00:20:59 · Eric Kim
[00:20:59] S4: Financial services, health care, education, all these big industries would be increasingly consumerized because you could own those end customer relationships through digital technology. That was our big thesis when we started the firm in 2014. At Goodwater, our philosophy is that investing is both an art and a science. And so we leverage our technology and our software to get to the truth of the science part as quickly as possible. Of our 65, 66 person team, two thirds of that team are actually data scientists, product managers, engineers. And since day one, we've been building an infrastructure, a software layer to enable us to look at consumer technology companies. So we find so much value in looking at the data, being able to have this infrastructure to see companies on a global basis. We track over 10,000,000 companies in real time. So we have very, very accessible reports, consumer research, analytics, benchmarks that allow us to understand a company we think better than any other firm because we have so much data around it and we know how to apply it. So when we see a new opportunity to invest in, we're very quickly able to assess, is this company best in class not only on growth but also retention, customer love, what's their differentiation? All the hard science of investing, we've really locked into a very strong process and a platform itself. What's as important and it goes with it is the art part, and that's really understanding the entrepreneur, understanding that person's will and desire to win, that person's desire to have impact itself. By taking all the science and being able to really get to truth as quickly as possible, then you can spend a lot more time on spending time with the entrepreneur, understanding their motivations, understanding what their long term goal is, their vision for the company. So if you have seven days in a week, in the old process, it used to take six days in the week to do all the science, and then you have one day to maybe understand the soft part or the art. We've reversed that, is that it takes one day to understand the science part of it, the analytics, all the components that you can have software and our data platform really understand very quickly and spend the other six days to really understand the entrepreneur. Can we partner with this person?
00:23:08 · Eric Kim
They have a similar philosophy around putting the company first. Are they open to feedback, doing reference checks deeply? Those soft elements of what makes for a great entrepreneur, we're able to spend the vast majority of time because of this dual approach between art and science. And so that's been the heart and soul of Goodwater since day one and something we continue to innovate on too. We interview a lot from venture capital associates, VPs, principals, partners. One of our screening criteria, if you wanna be famous, this is not the place for you. The Goodwater approach is one that is obsessed with finding generational companies that will have tremendous impact. One firm that I admire greatly is Sequoia Capital, and they had this saying that they were just one away. If they just missed one great deal, then that would lead them to potentially being a mediocre firm. And so they had this obsession with finding great companies. If that is someone's singular purpose, if that is their obsession as well, which is to find great companies and to invest in them, that's what we look for in young venture capitalists. And I think that's what young people who are looking to get into the venture capital should ask themselves. Is this something that I'm really obsessed with that I would go the ends of the Earth tube? I will fly over 200,000 plus miles going back and forth to countries to visit entrepreneurs. It's a really hard lifestyle. It's not glamorous, but you do it because you love it, that you are obsessed with finding that insight about a company that will lead to investment that no one else in the world might see. And if that's something that young people really want to do and they're willing to put in the hard work to have the discipline. It's like playing a sport. You have to be like an athlete. You have to be able to invest in your craft day in, day out, and get incrementally better every week, and it's not something that will ever be handed to you. Maybe some venture capitalists just get lucky. That's certainly possible. But to sustain a franchise and to sustain a career over the long term, it really takes a lot of discipline, hard work, and an intensity that is driven by a passion to find and invest in great companies and support them throughout the life cycle of growth.
00:25:16 · Eric Kim
I teach a class on this at various institutions, but how do you have an investor mindset that is, a, able to see the big picture, always having that big picture, that home run vision in your mind, b, understand what are the key components that allows that to come true. What do you have to believe for that big vision to come true? C, understand what are the key risks to those and being able to, d, then research those and underwrite those risks. And ultimately, e, taking a leap of faith that allows you to put it all together to have conviction in your ideas. Whether you're an investor or whether you're a founder, having those key components and being able to break it down, I think having this mindset for the key decisions you need to make is something that we talk about internally. We certainly teach it for our investors. And, also, I think great CEOs also have this investor mindset too because they're doing capital allocation, and they're making decisions. So how do you go through that framework and be able to follow it and then also know when not to follow it? When do you know to break the rules too? That's really where the poetry comes about, that you can able to innovate and create new things when you're able to have exceptions. But to do that, you actually have to know the frameworks and the rules first. We preach both that the frameworks are really helpful, but also, really importantly, knowing when to break the rules too is really important too.
00:26:53 · S3, S5, S6, S7
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00:27:23 · S7, S8, S2
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