take the position you don’t necessarily agree with.

Charging money brings you into this realm of commerce and transactions. People expect certain things that really brings it down to earth.

But maybe in a way, particularly when you’re doing, and for music I make this argument, it’s a really new kind of product.

A lot of people aren’t even really heavy iPad users, and even for people that are, we actually use the iPad and super weird.

In unusual ways, it’s a really big mental shift to even understand the vision of what we’re doing and then potentially fit that into your workflow.

And so the more you can keep that in the realm of mystery and excitement and less in the realm of just base commerce, I think we could potentially have more time to build excitement, build a community.

And then of course make a thing that is when it’s more polished and then if it comes out more to a mainstream audience published on the App Store or whatever, it’s further along, and so you’re more able to understand the ways it’s weird and see why the weird things are what make it good and special, as opposed to just this is weird and seems bad. That would probably be my best argument for something like that.

00:29:12 - Speaker 1: Yeah, it makes sense. I mean, I think it’s a no brainer to charge for stuff when the pain point is just very obvious, right? Basically, if your target customers not using software to solve this problem, or they’re using really, really terrible outdated software and things like that, that’s where it’s just smashed. Button right away, of course, you should charge for this, no brainer.

I do think it starts to get into an interesting gray area where you guys are, right, where it’s like, OK, you’re kind of trying to get into people’s habits with things, right? And maybe change their habits, like, even if it’s just they have a go to thing that they pick up.

To do that kind of process of brain dumping, mind mapping, strategizing, whatever it is, whichever one of those hooks, if there’s bugs, right? Or if there’s one feature that’s kind of lacking that actually would make that hook work, you can make the case maybe that you only get one or two tries at that depending on how intense the pain point is.

So I feel like you guys are actually really close in the middle and I think probably makes sense to charge to get that feedback from power users to make sure you’re actually solving something for them. And I feel like you have put together like the team you need to make sure that it’s not shipped completely terribly.

I mean, one thing you’ll see in our world, right, is we talked about like we do a lot of investing in vertically focused B2BA, right? So for industries you’ve never even heard of where like they’re using mostly Excel or something like that, literally emailing Excel files back and forth to each other, we’re like, oh we could build some software for that. You can ship something like that with one developer that takes 3 weeks, and it’s gonna be such a massive improvement for their lives that you should charge for it right away. You can pre-sell that thing with a demo. So it’s interesting to sort of identify what exact kind of opportunity is a match for some of these strategies. And the good part is, at least we’re actually thinking them through at this point rather than kind of picking like one playbook and immediately jumping on it.

00:31:06 - Speaker 3: One other potential wrinkle with Muse, and I’m curious if you’ve encountered any examples like this Tyler is individual versus enterprise. So an argument for not charging with Muse could have been give it for free to individuals, get as much distribution as possible, and expect to eventually only charge enterprises, that is businesses because they have all the money basically. And so I’m curious if you’ve encountered a case like that in your world, probably not, but maybe.

00:31:33 - Speaker 2: That is pretty close to the, what’s usually called the B2D playbook, which Hiroku used in GitHub and Tuo and now countless others, which is the idea that you get developers to use and love something, maybe it’s an open source library, maybe it’s a service, and they use it for their hobby projects for free or nearly free, and then they will bring it to the.

Their work, but that does require a long game, particularly if you’re doing something open source, you know, you look at something like an open source database or something like that. There’s a very long period of getting entrenched and winning those developer hearts and minds, and then only much, much later then you start getting that pull of like, hey, I’d like to use this at work by my bosses, we need this or that.

Access control thing, do you have this SLA for blah blah blah, and that’s when you slap a big price tag on it and start breaking in the box, but it’s a very long game, and the up front of that it’s a big investment, and that is a place where it is an argument for venture money because you need those pretty large investments of capital for many years before you really start to charge money.

00:32:37 - Speaker 1: Yeah, I was thinking of the same thing with mostly being developer focused. I was not really sure if there was a sort of like tool for thought, project management, like that general space of collaboration with an example of it.

00:32:51 - Speaker 2: The best example there would actually be something like Gmail. Gmail spread far and wide with this incredibly generous free plan.

And then they added the Gmail for business thing, and that kind of connected to Google Docs, which again, similar thing, people are using it for free, and then they were able to kind of transition that into the enterprise product.

But again, same thing, there it was just backed by a corporate parent, they could just say, Yeah, let’s develop this mind blowingly good piece of software and all this infrastructure that runs it and do that for years and years and years and get this really wide distribution, and then we can go ahead and monetize that. But that would be, I think, impossible to do as an indie hacker, bootstrapper, whatever. Yeah.

00:33:30 - Speaker 3: I also think this playbook could be appropriate for certain two-sided marketplaces. So one that I’ve thought a lot about is recruiting. I almost did a recruiting startup, ended up choosing to do music instead, but there you could imagine offering some sort of services to the candidate side to get them in and get some liquidity in the marketplace and then to charge the hiring firms. Yeah.

00:33:50 - Speaker 1: I think one of the core pieces of our thesis is that a lot of spaces are a lot more saturated than they were, you know, 1015 years ago. So if I was to think about this playbook running it from use, it seems to me like the thing that you would want to test, right? I don’t actually know what the answer is I don’t have an opinion, but one thing I we’re seeing is now when you’re talking about, OK, we’re only going to charge when the whole company starts to use this product to collaborate.

The friction point there is going to be probably you’re gonna have like one or two power user advocates trying to convince a large number of people in their organization to switch from something and that’s something might be a little bit more orthogonal, like, you know, we get on Zoom and we whiteboard on a literal whiteboard or something, but you need kind of buy in. Whereas like 10, 150 years ago, it’s just like an open field. It’s like, OK, yeah, we’re gonna roll this out as fast as possible and then they’re going to pick this because they’re not using anything and that’s when we’ll start charging.

Now, a lot of times what you find is that you are displacing something or you’re asking your customers to switch from something, and I think that increased level of friction would be the key variable, right, whether you should be just straightforwardly charging the power users and not Being reliant on them, convincing everyone in their organization to switch, just like it can be just them as power users or it can be a small subset of their team that really finds it valuable or the whole company loves it. And regardless, you’re sort of gonna have a linear kind of revenue from them versus like, OK, we only really survive as a company if we’re consistently convincing like whole teams or organizations to sort of switch. That would be the big question.

For me, that’s something we think about a lot is basically avoiding that dynamic because a lot of the playbooks that were sort of ran a decade ago, sometimes don’t work as well because now you’re going into a saturated market where they at least have some cobbled together thing on Salesforce add-ons or they have some no code solution or they have something that you’re competing against for their time in dollars.

00:36:00 - Speaker 2: It’s an interesting picture you’re painting here, if you can allow me to rephrase or summarize in my own way. It sort of seems like you’re saying on one hand, the software world is way more saturated in certain areas.

People are using when it comes to project management tools and other kinds of general purpose software, even just like, you know, Excel spreadsheets that get the job done for them.

Most of the productive world is computerized and has their tools and so on.

And so if you go in to do something really general. Purpose, like email or a word processor or these businesses of the past that managed to blow up and fill this just totally wide open frontier, you’re actually in a red ocean there.

But in fact, there is still a huge amount of uncovered territory that is just in smaller niches, like you said, verticals, some kind of insurance software that you wouldn’t have even specifically thought of unless you’re in that industry. And so on one hand, there’s maybe more opportunity than ever in all of those spaces. But then on the other hand, the classic places that you go, or if you look at the businesses that were successful in the software and internet world in the last decade or two, those are now in spaces that are very hard to compete in.

00:37:11 - Speaker 1: Yeah, basically, I think there’s fewer and fewer wide open winner take all markets, basically, I think that we’ve started to fill a lot of the big pillars of software productivity world, and if it still cost as much to launch a software startup as it did 10 to 20 years ago, we would be in real trouble, right? Because you really did have to find those really huge winner take all markets to be able to build a software business.

But we’re very lucky through this entire stack of products and services and stuff that’s become much more scalable, that you can now launch these businesses and get them to, you know, not just MVP, you can get them to like very, very high quality software solutions with a lot less capital and time and people. So it starts to make sense to fill in all of these smaller pockets, which can still be enormous, and at the same time, As entire industries have become more kind of aware of software or just open to the idea of software finding some of their processes, those number of pockets are multiplying and expanding all over the place.

Little sub thesis of ours is that There’s a whole ton of mom and pop industries that have gotten used to the idea of using computers, the internet, not their phone, not paper invoices, etc. by these venture funded vertical marketplaces, right? So you can imagine lawn mowing businesses. 30 years ago, right, they’re not using computers at all. They’re just literally I mean pen and paper and you know, checks mailed and all that sort of stuff.

The thing that got them over the hump of just using technology into their business were things like Craigslist and then some of the more omni channel like thumbtack and things like that, like these marketplaces that were aggregating up demand.

But now what you have are these folks who are used to getting down to a computer, and that’s how they generate quotes and that’s how they close business and send their invoices. So now they’re starting to think, well, wait a minute, why am I paying this huge 30%, 60% cut to this marketplace? Like maybe I should get my own software and do that process ourselves.

And so that’s creating this new demand for B2BAS for lawn care companies, essentially, and you can basically multiply that across just like every small industry that you can think of. And now we’re very lucky that it’s essentially cheap enough and easy enough to build software to serve that solution that you can’t do it and literally just serve lawn care companies and you don’t have to. Expand to every single home care product that exists. Maybe you can, if you’re good enough. The upside is still there, but that’s not the hurdle. You can just build a really good software business that only serves, you know, lawn care companies in the state of Georgia, and that could be like a pretty awesome business.

00:40:04 - Speaker 3: Yeah, I think an important point here is the enormous size and fractal nature of the economy, especially in the US, and so you can go down several branches of the classification tree and still end up in a huge node. So lawn service, organic lawn service in Austin, Texas, I bet that’s still a huge market, right? And you can imagine all the other variants of this, and so there’s corresponding software business to be built at many of those junctures.

00:40:28 - Speaker 2: Fun, relevant anecdote there is many years back when I was doing consulting to pay my bills in between ventures, had a really good client that I worked with for a number of years that is windows and doors.

Which is a whole huge branch of the construction industry, and they needed very specific things in their software.

Windows not only have their size and the type of glass, but they just break a lot. They break in transit, and there’s a whole service process related to that, and there’s the way you manage the breakage, the little breakage in your inventory, and you kind of account for that.

I don’t know, maybe there’s some firm now, perhaps funded by Calm, I don’t know, that makes Turkey software for that, but yeah, we built really comprehensive, complex software for managing all that, and it was a real, at least the owner of their business felt it gave them a real competitive advantage to have all of this computerized in this way.

00:41:22 - Speaker 1: Yeah, I mean, there’s just endless examples. Sometimes I get a little nervous because a lot of these are businesses that don’t really want to shout from the rooftops, what a great business they are, but. Yeah, there’s just more than you can think of examples like this that are just comically one little industry only serving Belgium, right? And they’ve built a phenomenal business with like 7 people just raking in cash, you know, and yeah, you can just sort of copy paste that everywhere, yeah, countertop installers and window washing services and all this sort of stuff. It’s amazing. The economy is big.

00:42:01 - Speaker 3: I’ve always enjoyed speaking with these small business owners because they have a certain down to earth and grounded quality, you know, cause the way you’re successful in that realm, it’s like you just kind of sweat it out and you provide good customer service, you make a high quality product, and you get referrals and do that for 10 years.

And one of the things I love about the commund is it’s bringing more of that sensibility into the software world. You know, there’s a place for the Galaxy brain stuff, and I’m glad we have all that, but I’m also glad we have some of this so-called small business mentality in the software world. And by the way, these are small businesses that are worth like 10 to $100 million right? So it’s, yeah, still a very good business. Yeah. So one of the things that I mentioned earlier was that you were building Earnest and then calm out in the open, and I was wondering if you could talk a little bit more about that, like, was that a deliberate decision, how has it worked out for you, so forth.

00:42:48 - Speaker 1: Yeah, so it definitely was a deliberate decision. One of the early risks that I kind of identified in the plan was that the target entrepreneur that we were gonna try to Build for historically has a really strong distrust of any kind of investor, right? Either they’ve had first or secondhand experience with somebody who had a great business and then raised money from investors that came with board control and then they got kicked out of their own company. There’s a whole laundry list of reasons, but the idea was that one of the first things we had to do was build trust to say, hey, look, we’re legitimately trying to do this in a different way.

We’re not just trying to trick a bunch of bootstrappers into taking our money. And I sort of tell people that I’m kind of a one trick pony when it comes to marketing, but it just turned out to be the right trick for this market, which is just really authentically building in public, talking about our thinking, soliciting feedback. And engaging the community has the benefit of being really good marketing and also a way to sort of build trust with that group. So that was why it’s been that way from day one for us. So literally the very first hello world of Earnest Capital at the time was we had designed a new funding structure, basically a substitute for convertible notes and safes and this general toolkit of early stage investing called the Shared Earnings Agreement and Basically just published it and said, hey, you know, we’re about to launch this fund in a couple of months. This is the term sheet that we are thinking of offering. What do you guys think? And literally just wrote up a blog post explaining our thinking, put the term sheet in an open Google Doc with comments turned on, like open comments. Yeah, and just blasted it out to every like community of entrepreneurs that we could find on Twitter. Etc. and we got like several 1000 comments. It turned out to be like really difficult to start to work through, but it was really fascinating to see the way that the folks would engage and they would say, oh, I wouldn’t like this as an entrepreneur and somebody else would pipe in and say, I think you’re not thinking about it the right way. Here’s what this means and all that sort of stuff and just that level of saying like, here’s what we’re doing and we’ve got nothing to hide from day one was pretty valuable. And then from there, I think it’s sort of continued to be a conscious strategy for building trust and engaging with folks, but it really has turned into a full-on kind of community driven strategy where we kind of view or I view my job here is to essentially like. Aggregate this group of entrepreneurs that a lot of the world is sort of overlooking, despite the fact that in aggregate it’s a huge, huge group of of entrepreneurs, aggregate them in some way, listen to them, and then build what they want. So we do that in small ways. With our portfolio, at first we took this very hands-off approach and then we started to get feedback from them that said, hey, we want a little more structure in terms of how we engage with folks in our mentor group and with you guys. So we said, OK, well, what if we took the idea of quarterly board meetings and we made them calm, we like did it our way and so here’s how we’re gonna. And do that and the folks like that. And as we think about the future, it’s like maybe there’s going to be different financial products and everything just kind of comes from building this community of folks, explaining our strategy, explaining our challenges, explaining what we’re trying to do, listening to what comes back, and then trying to make it happen for them.

00:46:23 - Speaker 3: Nice, yeah, I think there are a ton of benefits to building out in the open like this and building a real community, not just of loosely affiliated fans who are really invested and active and providing a lot of feedback and support.

One of the things that we talk about with building in the open for a traditional commercial venture is that when you go to bring in new customers or new hires, they kind of already know what’s up, you know, they’ve read your blog and they’ve self filtered in, and they might even be familiar with your lingo and so forth, and we experienced this both as Potential I guess customers of your firm as well as LPs, where I had been following stuff on Twitter and I’d read the school doc and I had seen your spreadsheets of how the seal works, and I’d run all my own simulations.

So when we were talking about does it make sense for com to invest in Muse, and when I was deciding should I invest in the fund, I basically knew all the parameters already. I knew you, I know your work, I knew the fund versus having to start from scratch. That was awesome.

00:47:16 - Speaker 1: Yeah, we’re in an interesting market position where there’s a large but dispersed group of folks who 100% get it and then the vast majority of the kind of centralized gatekeepers completely don’t.

So for example, like on the fundraising. I mean, we’ve taken like a completely decentralized approach to raising capital for the fund, and we basically have raised from our next fund, we’ll have 249 individuals in it, and that’s almost all entrepreneurs and folks like you guys and basically just people who Read what we’re about and get it and want to support it.

We just closed a crowdfunding campaign. We had over 1000 investors join that from the unaccredited space and we’ve basically just built a whole process. Like if you go to our website and you’re interested in investing, you can fill out an email and you get this like 10 part essay series that just lays out with. Really nothing held back, like exactly what our strategy is, exactly what we’re trying to do. You could absolutely just like copy paste a clone of our fund, at least in terms of from the strategy perspective, because we just put it all out there.

And what that does is it creates these flywheels of folks who show up, they get it, they want to support it, and we have, I mean, I would say probably. Even before the 1000 crowdfunding campaign, probably 60 to 70% of people commit to investing in the fund before I’ve ever met them, you know, and usually later at least try to have a meeting at some point, but there’s enough out there that they can put the pieces together to join and support it.

And now, I mean, with the crowdfunding campaign, I don’t even know, probably 90% of those folks I’ve never met either.

It’s a different way to sort of bypass the gatekeepers, which would be like large institutional investors that normally back funds like this, you know, we didn’t want to kind of run into the same issue that I was talking about, where like you have a good idea and you pitch VCs and then you change your idea to try and get money from them. Like I felt like we were setting ourselves up for the same dynamic, basically because we’d be pitching the people who fund the venture funds.

So we kind of knew we had. go a different way and that community driven approach was essential for raising the fund.

And then we also see the same effect on the portfolio side where we have a lot of folks who show up and say, look, I’m interested to raise money from you guys, or I’m just gonna bootstrap. This is not a process. I’m not pitching 30, 40 funds, like I know what you’re about. It resonates. I want to either raise money and work with y’all or I’m just gonna do my own thing, so. Again, like the one thing I know how to do reasonably well is just like explain what we’re doing and why we’re doing it from just kind of like the only way to get it off the ground to like a real flywheel, I would say of competitive advantage or just making it sort of self-sustaining if that makes sense. So yeah, it’s been cool.

00:49:57 - Speaker 2: As you explain all that, it reminds me a lot of, I guess most of the business ventures I ever do, I usually feel like there is much about, I have something I want to say about the world or I want a product to exist that is weird and different in some way that I think will be good and special, that’s up for the market to decide.

But it’s essentially breaks convention or breaks status quo in a number of ways, and two elements of what you’re describing for calm very much strike me as similar to what I went through with Hiroku, what we did with Think Twitch and what we are now with Muse, which is, first of all, once you start questioning some of these base assumptions that Cascades and you kind of end up reinventing everything in a way, like you were mentioning like your board meeting style is going to be different because once you change those base assumptions, everything else kind of has to change.

But then you end up with something worse, this whole kind of weird universe into itself, where everything you do is different from what people are used to. And so then the explaining is so critical, right? And so, in Hiroki’s case, I ended up writing tons of blog posts, but also ultimately this manifesto called the 12 Factor, and that’s when things really started to click for people.

For years, I’d basically heard people come in and why is this Things so weird, it doesn’t work like how I expect with other hosting it’s like this. Why can’t I write to the file system? Yeah, exactly. Why can’t I ask to say, etc. and we would kind of one off try to explain, well, actually, if you start from those first principles of what we’re doing differently, that is a consequence or a detailed downstream consequence. You know, it takes time to be able to fully articulate that philosophy, but once we did manage to articulate that philosophy, it’s much easier for someone to come in, download all your thinking, and then they come in and see that the product works in a weird way, and it may or may not fit with what they want, but instead of just comparing it to the status quo and being confused, surprised, or even angry that it’s different, they see why it is different, and then they can decide whether that’s right for them or not.

00:51:57 - Speaker 1: Yeah, that’s a really good insight.

I mean, there’s this magical thing right about building software is that essentially you just have to write like clear directions and you build a product, essentially, like if you really distill it down, you’re writing this code and explaining very clearly how you want this thing to work and that’s your product, and I never really set out to be in finance or to be an investor per se. It wasn’t like, oh if it wasn’t this, it would be something else.

This is the one idea I have for how to build a fund, but I really like it now because it even is like reduced down to just zero steps like clarity of thought is like the whole product basically, essentially just explaining the thesis to both sides of the marketplace, essentially people who want to invest and then people that you want to invest in.

That’s basically the entire product. I mean, there’s some ancillary things around controls and processes and stuff like that, but you really do just have to produce clear thinking in a way that’s consumable, and that’s the product, which is kind of a cool business to be in.

00:53:02 - Speaker 2: I’m not gonna lie, so clarity of thought could not possibly be more on brand for Muse.

00:53:08 - Speaker 1: So I’ve got a question for you guys, which is around the idea of how you align and incentivize folks who are on the team, basically employees. I think that for founders, everything about calm companies and a general approach makes a ton of sense. You own the company, you want to build a profitable, sustainable company that lasts. Forever and has great lifestyle for you and your team and as long as you have this nice ownership and maybe you have some nice dividends, you’re not super concerned, but one thing I think is sort of an unsolved problem, both for companies that we’re investing in and a lot of folks in this space is employees. How do you Incentivize them, how do you think about the spectrum of options, profit sharing, sharing in the proceeds if you ever sold, you know, all that sort of stuff, and how do you do it at the early stage when it’s very risky to make sure they have some upside and then how do you do it over the long haul when maybe liquidity events, selling the company is not on the near term road map. Yeah, I’m just curious how you’re approaching that or thinking about that with Muse.

00:54:11 - Speaker 3: Yeah, that’s a great question, and we’ve thought about this a lot. I would say first that I think a lot of the benefits or the appeal of being a staff member at a com company come from these degrees of freedom. It’s like you’re basically able to offer an employment experience that is at least different and we believe for many people better because you have this flexibility. So one thing is remote work, which even a few years ago was not super common, obviously, it’s.

Much more common now. But another thing is just like general flexibility in terms of how you work.

So we have a partner who really likes to travel the world and work all over the place. So sure you can do that. We had someone who wanted to go to 4 days a week instead of 5, which if you were at a thing would be like a whole thing with HR, right? Or maybe probably not even possible. But here it’s like, yeah, sure, basically, seems good to us. And you have more degrees of freedom to shape the work environment to be however you want.

Now more on like the financial and compensation side. That is tough. Our approach has been to try to make all full-time staff members partners in the business.

That’s the title that you have title Adam and I have and all the other partners have. And by that, it’s someone who wants to act like an owner, we expect to act like an owner and is in fact a very substantial owner in the business, much more than you would be in a typical venture backed startup.

Now, the mechanics. How you actually convey the ownership are very tricky. And we could do a whole podcast. I was actually going to do a workshop at the original Thunder summit on this, like basically the legal and tax mechanics of partner compensation. It’s a huge mess basically because of US tax law. But the kind of spirit of it is that we’ve tried to make the partners substantial equity owners in the business, so that if we do issue dividends, they participate in that. And if we do sell the business, they participate in that, and so forth.

00:55:54 - Speaker 2: And maybe part of where that works for us, certainly because we have a small team, you know, 5 or even if we were to add a 6 or a 7th, I could see that scaling. It wouldn’t go to 25 partners probably wouldn’t make sense.

Then you do probably need sort of two different classes, that’s similar to those kind of professional partnerships, like an attorney’s firm or something where there’s partners, and there’s kind of everyone else who are employees.

And maybe going back to business fundamentals. It’s OK that we don’t need to waive this lottery ticket of some options that might be worth something. It’s like your salary, that’s your compensation, and it’s not a crazy work environment, that’s all about we’re inventing a platform to change the world, we just, we make a great product, we sell it, and then, you know, employees get paid a fair market share.

I feel like there’s precedent from the non-software world for profit sharing plans and things of that nature potentially as a chance to again create a little bit of that upside without the complications of having absolutely everyone be an owner, or I don’t know, maybe there’s stuff we can draw. From co op models, maybe everyone should be an owner of a small amount, but it’s not the startup options. OK, we’re going to pay you less because you have this lottery ticket that might be worth something if we exit someday. It’s like almost the internal worth is very clear because you’re paying dividends.

Which is something certainly we will be excited to do if we get to that point where, and I’ve done this for past businesses in my pre-startup life, it was just, yeah, at some point when the business is profitable, you pay dividends, and it’s great, you know, you look at the bank account, you go, hey, cool, we’ve got like 10,000 left over this quarter. Let’s take half of that and divide it up according to ownership among the owners of the business, and it feels very pure and honest somehow. It’s like our business earned more money than we spent, so we get to keep some of it.

00:57:38 - Speaker 1: Yeah, yeah, I agree. I mean, I do think this is a big white space that needs to have some more just kind of go to off the shelf options because you’ve got the traditional like startup RSUs and stuff like that. I agree that while they overdeliver on knowing exactly what you’ve signed up for structurally and tax wise, they definitely underdeliver in terms of knowing how much they’re actually going to be worth someday, but it is something, right? It’s something where People can feel like they have some upside in the company and they know exactly how it works and how the tax consequences are, maybe not exactly, but they have a general sense of how it’s going to work.

And then in, you know, the world right now, we’re starting to see, I think, a pretty decent sized wave of basically bootstraps software companies start to hit, you know, very serious, mature profitability, and they’re all kind of starting to grapple with this idea of, OK, well, how do we incentivize our employees now and You’re right that basically there’s some really straightforward stuff you can do around like profit sharing and things like that.

The big challenge is that it’s very much at the employer’s whim, right, like profit sharing agreements are very hard to enforce and if you somehow don’t get what you think you’re owed, yeah, even just bonuses, right, the classic end of year bonus is basically your boss gets to decide who they like the best and give them money.

00:59:00 - Speaker 1: Yeah, and sometimes we’re starting to deal with software companies that are very large and very profitable and completely founder owned and these They’re honest folks, I’m not saying that there’s anything wrong with them, but as an employee, if you’re starting to put in, you know, 67, 10 years into a place, you kind of maybe want a little more solidity to it. But then you start to get into the tax and legal consequences where there’s just not a lot of paved things to follow. We were super lucky with Cofund where the main concept of profits are carried interest from the funds, right? When our funds do really well, we get this. stream of profits called carry or carried interest, and the rules around that and the taxes are super generous. Thank you. Big private equity firms or whatever. But essentially, like, I can do whatever I want with the carry. It’s totally at my discretion and also everything is taxed very nicely. So we just carved out 20% of all future carry of all future funds. So essentially equity your options and created a system of Distributing that to employees and also to our like very, very earliest investors. So that was super nice that I just literally updated our operating agreement and boom, it’s done. But it still does fall into that gray area where if 10 years from now we’re deploying billions of dollars a year, and that’s like really extremely valuable, our early employees are going to have this huge stream of revenue for them personally that’s completely Dependent on essentially like, there wouldn’t be a lot of obvious protections for me just changing them, which is not good. I would like them to have, you know, more firmness in how they’re going to deal with that. So yeah, I don’t know, it’s an interesting space. I’m curious to sort of see how different experiments play out on it. I think this is something we will probably double down on ourselves and have like a recommended approach. Nice, but honestly, it’s a challenging space right now, a lot of opportunity, I think, you know, so yeah.

01:00:55 - Speaker 2: It occurs to me hearing you describe that set up as well as obviously all the things like seal and so forth that you’ve done, you must have an attorney firm that is willing to like do weird stuff, which is always interesting to me, like, finding something like an attorney who’s really great at what they do, but willing to think outside the box in a way that those two things often don’t go together. The whole purpose of someone in the legal profession is to play it really safe. Yeah. Have you found someone that somehow plays ball with all your weirdness?

01:01:26 - Speaker 1: Huge shout out to Joe Wallen, who has been our attorney from day one. He was the one that first worked with me on the share earnings agreement.

I do think, yes, like one of the Things that we’ve had to do is a fairly like grinding process of finding the different vendors and service providers that want to work with us and are good at what they do, because, yes, there’s tons of times where the de facto top 5 people for this kind of thing, we would go to them and they would essentially.

They blow us off, right? Because it’s just they have no incentive to want to do it.

And economically, it’s like, yeah, we pay well, but you really have to just be intellectually curious and interested in what we’re doing for some reason to want to take us on as a client.

I mean, also, we work with an amazing fund administrator called Aurro Advisors, and they also very rightly should have just told us to look somewhere else, you know, but essentially they were just excited about what we were trying to do and So accumulating those folks who are on board a little bit mission driven, or maybe a lot mission driven, has been a big part of the process, to be honest, because yeah, I think we got super lucky finding Joe very early on, but with other things, it’s been like, OK, we’ve iterated through 15 conversations with folks and they’re just not gonna be a fit for that very reason that they’re not heavily incentivized to do experimental interesting things and. Yeah, it’s probably one of the toughest parts of doing this, but now we’ve kind of got like the dream team in place, so we can start to roll out new things like along the topic of how do you help early employees, one of the things we’re in the process of launching is a product we’re calling it like Express right now, it might change, but Cofund Express is for later stage mature companies.

That are in that position. They’re profitable. They have early employees or early investors that have been there for, you know, 5 to 10 years. In theory, they own some slice of the company that’s now worth like a house or two, and they would like to get some money, but the company doesn’t want to sell, so we’re building a product to like really quickly and easily be able to.

Buy small chunks, 3, 5%, 10% of the company to give liquidity to basically anybody who wants like to be able to run an opt-in process, which you see this in like the venture back worlds is something they have figured out when they do a big round, they will often let employees or founders sell off a slice of that round.

There’s no equivalent in our world for that. And so we’re building that and it’s great cause now we have all the people in place, so we just, you know, go to our tax folks and go to our fund administra folks and go to our legal folks and we just say, OK, here’s our in crazy idea, let’s spin it up.

So yeah, it’s good.

01:04:06 - Speaker 3: Yeah, nice, and Tyler, I appreciate that throughout your process of working through all these things, again, you’re working in public because that does help pave these paths that hopefully other funds and entrepreneurs will be able to walk down in the future. So thanks for that.

01:04:20 - Speaker 1: Yeah, thanks guys. This is a great conversation.

01:04:23 - Speaker 2: Well, let’s wrap it there. Thanks everyone for listening. If you have feedback, you can write us on Twitter at UAHQ on email, hello at museapp.com. You can help us out by leaving a review on Apple Podcasts. And Tyler, thank you so much for helping fill out that map of possible funding options and helping entrepreneurs like ourselves feel good about getting to do this work we love to do, but do it in a way that’s calm and allows us to live our best lives while also hopefully making useful software products that the world needs and wants.

01:04:56 - Speaker 1: Absolutely, thanks guys.