Invest Like the Best with Patrick O'Shaughnessy
· Tom Digan, Patrick O'Shaughnessy
So I felt naturally this obligation and my role and mindset shifted from one of co-founder to trying to be a steward of the business. And at that point, this is the day after Christmas 2019, came to the board and proposed that we needed to make some pretty significant leadership changes in order to really reset the business. And as part of that, we had some changes at the executive level, including naming Greg as CEO. Felt like at that moment, we had this sense of we can go build this thing now. Our problems were hardly solved, but it felt like the problems were now worth solving. [00:00:00] S0: Just to put like a finer point on the situation for you personally, you've left this job where you're making a bunch of money, you're in Austin, you moved your family, you've gotten most of your good friends and your family, as far as I understand it, my family, so many people that you cared about, that cared about you, to invest in this thing. What did that feel like? What was the darkest point and what did it feel like for you personally? [00:00:00] S2: Just felt like there was nothing we weren't willing to do to make it work. I think that's why it was appealing to meet someone else that felt that way, that was going to be in that foxhole. I should have learned that lesson and said, I need to not raise money from friends and family. Instead, they were the only people at that moment that I needed to double and triple down. You just had to go even further all in. Not sure I would do it again or recommend other people take that path. [00:00:00] S0: Why not?
· Patrick O'Shaughnessy, Tom Digan, Greg Stewart
[00:00:00] S0: Why not? [00:00:00] S2: You have to just know deep down that you'd be willing to do whatever it takes, including some very difficult conversations with your wife, and you're building a family, and you're leaving a lot on the table on a much easier, cushier hedge fund country club type existence here in the Northeast. And you want to go and do something hard. It turns out it's pretty fucking hard. [00:00:00] S1: I think that dynamic is why Ladder's here. Your motivation was delivering to everyone in your life. That sits with you every single day. I don't think there was a moment where we thought we weren't going to figure it out. I can't think of one day where we were like, it's not going to happen. We were going to figure it out. And on my side, I don't have that same dynamic I do now, but it wasn't true when I first joined. Not everybody was invested in Ladder. But I had a conversation with my wife where she said, this is the last one. If you don't figure this one out, there are no more startups. It had been 10 years of not a lot of success tied to a lot of work. And my wife married an investment banker who was a closeted entrepreneur. And she's been an investment banker for 18 years. And it's been a long time of, you know, I'm going to the clubhouse. I'm going to figure it out today. I promise it's coming. It's coming. That's been an enormous motivator of like, no, this is going to work. There's just no scenario where we can let this not get to the vision that we've set ourselves.
· Greg Stewart, Patrick O'Shaughnessy
[00:00:00] S1: I think that dynamic is why Ladder's here. Your motivation was delivering to everyone in your life. That sits with you every single day. I don't think there was a moment where we thought we weren't going to figure it out. I can't think of one day where we were like, it's not going to happen. We were going to figure it out. And on my side, I don't have that same dynamic I do now, but it wasn't true when I first joined. Not everybody was invested in Ladder. But I had a conversation with my wife where she said, this is the last one. If you don't figure this one out, there are no more startups. It had been 10 years of not a lot of success tied to a lot of work. And my wife married an investment banker who was a closeted entrepreneur. And she's been an investment banker for 18 years. And it's been a long time of, you know, I'm going to the clubhouse. I'm going to figure it out today. I promise it's coming. It's coming. That's been an enormous motivator of like, no, this is going to work. There's just no scenario where we can let this not get to the vision that we've set ourselves. [00:00:00] S0: Why did you decide to join it? If you think about the circumstance that you were opting into, he said it best, no money, no product market fit, needing a whole new team. Why not start a new company or something? Why come into this specific situation?
· Patrick O'Shaughnessy, Greg Stewart
[00:00:00] S0: Why did you decide to join it? If you think about the circumstance that you were opting into, he said it best, no money, no product market fit, needing a whole new team. Why not start a new company or something? Why come into this specific situation? [00:00:00] S1: It was this perfect moment that is very unlikely to ever happen again. I was building a company inside of a big real estate private equity business, a consumer company, which had all kinds of complexities of trying to be an innovator inside of a really established company. But I had this amazing team of people, some that have been with me for a couple of ventures, some that I've worked with for two to five years. Really powerful team that could build anything. It was a product and engineering and marketing, but a core group that, we wanted to just keep working together. And we wanted to be in consumer. We wanted to work on a hard problem. But we had a group of people that were not at a stage of life where they could take zero salary and start something from a garage. People were starting to have kids. Life is starting to happen. We got spouses. And so just starting something from scratch and we thought about it, it just seemed like it was a hard task to keep the group together. And that was my number one focus is I keep this group together. It's special. And I want to hold onto it for dear life. So that's what I was solving for consumer and bring my most important people. And let's take another swing together.
· Greg Stewart, Patrick O'Shaughnessy
[00:00:00] S1: It was this perfect moment that is very unlikely to ever happen again. I was building a company inside of a big real estate private equity business, a consumer company, which had all kinds of complexities of trying to be an innovator inside of a really established company. But I had this amazing team of people, some that have been with me for a couple of ventures, some that I've worked with for two to five years. Really powerful team that could build anything. It was a product and engineering and marketing, but a core group that, we wanted to just keep working together. And we wanted to be in consumer. We wanted to work on a hard problem. But we had a group of people that were not at a stage of life where they could take zero salary and start something from a garage. People were starting to have kids. Life is starting to happen. We got spouses. And so just starting something from scratch and we thought about it, it just seemed like it was a hard task to keep the group together. And that was my number one focus is I keep this group together. It's special. And I want to hold onto it for dear life. So that's what I was solving for consumer and bring my most important people. And let's take another swing together. [00:00:00] S0: Talk about what a given day was like. And when you guys joined forces, there's still this mess to clean up. And then there's this thing you have to go build. And it's like two sides of the coin. What would a day look like in those early days?
· Patrick O'Shaughnessy, Tom Digan
[00:00:00] S0: Talk about what a given day was like. And when you guys joined forces, there's still this mess to clean up. And then there's this thing you have to go build. And it's like two sides of the coin. What would a day look like in those early days? [00:00:00] S2: It's literally late March 2020, when we have zeroed in on the concept for this new product and we're having to go fully remote. The team's new. So everyone's working from home other than Greg, myself, and Johnny. The mornings were for the messy stuff. It was figuring out how to untangle some of the situations we found ourselves in, debt collectors, and actually just trying to fix things so we can move forward. In the afternoons, we're actually building product. And Greg's focused on winding the team up and iterating on what we're about to build and launch. A few months later, we're raising money at any moment during that. I'm spending every moment redialing people that are already investors and reaching out to new people. What I remember most, though, about those days, because it was hard, but it was also so exciting. And I think about at night at 10 o'clock, we had finished. The whole world has stopped. Everyone's at home. We've been in the office grinding since 6 a.m. And at 10 o'clock, it would be like, all right, like whatever win we had that day, let's celebrate. And it was like, you've seen that scene in Goodfellas when they're all in prison. And when wise guys go to prison, it's not like everyone else. They got lobsters coming in. [00:00:00] S0: Slicing the garlic.