What's up, everyone? This is Anthony Pompano. Most of you know me as pomp. You're listening to the pump podcast. Simply the best podcast out there. Let's kick this thing off Jeff Morris Junior is the founder and managing partner of chapter 1. He was previously the vice president of Revenue product at Tinder
in this conversation.
We discussed the product thinking that built the highest grossing app in the app store why Jeff is so product focused as an investor. What makes a good product and what Jeff has learned.
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All right guys bang bang. I've got a special treat for you today. I have Jeff Morris here. Thank you so much for doing this sir. Just waking up and this is the best way to start the day. So I'm excited to be here. Most people don't say that to me. So I'll take it but let's jump into let's jump into your background your investing today, but you spend a good amount of time as an operator kind of walk us through. Where did you grow up? How'd you get into whether technology industry and would you do sure?
Set grew up five minutes from Palo Alto and five minutes from Sand Hill Road says really kind of in the heart of technology and Venture went to Menlo High School kind of grew up around around the scene ended up going to UCLA to study English, but I want to be something something in film as screenwriting for a little bit. I worked at UTA which is an agency at I used to read scripts for 50 bucks and in college for different producers and la and
really thought that was my track and then when I went to the agency world, I just realized how shitty being in being an entertainment is I'd literally like if you watch Entourage I've had like staplers thrown at me like like my life was threatened many times. It just wasn't a healthy environment. And so I left I was going through a breakup with a girlfriend and just kind of like left Allah even classic kind of road trips. I'll pack the car moved back up to San Francisco. And then I was just this is 2010 and
So many great companies around so and I had still had good connections, but I wasn't like going to just get a job. I wasn't going to walk through that door and get a job because I knew anybody and so I just start applying to every every company I can apply to and it turns out I was really good at applying to unicorns. I applied to Uber to be their 15th employee applied to Airbnb to be their 50s employee and I applied to Twitter to be like their 200th employee and none of them would hire me. So I ended up going to South by Southwest in 2000.
11 I had just a I was sleep on someone's couch. I had no no reason to be there but I met a company called zaarly and there were based in Kansas City at the time in Seattle, but I ended up just like that on Twitter. I saw the CEO post a job opening and I was the first one to apply wrote a really kind of dramatic cover letter and he got on the phone with in the next day and said he would hire me but I had to move the next day to Kansas City. And so at that point I was kind of its kind of being an up by.
And apply to all these companies and so I said fuck it and I moved to Kansas City and that was really my entry point into into Tech. I had to literally move from LA to San Francisco to the middle of nowhere to get a job. And then from there was just kind of became known for building products towards that has early I started releasing a bunch of products online mostly on product hunt and I had three products hit number one within a couple months and then suddenly I was like the product person on Twitter and
And and tested out a few ideas that I thought I was going to try and being a CEO. So I try to start a gas delivery business, which is really a dumb business to start so don't start if you're thinking about it, but we were driving at a Jeep Wrangler. So we would have touch a little oil tank. So the back of my car we were driving around the lamp cars in Menlo Park. I also realize people like the gas in the morning and at night so it's not a great time to be an operator. You have to wake up early and stay late.
So I ended up leaving the gas industry and luckily at that time. I got a phone call from Tinder and I'd use Tinder. I was in online dater for several years at that time. You wouldn't say that out loud because online dating was still kind of a just a weird world in a weird thing to say you did and so ended up moving to La I was one of their early product members joined in 2015. The team was about 55 people Pig.
Really
amazing product Market fit but very disorganized organized organization. We were just starting to monetize. So we're doing about 20 million dollars in Revenue. I think a lot of people misunderstood tender and subscription businesses and didn't realize what we'd become but, you know kind of like right place right time and also just hard work, but I ended up leading all the revenue products at tender kind of from 20 million.
To 1.4 billion in revenue and it's very much sass Revenue because it's 97 percent of our revenues subscriptions. And and from there just became kind of like Twitter Twitter famous, which sounds weird to say, you probably understand that poppet people were really curious to learn about Tinder and how we were suddenly becoming a monster business and so I was showing a lot of thoughts and and and just became kind of like a person in the tech world.
And have since gone on to do a lot of things and now kind of focus on investing. Yeah, let's go back to when you put three products to the top of product hunt. This is when product hunt like everyone was paying attention and it was the only thing I think now there's kind of a couple of competitors and maybe some of the attention has a little bit fragmented but were the products and kind of why do you think they hit number one? Yeah sure. So, I mean, I think the biggest thing was they were really like very quick projects that I built which
enable them to be a lot more timely. And so one of the products was a good example of slack was blowing up everybody who is joining these kind of consumer slack group. So slack was really an Enterprise tool. They were they did not want you to discover the fact that they had like AOL chat rooms. And so I release the the kind of the the biggest one that that did really well was called slack chats. And so if they get it
Is being a directory of all the best slack rooms for non-work topics and it did really well. It was getting a ton of traffic and then I got a letter from slack asking me to cease and desist is what you call it asking me to take it to take it down to which I kind of thought back because I was so happy and you know to me I thought I was doing them a service by giving them more more traffic that eventually took that one down and they sent me.
The fire spread the stories. They sent me a pair of slacks Ox after I took it down which was less less than the price of the domain. I was like, all right, great not have to wear your socks on my feet to remind myself of this season desist desist letter I got but that was one of them and then another one was called startup adoption agency. And so it was just this idea of everybody who's watching products on product done and a lot of people would have been in the projects and you could adopt other people's startups.
Which again was like really easy to do is just a little matchmaking product and wasn't too too difficult than the other one was called request for startups and so is taking y combinator every year releasing this kind of a list of startups are looking to fund or themes that they're looking to fun. And so we would just go to all the BBC's and Silicon Valley and ask them what startups they want to fund and created just a kind of a Marketplace of ideas where we try and connect entrepreneurs and DCs.
With with projects they actually want to fund again. Like these aren't like there weren't like machine learning teams. They weren't like big projects. They were just things I was doing on the weekend. But as you know, if you just release a lot of things whether it's content or no code projects and they do well people start to associate you with being a certain type of person and for me, it was just being someone who can release products at a faster rate. Yeah.
You're fascinating to me about this is you basically we're practicing like you were getting reps and you were creating lots and lots of products and you were learning along the way what works what doesn't work, you know how to build how to iterate you're getting kind of really tight feedback. Loops. I'm assuming that you think that a lot of that practice was very helpful when it came to Tinder and some of the stuff he did later.
Totally. Yeah, I was it was more frustration because keep in mind. I was also trying to launch this gasp. It's and some of that which was just an impossible logistical business to run and I was like, I can't release this because I have to deal with literally like local regulations and governing bodies, but I can't release this little treat project on week on the weekends. And then when I got to Tinder, I didn't have Engineers all I had we end up giving me
Access to this platform where you can send push notifications those all literally all I could do for six months with send push notifications. So I started having a lot of fun with that and I started to kind of run product test through push notifications. So I'll give you a couple examples one was we had this tool where I could draw a map or on any any location. So I would I would spend my nights like creating little circumferences around around different venues being liked.
Kif Coachella was going on. I would send them what we called a swipe surge notification that just said like tinder's blowing up at Coachella like open Tinder right now and I would do that for all the large events in the country those one example that you know engineers and then we ran a similar thing on in dating the biggest are kind of like our Black Friday is always the day after New Year's because people make their resolutions they're probably
Over the sitting on the couch and a lot of them want to meet people and so we did a swipe surge on January 1st. It must spend like 2016 globally which is pretty scary to do because you're sending 40 million push notifications, which is you know, if you think about that just traffic if you put those people in a football stadium now, do you like 400 football stadiums, but that have been our highest traffic day ever and then you know it got it got a TechCrunch article.
On the whole company was like who's this person on the side like sending these cool push notifications. It's you know, driving our highest traffic days and and suddenly like people sort of take me more seriously at Tinder, but I think any time you enter a new job or or a product team specifically you need to like earn the respect of your teammates and for me, I didn't have Engineers, but I had this little tool that I could mess around with and I think I became like known on the tender team and so on.
Good do good work just because I was poor see my way into kind of into being a person on the team. Yeah, what's fascinating to hear is you're basically talking about various features that meeting people don't think of as part of the product. Right? Some people think of product I think of like the user experience when somebody's in the product or they think of kind of what is this product solve for me, but as a product leader, how do you kind of holistically think both about the user experience you presenting to
Buddy kind of the back end and what the product can do but then things like push notifications, you knows all sorts of prediction algorithms. Just how do you think about product and what makes a good product in today's environment? Yeah. I think you guys have to start with one core product Loop that just works like for tender was when we tried to innovate on swiping or five or six years is actually really frustrating as a product person because you were trying to like out do the swipe but
for us that that core mechanic of just seen profiles and quickly saying yes or no was so mindless and and quarter the product that we had a really great Foundation to build off of so you need you need that like Foundation whatever it is like that hooker that Loop that keeps people coming back for more and then, you know around that especially for mobile the hidden secret amongst product people and most people who are in the industry know,
Oh, this is push notifications overly your lifeblood. That's your retention tool that keeps people coming back because most people's phones are so crowded with different applications that if you don't have a good way to pull people back in through push notifications, they just won't think to open your app. And so a lot of messaging the kind of highest retention apps always messaging because you get the most push notifications generally, but you know for Tinder specifically we are going
Was to get you a match as quickly as possible. So we could get you in that messaging Loop where you were having a conversation and that became kind of the driver of retention. But you know, I really think of it as being you have to have that core product and then and then it's all about finding ways to keep people coming back and you know, I think that comes with pros and cons because you can have you can lose trust with the the user if you're spammy or you're not delivering value through those notifications, but for something like Tinder which
Is dating like it people perceive dating as a very high-value activity to their lives? And if you if you miss a push-up occasionally, you're slow to respond to someone it might be that might be your soulmate and see maybe maybe you just miss like the person you're supposed to spend the next six years of your life with or maybe it's just the person that you want to have a fun weekend with so, you know, it's a pretty high-value activity. So we were really lucky to be in dating which I think is just a fun.
It's to build an yeah, how much of this is like Master Strokes of Genius where you and the rest of the product team sit in a room and you say oh we have this amazing idea. Like let's just go implement it and it works versus it's a much more iterative process and you're just testing so many different things and doubling down on the things that work. It's a combination of both. I think every team every product team has to have a few really ambitious projects every year where you're kind of taking a leap of faith and
Whether it's through user interviews or data or just like something in your gut tells you this is what you need to build. You need you need those big ambitious projects and most of those projects actually don't end up working sadly. You know, I think it's why companies do things like a/b testing and you do try and roll out cheaper version. So you're not spending three or four months of engineering time doing those projects, but you know around all that is
Just a ton of baby baby testing experimentation and a big a big metric of successful product teams is just here you're testing velocity. Like how quickly can you release test? How do you build that muscle internally? How do you get to significance in your tests? Which for Tinder was very easy? Because we had such a large user base. If you're a startup. It's hard to run a ton of A/B test because you don't have users to run those tests with but you know, it's really
A muscle you need to build and for most startups. You don't actually build that for a couple of years. I get tender we weren't great at A/B Testing until probably four or five years into into the company and I'm sure there's still room to improve. Yeah, what about user research in terms of not master stroke of Genius not actually just we're going to throw things out and test but actually going and talking to the users and getting specific ideas or feedback from them. How did you guys think about that from a product iteration standpoint at Tinder? And then how do you think
For startups in general. Yeah. Definitely. I mean I think again like Cinder was such a topical product that you can get your user research in the back of an Uber or a Sunday brunch or people. If you tell people you work at Tinder, they will just start talking for 30 minutes. Like you don't even have a chance to say a word and I'll tell you all sorts of stories and and I'll give you plenty of product feedback, but we didn't really formalize the
the user research and tell again like probably 2018 or so and which Tinder was was already or five years old and you know, I think a lot of the feedback we got at certain times was done kind of by Third parties, which it's hard for someone who works in product and thinks they're they know what they're doing to kind of like trust like third-party research and so on does like a big user study and they tell
It's a build so I think the most valuable feedback is is 121 feedback that you get yourself and the job of a product manager product team is to really consolidate that feedback and build the right Solutions. But I remember there was a point where towards the end of Tinder. I was actually on I started a kind of experimentation clean a team is it's an exaggeration, but I went off and I was like, I want to build an entirely new company within tender.
And it was the first time I think in a couple years where I literally just identified our highest paying subscribers and I just asked them if they would do a phone call with me and I'd probably did 20 phone calls and I was like, holy shit like these people talk to us. So, you know, we're a public company and our users will still talk to us, but it's just a good lesson that people are willing to talk to you and I think the more you can just have one-on-one conversations like we're having right now with
With the users as long as you have the right sample set that to me is the best feedback way better than anything that a third party could could give you an a hundred page printout of what your users want you to build. Yeah, and what about like gamification in the product? One of the things I think that Tinder really did well was everything from like the super like all the way on down. There are so many features that had monetization kind of woven into them and made it a better experience.
Needs but also made revenue for the business talk a little bit about just the philosophy behind kind of gamifying some of the Tinder experience. He already knew had product Market fit. Yeah. So a lot of people are further tender as a game. There was there were moments internally where we refer to it as a game. I think some people think that's off-putting. But the truth is a lot of people want to use Tinder just to have fun. A lot of people don't even plan to date. They just they like the game of swiping on people and seeing who likes them. And so we definitely
lean into that. I think a lot of the products we built were products that are already been built for dating which has a ton of people in gaming move over to dating because it's just a really fun place to build but super like as an example or I think boost is a really fun one. It's you can use a boost to to get more Impressions on your profile and it's kind of when you buy it. There's this crazy animation of lightning bolts liner on the screen and it does feel like
If you've ever played NBA Jam and you kind of your player goes on fire, it's or are like Mario Kart when you when you get the don't know what the icon is, but you start racing on the track a lot faster and we tried to lean into those playful moments and we added crazy video game like animations just to let the user know like, hey, we know this is kind of ridiculous that you're buying a boosted to amplify your profile. We don't want this to feel like goo
Google AdWords, let's have some fun. And I think the more at Tinder that we just realized that people want to fun with the product. I think a lot of people wanted tender to to say it was it was a dating product or to Define its use case and we were just like the word association is just fun and we didn't want to be we didn't want to tell abuses what to use Tinder for and I think part of that was the gamification and just leaning leaning to the fact that we knew dating is
Is just kind of a crazy thing and we didn't want to be a serious product and we never we never I don't think we ever got there as a product which is a good thing. Yeah, before we move on to talk about the investing talk a little bit just about one or two stories. Maybe like what was the biggest product Improvement you made that move two numbers in a positive way and then maybe something you guys tried that you immediately realize that we might be taking the numbers and probably should shut this experiment off. Yeah, totally. So I think kind of my defining moment and the
the big product I built was tender gold which we had Tinder plus which was kind of our entry-level subscription package and Tinder gold really just moved the business in and it hugely impactful way and the core feature in that was being able to see who likes you before you swipe, which actually is a pretty scary thing to build because we had these rules of tender and one of the rules was it's kind of like double opt-in to swiping like you don't know who likes.
You and they don't know who likes you when when you're both swiping but you know again back to video games like we have these rules that we come up with as product people in my job on the revenue team was to break the rules a little bit for a subset of users and say hey, if we if we let ten percent of our users access this feature that that kind of breaks the game. Will that will that are is it something that they want to pay for and then to will that literally just like blow up the
Ecosystem of Tinder and in the case of tender golden scene. He likes you before you swipe. Everything was fine. And it not only did increase Revenue dramatically in led to more matches. It created more conversations it got the that engagement loop I talked about was was really sticky. And so that that was just huge and it's really fun because we were a public company and so, you know, like nothing gets a teamwork excited when your public coming and Senior stock price go up. It's just addicting.
Seemed like the Robin Hood era where everyone's checking the stock price and you know, we can that we can pretend that this exists but every day everybody when you walk in the office knows what the stock prices and everybody gets really excited. So when tender gold came out and kind of like literally like to X then our prize value of tender people were just pumped up like like the mood was oh it's good when we walked in the office and in our team was really proud it was it was a again?
Like we your internal kind of like like respect just keeps going up if you build products like that and it was just a really fun product to build. I think you know some things that that were hard to do a tender. We always wanted a p and a lot of people pushing Us in this direction. I think we wanted to be a social product because you know, obviously like like bringing your friends on a tender dredge growth it. Also I think in the public
Markets, if your class has a social product its it has a higher tan than a dating product. And so we built this product called Tinder social which basically allows you to swipe with friends and it just didn't like dating at its core is kind of a one-to-one activity and we always try to build like sharing mechanics and all these growth kind of growth hooks, but
In some cases people view bringing their friends on a tender as being competitive. Like if you go to a bar and you have a bunch of you bring a bunch of your cool attractive friends, maybe that lowers your odds of finding funding success or finding your soulmate. And so so social products were just really hard to build them dating and that was something we saw with two new social all depends on if your friends are attractive or not, I guess but yes, it makes a lot.
Since I lived with water polo players when I went to UCLA and they were six foot four and way better looking than me. So I had to be like the funny intellectual Pursuit on one side who would occasionally like meet my soul mate in that way. I love it. Let's talk about investing your investing at a chapter one talk a little bit just about your investing philosophy why go folks on this full time and kind of how you think about the companies that you're looking for? Yeah. Sure, so
While I was at Tinder, I was doing a lot of investing and I launched a big Angeles Syndicate. I was one of the larger syndicates just by like backers on the platform. I was getting a really cool companies through just being like a person in Tech. So it's at invested in companies like Lyft superhuman cameo in the list kind of goes on but some myself getting onto two really good cap tables and you know, AngelList has a product that lets you.
Launch of found within within days and they set up all your back office legal compliance. And so I decided just to run an experiment again. I wasn't thinking too deeply about it. I do see male my backers on AngelList and said, hey, I'm starting a fun who wants to to invest to me and I think I had a million dollars of commitments within a day and I was like, holy shit. Now I manage I'm managing a fun. And so then I made a DAC and I got more serious about it and and
It up raising about a 10 million dollar fund over the course of six months, but was doing this at night. So on the weekends in really there was a breaking point where I felt like I was doing both product and investing. I was probably like giving myself I would give myself like a C+ because I was just so distracted in both directions. And so I needed to make a choice and for me at that point I had so much momentum with with investing that it just made sense.
To do it full time. I also got to the point where I'd had a little bit of add. I just enjoy working on different problems during the day and investing. That's the perfect job if you have any any add and so so yeah and then launching chapter 1 I think launching new funds so tough It's so noisy right now and you need to figure out what your hook is again. Like it's like a product you need to have something that just like stands on the marketplace and for me. I knew I loved working on.
Product. I knew I loved collaborating with with with honors that way and I also kept I kept asking Founders in kind of those early Investments like yd. This is after we work we start working. It was like why did you like let me invest and they kept saying like I wanted I wanted your help on product. And so I was like, okay like I've heard that again like user research. I've heard that enough times where I think that's why people want to work with me. And so I branded the entire fun around being like the product person on your cap table.
And so I telephoned her is like I want to be your first phone call. If you have any any product questions, whether it's you're having like some issue with your A/B Testing platform or you're hugging like this big existential question around what you want to build and you just need like a third party to come in and play a tiebreaker a little bit and and then I thought to myself where do people really need help with product its before they have product Market fit. And so it made sense to be an earlier stage investor. And so we do priest
Eden seed Investments and typically kind of look for teams that have a really unique lens on on product and normally comes from being like a former VP of product or director of product somewhere or just a great engineer who has product sensibilities. So I end up working with like a lot of really like nerdy semi artistic product people who just like love to talk about this stuff all day long talk a little bit about
Your thoughts that you focus so much on product. I've had people come on the podcast you say maybe that product doesn't matter but like distribution is everything and you know, the truth is probably somewhere in between like you need a good product. You need good distribution. How do you kind of think of that at the earliest stages? Especially, you know proceed and into the seed round for companies, especially the ones that you're working with are very product focused. Yeah. I've talked with so many people at this topic and I you know, like the prideful product person means
Has like product is everything it's all that matters. But as you mentioned, I think distribution especially right now is is probably more important and and I might go against what kind of the fun thesis is, but the truth is, you know within your product click growth and go to market are part of the product strategy. And so it's not they're not two different competing areas, you know, if you're building a consumer mobile product, you will get the question of how like
You're going to get field of download your product. There's millions and millions of apps in the App Store and people just don't like download new apps. So that's a big question on the on the B2B side. I think there's there's different unlocks whether it's hey, you know, we we have you know, we just got through YC and we have access to 3,000 YC companies. That's a growth kind of a growth unlock. There's been I'm always looking for different unfair advantage.
Azure especially right now. Like I just did a consumer deal and we're just stacking the cap table with Tick-Tock influencers, which sounds funny and I tweeted about this yesterday, but I was like which Tick-Tock influences are actually investing right now. And so we made the choice to not have too many Silicon Valley investors. We want people who have audiences and so again and that's all distribution. We know we have a product that works, but we need
Balls on that product and so we're trying to figure out how to get those eyeballs. Yeah, it's really interesting as you think through kind of building in the earliest stages. Is it something that a precede a seed company again Master stroke of Genius just because they don't have enough traffic to really kind of run an iterative process and can get feedback or do you think that many of these product folks can still kind of run that iterative process and maybe they don't have tons of traffic, but they can
Do some things to kind of short circuit learnings and really get the product in a place where it's valuable and finds product Market fit. Yeah, I mean most in consumer, especially you need a little bit of Genius. You just do like you need a core nugget or idea that just blows people's minds and gets people to talk about your app enough where it becomes like a Sunday brunch conversation. I just believe in consumer that you need that.
that said there's ways you can run tests if you don't have traffic and we see a lot of people do this at different accelerators or Studios more when they're incubating ideas is you can take out 15 or $20,000 in run a bunch of smoke tests against different landing pages and product ideas to see what converts and see what people will literally just sign up for
Sometimes you can A/B test products with medium posts like all it's another will have an ID and I'll say hey, I'm building this. I launched a medium post if nobody responds and maybe nobody thinks it's a good idea. And if they do then the only problem is then you have to actually build the product you say you're going to build up you want it, but you can you can you can find a ways to get traffic. I think you're just trying to see if people will literally
Sign up for it. And if you have something, you know, hopefully hopefully you can have enough traffic to measure retention over a period of 28 days or so. But yeah, I do you think it's harder to be tested set up at don't be creative and figure out ways to get that traffic because you can you can do it if you have a little budget. Yeah, you're investing is a solo capitalist talk through kind of the thought process of why invest as a solo
What are the advantages made with some of the disadvantages are as you've been doing it for a while now? Yeah, we were talked about this before the show, but I've always invested on my on my own and I've just developed a lot of confidence in my picking ability. And so I went through the process this year of like asking myself to do I need to bring on other investors other GPS and just in the past year LPS.
Our partners have become so accepting of solo capitalist. Swear to me. It's an advantage right now because you it's so competitive and if you can move with a slightly faster speed by being so low you can win deals and I let a seed deal this week where I was literally I got to them percent said yes before they can talk to other investors and if I had a team I would need to pull in someone else and it would be this whole process.
I think the key is building a support system around you either through platforms like Angeles or by setting up your own back office where you don't have to worry about the other parts of your job. And so you can just focus entirely on investing also think a lot of people as you have a big kind of online presence. If you have a big online presence and you can raise money bringing on a partner in most cases just doesn't really make sense if you can if you can, you know, raise
Finding and get going up unless you find the perfect complement to you and a gun through the process of talking to folks about partnering and it just hasn't you know back to like dating like I haven't found my perfect match, but maybe maybe one day somebody will come into my life and I'm I just need to work with them. But until that happens, I'm so happy doing what I'm doing now. Yeah, do you think about the balance between like speed of decision making and quality of decision making this is
I constantly go back and forth on right because when you're a solo capitalist, you definitely have speed but you don't have those investment committee meetings. You don't have partners that you can kind of bounce ideas off of how do you are there things that you maybe you do to get feedback or have sounding boards? And then also, how do you just think about the trade-off between speed and quality of decisions? Yeah. Sure. So there's two parts of this one is just this idea of a prepared mind and so it's doing the work before you have that meeting.
For knowing what you're looking for and having seen enough kind of like like different versions in my butt idea. You've gone through the idea Maze and when you see it, you just know like you like I've seen 10 of these companies and and there's this slightly different twist where this is actually the company the back. So having a prepared mind is a big part of it. The second part is building kind of building your support system in terms of appears and people you
invest with so I invest really opt-in with with the same people. I know we're on cap tables the other but invest with guys like Ryan Hoover great investors like Lee Jin Harry stabbings tomorrow from superhuman. So we're always doing deals together Josh Buckley's other one and and so all send deals to those people. Maybe I'll kind of like be around the hoop and think
documenting and I just get the reaction so it's like having an investment committee, but we all have different balance sheets and different funds and so you get you get that peer feedback, but I think I think being a being an investor can be a really lonely job as you probably know and so you need to figure out who your peers are going to be in a lot of people build peer groups within investing they try and go really wide like they have
A hundred people who they catch up with every every couple months and it's not very it's not a very intimate relationship. But I've kind of just like picked it's happen naturally like ten people who we just love to bullshit all day long about investing and and we challenge each other and it's probably what it feels like to have an investment committee. Yeah, they think about follow on investments in terms of your investing at the preseason seed. Do you try to save a bunch of capital and
Kind of invested the stack. Do you just say? Hey, look I'm going to make a good decision precede seed and then I'll just take the dilution later on. What's the strategy or thought process? Yeah for me. I have reserves baked into my Python A lot of people view these smaller funds as being first check funds and then you kind of spin up spd's for your winners. I talked to a lot of people who are smarter than me Mike Maples from Floodgate Chris Dixon from it dries in horror.
It's and they all insisted and they showed me data that suggested having reserves would increase my performance as long as I could pick the right companies to Double Down On which is an entirely different ability. So I have 50% reserves all occasionally do all I'll see a great series a occasionally I didn't invest in the seat. And if I do those I call my reserves like flexible reserves. So I'll take money out of my Reserve bucket and do the deal even though
I didn't invest in the procedure seed but out of my found. I think we've invested in 45 companies. I'm looking to deploy reserves into like eight my topic companies and I don't know the hard part about investing side know I'm a pretty good first check picker but TBD on it than the right if I'm good at reserves and reserves management and some All Copy curious to see how that plays out. Are there anything other than just pure returns that you're looking at to see how you'll measure whether
you're a good kind of reserved picker or not.
For me again. I worked on repair teams. Like I'm very dollar-driven and so there's no there's no kind of like like I'm going for returns and those I don't get kudos for anything else. So I want to to buy the X my van der. You know, there's some scenario where my fun does really well in the end becomes kind of a legendary found and I want to be
those stories where people say, you know, Chris sacca is first fun was like this because he had Uber like everybody wants to have that legendary fun. So that's all I care about and that's how you stay in the business. If you can't return Capital investors, I'll be out of this game. I'll be back on product teams after fun to so some really I you know, I'm really kind of returns driven it's hard because you meet great entrepreneurs and maybe your check says isn't big enough that they give you or maybe you love them, but you just
See the kind of Market potential what they're doing and you have to say no all day long, which is the hardest part about this job. And so yeah, that's kind of how I think about the world makes sense. What are the some of the downsides to the soul capitalist model? We talked a little bit maybe just about kind of being out on an island. Is there anything else that you've noticed is a downside? Yeah. I think I think sometimes you can be viewed in the market or as entrepreneurs is as being kind of like an angel says check.
Check so if you if you start raising a larger fund may be raised.
You know 40 million dollar fund or even I've seen sell a couple has raised a hundred million dollar funds in your asking for a 1 million dollar check and then they have this other found that has a platform and they have up like a platform team and they have you know, 10 partners and it's just it's like you can imagine how that model to some entrepreneurs appears to be a better place to go and it's just different people view you still accomplice as being your other viewed as a funder.
Your Vitas an angel and so those are hard conversations because I think the right now again, like if there's a great company, there's going to be dozens of investors trying to get on the cap table. And why are you the person who deserves, you know, a 500K check or a 250k check which once you start going above? 250 K. It starts to become hard at the presidency the up to convince them that you're either the second or third largest check and so
And then maybe you make some some compromises on quality at that point. And so it's this it's this kind of kind of mouse game of knowing how big your phone should be based on how much power you think you have in the market and how you're viewed as entrepreneurs reviewed by our customers. How is your process changed with the pandemic and kind of the lockdowns or were you already doing most everything remote and it's not a big change where you taking a lot of in-person meetings and you had to kind of adjust
Yeah, it's been all all Zoom. I've invested in best. I think 40 plus companies this year and I've met one of the entrepreneurs in person and it was after I'd invested in them. And so and that shocking is some people like I was pitching a really well-known institutional p and they asked me the same question. I said, I haven't met any of these Founders in person and I could kind of tell like based on the reaction. I was like that wasn't the right answer but
This is the new world we live in and especially at the preseason see it's so fast. People are building products all around the world now and so and we're in a pandemic. So there's really no other option. You have to figure out how
To evaluate people on video and it's a lot of its social cues a lot of its reference checks, but I've just become so comfortable interacting on video and to me I don't need to like Shake someone's hand and have coffee with them anymore. Of course, I'd love to I love I love meeting people in person. But if you do that, you'll probably miss the deal.
Yeah, I tend to agree you recently posted on Twitter a photo. It was very beautifully taken. I don't know who took it. But it was you with the Golden Gate Bridge behind you and the waves of San Francisco and you I'm gonna paraphrase what basically said look there's a lot of debate right now on, you know, every other city in the world, but like San Francisco is so beautiful. I took that to be you will still spend a lot of time in San Francisco What's your
General kind of take on Austin Miami La San Francisco New York and you know wherever else internationally people are considering. Yes. I post that photo yesterday and my wife sent me and I looked and I was like, you know, we had a lot of good times in San Francisco. I started my career there. I was born in the Bay Area. I met my wife in San Francisco. And so the Twitter narrative is so bearish uncertain Cisco and it's you know, it's gotten really aggressively antiserum disco and at times I've been
a part of that in different ways not aggressively but I've been very open about the fact that I think San Francisco needs to change in different ways. I got a text actually for my mom two weeks ago kind of is like a mom to send moment which we still have when you're when you're adult when you're an adult and she said like why you know, it's kind of like, why are you speaking so negatively about San Francisco, which I didn't think it was that negative. But she was like, this is the place where you grew up in.
afford to do so many great opportunities and it was just a good reminder that the city itself and the various given me so much and I was just trying to like
create some positivity around here in Cisco because a lot of my friends still live there a lot of my family lives there and to wake up and see people she the only a city all day long probably doesn't feel good and candidly we might move back to San Francisco at some point because again, I grew up there and I still think there's so much value in being get up in the center of it all. I've a couple Brothers. I have a large family one of them just moved to Austin in August another one's moving to
In March, and so I'm like the brother who's trying to figure out where I belong and for the moment. I'm in LA but I think as you've seen you can build a cup the anywhere. I think the question is just can you raise couple nice places and more and more think that investors don't care where you are as long as you're building a great a great company. And so it's very the one great thing about the pandemic is I think people have finally just
They're like they're like chasing their like in a desires your it's kind of like this like fantasy world where it's like, where would you live? If you could actually live anywhere again, this is for people who are lucky enough to be able to do that. But and you're seeing people live in Hawaii you seen people live all over the place and you know, it's a very privileged thing to be able to do but but I'm seeing people who are you know, they're happier because they're not bound to one city and its quality of life for them as has increased in many ways.
So it'll be interesting to see how things shake out. I still think there will be some pullback. I'm not serious Canary narrative people will come back to San Francisco. I just don't know if it's going to be quite the center of gravity that that it used to be. And so I think there will be especially if the city doesn't change in terms of you know, I'm sure you've seen the debates about Chess and the district attorney and all the crime. It's not a safe place to live right now. And so
Until it becomes a safe place. I don't think it will ever return to being this is the San Francisco. We know and love absolutely before I move on to anything else where can people find you or send you deals if they're working on a company that they think could be a good fit. Yeah. Definitely. So I'm jmj on Twitter, which is a great place if I me and then you know, my GM's are open all the Twitter's DM product sucks. But Mighty hands are open and then you know, there's a
Chapter one.com is my website so you can visit chapter one.com got it. The Twitter DM search works like 20% of the time 80% of time. It does it but at least they have it now, so like I guess that's like somewhat of an improvement if you want to go viral on Twitter just complain about Twitter DM because everybody will like your post and reshare it because it's like the one thing we can all agree on is just not a functional product. I love it before we get into the rapid fire.
ER questions that I always ask everybody. I pulled some questions from Twitter and we'll kind of go through these Drew Morris who almost doing has zero relationship to you wants to know who's your favorite brother? Oh man. He's my Miami Miami Brotherhood. I grew up in a house with eight kids my parents split up at they remarried and so this kids everywhere and throughs lawyer. He likes to ask really pointed questions.
Honestly, I this is going to be like the most PC answer but I love each brother for different things like Drew and I have completely different conversations. We talked about all sorts of stuff in that my brother and Austin loves investing that and so I'll call him and we'll just like talk about the crazy Sandusky ideas. I know pump you've Brothers but such different relationships with all my siblings. And yeah, I can't take one for you know that he knows what he's going to ask.
Ask anyways, Liz Keating asked for you to explain your college bedroom / sunroom and explain the impact that it had on your life. Yeah. Sure. So I lived as we met with a bunch of water polo players. And then with Liz was a swimmer at UCLA and it's a great friend of mine. She was also in the house, but we moved in together and there was a sun room in the back and everybody was picking their bedrooms and I ran and I was like, this is my room.
Get the sunroom, which I don't think anybody wanted that I was trying to be at that time. I thought I was going to become an author and so I was like this. Is there like Poetic place where I had a typewriter in there and I was just like totally just like and it's like Danny SeaWorld. I didn't I was I was an English major and so the sunroom just became like a part of my personality is like Jeff just the one in the sunroom is kind of just like a weird first choice, but at the time I was always just trying to do like the most hipster here.
Nothing I could do and it's felt like living the sunroom was like a place to be an author. That's a great answer. It makes a lot of sense Dallas Cohen asked if you could have lunch with anyone who is living. Who would you choose? Yeah, definitely. So my grandpa is a hundred years old. It seems Mark Morris. He started Mervyn's department stores, which end up becoming a large public company and I
Let's talk to my grandpa. It's just like we can talk about business. I can talk to him about how he was, you know started his first story didn't have any money. He took out a bunch of debt and how he grew that to becoming just a public company. It's so fun and then just on a personal level. It's pretty amazing to have a grandparent. That's seen that much who's been through multiple Wars. He's used born on the fourth of July. So he's very he's
he's very patriotic. He's anxious somebody who had loved to spend time with and so he he definitely wins that that question. That's a fantastic answer Jonathan Bay Dean I think is how you pronounce it. Yeah. He wants to know what your morning routine is, which tells me he knows something. I don't know. So what what uh, what's he asking for? So 15 is the inventor of the right swipe, which is his great claim to fame well deserve but
So when I joined Tinder I was asked to to there's this website called my morning routine.com and they asked me to write an article and if you read the newsletters, it's people who have these really like prescriptive morning routines. And so I thought I had at the time I was pretty regimented in my mornings, but I wrote this ridiculous summary of what I do in the mornings or what I did and it was like, you know six o'clock I wake up for yoga like 7 o'clock. I walk home like, you know.
Into my record player for 10 minutes or it was just it was ridiculous and looking back on it. I'm I locked myself, but it was trying to like summarize my morning routine. And the truth is now my morning routine is completely Bonkers like during during quarantine. I'm just like you can get an extra hours sleep if you need it. So I've just decided that I'm not going to pretend to be like the Tim Ferriss of morning routines and I'm I wake up when when when I'm ready and I work a long day, but I'm not going to try and be like
The most productive human in the world and I don't think that's my personality at this point in life. I love that and I love that. He knows that you've got a great answer to this. That's why he's asking the last one comes from a suit Anonymous account stock market hats but it's a good question. What is your best and worst investment. They've made
Yeah, honestly a lot of my best investments and I know you're keeping crypto. Then crypto bets so compound Finance was was a really great one of course Bitcoins been a great one for so many of our of your listeners, but I love I love the the quick returns and crypto and how you get liquidity really quickly. It's a really attractive thing. I think a lot of my best investments will still play out on the private side because I really start investing.
Years ago and so invested in company called Rome research in March that I'm really excited about and so we'll see what happens. But in terms of bad bets I think I've made a ton of them and it's mostly things that you didn't invest in but rather than calling out one company. I think it's been a when I just invest in things outside of my Strike Zone and I've talked with Mike Maples a lot about this. It's just like as an investor you can
You know what? You're good at. I think it's this is true for a lot of parts of life. But self-awareness is a big part of investing whenever I've been mistakes. It's just things that I don't know enough about and so part of becoming a good investors refining your idea of what your strike zone is and then sticking to it. Yeah, that's it. Couldn't agree more with that. Ask the same three questions everyone before we wrap up and you'll get to ask me one to finish. The first question is little bit more.
Curious, what's the most important book that you've ever read? Yeah for me. It's always catching. The rise is my favorite book. I love holding copy of this is Outsider. He has its own mind. It's also a book were in high school. I read it and I was I want to write like that. I was like, I want this like stream of Consciousness first person narrative and I started to write a lot after that book and I became
One of my teachers in high school pulled me aside things. Like I think you could be a professional writer. And so and I tried to be a professional writer. I spent two years trying to be a screenwriter. And so so that that book really like let me down this path of trying to communicate better through writing. Yeah, it's awesome that you get inspiration from the things you consume right? So it out. Yeah, that's fantastic. Next question is from our friends over.
Eat sleep. They got me asking everyone. What is your sleep routine in the context here is I did not sleep at all. Like I literally would operate on my for five hours. I was flying all over the place and just beat that my body and in 2020. I told myself. I'm not going to fly anywhere like I'm gonna chill and then the world conspired to make sure that that came true because literally I was locked in my apartment and and I eventually got a neat Sleep mattress and this like thermoregulation. I sleep like a baby. So are you somebody who?
Sleeps a lot. You didn't sleep at all. How's that evolved over time? Yeah, so I actually developed sleep apnea and in high school when I was 15, I was I could not fall asleep for the life of me and I started taking Tylenol PM eventually. I started taking Ambien like it was it was a it was not good and then I said don't work out a lot more and just that helped a lot. So I was working out at fall sleep better and then
You know all the way up to now I do have in a sleeve mattress so that L will be happy that I got the aid the thumb pad or the pad that goes on top of your mattress and that's been just so cool. So my wife has her side of the bed which she can regulate the temperature and then I have my set and then there's no I sound like an advertisement. There's no alarm clock because you it vibrates your side of the bed and so my wife doesn't have to wake up.
And be mad at me when when the alarm goes off in the morning, but that's that's helped a ton. And then you know, I tried again like I try to not look at devices before bed. And I'm not I'm not a saint Like I Do I Do check my email before bed and I'm addicted to work. So but similar to you, I've sort of value my sleep a lot more and I used to sleep for 5 hours a week. I was like cranking trying to stay up till 2:00 a.m. And I've just gone to the
Point where I thought more and more like entrepreneurs and and just investors is being more like athletes like you have to take care of your mind and your body to make a decisions. And so I try and get seven or eight hours of sleep. I still have like really shitty sleep nights, but but I think I think socially the value of sleep is just become such a topic and it's something I'm paying attention to you. Yeah. I told Mateo that this was going to happen is if I start asking people
All this like half the guests are going to be your customers. So it's going to just be it's time right? He'd sleep. The last question I have is more fun. And you get to ask me one aliens. Are you a Believer or a non-believer? I'm a Believer. I when it comes to space I trust Israel and if they say there's aliens I'll just go ahead and say that there's aliens so you're a one of they say Galactic Federation was the guy. He said we're all part of AG lactic Federation and
And they still want to tell us yet.
I did think so. There was one part of like someone was trying to make Trump unlock all the all the documentation about aliens before he left the White House. And of course today, we have a new president and we didn't see those documents. So I'm curious if Biden will unlock the documents. Yeah. My favorite moment over the last four years was I remember whatever was going to storm Area 51 and like six people showed up for something like there's this whole thing. We're just gonna go find
Nips feel like I don't think that's where they're keeping the information. Like I'm pretty sure the information somewhere else. Yeah. I think Elon Musk should just own this topic and like he should be the one that tells the world if there are aliens are not at the keep it would just be like the most viral topic with the most viral person. It would just light the world on fire. That's a great suggestion. Don't let him hear that because he will he will definitely try to try to do it. All right, you get to ask me one question to finish up. What do you got for me? Yeah pump I'm curious.
Obviously we met I think in 2014 and 2015 and you were exploring crypto and you just made this decision to just go all in which for me I think is there's a deeper part of that which is really applicable to many people which is just like owning something and not giving a shit if people judge I'm sure there were people in your life. Who told you you were insane. I'm sure there were other investors who told
You you're an idiot and I'm sure there are a lot of people in Silicon Valley who wrote you off. But what like freed you to just jump in and how did you
Not give a shit. I guess it's the captain. Yeah, so I don't think it necessarily was around like investing as much you know, like hey caring what other people thought are not I had this really unique experience when I was 20 21 years old where I was in the military went to Iraq and I was there with a bunch of guys that were a little bit older than me. So kind of late 20s early 30s. I was frankly. I just a dumb naive like very impressionable kid.
And when I got there I had basically a pulled out of college to go and so I've been worried about like what was like the party on Friday night. I mean the same things every was worried about you know, like do I have enough money to get some beer and have a good time. And so these guys were worried about like their wives and their kids and their mortgage and is their job going to take them back when they come home and like real life kind of adult things. And so that was like one like this like maturation process that way.
Like I had to really accelerate because of it kind of just being around them in the conversation, but the second thing was like it's war and so you see both the good and bad sides of that situation and I think that at that age like in that moment what really stuck to me, it's just like, oh we're all going to die. Like there's an end to this thing. And so when I came back there was a short period of time where I probably like I implemented that learning and like a negative way like,
a motorcycle I'd do like a hundred twenty miles an hour down the highway and just like well if it happens when I'm 21, or if it happens when I'm 81, like, you know, it's like very quickly like you kind of get that out of your system, but I think that it really just got me to the point where I really just didn't care what it was like Hey look like you only have so much time and like who cares what anybody else thinks and so like that's a hard lesson to learn because you have to go through that specific experience to get that but I really carried that with me for you know, ever since
Really? And so when it came to investing, I think the one thing that I just kept telling myself was like the thing that seems least likely but has the most asymmetry is like the area to go focus on and to me like when I first started looking at I was like this is insane like literally they like you people are crazy. There is no way that this is going to work and I remember I sat down with a couple of people in there like but if it does and I was like good. Yeah like
It does like this is you know, one of the largest probably like disruptions and not you know, just a Bitcoin thing but like from an ethos standpoint from a decentralisation a privacy Center Technologies, like all this stuff and so I just slowly started to do it was never like I sat down and was like, you know, all right, I'm gonna just go focus on this it goes kind of a slow Evolution and then when I started to realize was as I got better educated about I started meeting more people it was like both like this is real right and I felt like I kind of knew something.
Before other people and other people would warm up and kind of learn it as they spent more and more time as well. So that was like one advantage and then the second thing was I was willing to be wrong and I think that's where it was. One thing to like have the opinion like hey, this is going to be big and let me like go invest Capital but a lot of investors like they'll invest a lot of crazy stuff. I don't talk about it, right or they don't want to like go Bang the Drum publicly in like, you know talk about a lot of their early stage companies until they know it's going to work and then it's called. Yeah.
Early, right and so for me it was just like if this works this is going to be really really disruptive and I'm willing to like one be wrong in public but also to Melinda learn in public and so I'm going to change my mind. I'm going to like do all this and I think it was just the expectation setting of like I may be wrong, but I'm going to like go through this entire journey in public that gave me the like safety net of if it doesn't work then I'm like, well, we all learn together didn't work. So it almost felt lower risks.
I think a lot of people thought it was but looking back like yeah, it's pretty crazy I guess and so, you know, it's working I guess and that's a good thing but I still worry that you know, the more and more that your public reputation becomes tied to something or like very much intersected. That's great today when it's working but like God forbid something negative happens in the future like they're still risk to some degree. And so you just I think got to be smart about
Educating people about hey, here's the risk do your own research? Like that's why I talk about that stuff a lot. It's just to clear my conscience of like hey, you know, I'm doing the work. I'm making my own decisions. You should do the same thing. And if you do that and you decide this is what you want to do then, you know all for it. But just make sure you kind of do your own work. I love that. I love that part about you found something. Like there's a hidden secret that you found before other people and investing. I think that's so that's what you're looking for. You're looking for hidden secrets.
is that whether it's emerging communities or behaviors and you just know before everyone else and you you know for you personally you you did put yourself out there as an observer as an observer like and it was it was very I think it's very risky to do that and in ways because at that time maybe maybe you limit yourself from getting a PP job at a big Venture firm, but you were okay with with just going in a different direction with your life and you know as an
It's been really fascinating to see as you know, when I really started to learn about it. I thought I'd missed it. Right I was like, oh my God, like how did I not see this? So that was like one weird thing and then to I won't say who it is because I'm still, you know, pretty friendly with them and they've been incredibly gracious with their time but like two or three people that I always keep in the back of my head like I got the messages of like your torpedo and your career like what are you doing? And for whatever reason there's just
I just followed my gut and like that's a horrible kind of theoretical decision making framework of like I just followed my gut but over time I think people just become more comfortable. So I should get more mature and kind of more experience. You just become more comfortable doing that can't explain it. But you know worked out so far so we'll see. I love it. Yeah, my best decisions are always when I follow my gut and investing and in life but investing and then my worst decisions are when you have that feeling
And you still say yes, and so that's so powerful and and again like knowing knowing when to follow your gut is something I've learned it took me thirty six years to learn how to do that. And I think I'm still learning it. I have a friend I'll leave you with this. One thing. He used to always say we're doing irrational things. Why are you trying to be rational? Yeah, like kind of just eat. I don't stop trying to explain to stop trying to defend. It's just like if you believe in it
Do it. So, all right, Jeff Lewis aware. Where can we send people at JM J on a junior at GMT on Twitter? You can follow me a tweet a bunch of crazy things. Don't take anything. I say too seriously, but actually, I'm Jay on Twitter and chapter one.com exactly. Awesome, and I will listen. Thank you so much for doing this with don't have to do it again the future. Thanks Pop appreciate.
