The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:49:26 · Harry Stebbings, Matteo Franceschetti
[00:49:26] S1: But one thing that I'd be nervous of, slash scared of if I was you is, like, the ways in which you work may not be transferable to having a child. Going to China for three to four months, you can do it. You're a lovely human, and I really appreciate our friendship. I don't think that's the type of dad you wanna be. [00:49:41] S0: I think we would figure it out. I think we would brainstorm. That is how it works at our house, right? We would brainstorm, and if I have to come back for a weekend and go back, I do whatever it takes. I go hardcore, whatever it takes. And then I try to do it in a smart way for whatever is possible. [00:49:57] S1: We said before about the travels. You can travel anywhere to any hotel. What is the favorite hotel in the best place, and why? [00:50:06] S0: I love Maldives. [00:50:07] S1: Do you not find it boring? [00:50:09] S0: So here, problem, which we call Alexander and I, we call it the scene. And we say we have the scene. And so, I never took a vacation since when Aeslip started. We didn't even have an honeymoon because we set the date of our wedding to be exactly one week after the end of the crowdfunding campaign. And so I get bored in any place for longer than we calculate that longer than two nights in a place, I start feeling like I'm bored. Let's move to the next big thing. [00:50:39] S1: So what'd you do in The Maldives? [00:50:40] S0: I was literally there for a weekend because I had to be in The Middle East for work, so we just [00:50:44] S1: filled To do a weekend in The Maldives?
00:50:44 · Harry Stebbings, Matteo Franceschetti
[00:50:44] S1: filled To do a weekend in The Maldives? [00:50:46] S0: Mhmm. Yeah, because we had to go to Middle East for work, Friday night. But then what happened, actually, is that the guy who was leaving hardware, he calls me that Friday night at two a. And he's saying he's leaving. And so I spent the whole weekend trying to save him because we want to save him, and I saved him, but I spent not the whole time, I had dinner, and I went snorkeling once during the weekend, but dealing with the guy, but then we retained him, so... How did you save him? Because of our culture. The company was paying him way more, giving him RSUs, so liquid stocks, plus paying him probably 3x more. But he loves so much what we do, how we work, and what we want to build that, at the end, decided to stay. But he literally decide five minutes before going in the conference room to tell his team. So it was out, out, out, out, out, and then comes to me five minutes, I was in San Francisco, he's busy in San Francisco, five minutes before going into the conference room to tell his team he's leaving. He says, I thought about that. Can you do this for me in terms of offer? And we say, Yeah, I'll do it. And then he stayed. [00:51:52] S1: Can you advise me? I'm a founder of an early ish stage companies' day. My talent is getting poached by hot companies, top labs. Should I pay the same as what they're paying to keep them if they're great? Or do you just have to accept that it's out of our league?
00:52:06 · Matteo Franceschetti
[00:52:06] S0: Well, I'll tell you something slightly different. I think you cannot even compare, meaning if the people are really comparing the options between a company at a total different scale to you, they're probably the wrong people. Or it's not that they are wrong fundamentally, like in our case is, this person was tired of, no, there is pressure at his sleep, and he does artwork, so he needs to go to China, Vietnam, travel all the time. And so it was becoming a personal choice. But he's a hardcore guy, and at the end of the day, he realized that this is what gives him energy, and so he didn't even want that life. And so, sometimes it's still happening today. Sometimes people say, Oh, I'm at the final stage with Anthropic and Eight Sleep. And to me, that is a really bad red flag. Not even for the salary, but it means you are confused. There is no way that these two jobs are any way similar. And I'm not talking because we are hardware versus software, it's just, man, get your shit together. Do you want to work at a very large company that has no certain standards and probably a certain profile, or you want to work at Eight Sleep? But here, tell you another thing that we are seeing, actually. You will love this. There is another trend in Silicon Valley where there are people that have been laid off. Obviously, I don't want to generalize, but we have seen this in the data. And so what they do is they start talking to a lot of companies. And sometimes, some of these, at least with us, they took one of our job offers, and then two weeks later, they switched to another company. And the reason is because they didn't have probably income or salary for every few months, they want to try to get a salary or income, and then they keep certain conversation open, and then they might take another job. Does that not look terrible, switching so quickly? Yeah. But then they don't even disclose.
00:53:50 · Harry Stebbings, Matteo Franceschetti
[00:53:50] S1: Do you think the value is too money oriented? Chamath said on X recently that it's become too transactional, it's too financial. From Chamath, that really is something. Do you agree with that? [00:54:01] S0: Yes, but with the caveat. I think people that join a startup, they should be driven, and it's important that they are motivated by potential financial success, and I agree. But that success will come by increasing the equity value from X to 10X. That is also why, to me, it's so important, right? You cannot really compare us to one of these big companies that are already so big, where they are way more stable, and maybe you do two, three x. At this leap, you should come to try to do 100 or 1000x. But the team size, there are so many details that are totally different, and so we actually want people that are very driven and ambitious, but they need to be driven and ambition because of the right things. [00:54:41] S1: Do you think people care to say more about upside in terms of 10, 100x, or actually just certainty of cash? Yes, it may be more capped, but you will get a tender next year, and that will be done as they are every year.
00:54:41 · Harry Stebbings, Matteo Franceschetti
[00:54:41] S1: Do you think people care to say more about upside in terms of 10, 100x, or actually just certainty of cash? Yes, it may be more capped, but you will get a tender next year, and that will be done as they are every year. [00:54:55] S0: I think it's completely fine, but that it goes back to get your shit together and understand what you need and probably what your family needs. So another thing that I learned as a CEO is sometimes now, like, we just promoted one of our best guys to VP of Engineering. And we were running a search for VP of Engineering, but he wanted the job. And what I told him is, Look, we will run the search, but you have your own shot, so prove yourself. He did insanely well for three months. And then we decided to go for him. But I think it was very good that we run an external search so we could see other people as well. I found that not the professional way to do it. But what I told him is, I'm gonna give you the job, but I don't want you to answer tonight. You go and you talk to your wife, because she has seen how hard you work over the past three months. You were already working hard. The last three months, you went like 130. And so here is not just you commit to this life. If I give you the job, I expect you, or I would like you that everything equal, you stay with us for the next two, three, four years. Otherwise, I'm not going to bet on you. So go and talk to your wife. She has seen how hard you work, and you guys, both of you, need to commit. Because it's not just you, it's your family.
00:56:03 · Harry Stebbings, Matteo Franceschetti
[00:56:03] S1: Completely agree. I call it the power of pillow talk, which is why I will always spend time at a dinner party or a drinks party as being their partner. Yeah. Because I want them to know at the end of the day why I'm doing what I'm doing and how important my family is to me and what we build is together. And so when they come home and have a shit day, it's like, but I do like Matteo and I know he's a good human. Exactly. Changes everything. [00:56:25] S0: Everybody has a family. Right? So we need to take care of them, but they also need to be both in. [00:56:30] S1: Can I ask you, when we look at the team today, how big is the team? [00:56:33] S0: We're only 160 people. Wow. That's small. Our revenue per employees is way higher than Apple. One thing I can tell you is, without disclosing our revenue, but other similar companies are probably in the thousand people at our revenue stage. Our output is five x what is average in Silicon Valley. [00:56:51] S1: Can I ask you, when we look then three years out, it's a reasonable time frame, it's not crazy out, but it's decent? How many people will you be then? [00:56:58] S0: Two fifty people making a billion. [00:57:00] S1: Which function does not exist today that will be very important,