Riding Unicorns: Venture Capital | Entrepreneurship | Technology
00:12:20 · Shah Ramezani
[00:12:20] S1: me, maybe as a founder, I think it's very important that you often start a company not really for the first idea that you're pitching to investors. I think that's, like, the best idea. You just get everyone together like a team. We we pivoted many times. It's just, like, get everyone excited about something. But really what this is is the most important asset here as a new upstart is that you are with a ready team who is like knows all the tooling, all the technology, who's constantly tooling around, playing around. Plus, you are in the market listening where the market is moving more than anyone else. Okay? So you're like there. And then once you spot something like a torpedo, you can just move much faster than anyone else because the team is basically not doing anything. They're just waiting. They're just, playing around, like... Because normally, if it's another company, let's say, like, it's a big payment company, all their engineers are allocated to existing customer base. Like, okay, you have to pull out 10. Like, no. Thanks. You know? There's, a team of, say, let's say, people, like, constantly searching with the conviction that there is something there. And then I called them almost like the tiger in the wilderness waiting for the next bait. Think the best time to build companies is when market crashes happen because it's very hard to build around right now because everything seems like a good idea. Everything sells because a lot of customers are buying because of the hype. But then the market crashes. Everyone's like, oh, yeah. So I don't need this actually because company A says the same thing. We don't need this. So what so happened in crypto crypto crashed, you were like one year in, two year like FTX. Everything went to which like zero. People were like, it's over. Regulatory is gonna kill it. All that stuff. One thing you could have spot is that Tether and Circle were growing. And then you were like, why are they growing? Crypto is dead. So then you were calling around like, oh, actually, people are using them for payments. And, actually, they don't even care about the stablecoin. They really don't care. And then what happened as well is you noticed that Tether was starting to make crazy amount of money. It was like hundreds of millions per week. It's crazy.
00:13:56 · Shah Ramezani
I was at some point looking at my phone and there was an announcement of, oh, Vantor just hit 100,000,000 ARR. Amazing. Like, or some company, don't even remember. But 100,000,000 ARR was being celebrated. And I was, wow, this is such an arbitrage. I think the industry will realize soon that this is an amazing business model. Regulator, governments, everyone will move around this because we had also the issue with regulatory support. We didn't have that for stablecoins. But my conviction was it will happen very fast because The US will realize stablecoin is the best thing that happens to them because it buys US debt and avoids inflation or at least dampens it. So that was my bet. I was like, this is going happen. I don't know the timing. And that actually happened faster than I did. Whether it happens faster or not doesn't really help us. It's like it neutralizes us because in a way, if it happens faster, you have more people moving into the industry faster. You basically are competing more. Whereas if it if it happens a bit slower, you might be able to grow so fast. So I think we got it right in some way. I don't know. I think it happened faster than thought. I think the speed came a lot with the Trump administration, Stripe, and there was a couple of moves that really ignited the fire. So that's, think, that's kind of how you think about it.
00:14:54 · James Pringle
[00:14:54] S0: Yeah. It's fascinating because I think there's that table of the company that was founded in the year and the sector that was most hyped, and it's never the big deck of corn built in that year is never the industry that everyone was most hyped about in that year.
00:15:09 · Shah Ramezani
[00:15:09] S1: No. You can't because you're always... Yeah. Exactly. I mean, most founders, make a mistake. They run off the hype, but you're just too late. You're never gonna get the traction. It's like almost like you're five steps behind. You have to be one steps ahead. For example, at the time, remember one very good investor, don't wanna see his name, gave me this advice. He said, listen. Don't play yesterday's game. And that was four, five years ago. He was like, everyone is doing SaaS, but the people who actually made a killing in SaaS did it at a time when people thought you are crazy to do build something on the cloud. Cloud is not safe. But they made the bet and they were early and there was only a few companies doing that. But now everyone who's doing it is kind of like late and they have to carve a niche of a niche to get a product. And now obviously, they are all like, you have to play tomorrow's game. In order to do that, you have to really think what's gonna be the next order effect or the next second or third order effect. That's And why when we spot a stablecoin, we said we're not gonna be an issuer because that's first order effect thinking already. What's second order effect thinking is that all these stablecoins in payment processors and convert them in all local payment, and that's... No one is gonna think about that. And plus, it's super hard. So most 80% of funds don't wanna do hard things because it's too complicated. They wanna do fast software, but there's no moat. So you have to really think four steps ahead and then place yourself. And then when the market moves you right away. But that's the only way as a small company, a first time founder actually. Because if you wanna be a first time founder but then also get the wave at the time, it's hard. Everyone is competing for the same thing. It's like never gonna happen.
00:16:25 · Hector Mason
[00:16:25] S2: So what's your approach and tolerance to risk? Because you can make a quick buck by playing into the hype, but you... You're gonna become a billionaire by being, you know, one step ahead. But it's riskier. Like, the money from customers is less available in the early years. So, I mean, just in general, how do you approach risk?
00:16:44 · Shah Ramezani
[00:16:44] S1: Yeah. I mean, risk is a kind of an interesting term. Right? I mean, you know, when I was a founder, a lot of these, like, consultant type of people would tell me don't take, you know, risk. And I was like, you don't assign risk. The risk for someone like me is not taking any risk at all. It's a bit like now. Right? We're taking a bunch of product risks because not doing anything is very stupid because everything is changing and you're not capturing any of that. So I think it depends what you want. There's some founders out here for making a few millions or 10,000,000. Some people wanna build amazing companies. We have no choice. We have to take the risk. There's no choice. But you could take risk in a way. Jeff Bezos used to say that. It's not like risk risk that you just structure it. Right? You make these bets, if they take off, you double down and mobilize resources. But it's not that much risk. Like, you get few engineers playing around with things, then you listen to it. But you have to do something about it. Right? You have to be early there. Imagine, like, Jeff Bezos never took the risk of being a cloud company. I mean, I think the reason why Amazon went into clouds, and I find that the true reason is that they were always criticized of not being a tech company. Whilst tech companies were so hyped, they were like, oh, you're a retailer. And he got so annoyed of that. I was like, this is annoying. So we'll fix that. So then he he just hired some guys from Microsoft. I don't know. Then, like, figure this out. So that was a risk. Right? Played out. And even now, we are moving into agenting payments. You can consider it risk. I don't think it's a risk. I think the risk is not doing it because if we don't capture the next big wave, someone else will capture it and come and outcompete us because they have more resources, more traction, more better people. Also, get to think about it. Talent is actually scarce. You don't grow fast enough, you're not going to capture talent nor retain talent. And I can't be a demanding person if I don't bring the underlying growth. It's very hard. So I think, you know, when you're in the startup growth mode, the only way to win is I just keep growing.