# AI Disruption, VC Collusion, and Enterprise Cost Leadership

**Podcast:** The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
**Published:** 2026-06-20

## Transcript

I say it's white collar fraud.
I have a three-year-old and a five-year-old.
The idea that I could do any work at my house is like a total fantasy.
Like, come on, you're kidding.
I think the negotiation that we're going to have with Salesforce can be a lot different than the last one.
I think selling SaaS to tech companies is going to be a tough business because we can build stuff ourselves.
Revenge and patriotism is a great investment thesis.
There's a lot of collusion in VC.
Like I have a feeling that most VCs actually collude more with competitors than with their own partners.
This is 20VC with me, Harry Stebbings.
Now, I've done 3,000 shows.
The best guests have two things.
They have high IQ and they do not give a shit.
Our guest today is a longtime friend of mine, Ryan Peterson, founder of Flexboard.
He's been on many shows before.
I don't think he's ever had a conversation as open and honest as this.
I think the friendship allowed for a much more authentic and transparent discussion, where we touched on everything from Chinese open source models.
Is the CCP a risk?
Why remote work is like white collar fraud?
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Ryan, I cannot wait for this.
Dude, we've done this a couple of times remote, but I feel it's much more special in person.
We're going to get to remote work, but remote interviews are not as good as in person, dude.
So thank you for being here.
Yeah, it's great.
Dude, I want to start on what motivates you more?
I'm finding this really interesting pattern.
It's either the fear of losing or it's the thrill of winning.
Which one is it for you?
Interesting question.
Probably the fear of losing.
Why?
I don't want to be a loser.
You never win enough, right?
I've already won, and yet I still don't feel like I won by any standard of what I set out when I started the company.
I've won.
My first and only financial model that I made for myself for the business got to $1 million of revenue.
We did over $2 billion last year.
I hate Excel models.
I'm terrible at it.
When I open up Excel, it says sign in or register.
And I'm just like, I'll leave it for someone else.
I'm not very organized, so...
Are you not?
No, and I feel like making a good model requires you to organize your stuff.
So today's rule is we're going to play a game.
You've done shows before.
Every single question that I ask has to be a question that no one else has asked before.
Okay.
And if I ask a question that someone has asked before...
You have to tell me and I will donate $100 to a charity.
Oh, wow.
Oh, great.
Do I get to pick the charity?
What are we going to do?
What's your charity?
My mom's got MS.
Oh, that's great.
We'll do the MS charity.
I like to give it to an MS charity.
Oh, bless her.
But that's the deal, okay?
Okay.
So these questions can be fucking weird or interesting.
Do I still answer the question?
No, I don't answer.
I just go $100.
No, you just go bang, bang.
Great.
But if you lie, you pay $1,000.
Oh.
So if it's a hard question.
So I get out of any question just by paying $1,000.
Actually, it's not a bad deal.
That was a bad start, Harry.
You should have rethought your rules.
The first one I wanted to ask is, when we were chatting before, you said about the nature of VC jobs and why it means that inevitably the way that VC's jobs work is they end up as herd animals.
Why did you think that was something interesting we should discuss?
Well, I found it, you know, VC, your show is called 20 Minute VC, so what's a hot take on venture capital?
The nature of the job is simply that it's just such a good job.
If someone who likes to have a job, what would be the attributes?
Like, pays really well.
You basically don't have a boss.
Once you're like a partner, like some level of seniority, you have no boss, pays well.
You don't have to be anywhere on any given day.
Kind of not a fixed schedule.
And it's very hard to measure if you're good or not.
on any reasonable time frame you can't get fired these are pretty good attributes of a job so like therefore and security like you have fun fees for 10 years and not only can you not get fired but like dude i run a media company you run a company revenues can go down they are not certain you know fund fees are legally structured yeah so so you have to if you're in if you are a partner now if you run the fun that's one thing but if you're like a partner that doesn't own the fun You could get fired.
So you don't have infinite job discurity.
So your whole thing has to be, how do I avoid getting fired?
So you can do this in reverse or invert the problem.
And you go, well, how would you get fired as a VC?
Okay, like scandal.
Sure, avoid that.
And you can't allow everyone else who works at your firm to think you're dumb or doing bad things, like doing stupid deals.
They don't know.
It can be bad deals.
Or they can be great deals.
You can be doing great deals, but if people think they're bad deals, you might.
lose your job so therefore okay i need everyone can you're going to get consensus right and you're also going to channel check all your deals you're going to like check with your competitors there's a lot of collusion in vc like vcs are constantly talking to each other in part because they need to make sure that they don't step out on the edge and do something that their own partners are going to think are dumb.
Like I have a feeling that most VCs actually collude more with competitors than with their own partners because they need to spot check their deal and make sure it's good before bringing it to the other partners and make sure that they're not seen as being dumb.
So that's where you get the herd behavior.
I love Keith Raboy who says that actually he likes to sense check his deals with friends.
And if they don't think that his deal is stupid or crazy.
He's not doing his job.
Oh, yeah.
Okay, good.
Yes.
See, I think Founders Fun, and Keith was at Founders Fun for a while.
There's a few funds that avoid this type of behavior somehow.
Or some people are just born into it with a contrarian bone in their butt.
Do you think you can only do stupid or crazy shit because you have money now?
Me personally?
I don't have that much money.
But you don't need money.
No, I have enough.
I have enough.
Yeah.
Like when you're paying rent and school fees and it's like, oh, God, fingers crossed.
I think that richer investors make better investors.
Sequoia are focused on upside maximization.
How big could this be?
They are not fearful of LPs coming back for their next fund.
They're not fearful of deployment speed compressing, so they're elongated.
They just invest in what they think can be mega companies.
When I started as an entrepreneur, it was kind of like now it's like everybody's.
becoming an entrepreneur, but I started doing companies like in the early 2000s, late 90s, even with my older brother.
I mean, I guess at that time, it was less mainstream to start a company.
And we weren't in Silicon Valley.
We didn't call ourselves like tech startup.
We didn't raise venture.
We were just hustling to make money.
And one of my tricks actually was I moved to China when I was 25 years old for this company.
And my rent was $120 a month.
for a two bedroom apartment in a nice part of a second tier city, but it was like a nice.
And so I knew like that actually gave me a lot of permission to be an entrepreneur, which was kind of being crazy, doing crazy stuff because I knew I could live off of, if I could make 500 bucks a month, I could survive.
And I knew I could always make 500 bucks a month.
So like I could do a startup, I could take risks.
Cause I'm like, worst case, like I lived in a nice apartment in a nice town.
I had a good quality of life.
My total op-ex was like.
$250 a month.
So it gave me permission, yeah, to take some risk.
But it's the opposite.
I'd have to be, I was relatively rich, right?
Or like, relatively secure.
What's your number?
What's that mean?
What's your number basically means?
What's the number that you had in your head of like, ah, once I have this, I'll be happy.
So for me, it was always like $20 million with the rationale that you have 5% interest, you make a million bucks a year for doing nothing.
A million bucks a year is more than enough for anyone who's adjusted, not mentally.
Well, this is how you know money is amazing because the more you have, the more you want.
You can never satiate the human desire.
It's infinite.
Do you find that?
Because I don't.
No?
No, of course you want more.
But I only buy trainers.
I would much rather have more convenience than more money.
I mean, I haven't been that motivated by money.
I'm more into like power.
I want to do big things.
That's really interesting.
There was a question that my girlfriend asked me the other day.
And she said, if you lost 90% of your money, how much of your self-worth and self-esteem would you lose in percent?
What would you say?
Maybe you're more adjusted than me.
I said, I'll go down 90%.
No, I did, but my work is directly correlated to the financial outputs that you have, like, candidly.
If you are a general in the army, your success in your profession does not correlate to your financial statement at the end of the day.
I'm a venture capitalist.
The clue is in the name.
If you're good, you make bank.
If you're not, you don't.
Yeah, but it's, you know, you've got to forget the past and the future.
And, like, the future's not written, so you can go make it.
If Flexport would have raised today, what do you think you'd raise at?
I don't know.
I really don't know.
I think this year we're going to get to basically break even.
We're on run rate to do about $450 million of revenue, net revenue.
Breaking news here.
I haven't shared that, but $450 million of net revenue.
What's your growth rate?
Last year was $350 million.
$350 million?
No, $350 million last year.
So what is that?
It's $100 million, almost 30%.
So you're doing 30% out what you said, $450 million.
Yeah.
And I think we'll do $600 million.
I mean, the goal is to keep going 30% every year.
for 10 years.
I think the big question and then beyond, but the big question for most startups, I think you have two things that you have to ask.
Actually, I got this from Paul Graham where he said, every startup, if you see like a hockey stick growth curve, then there's two questions you need to ask.
Like, are they doing some kind of hack that's unsustainable and going to stop working?
Number one.
And two is, is the market big enough for it to keep going?
And if the answer is like, no, there's no hack.
Like this is genuine growth.
And two, the market is really big.
The thing will just keep going.
Right.
And I think Flexport's like that, like the market, there's no hacks.
It's actually a grind.
Like we've got salespeople out there in the field, like calling on businesses and going around the world.
And then the market's enormous.
We're still less than 1%, 0.1%.
When you extrapolate that out, you said 450 to 600, and then you can be 750.
And do you worry about the constraining exit landscape?
Like when you look at IPOs today, dude, unless you're a mega scale, you don't want to go out.
With the greatest of respect, strategic buyers are less present than ever before.
And then you've got buyout firms which are running for the hills because the Medallias and the Coopers and the Anaplans of the world are all looking pretty precarious right now.
Do you think that's a concern that should be felt?
I don't think about it at all for Flexport.
The word exit implies that I'm like...
going to stop working at the, you know, that I'm exiting.
So I don't think of it in that term.
IPO would be...
Do you want to take the company public?
Yeah, we intend to go public.
And I don't know what the valuation is or should be or will be.
It's sort of like, well, but if we can just keep growing, you just draw the math out.
But when do you think you should go public then?
I'd like to be a nicely profitable, making a few hundred million of EBIT and then we'll go public.
So it could happen in a couple of years.
It should.
The way that things are going right now, we should be able to get there.
And like, you know, maybe it's not.
I don't know what it will be worth.
And like the market kind of sets that at the end of the day.
And if it's undervalued, okay.
Like as long as you're generating a lot of cash, then you could, if you're really undervalued and you just buy your own shares back and like maybe that's a good thing.
Do you think you should underprice on IPO day so you have the pop?
Or are you like you should price to perfection?
People focus so much on this.
Like I don't understand it.
Like of course you're going to focus on your price and whatever, but people, there's this concept of like an IPO window.
that investment bankers and founders talk about.
It's like, oh, the window's closed, you can't go public because the price won't be there or something.
But you're like, well, what if you went public and then your price went down?
Is that better?
I mean, it's the same thing, isn't it?
So I don't quite understand that dynamic.
I'm an operator, run a good business, make it super profitable, have it grow.
And don't compare yourself too much to Anthropic or these AI companies that are, we've been around for 15 years and there's companies that are getting to our revenue in 18 months.
And you're like, I think Envy is a very bad.
Is it one of the seven deadly sins?
You certainly should avoid it.
Do you worry about the concentration of value to a few companies?
When you look at eight companies making up 85% of year-to-date gains in the stock markets, and then you look at Anthropic and OpenAI, do you worry about that concentration of value to smaller and smaller number of names?
As long as I'm allowed to use OpenAI and Anthropic, then I don't mind at all.
They deserve it.
These things are just incredible, miraculous products.
What I worry about is that they cut us off and that we can't use it anymore.
If I can't use OpenAI, we're all going to go back to being just idiots we were two years ago.
Like, if I, you know, like I need this stuff, like we're so dependent on it, both personally and then like...
What do you need it for most?
It's a ton of business logic, like a lot of rules, because every, we serve, we're an enterprise logistics company.
We help businesses manage their cargo shipping around the world.
Every business is unique.
and has their own process and their own, oh, we need this data and this format moved into this ERP system.
Like, we want you to notify us.
Some companies want to be notified 10 days in advance of their container arriving at their warehouse and some seven.
And like, they really care about that.
And they spend so much money that you have to do what they say.
So a lot of our tech is like this big rules engine and you get all these if then type statements of, and it becomes very unwieldy.
And at the end of the day, it can't really keep up and you end up with people managing some of this business logic.
Well, the agents can just do it.
And RPA couldn't do that before.
Because I thought that was the promise of, and for people who don't know, robotic process automation, I thought that was kind of the promise of RPA that was meant to be fulfilled.
It does a lot.
And we've gone a long ways with that.
But agents can go all the way.
Like, we think we can automate the full end-to-end.
And this is your building your own.
We're using OpenAI, we're using Anthropic, we're going to increasingly use open source models to save money, but also because we don't today have a budget constraint on our Anthropic contract.
Did you see that article the other day?
It was like, we spent half a billion dollars.
I thought that was sort of fake, but we don't have a budget on our contract.
And yet last Thursday, I woke up, I don't know when we're going to air this, but it was like a few days before the end of the month.
And it said, your organization has reached your limit for the month, which it's not true.
Like something went wrong in their side.
But I had this like shot, this moment of like, oh, man, what if they just decide one day to like cut us off and say no?
And I actually think this is a realistic scenario.
Was the expense much more?
We'll go back.
It's not that much money for us.
It's not.
How much is it?
I think we're spending probably like $5 million a year or something, ramping pretty fast, though.
Like, it's doubled in the last few months.
We released a show with Brandon at McCaw, and he said he spends more on Anthropic.
Or, no, he spends more on OpenAI, whichever one.
Did I say $5 million a year, right?
Yeah, not a model a year.
No, he spends more on models and compute than he does on salaries, by far.
I thought that was really interesting.
We're not even close to that.
But there's a world where that becomes...
I mean, it has to...
At some point, it's very interesting.
It has to for the valuations to be justified.
So right now, Benioff said that he spends $300 million a year on Anthropic for his team, which works out to 3.8% of developer salaries.
For the trillion dollar valuations to be justified, you need to be in the 18% to 20% range.
We still need to see quite a movement.
Yeah.
We do see ourselves automating a ton of the work.
taking it away with, you have to, right?
I mean, even at five, like, I better save five million a year in labor costs or make my product way better, which we are finding ways to make the product way better.
Do you think you're spending 20 million a year on Anthropic in five years?
Yeah.
I mean, I don't know about Anthropic, but on LLMs.
100%.
But it's possible that the price comes way down, deflation, and there's, it's also possible that we move a lot of workflows onto open source, just because if it's good enough, like...
For our coding agents and for actually developing product, we probably always want the frontier model.
But if you're just automating a workflow, if the open source one that's basically free can automate it, then there's diminishing returns to frontier LLMs.
And there's diminishing returns also to just doing it.
Once I've automated all the work, I don't want to keep spending the money.
I had the agent's work.
I should probably stop.
Now, I'll keep spending money on code and things that improve our product and our surface area that our customers interact with, but we have a lot of manual processes.
Once they're automated, I should stop spending the money on Anthropic.
I was a terrible interview.
I interrupted you.
You said there was a realistic scenario that...
Oh, there's a realistic scenario that they decide that the compute that they have is more valuable for training superintelligence than it is for letting customers use it.
And they stop, you know, to cut us off.
And we're all just going back to being idiots.
At that point, do you not think governments need to step in?
Maybe, yeah.
Do you not think actually that you're extrapolating it a bit far given the fact that I can't even do fucking clips on AI right now?
Like, this is my point.
Not yet.
No.
You're seeing Uber and Microsoft come out saying, yeah, productivity gains are kind of questionable.
I think that's probably true in those businesses.
Our business has just tons of...
manual operations with humans like forwarding email we call it freight forwarding i often say it should be called freight email forwarding it's like people passing pdfs around and moving data between enterprise systems and there's just like a huge amount of human labor and i think that most of the economy looks like that not like uber which is a highly automated business although i don't know why they have like tens of thousands 30 000 more employees because pretty automated right like i don't quite get that you said the team is 2000 almost almost 2000.
20, 30, four years time.
How big is the team then?
It might be about the same.
We're hiring a lot of salespeople and we're expanding a lot in new markets.
But I think you're going to see like a shift from people that today do operations, kind of manual work that I was describing earlier into, okay, you've got to, the work style is going to change.
And if the people are not...
able to make that shift, then we're going to have to rebalance into much more customer-facing account management, sales, kind of like, all right, how do you, because I think that's the future is just like.
Do you know what I think the future is super contributors?
And I don't see people talking about this enough.
Zeb from ClickUp said this in his post, which we chatted about before, but he essentially said he was cutting people so he could pay the super contributors 10x more.
You don't need more salespeople.
You need more fucking amazing salespeople who leverage AI, outbound AI tools, inbound AI tools, pipeline tools, forecasting tools to be the next great sales leader that leverages AI.
No?
You certainly want as many of those people as you can get.
There's just like a lot of mass that you want out there in the field.
I mean, think about our business.
We're global trade, platform for global trade.
There's every business on the planet.
that needs to ship something anywhere.
There's a lot of boots on the ground that you want to just to interface with those companies out there.
And like, there's a limit to how many relationships a human can have.
And I think you can probably use AI and use other techniques to like double that ratio or something.
But like, there's some limit to how many relationships you can maintain.
And it's a relationships game at the end of the day, sales.
And so I'm somewhat skeptical.
It's an interesting question though.
Like Yelp has 3,600 salespeople calling on restaurants.
Wow.
It's actually a pretty good business.
I think they haven't grown that much, but they print cash.
And like 3,600 salespeople, if Yelp can have 3,600 salespeople, I feel like we should have more than that.
I interviewed the founder of Invisible, which is another data provider, and he said that you can't do enterprise without a fully-fledged FDE model.
Do you think that's true working with some of the biggest companies?
No, it's not true.
You can do it without that, but your business is better.
If you can get that level of integration, you know, the freight industry was the original FDs.
They just weren't engineers.
They were just, but one of the big tech companies that runs like hyperscaler, let's call it, has one of our direct competitors, has 130 full-time employees that work at that company, that have badges, that show up to work every day, that run their logistics for them.
And we cannot crack the door at that place.
I won't say their name, but we cannot get our foot in the door because all the decision-making is done.
by our competitor.
I think it's an insane, what an insanely great competitive advantage in positioning to have at, so I'm jealous.
And I don't know where you find, but they're not software engineers.
These are just like logistics people.
If you can get that same thing and just deeply embed yourself into the process workflow of a company, it's so valuable.
It's not easy to do.
And like, it's not easy to find in the FDE model to find good FDEs who will like know what to do.
show up and do a good job every day and like stay in the job and not have the turnover and...
You also have like a question of like, do truly great engineers want to be FDs?
It's not often as close to the pure art of solving engineering problems that they want or great engineers want.
It's challenging.
Yeah.
Actually, speaking of the...
So it's quite common in our industry where you have these like forward deployed, they're not engineers, like I said, they're forward deployed logisticians or something like they're on site.
And we had this recent, we just had this huge customer win, one of our biggest ever.
And I was like, wow, this is great.
But I had heard that our competitor has one of these forward deployed logisticians like and runs their RFP, runs their process for choosing a freight forwarder and they always choose themselves.
which I'd heard about and was like, wow, this is idiotic.
Like, why do they do this?
It's a great business.
Totally.
Today I'm going to choose me.
And we won.
And I was like, wow, what happened?
And then I found out the competitor had been acquired by another one of our competitors.
And they did a huge layoff and they fired the person.
And she got hired by the company.
And then they chose us to get back at them.
Wow.
Never underestimate corporate incompetence.
What's your largest customer?
Not named, but size.
I spend about $150 million a year.
The biggest one.
We don't have too many like that, but we have probably a dozen that spend over 50 and then a long tail.
Wow.
Yeah.
Logistics expensive.
It's 11% of GDP.
So people spend, and these aren't, they don't have to be that big of company.
That's the thing that I will often have to educate investors on is like logistics is a much bigger market than software.
So for example, like a typical, like a medium-sized company will spend, call it 5% of their revenue.
Companies spend about five, if they're physical goods companies, they'll spend like 5% of their revenue on logistics.
They're not spending 5% on any software.
You know, maybe like at scale, like our price point is similar to what you would spend on Oracle or something.
for a comparably sized company actually less like but then you would say that we are not seeing the productivity gains in logistics that we are seeing in software creation because if we were you'd be seeing revenue scaling in logistics like you have done for a cognition or a cursor You see costs come down at least.
Yeah, I don't know that you're going to see a huge revenue scaling of this.
I mean, by the way, our competitors, like us and others that are scaling, that are serving data center companies, that part of the business is growing like crazy because the data centers have to be built.
The data center economy is fucking wild.
It's wild, yeah.
When we go back to the teams themselves, I am intrigued.
You said about the use of Anthropic.
Have you always used Anthropic?
Or has that been a switch?
We switch back and forth.
We're using Codex, too.
In fact, yeah, Codex.
won us over.
Sam stole my heart two months ago when he said you can have two months free.
That was like 30 days ago, so we switched everything to Codex.
So you switched everything to Codex?
The engineers can choose both.
What do the engineers choose?
I think they're still more habit formed on Claude, but they use Codex.
We're cursor users.
We use everything.
As an enterprise, we've been more Gemini because we're Google Docs centric, and so it's really nice how baked in it is and Notebook LM and these things, but all of our employees have Claude access as well.
You're able to invest in OpenAI or Anthropic.
OpenAI is whatever, $900,000, and Anthropic's a trillion.
So there's a slight difference on price.
Yeah.
But you can only invest in one.
Which one do you invest in?
Oh, I can only invest in one?
Why?
Why can't I invest in both?
Because I'm forcing you to choose.
It'd be easy if you could choose both.
At the same price?
Let's do the same price.
Yeah, same price.
I think I'm going Anthropic.
No offense, because Sam's a friend of mine.
Just because the enterprise business?
Yeah, the enterprise business seems great.
And the team, I think there's a lot of value of this cohesive team that's been together forever, and OpenAI's had ups and downs, and people have left, and it's been hard to keep the whole team in place.
And there's just so much value in founders that love each other, and no one quits, and the talent density, et cetera.
But OpenAI has people that sleep on it.
I would invest in both, right?
And I have.
I would do as much as I could into either of them.
You invest in Anthropik?
Yeah.
Well done.
No, but not like early.
I'm not like...
What price did you do it at?
No, it's like $600 or something.
It already ran away, so I'm not going to make much money off that.
Doing it at $600 is not bad.
Well, like two months later, I got my...
It wasn't very long ago.
I just recently...
How much did you do?
My finances are private, but not that much.
I don't have that much money.
Do you worry about open source?
As a threat to Anthropic?
I don't care.
That would be great.
I don't know, dude.
If you think about what you just said earlier, actually, which is a lot of the usage from Frontier models can be moved over time for more mundane tasks to open source models, which we both agree on.
That massively maims the market for the core providers.
Yeah.
If we only use them for the most Frontier...
advanced tasks and everything else we can just push to open source or older models.
Their core business is much smaller than you think.
No, but your question was, do I worry about that?
I don't care.
I mean, Antropocode is zero.
I don't care.
I didn't put an amount of money that matters for me.
So on my personal basis, and if AI and intelligence becomes really cheap, that's like much better for the world and for me.
Do you worry given the majority of open source models are Chinese?
Not really.
I don't know how they work, like how they can stay competitive on some level.
But if they're open source, they're open source.
Who cares where they're from?
We can use them.
Well, because you're essentially feeding data back to the CCP would be the fear from Keith Rebohr and others.
And then actually, CCP-funded open source models are powering the majority of early-stage Silicon Valley companies.
And that essentially is giving a window into Silicon Valley for China.
Yeah.
It's pretty interesting.
I don't personally spend a lot of sleep over it.
Do you sleep over China?
Not really.
I mean, I think...
I've lived in China for a few years, and I speak Chinese passively.
Not really well, but I could have a conversation.
And so I feel like I know China better than most.
It's not a high bar.
For sure, yeah.
On some level, I think that China and the U.S., there's a huge amount of mutual dependence there.
that is underplayed.
And I think that there's a lot, the interests are much more aligned than people give credit and all this.
There's so much saber rattling and so many people like trying to sound, I don't know if they're trying to sound smart or tough or something, but they're casually throwing around like war between China and the United States without realizing that like such a thing would be a nuclear war and you'd all be dead.
And so I think that the odds of that happening are pretty low.
I don't really believe that these countries are going to suddenly start shooting nukes at each other.
And yet if you have war between these two powers, that's what it would be.
I loved it when Trump landed in China and they played YMCA.
Oh, they did?
Yeah, yeah, yeah.
And there's this video of Trump.
And you can see he's kind of like a little child as a party, desperate to dance, but not allowed to.
Bad protocol.
Yeah, yeah, yeah.
And it's just brilliant YMCA playing in the background.
Well, I remember when I- Obama went there, they didn't even open the, they didn't roll out the red carpet.
They didn't bring up the stairs to the Air Force One.
You had to like, Air Force One has its own stairs, but it's like, they're not very good.
They're sort of awkward.
You had to climb out the bottom of it, so.
Oh, wow.
I did not know that.
Yeah, you can look it up.
And when I think about China, I think about a mutual friend of ours, Keith Reboy, given his very open concerns around China.
And it goes to something you said to me before, which was going back to kind of venture and fundraising, how you kind of fluffed or fucked up two funding rounds, very humble of you, and how Founders Fund bailed you out of them.
I don't actually know this story.
They're both different stories.
Thank God, it'd be rather embarrassing if you did the same mistake twice.
Yeah, exactly.
The first time, but they're both my fault.
Well, at least the first one was definitely my fault.
So our Flexport Series B round, we were like a hot company.
We were getting, a VC came in and tried to preempt our round and offered us for our scale and where we were, what were great terms.
I think it was, at that time, it was like 50 on a 500 million valuation or something.
But like this was in 2015, I want to say, 2016.
It was pretty early in our journey.
We were founded in 2013.
So it was like, they were good terms.
And I was very happy with the terms.
And yet the VC wasn't that famous or well-known.
They're a good firm.
I'm not going to say their name.
They don't need to be starting fights.
But I decided, and this is where I screwed up.
I decided I could get the same or better terms from a better known investor.
And so this was like on a Thursday and I spent Friday and the weekend hustling, trying to like pitching a whole bunch of investors, but I had no, I was being preempted.
So I had no data room or deck or anything that you would need to do a fundraise.
And I think the word must've got back to this investor.
Cause I, he coached me.
I basically never talked to him again.
He definitely didn't show up with an actual term sheet.
And then now I'm in the midst of a fundraise.
where I've set this artificially high price and I wasn't fundraising, but you can't like turn off the fund.
I don't know.
It wasn't, we were going to need to, we didn't need money then, but we were going to need it within a year.
And so it was just like this very awkward position and no, and Founders Fund was our investor at that time.
They'd led the series A.
So first mistake, I should have just called Founders Fund day one and said, Hey.
will you do this round?
But like, I thought I was hot and like, yeah, eventually I did call Founders Fund and told him, yo, here's what I screwed up.
Like I tried to raise money, failed.
I did have an offer, but the best offer I got from my process that I ran post was like a 275 million valuation instead of 500.
And I went to Founders Fund, I just told him everything.
It's like, here's how I screwed this up.
Best offer I got was 275, but the firm wants board control.
So if you'll just do it without taking the control of the board, you guys can have it.
And Peter just offered 300 instead of 275, which wasn't as good as my 500, but he didn't need to do that.
I told him he could have it at 275, but he offered 300.
What's been your biggest lesson from working with Peter?
They've invested several times in you.
Yeah, they have.
Founders Fund led our A, our B, participated in the C or D, and led our E.
How much of the companies they have?
They probably, I think I'll look at the latest cap table, probably like almost 15% or something, maybe 12.
There's been some dilution, so.
Okay.
Any big lessons from Peter?
Man, he's sort of an enigma.
Just amazing how far in the future he's able to look and be right.
The number of predictions that he's made well out there.
Just kind of blow your mind.
That's not unique insight for me, but that's one of the things that amazes me.
Actually, one of the things I love personally about Peter is that I feel like most people I talk to talk too slow.
And Peter does not.
And if you accelerate your speech with him, at least when Peter and I talk to each other, I think we talk like two times faster than when we talk to other people.
There's never a moment where he's like, doesn't understand what I'm trying to say.
I care a lot about word to value ratio.
You know, the people who take a very long time to say quite a simple message and you're like, just say the fucking thing.
Drives me crazy.
Yeah.
Should you always take the highest price?
When fundraising?
Yeah.
No.
Maybe.
It depends.
That was the worst.
I hate flopping when people don't get into it.
Should you know, maybe it depends.
I'm trying to think, like, over the years, I kind of would always just take the highest price.
But then Brian Chesky says, don't ever take the highest price.
Don't ever?
That I disagree with.
It could be quite uncorrelated, like, the best brand name investor could pay more than the second.
best sometimes.
It's very hard to give generic fundraising advice.
I think it's very dangerous.
If a founder asks me for advice, I'm like, you know your situation much better than I do.
So it's like you have to be careful on that.
No, I disagree totally.
And with the greatest of respects, I actually think there is generic advice which you should listen to, which is like tier ones are worth it.
Take a discount.
Yeah.
They will help you get a next round unwaveringly.
Yeah, that's the next thing I was going to say.
It's like with that caveat, you probably will get a bet.
Like the fact that we're a founder's fund company has made so many other investors want to invest in Flexport and like.
You consistently underestimate how team members think about VCs and the importance of VCs to joining a company as a decision.
The amount of great operators who you're like, well, they wouldn't be, I'm so, I don't mean this rudely, dumb or naive enough to.
just join a company because of a VC, do just join a company because of a VC.
They'll go, oh, it's a Sequoia-backed company.
Oh, it's a Founders Fund-backed company.
It must be hot.
Yeah, and employees have the hardest time because they only get to pick one at a time, right?
Like one company.
I'm Silicon Valley right now.
You hop around one at a time.
Do you find that hard, the hopping that seems so prevalent today more than ever?
It seems like there's a lack of loyalty.
For sure.
And we basically moved away from San Francisco as a result.
Like our team in San Francisco is maybe 4% of the company is based in San Francisco, even though that's where we were founded and where I'm based.
Why is that?
Is that because of cost or loyalty?
Cost and loyalty.
Retention of good people has always been really hard.
And acquisition, respectfully, you're fighting against OpenAI, Anthropic, and some of the hottest companies on the planet.
As great a business as you are, you're not as sexy.
Yeah.
And like our customers aren't there.
So I don't need a big sales team in San Francisco.
You know, we need to be everywhere, not just in San Francisco.
I think we maybe overdid it, though.
Like six years ago, five years ago, I had 800 people in San Francisco.
And right now we're down to about 75.
And actually, I'm looking around being like, my leadership team is too distributed.
I want more talent in San Francisco.
So I'm probably going to start pushing more of our employees.
Like, hey, you should come move back to San Francisco.
I just got our CFO to move to San Francisco.
It's made the business much better.
Leadership team distributed.
You said remote work is what?
Dot, dot, dot.
Can you help me fill in the statement here?
Well, I say it's white collar fraud.
I have a three-year-old and a five-year-old.
The idea that I could do any work at my house is like a total fantasy.
Like, come on.
You're kidding.
And like, I have a bigger house than most employees do.
Like, I actually do have a private office I can close the door on.
It doesn't matter.
Like, there's no work getting done at that house when the children are around.
And the kids come home like at when to school and 3 p.m.
like your workday needs to keep going.
So I think I'm highly against it.
But we're five day a week in office as the baseline assumption.
at our company.
And I made the mistake during COVID of like going remote and letting it stay remote for way too long.
And so like, I think our culture suffered as a result.
Was it difficult to bring it back in?
Difficult for the people who don't work here anymore.
But a lot of founders are sitting in the seat today going, man, I want to bring it back.
I want in person.
I know the value of in person, but I don't want a revolt when I say I'm sorry.
What advice would you have to them?
Yeah, I just got to do what you want to do.
I mean, I think all the bad things that have happened at Flexport were when I didn't do what I wanted to do and was trying to...
You don't want to ever be afraid of your employees, first of all.
The employees don't want that either.
They want a leader who's going to go in the direction that they believe in.
Even if they disagree, they want to follow a good leader.
And if they opt out, that's fine.
They can opt out.
There's a lot of good jobs.
I think that also the idea that work from home is going to benefit highly paid employees is sort of...
a total fantasy.
Work from home done correctly, you should be hiring the world's greatest geniuses.
There should be a labor arbitrage here where you're finding really, really smart people who make a lot less money because of the way that our economy is structured, where some countries just have a lower purchasing power.
And you can hire people like my brother has an assistant who has like off the charts IQ.
in the Philippines and makes like 500 bucks a month or something.
I don't know what he's paying the person now, but like that's who's going to benefit from a work from home environment.
It's not the guy who's making 250K a year and lives in Jackson Hole and wants to go skiing for four hours a day.
Like that is, there's too much of that.
Also like, like look, your podcast is better if we're in person.
Sure, way better.
It's the exact same with every meeting that you have.
Like I struggle and we struggle because we're still, even if we're in office, we're distributed.
We have 40 offices.
We need to be in every country.
So I struggle personally, and my team all knows this.
I struggle with paying attention in video meetings.
I don't actually really do Zooms anymore because I just, A, find that the quality of interaction is so low, and B, find I'm so disengaged.
I know.
It's bad.
It's bad.
And yet, it's the nature of our business.
I do want more of our talent to come back to SF.
Google has this new product.
I haven't used it yet.
They built this, like...
I think HP is marketing it for them called the Dimension.
Oh, the holograms.
People have used it and said it's amazing.
I know, I like the sound of this.
But they're like $250,000 each and then you need one.
You can afford it.
No, but I need one in every office.
Well, how many offices do you have?
40.
40?
It's growing, yeah.
Oh, yeah, you can't afford it.
It gets a little crazy, right?
That's a lot.
And we need to have an office in every country on Earth.
And then that's only one person at a time.
I do want to ask, just going back to the execs, you said before that we should touch on like...
why you should never hire.
I think it was that you should never hire exacts.
Was it?
Most startup founders, yes.
Yeah, and I just consistently see, I saw this the other day with this founder, and it's one of the really fast-growing companies, and they hired the CMO from one of these big logoed companies, and I go to the CMO's Twitter.
They don't have Twitter.
CMO doesn't have Twitter.
And it's like the most enterprise CMO ever, and I'm just like, ugh.
Marketing is the hardest thing to hire for too.
Marketing and HR.
Well, pause.
Why is marketing and HR the hardest to hire for?
For different reasons.
Marketing and enterprise marketing.
The moment something works, it stops working because the competitors will copy it.
And so it's like, it's all about creativity and originality.
And like, how do you get creativity and originality in B2B enterprise marketing?
And if you are creative, like you probably kind of become a founder if you can do good storytelling and creative.
ideation in the marketing storytelling angle.
So if you find a good marketer in B2B, you really want to lock them in.
And so it's been, it's been a, that's a hard one to hire for.
And also to do that, to do like successful B2B marketing and stand out, like it's one thing, oh, I just make good sales decks for the team and like, okay, fine.
Like that's some baseline stuff, but you're not going to differentiate or move that bend the curve on a company's success.
You have to be doing kind of crazy stuff.
Most crazy ideas are bad ideas.
So it's like being an investor.
Like you want to do crazy things that happen to also be good ideas.
Like it's that narrow intersection.
Which also don't denigrate enterprise brand, which is even harder.
Yes.
And like as an employee, it's so hard to take that risk because you're like, I don't know, if I do something crazy and it like blows up, I get fired.
Like why take the risk?
So it's very, very hard to find like a marketer that's not part of the founding team or like somehow.
You have to give, as a founder, if you're not the one coming up with these crazy ideas and trying things, you have to protect the team and let them, the leaders there, and let them know, I want you to experiment.
Because if it's not crazy, it won't work.
Or it has to be very expensive.
And most startups can't afford that.
So it's the big benefit that a big brand has is they can just do really expensive stuff.
Expensive is a feature in enterprise marketing because it's like you wouldn't spend a lot of money on something.
promoting something if it wasn't good, so it must be good.
What's the most expensive thing you've done marketing-wise?
Well, we don't have money to waste on marketing, so...
But you've never spent, like, a million dollars on big logos, big brand?
No, I mean, a million dollars, sure.
We do, like, a conference that costs maybe a little bit more than that, customer conference.
Do you find them effective?
Yeah, yeah, yeah, for sure.
Events works all day.
And by the way, you don't have to be that crazy to do events.
B2B marketing is events marketing to some extent.
And that's plain vanilla.
By the way, you don't need to go hire a CMO to run events.
Conferences are kind of hard to pull off, but normal events, like, hey, host a dinner, you don't need marketing at all.
Just have your sales guy call the people and give them a budget for it.
So I basically was doing, I was prepping for a show with Adam from Applovin.
He's like, oh, I fucking hate HR and every great CEO hates HR.
And like a complete dick that I am, I thought I'd front run his show and take every great CEO hates HR and I'd tweet it myself.
Oh my God, I got killed by everyone for this tweet, which was essentially Adam's words, which I agree with and I think he's right and credit to Adam, he's amazing.
Do you agree every great CEO hates HR?
You probably go through these phases, right?
I mean, I think the thing that you cannot have is them being like union representatives of your employees.
They're not.
They're there to represent the company and therefore the CEO.
And so if you don't have that as a CEO, like a trusted HR leader, and you feel like the HR leader is more on the side of the employees than on the side of the company, then there's a problem.
There have been periods in my company's history and like the industry in general where you're like, didn't have the right HR leadership that wasn't focused on the business outcome.
But the employees are the company and the company is the employee.
Everything else is a fiction.
We're just like just a fake brand name here with a bunch of people that are building the company or serving the customer.
So the word HR is kind of wrong because they're not humans are not a resource that you can mine and take out of the earth.
Like you have to give back to the employees and have a two way relationship.
They're not.
But agents are resources.
That's true.
That you mine and agents will in large part replace humans.
And so the really interesting job function that could be created is like agent resources.
That is a good idea.
Honestly, yeah.
It's like 996 is being replaced by 007, which is midnight to midday, seven days a week, which is your new agent timeline.
Do you buy the SaaS apocalypse?
And what I mean by that is you said earlier that you've built agents for a lot of workflows.
Have you ripped and replaced Salesforce, Cooper, you name it, and built your own SaaS tools?
Some, not those names in particular, but yeah, some.
And I think the negotiation that we're going to have with Salesforce is going to be a lot different than the last one.
Because I think selling SaaS to tech companies is going to be a tough business because we can build stuff ourselves.
And Salesforce is great, although most of our people don't like Salesforce.
How much do you spend on Salesforce a year?
A few million.
A few million?
Yeah.
It's expensive, yeah.
So it's on the list of candidates.
I just did a show with Fradick Curative.
I don't know if you know this guy.
Fascinating guy.
Loved him.
Built a health insurance business in San Francisco.
Saw $5 billion of COVID test kits during COVID.
Oh, wow.
And then, obviously, COVID no longer such a problem.
And now he's pivoted into a health insurance business that does north of a billion in revenue.
Amazing guy.
And they spend $600,000 a year in Salesforce, and he replaced it with an inbuilt tool to three weeks.
Yeah, yeah, yeah.
So I suspect that.
will be replacing a lot of these things.
And I think a lot of what will happen is you'll just shake them down.
I don't know about Salesforce.
Salesforce Slack is also going to be a great, turn out to be a great acquisition because like that's pretty sticky.
Nobody wants to replace, build their own Slack.
I could see a situation where you go, we're cutting Salesforce and they just raise their rates on Slack.
I don't know.
So we actually incubated a company which is- A Slack competitor.
Yeah, it's a direct Slack competitor built for the AI age.
Okay, yeah.
And it's kind of actually predicated on a kind of idea of- Alex Rampell from Andreessen.
He says you want to be in markets which is Greenfield Bingo, which essentially are markets where there's a huge amount of net new customers created every single year.
In other words, you don't want to exist in markets where there's static market entrance.
And actually, our market is every new startup that's ever created.
If you're creating a company, do you want to go on to Slack and Salesforce, or do you want to have an amazing AI first messenger?
That makes sense.
Which I thought was interesting.
Yeah.
Definitely want to be in big markets too, but...
I mean, I think we're coming back to our earlier thing about SaaS.
I think there's going to be a lot of categories where you say, for example, there's one or two pieces of software that we fully replaced and killed it and more every few weeks.
But there's going to be a big category where you take like one of the things I'm having our procurement team doing is make the PowerPoint case study of the one of the SaaS that we did replace and how we did it.
and how long it took.
And then just go down the list of all the other SaaS vendors that we have and say, hey, look, this is what we did because the vendor didn't reduce our rates.
So I need you to reduce your contract rates or else I'm just going to have to replace you guys.
Question one, what is that reduction, do you think?
I think you get like 20% out of almost everybody.
We'll see that.
We'll see.
No, I think that's very fair, actually.
Do you worry about maintenance?
Yep.
That's why I don't want to have to do it for a lot.
In some cases, it might be a bluff.
I couldn't do it for all of them.
And I don't want to dedicate that much of our engineering resources to replacing SaaS.
I want to replace work, expensive labor, and I want to build our product and make it way better.
So I want to focus on our core business with our engineering talent and not...
Do you worry about security?
Yeah, constantly.
Paranoid.
Almost all of our competitors have had major hacks in logistics.
It's been a major target area for cyber, and there's been a lot of ransoms.
I'm not going into personal finances, but I didn't know before we walked in the park about the angel investing.
If you're comfortable sharing, what have been some of the best angel checks?
Yeah, I've done really well as an angel investor.
I used to do a ton of it, early days of Flexport.
So I started this company called ImportGenius.com that throws off a lot of cash.
It's a nicely profitable business.
So I actually started as an angel investor while I was in Y Combinator.
because I realized I had inside access.
I was kind of like a Was it really obvious who was great and did your beliefs on who was great turn out to be correct?
It wasn't obvious who was great.
It was obvious who was terrible, though.
And I think if you can eliminate the bottom half, like you're doing pretty well inside of a YC batch.
What were the bottom half doing that the top half were?
You just talk to the people and be like, oh, this is a good person.
And they didn't see me as an investor.
So, you know, I'm their peer, so I could get like the real story.
So I invested inside my own batch.
I invested in like 13 of the 50 companies or something like that.
And there was a few good outcomes there.
Algolia, I was an investor in that.
But I miss Cruise.
Cruise was in my batch.
Did you get out of Algolia?
Yeah, I did.
I sold my shares in Algolia a while ago.
Well done.
Fantastic.
I made money on that one.
You miss Cruise?
Yeah, and I'm friends with Kyle.
Why?
I don't know.
It's just like it was too crazy.
Like he was just like throwing this camera set up on the roof of his Honda Civic or no, I forgot what car he had, an Acura or something.
I was like, this is not legit.
It's not a thing.
It's not legit.
You know, the crazier the thing, the more I'm like.
I need to do that.
Yeah.
Because if I don't get it, I'm probably missing something.
Maybe, yeah.
So what are my best angel investments?
I was, well, actually Bitcoin, early Bitcoin, sold that.
Don't kidnap me.
I don't have any Bitcoin anymore, but I made money on Bitcoin.
I was the first investor in Rippling, put a big check into that, did really well.
Are you revengeful?
No, I'm personally not, but I think that investing in founders who are pissed at somebody and want to get back at them, same with, Rippling, Daria I'd never met before, but yeah.
I don't know if he was wronged.
Rippling?
Yeah.
Parker?
Parker, Zenefits, A16Z, they fired him.
I never got that vibe when I met him.
Oh, yeah.
Rippling.
I think actually it's a great, I have a great thesis around like founders who have been wronged, second time founders who feel like they were wronged.
the first time around would be like great investment thesis.
Revenge and patriotism is a great investment thesis.
Revenge and patriotism is a fantastic one.
Do you have a chip on your shoulder?
Not really.
Yeah.
There's a few people who I should be way more like who have wronged me, but I like totally black them out and don't care.
I don't know why.
It might be better for...
What was the single best investor meeting that you had where they didn't invest?
Oh, none of them.
I mean, those are...
None of them.
There was never an investor meeting where, like, I don't know, it was with, I'm just making it up, Alfred Lynn, and he was just super insightful and smart on the future of the industry, me, my business, and I was like, God, I'm just a shame we didn't get them.
No, I've never had one of those.
Really?
I had, like, a lot that seemed like they went well and then they never invested, and the number of investors who ghosted me, by the way, after the pitch, the vast majority, I would say, where I pitched them, it seemed great, and then I just, like, never hear from them again.
That would be the majority of investors I ever picked.
This is where I like also the fact that you know, I'm in the no bullshit camp.
So I just say, I'm really sorry.
We invested early.
I just didn't believe that you were good enough.
I'm not going to bullshit you and say that the market's not good enough or big enough.
It's all crap.
By the way, if you're giving any reason, you're pretty unique.
Most people just like, just divert it.
No, but it's kind of rude and personal, but I'd rather just be honest.
I just didn't think you told a very compelling story and you were a bit dry.
No, I'm being serious.
It's good.
Do you mind?
But at least then you can take away, okay, tell a more compelling story.
Yeah, fair.
Which is always the case, right?
PG, his advice to founders was always, you should hear the no, but ignore the why, because...
The odds of them telling the truth multiplied by the odds of them being correct are so low that you're just like very little signal in what investors tell you about no.
You should definitely hear the no, though.
They pass.
And by the way, especially when they're multistage funds, when there's absolutely no reason for them to ever kill optionality.
I want you to think that I'm amazing because in case you do in flight, I want you to come back.
Yeah, I wouldn't have any founders out there like actually secretly hate you because you tell them something that they didn't want to hear.
It's probably non-zero.
Like honestly, a lot.
But I also think that they're not the best founders.
Yeah, who cares?
But I think if I actually said to you, dude, I actually liked you.
I just didn't think you told a very interesting story about the future of logistics that excited me.
I think you'd probably go, I need to get better at telling stories.
By the way, my overall experience with VCs have been incredibly positive, including those who've passed and become friends and people that I hang out with, and there's no ill will at all.
But I have way more negative experiences than...
positive.
Not to say they weren't positive experiences, but I think you said earlier you enjoy pitching investors.
I like pitching, but I don't like hearing no or getting ghosted or whatever.
Have you ever had a terrible one where they fell asleep?
No, I've had a customer fall asleep on me, never an investor.
Literally fell asleep that way.
What do you do?
Do you wake them up?
What did I do?
It was like seven or eight years ago.
I just fell asleep.
We ended up winning them over.
It was a sales pitch, so they weren't a customer yet.
It was a prospect.
I'm terrified of what the capacity is.
The worst one, I walked out of one investor meeting, not like in a huff.
I left my partner there, my co-founder, or the president of Flexport.
He stayed behind, and I said I had to take a phone call, and I just never came back.
Why?
They kept telling me that the market size was too small.
And it was like the third pitch.
And after this first two, I thought we'd overcome this.
We found some BCG market sizing report and shared it with them.
And if you need BCG to convince them, just don't bother.
I know, 100%.
And it was like the third pitch.
And I thought we were going to move to term sheet.
And instead, they had brought their own report that showed how the market size was only...
for Flexport was only $6 billion.
And I was just like, actually my partner had the best line.
He was like, oh, so it's smaller than the market for USB cables.
And it became obvious to me that these, and I said, I don't think in BCG reports, like I wasn't me that got the BCG report, someone else did.
I was like, just look at every object for the rest of your day.
I want you to like look around at everything that you see and just ask yourself, how did it get here?
And like, that's our market size.
Like, I don't think in...
So I always say to founders, if you need to educate an investor on the market, they're not the right investor for you.
It's tricky because if you're doing something very unique and different, or like in our case, like...
Do you think any of your investors bet on you because of the market?
I don't think they did.
I think they probably bet on you because of you.
Maybe.
Yeah, they mostly bet on me.
They had never invested in this market before, that's for sure.
Peter, you know, I met Peter.
Sam Altman introduced me to Peter.
Sam was one of our earliest investors, and he invested me to Peter to get advice.
It was a classic thing.
because everyone loves this book, right?
Zero to One is such a great book.
And so Sam introduced me and that book has six or seven, I can't remember, I think there's like six questions to decide if you'll change the world.
They're like, this is like an incredible startup that you should ask.
And on five of the six questions, I felt like Flexport knocked it out of the park, best possible answer.
But then one of them was, one of them is, is it a small market?
Because his whole thesis was like, you should have a market that's small enough that you can be a monopolist.
And when I went to whiteboard with him and hang out with him.
I'm like, well, look, it's, I want to know, like, should I be, should I make myself like, I can make this a small market.
I'd be like, oh, we're going to dominate like logistics for hardware companies in Silicon Valley or something.
But like, it's kind of fake.
Like the market's actually really big.
And he like stopped me and he's like, look, it's, don't be too dogmatic.
It's okay to have a big market, you know?
And then a few weeks later, he emailed asking if he could invest.
So my biggest mistake is when I focused on market at all.
All of my biggest mistakes investing have been actually not really like losing money.
It's been turning down great companies.
But because I thought that I was smarter than the market.
Oh, this market's shit.
Oh, this market's shit.
How many angel investments have you got?
I did so many.
So like the vast majority didn't do well.
Like 200?
Yeah, something like that.
Wow.
Do you track them?
I have a Google sheet.
Do you?
Yeah, I know.
I've just made one.
Well, I didn't for a long time, but at some point I had to clean it up when I was getting married and going through that exercise.
What of doing like a will and...
Yeah, exactly.
Eventually you want to clean this up.
Much better if you track it from the beginning.
I would say probably it's a super power law world.
And actually this is an interesting thing for founders to understand is once you see the world from the perspective of the angel investor, you realize that we really don't care.
Even a 3X, like if you take my spreadsheet and...
this investment made three times the money.
Like the founder is very proud.
Like, hey, I made you three times your money.
But if I remove that and make it a zero, it has zero impact on the bottom line of the fund, like zero relative impact on the IRR.
Because I have a couple that are 1000X or 500X.
So they strictly, completely dominate everything else.
So you don't care like about the ones that failed.
And when I write a check as an angel investor, I would just mark it to zero.
I don't care.
I just assume that it's a zero.
And then that way I don't worry if it fails.
founders don't know about the VC mindset that they should do.
I think that's really valuable because I also see, and this actually does pay me, which is like a really noble founder mindset, which is I'm going to give five to 10 more years of my life to grind out a one and a half X.
And I'm just like, don't.
I don't mean that callously or flippantly.
I'm not flipping with VC, LP money, but just your time and my time.
Yeah, yeah.
I don't even want the investor updates.
It's fine, dude.
Yeah, like it's okay.
Like return 0.6X.
It's better.
Yeah, I mean, if it's your life's mission and your calling, then like, great.
Never give up.
No, it's like an ability to like investors.
There's that.
There's what I was saying earlier of like how much they're a circular rumor mill.
You know, like when I was doing one of the rounds of funding we were doing.
And I was pitching this investor.
And I think I was on like the third meeting.
I'm not one of these people who like, oh, you never talk to associates.
Maybe I should be.
But I think it's kind of a loser way to live your life.
I never had this attitude that like you shouldn't ever talk to the junior people, mostly because I'm not a dick.
But also I just assume that those people someday will become like partners and they'll remember that I was cool.
I don't know.
But I was like on the third meeting with this fund and I was still talking to the not the junior person, but I wasn't at the final decision maker yet.
And so I told the guy I was like.
hey, I've decided to go in a different direction here.
This isn't going to work out and I'm going to raise, you know.
And within an hour, I got phone calls from like three other funds.
I hadn't picked a different investor.
I just was like trying to let this guy off the hook.
And within an hour, I got all the funds that I was still talking to called me like, hey, what happened?
I heard you picked a lead.
And like the amount of rumor mill and collusion that happens in VC, founders have no idea.
It's like this crazy, and you can use it to your advantage.
It can work against you or it can use it to your advantage.
Like you're looking for an outlier who will value you more than everybody else.
So like, you know, that collusion does not work to your advantage unless they're all hyping you up and saying, dude, this is the best company ever.
This is so not in my interest at all, but that's why I always say to founders, don't like.
test the market.
Don't dip your toe in with one or two meetings because the associate WhatsApp groups are so pernicious where if you meet me and I don't think you're great, I promise you they put you in the weekly roundup, which they send out because they're exchanging currency.
They need to give to get.
Yeah, exactly.
And so I'm putting you in my weekly update where I say, Ryan, only at a million ARR, not growing that fast, not a compelling sales round.
And these are within a firm or these are cross firm?
They're cross firm.
It's crazy.
Yeah, exactly.
That's what I was getting at before.
We're all associates and we're all in the I need to bring deals to the firm business.
And so they all send weekly roundups of who they've met and seen.
That's crazy that they're sharing that externally.
Oh, shit.
Yeah.
Their firms probably don't know, right?
No, no, no, no.
You get fired for that.
But remember, they're more in business.
This is almost a good article, actually.
But the associates are more in business with their class than they are their firm.
And they're trying to get ahead within the firm by showing that they don't bring dumb deals because they've referenced it.
My competition is.
not the other associate at X firm, it's the other associates in my firm.
And so if I can get ahead.
It's like the F1 drivers, huh?
Which is why the perniciousness is actually very real.
Because then do you know what the others go?
Oh, well, Ryan's only at a million there.
Oh, not interesting either.
Don't need to meet him.
That, I do, I see that.
Well, and I also think founders should basically never share their metrics, which I've done on the show, so I don't care anymore.
But you should never share your metrics.
No offense, dude.
You're kind of past.
Yes, I don't need to raise any money ever again.
But you should never share your metrics because what you want to do when you pitch a VC is you want to cherry pick whatever metric looks the best and pitch that as the important metric for your firm.
But once you've shared a metric, you're now committed to that being the metric.
And who knows, maybe you couldn't make that one go up hockey stick style, but now you're committed.
I remember Colin Mathilde.
I think it was Colin.
I think it was.
Colin, French founder, YC partner now, I believe.
Awesome woman.
and she always told me that you want to raise when you're really confident, just because, like, confidence emanates.
Oh, yeah.
When were you least confident?
Oh, God, when you're losing a lot of money, the Black Sports app.
We've been on the Ego's journey, right?
If anything is straight up and to the right, by the way, is pretty boring.
As an investment, great, it's wonderful, but as a human story, that's...
It's pretty hard to see any company.
I've tried to think about this before.
Snap was pretty up and to the right continuously.
I mean, post-IPO, it's been up and down, but it was pretty continuously linear up and to the right.
Not many others have been.
But I don't even mean as an investor.
As an investment, of course, you want things to just go up into the right and never come down.
But as a story of like what's compelling to the human, like Snap's story will be infinitely more compelling if they figure it out and start growing and going like hockey stick again than it would be if it never stopped and it was hockey stick.
You'd be like, wow, what happened here?
Like that, the human brain loves the story, the hero's journey where you got to go to hell and come back.
Like if it's just always good, like that's not fun.
Dude, social media posts, the absolute bangers, the zero to zero.
I started in my bedroom with no dollars and now I'm...
Yeah, but even Zero to Hero is not good enough.
You want to go Zero to Hero and then take a fall and come back.
So we need to cancel you and then the comeback.
It's different, a little bit different in enterprise because you have competitors.
So like in our case, if we have a negative news story, like literally no one will read it.
And we don't have scandals.
It's just like, oh, it's such and such.
Like I once had a Bloomberg article about us where we lost a package for a customer.
One single parcel.
I remember this.
It was one parcel.
It was quite a scandal.
And it was a newspaper.
I mean, Bloomberg's not.
print, but it was front lead of the story that Flexport, we used DoorDash to do the delivery.
One parcel, by the way, the story did not mention we delivered 40 million parcels successfully, but we lost one and we gave her a full refund.
before the story ever came out.
And that became a scandal of sorts.
Nobody would care.
Nobody would read it, except we have competitors.
And the competitors will take your bad news and send it to your customers and stuff.
So it actually can hurt.
In enterprise, it can hurt your business, negative news stories, even though it's not the story itself.
It's like your competitors are kind of low life looking for dirt.
One in 40 million.
So I mean, we probably lost more than one, but the story was about one.
You dick.
And actually, it's an interesting story that we use DoorDash for logistics.
People don't think about that.
But if you, DoorDash has a bit of a problem there because DoorDash's quality is better than others or it's as good as.
like a FedEx or UPS.
But when you use FedEx and the package doesn't get delivered, people are like, yeah, it happens, it's FedEx.
But when you use DoorDash and it doesn't get delivered, they're like, why did you use DoorDash?
Like, what's wrong with you, company?
Like, DoorDash is for food delivery.
Why did you...
It's something they have to overcome because their quality is actually fine.
I think Tony Robbins said this once, but it's like how fast appreciation turns into expectation is extraordinary.
And it's like, you know, before you're like, hey, we didn't expect to have Wi-Fi on the flight, but now...
We've got Starlink.
I need Starlink.
And you're like, wow, that's amazing.
And then you get expectant of Starlink.
And then the down is so bad.
What did be a massive appreciation, now you're like, I fucking expect this.
Yeah.
Which entrepreneur do you most want to have a dinner with that you haven't had a dinner with?
Never meet your heroes.
I've met most of the great founders.
Do you believe the never meet your heroes?
Yeah, they're not.
Well, I don't I don't buy that analogy.
I've met some of mine and they are heroic.
Yeah.
Yeah.
Maybe I'm still idealistic.
Depends.
You know, also, you want to meet people who are like at your level or see you as a peer and want to actually engage in a dialogue with you.
If you're meeting somebody and they're like unhappy to be at dinner with you and they don't care about you and don't ask you questions or want to learn about you.
Do you know what I found?
The more amazing the people.
the more interested they are.
I've been fortunate enough to have a sit-down with Charlie Munger.
Yeah.
He was so curious.
Oh, really?
Yeah.
Yeah, one of my dearest mentors would never want to be named down here, but he's one of the founding fathers of one of the greatest firms.
He's so curious.
Yeah, yeah.
Some of them are like this and some aren't.
I find it somewhat uncorrelated.
Certainly, they were like that on the way up.
Some people get to the top and then stop being curious, and then probably their returns or their impact after that will slow down, is my theory.
You beat some people on the absolute top who don't care.
Final two for you, and they are more personal, but I hope it's okay for me to ask, but it's general wisdom for me moving forwards.
When you think about winning, but also winning at marriage, any tips on how to continuously have a great marriage?
And dude, you've been through some rocky patches in terms of the business.
How to sustain marriage through fucking hard ups and downs.
Well, it's a picking game, I guess, and you only get one bet, right?
Make sure you get the right one.
My wife is a, when I met her, she was a journalist, actually at Bloomberg.
And I still couldn't kill that Bloomberg story, even though these were her peers that she worked with for years.
I mean, it was crazy even then.
That was a risky move.
I know, yeah.
Fuck, I don't talk to journalists.
It was.
It was a bit...
In fact, someone, one of my investors at Founders Fund told me, dude, you need to either marry this woman or break up with her, but you cannot be dating her.
No, he's right.
That's great advice.
So I married her.
And then she had to quit.
In part because of me, because she got assigned to cover SoftBank, who's my investor.
And I was like, no, can't do it.
Sorry.
And she knew that it was not a good fit.
What's it been like having SoftBank?
I love Masa.
But did you pitch Masa?
Yeah, yeah, of course.
How was it?
I love him.
He's just like a big, larger than life.
Was it in person?
Yeah, yeah.
I think definitely in person.
I'm trying to remember if I also met him first on video.
No, it was in person.
Can you just take me to this?
I love Masa.
I love Gambino.
I just love the guy.
How was this?
Where was it?
I mean, I can't say I love him that much interpersonally.
We're not friends or anything, but I'm just a big fan of Masa.
Sure.
Where did you meet?
How did it go?
First time I met him would have been at his house in Woodside, California, which is very nice, let's say.
You can look up the Z estimate.
You're like, oh.
This is going to be fun.
The Zillow estimate.
How long was the meeting?
Probably, like, actually pretty short, maybe an hour or so.
Considering the size of the check, I thought it was a surprisingly short meeting.
He has this painting of Napoleon behind him, and I wanted, I didn't end up finding one.
I was trying to buy a painting of the Duke of Wellington to send it to him.
who, of course, defeated Napoleon as a troll, but I never found a good one that was worthy of the prank.
It's a bold move as well.
It's a risky one.
I'll just leave it.
Well, after he invested, I was going to send him that as a gift.
He's very bold.
He pushed us to go, hey, be cheaper than everybody, because we raised a billion dollars from them.
You raised a billion from them?
Yeah, well, they led the round of a billion, yeah.
And he was like, whatever the price of freight is, you just be 10% cheaper than everybody.
And then if someone matches you, you'd just be 10% cheaper than that, which is like a terrible strategy.
I did not do that.
We would have burned so much money.
But he was very aggressive.
He just wanted to push you to go bigger.
I like the mental elasticity there.
It's different to most investors.
Yeah.
And he's very connected too.
Like he was able during the meeting to call like...
Foxconn, get him on the phone, be like, hey, what do you think of this thing?
In the meeting?
Yeah, yeah, yeah.
Like, live.
Are you serious?
Well, he had this guy next to him call, or WhatsApp, I forgot.
I think it was a text message.
This must be the weirdest thing, like, due diligence in process.
And you're like, oh, shit, do I, like, thumbs up, thumbs down.
You do not want to fuck up.
You must have been nervous.
I don't remember.
I don't get nervous on that kind of thing.
When have you been most nervous in the Flexport time?
I get nervous when I have to give a talk publicly and it's very time bound because I'm like kind of long winded.
I don't I know that I don't I can't memorize anything.
So I don't prepare like I usually will just go speak off the cuff and I'm a good public speaker, basically a good public speaker.
But I can't like memorize.
So like actually the most nervous I ever was was the Y Combinator pitch because I only had two minutes.
I find TV most nerve-wracking because it's like you have like five to seven minutes and they're like, so Ryan, let's join you for Is Trump Wrong?
And you're like, no intros, no in and outs.
And they don't want to help you out.
And they don't want to help you out and they just want the seven minute I'm going to get you.
I've gotten pretty good at TV, I think.
Do you think you having a big personal brand matters to the enterprise value of Flexbox?
Yeah, I do.
As measured by when I tell my sales team I'm going to do less of it, they always push me to go do more.
They say that it helps them get deals and close deals and stuff.
But it's one of these things, I think it was Steve Martin who said he went on the Tonight Show.
He went on every late night show that would have him.
And then he would go around West Hollywood, walk around Hollywood, and nobody would recognize him.
This is in the early days.
And then...
You know, so he couldn't tell like if it was having an impact.
And then after like five years of that, he was like the most famous comedian in America.
Everybody knew him.
He couldn't go anywhere, but he couldn't pinpoint it to like any one thing.
So it's been a bit of my, I only learned that recently.
That wasn't like driving me to go try to do more press or anything.
But generally, I think being famous has helped Flexport a lot.
And we're way more famous than like we should be given that we're like the 10th largest freight company.
I couldn't name any of them.
Yeah, exactly.
I mean, you could like.
No, you don't know some of them.
Maersk is like a famous company.
I know Maersk.
Yeah.
They're a monster.
They're big, yeah.
They're a lot bigger than us.
But I probably, I think Flexport gets more, we're more likely to be cited in the press on a story about supply chain than they are, despite them being much bigger.
Final one, then we'll do a quick fire.
You mentioned two kids, five and three year old.
Any big lessons on parenting?
I love kids.
It's really important that I'm a good dad.
You just sit me down.
Imagine I'm your younger bro.
Dude, you should know this.
Well, you need to have a great wife who's a great mom, so you have a good partnership.
The kids will be pretty natural.
You've got millions of years of evolution.
It'll be great.
Great to finally care about someone besides yourself.
It's very natural.
It's like a chemical wash of just like true love that you can't get it anywhere else.
Does it change perspectives?
For sure, yeah.
But I get a lot of meaning from my work.
Truly, I just genuinely love what I do.
It's a real mission for me.
My life's work is building Flexport.
But a lot of people don't have that.
And I was always kind of confused because most people I meet don't have a sense of purpose about their work like I do.
And I'm like, how do these people function?
I don't know.
How do you get through life?
You notice as soon as you have kids, I get more purpose from that than I could from Flexport.
And so that's the vast majority of human beings should get their purpose from their family, from their life.
I would feel incredibly lucky.
I watched The Social Network and I saw Peter Thiel invest in Facebook.
And that's how I ever found out about venture capital.
Really?
When I was 13.
I lived in London.
Venture capital was not a thing.
And so that was how I found out.
From that movie?
Yeah.
Cool.
And I've only ever wanted to be a VC.
And this is my whole life and being.
And I always feel terribly sorry for people, but especially young people who don't know what the...
they want to do with that life.
Yeah, they should just have kids and then they'll be solved.
That'll be solved.
That problem will be solved instantly.
But if you get a lot of purpose from your work, then you can have the opposite problem of like, oh, like you still got, you got to be a great dad.
I want to do a quick Friday because I could talk to you all day.
So what have you changed your mind on most in the last 12 months?
For the last decade, I didn't want to compete on price and I wanted to be the premium provider in logistics and thought it would be bad to compete on price.
And now I'm like pretty convinced that we need to be the low cost leader and just...
go so hard at lowering our costs that if you're cheaper, you just take all the market.
And I think I was maybe lying to myself because it was too hard to automate the work and too hard to become the low cost provider.
And we're smaller than some of the big peers, so they buy freight cheaper than us and stuff.
And I think I was lying to myself and it's like, no, you need to be the cost leader.
And we have to figure out everything we can to be the cost leader.
Maso was like, he was like, just fell under your cost.
Like, I don't believe in that.
Who do you not have on your board that you'd most like to have on your board?
Magic Wand.
I don't think our Flex Sports board needs anybody.
The board is mostly there to represent the interests of the investors and make sure we're doing a good job, not driving the company.
Okay, but whose wise counsel would you like to have?
You want to join the board?
Is that what you're angling?
Listen, I think I'd add a lot to the board personally, but it needs to be your decision ultimately.
I'm just glad that my board doesn't screw with us.
My board has been very supportive of us, of me in particular.
I don't really want a more active board.
They're not super active in the business.
They're not telling us what to do.
They don't help that much, but they don't ever hurt.
And I would much rather have that than a really helpful board.
I don't think there's a risk of the board firing me.
Someone who's really smart and thinks they're smarter than me might fire me.
Penultimate one, what sports team do you not sponsor that you would most like to sponsor?
Oh, I really would love to sponsor this.
football club in Hamburg called St.
Pauli.
Why?
They're the second team in Hamburg.
And the first team...
My great-grandfather was a sailor from Hamburg, first of all, so I've got a personal history there.
I don't know if that team was around back then, but the first team is owned by Klaus Michael Kuhne.
who's the owner of our direct competitor, Kuna Nagel.
And I just love the idea that we would take the second team and beat him, and he would be like, ah, those kids, these damn kids, here they come again.
So just more of a troll than anything else.
And their logo's a pirate.
They're like, I don't know if they're a logo, but they're kind of like, they're kind of like a leftist, communist-oriented club.
I think they would kind of hate us if we tried to buy it.
Yeah, maybe.
Maybe I didn't know that.
Because they wouldn't be that expensive.
But if they are, totally.
Also, sports is a tough business.
Yeah, I don't want to own any teams.
Final one, what has to happen in 2026 for you to consider it a successful year?
We got to hit our numbers.
We got to grow like crazy.
And then this automation via AI, like we've got about probably like 100 core workflows that are costly that we're building AI agents for right now.
And like five of them are live and working and saving us money and 95 that are under development.
And I need at least like 80% of those to come to life and like actually have the impact.
Otherwise, we're just spending money and not getting much back for the AI.
Dude, it's been so great to have you in person.
Thank you so much for doing it also on a Sunday of all time.
So I really appreciate it, dude.
And it's really special to meet you in person properly.
Yeah, it's great to be here.
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Illegible scribbles.
That's why I use granola.
Granola is the AI notepad for people in back-to-back meetings.
I say back-to-back because it makes me feel busy and special.
So I jot down rough notes like many do.
and in the background, Granola transcribes and turns them into really clear, useful notes immediately after the meeting ends.
And I've been using Granola for months, and my favorite feature is chatting to my notes.
No one else will chat to me these days.
And I can ask it anything, and it trawls through every meeting I've ever had and finds the answer.
What was the valuation of the startup that pitched me last week?
Who on my team said they would share the memo?
And even coaching and tips, like how can I ask founders better questions when they're pitching me?
All the best operators I know use Granola to help them.
get more done.
So if you're in a lot of meetings, trust me, this is a really good tool for you.
It takes seconds to set up, connects to your calendar, works on any meeting platform.
Head over to granola.ai forward slash 20VC and get three months free with the code 20VC.
That's granola.ai slash 20VC with the code 20VC.
That's 20VC.
Once Granola turns the conversation into clear notes, Finn turns that clarity into better customer support.
As AI So, it understands the nuance and complexity of customer service better than any other.
agent.
That means faster resolutions, more consistent support, and just better experiences for every customer.
It's also designed to be fully self-manageable, so you can easily improve and adapt it as your business evolves.
No third parties required.
Leading companies like Gamma, Asana, DoorDash, and Crypto.com already use and love Fin to deliver better customer experiences.
So for a limited time, you can get $500 a month in Fin credits.
For your first three months, learn more at fin.ai forward slash 2-0-VC.