Inside the Mind of a CEO: Deciding with Impact I KP Reddy

[00:00:00] A lot of founders believe that they suffer from imposter syndrome and they think that that's like a unique characteristic. Every CEO I know suffers from imposter syndrome. I'm Felicia Shakiba and this is LeaderbookAI, where we solve a business challenge in every episode. Your entire career has been incredible. So you have built companies for 30 years. Yep.

[00:00:29] You've coached many entrepreneurs and you now have your own company, Zero RFI. Right. Tell me a little bit more about what has you in the operator's seat today. Yeah, I mean actually there's a couple things that I decided probably four years ago as I started. You start to see early signals as an investor. You quickly see people talking about the latest technology as an investor, especially when you're a pre-seed, seed stage investor.

[00:00:58] All you see is things that are fairly new ideas. And so about four years ago I started seeing a lot more AI, LLM. And I built some things in AI 15 years ago that was very hard. It was just very, very hard. It was very, very expensive. It took forever.

[00:01:17] And I just started seeing this pattern of thought that like, well, all the things that I was doing as a founder 15 years ago, 20 years ago, just seems that much more easier to do today. And the more complex ideas that I had back then, which was just impossible to do, were just a lot more approachable, right? From a compute, from the AI tools and everything else.

[00:01:43] So I generally, you know, sitting in Atlanta and basically decided to my wife like, hey, if I'm going to participate in this next phase of technology and innovation, we just can't do it from Atlanta. We need to move to Silicon Valley. And so we picked up a move two years ago. I think it makes sense to be here. This is the core of where AI is really taking off.

[00:02:06] Zero RFI is applying AI and robotics to construction and growing through acquisition, which I think is interesting because most startups or companies that start early are not acquiring so soon. So what has led you to that decision? Well, partly my partners in the business is a general catalyst.

[00:02:31] So partly they've been pretty vocal about how they think about investing, which is either you invest in the foundation models, right? So anthropic, et cetera, or you invest in applied AI. But if you look at investing in applied AI, the real opportunity is transformation of call it the boring businesses, right? Yes. And so, you know, I was a product of the dot com like that's where I had my first exit.

[00:02:58] My company went public when I was 28, you know, so early exposure to what scale and what this all looks like when done well. If you think about it back then, you had all these alternative like e-commerce, right? We just I don't think we call it e-commerce. I think we just call it commerce now. But back then you had e-commerce and there were startups replicating the brick and mortar. Mm hmm. Right.

[00:03:26] And then a lot of them as they started running out of cash, they started getting bought or shut down by the brick and mortar. I think what you're seeing this time is the way investors are looking at it. It's like, why would we let that happen? Why don't we over capitalize these AI native companies that trade at higher multiples? Right. To value.

[00:03:48] And you go buy companies that are making 10% to the bottom line or 5% to the bottom line and you can buy those. So, you know, imagine if Amazon had bought Walmart. Right. So or if you think about it now, Amazon buying Whole Foods. Right. Or buying one medical. Right. So.

[00:04:08] So I think the theory is the finance people have figured out that the value is really in taking these existing businesses where the customer acquisition risks and costs are very low. So you're buying an installed customer base and then you're up leveling the service. You're giving them a different experience. And also you're much more profitable. So you take something that was doing 10% to the bottom line and now you're doing 30% to the bottom line.

[00:04:38] You take something those 30% gross margins and now you're 70% gross margins. Yeah. How did you come up with zero RFI? What was the catalyst? What was the trigger for you? So I'm a career construction technology person. Right. So I've been building stuff since I was a kid. My dad was a civil engineer. I'm a civil engineer. Both my older sons are engineers. So I kind of grew up in the family business.

[00:05:03] And when the dot com was happening, I basically was more interested in building a tech company than an engineering company. So I think a lot of, you know, I say, you know, zero RFI is a year and a half old, but it's also like 40 years old. Right. With all of the knowledge that you've accumulated over the years. Yeah. And just seeing how things work in construction.

[00:05:30] And if you think about it, every other industry has seen a deflationary effect of technology. Right. We don't spend $20 on a CD to listen to one song anymore. Right. I mean, it's just like, I hope not. I sure. I mean, I still buy vinyl. So I'm a little bit archaic that way, but it's fun. But I do think we're the only industry that hasn't seen a deflationary effect of technology. And we are the most important industry in the world.

[00:06:00] Right. So if you think people talk about construction, it's like, yeah, you know, we build hospitals. We build schools. So if we can take all those things and make them 30 percent cheaper, think about the impact on housing. We don't have to talk about affordable housing. We can talk about housing being affordable. Right. And we can build better schools. We can have better experiences for students. We can build better hospitals.

[00:06:26] You don't have to have these massive hospitals in the centers in city centers because that's the only place you can afford to put them. So it's a it's a pretty big impact in terms of to society and the economy, yet still doing it the same way. So I'm curious, how does zero RFI actually do that? Yeah. So the way we work is we work as in the position of the owner's rep.

[00:06:52] So we manage the entire project from site selection to hiring the architects and engineers to hiring the contractors, even to down to facilities management. And what our system is able to do is connect all the dots. What happens in our industry, things happen in silos. So if you can imagine if you went and bought a car and they said, well, it's X, but it might be 30 or 40 percent more when you actually get delivery of it. Right. And oh, by the way, I can't tell you how many miles per gallon it gives.

[00:07:23] Mm hmm. And oh, by the way, we're not sure what it's going to cost to maintain. You'd walk out of there. Right. You go build a billion dollar hospital. That is exactly what you're told. There is no predictability. And it's because everything happens in a silo and the information is never shared. So there's no project context. So you're saying that the information that you would provide is just a holistic view of economics of what it takes. Right. OK.

[00:07:52] And what all the issues are. Right. So back in the day, we had this idea of the master builder. There was a person that owned everything. They took care of everything. Mm hmm. But now on a construction project, there's 200 companies that work on it. Wow. That's a lot. I mean, well, I mean, depending on the size of the building. Right. Sometimes, but not always. Right. Because what's happened is the industry has gotten very specialized. So you'll have a low lighting consultant. Mm hmm.

[00:08:22] You'll have an outdoor lighting consultant. You'll have an interior lighting consultant. That blows my mind for the same project. I mean, can't you have. Where are the ones that are, you know, the full stack developer for construction? They don't exist. Wow. I think that's a great example. Yeah. Right. For the longest time, like, oh, we have a UI person, a UX person, a database person. Yeah. And we saw how inefficient that was in building technology. So we thought about this idea of the full stack developer. Yeah.

[00:08:50] But the full stack developer only could have been developed if the tools got to a place that you could actually do the full stack, right? You didn't have to be in your silo. So yeah. So it's very common to have 100, 200 different companies working on a construction project. And they don't talk to each other. I say all the time, people think construction is like manufacturing. It's more like a movie set. That makes sense. Right? Yeah.

[00:09:20] And hopefully there's a director somewhere. Hopefully, right? Hopefully. Sometimes you have a prima donna actor. Right. In our case, it's the architect. Like I used to work for Frank Gehry. Yeah. And they get to do whatever they want to do. Right? Yeah. They don't understand a budget. They don't understand any of those things. So it's very similar to the movie industry. And what happens is at the end of the project, everybody disbands. And there's no institutional knowledge.

[00:09:49] So on the next movie, sometimes there's, it's a sequel, right? It's Fast and the Furious 12 or whatever, right? There's some, so. What did we do last? What did we do last time? Right. What did we do in the first and the second? And all of that knowledge you're saying gets lost normally. That sounds painful. Yeah. It's very painful. You and your CTO visit your North Star every week. Mm-hmm. What are the decisions that tend to pull founders into short-term tactics?

[00:10:17] And how do you keep the company oriented to the longer horizon? And I think that this is a really important question because it's easy for founders to go from one step to the next in short intervals, knowing that they have a deadline for either their first customer or their first investor, et cetera. So how do you kind of balance those two? Yeah. What's your advice? I think the reality is any startup is a series of experiments. True.

[00:10:47] And if you're not getting some things wrong, you're not trying hard enough, right? Yeah. And I think what keeps, if you get stuck on like this is our three-year product roadmap and keep your heads down, focused on that, by the time you pick your head up, the market moves, the technology moves, things happen, right? So you have to have a certain level of nimbleness. The benefit of a North Star is that it allows you to stay within the framework of change and

[00:11:15] experimentation, but still compare it against your North Star. In the world of like, should we be doing that? A lot of times you do things that don't make sense. It's like in that moment, you're like, well, we need to go figure that out. So then someone raises their hand and say like, why are we doing this? And then you have to compare it to your North Star. So when I look at North Star, it's more like a compass and product planning and product roadmaps is more like turn by turn directions from Google Maps.

[00:11:45] And so I think you have to pick your head up and say, okay, am I going off? Am I actually going the wrong direction? Or am I just taking a detour because I'm trying to avoid something in front of me? Right. And so I think the North Star really allows you to question it. It gives you space to create. It gives you space to be creative, but not go off the rails. Mm hmm. What would you say to someone who has been able to consistently hit those short term goals,

[00:12:14] but isn't feeling like they're really getting to that long term vision just yet? Because I mean, I've spoken to founders that feel like they're not there. I mean, most founders always feel like they're not there yet. And they're not there yet. Maybe that's something that keeps them going. But, you know, how do you keep that the hope alive when they're in constant failure mode? It's really hard. I mean, I think for me, you know, there's just a certain experience. You know, experience.

[00:12:45] Sometimes you have to learn and live things. People can't tell you things. Yeah. But I do think things move very slowly until they move very quickly. And I think you have to have some level of faith that if you're doing the right things, moving towards your North Star, and it feels like things aren't popping fast enough, you have to kind of...

[00:13:12] I think that's where the solace, like the North Star, and having really good conversations about it, I think really helps you feel like whether you're moving in the right direction, and you're not getting stuck on the tasks, right? The tasks... You have to do the tasks. People have to... You gotta do the tasks. You have to execute. You have to execute. There's no way around that. Yeah. But I do think it can get exhausting when you start to feel like,

[00:13:39] I mean, I'm executing the things, but I'm not seeing the progress in the company. Because I mean, there's this thing that happens. And I think it's interesting where SaaS has come into play over the years, versus back when we were selling licenses on CDs, right? Mm-hmm. I think SaaS has made people have a constant iterative R&D process.

[00:14:08] And I think the difference is when you used to ship, like, here's our... You know, here's Windows 95. Like, it's this version, right? Versus the continual shipping of technology. Mm-hmm. It really made you think about things and how you were investing and what was R&D and what was just a feature enrichment, things like that. And I do think with how quickly we move as companies these days, I think it's really important to balance, like, what's a feature enrichment or a bug

[00:14:38] versus what can be, like, a stair-step change in terms of the product, what the value the product delivers. The other thing is, I think, in my experience for any startup, you kind of grow your MRR or whatever it is, 10% a month, right? But it's never... That's never what defines the business. It's that one whale that shows up. The big customer. It's that big customer. Like, when I had my first startup, my second startup,

[00:15:05] we were doing, I don't know, $5,000, $10,000 a month. Mm-hmm. And then I got a call from a friend saying, hey, there's this RFP out there for a big hotel chain to build a workforce management platform. They want a web-based workplace management platform. I was like, great, give me the contact info, right? So we made the shortcut. It was us, literally a 5% firm, Microsoft, Oracle, and Sun Microsystems. No way.

[00:15:35] And I go into this meeting. I am 26 years old. I go into this meeting, and so we'd quoted, I think, like, $7 million or something to build this platform, right? And the head person's like, so why should we go with you guys? Yeah. Like, you're... You're just small. And so, like, and literally this wasn't strategy. This is just me being young and naive. Yeah. I'm like, well, I don't know, it's pretty important. I'm the CEO of my company, and I'm here. I don't see the CEO of Microsoft and Oracle. Oh, my gosh. I love that answer. But it was like, it wasn't like a play.

[00:16:04] It was just more like being naive. Like, well, I mean, this is the most important thing I have to do, and if I win the project, this will be the most important thing I have to do every day until you're satisfied. And so they gave it to us. Oh, what an amazing answer. It was so funny. It was so funny. And then me being, once again, young and naive, I'm like, so when do I get my $7 million? I thought they were going to go cut me a check or something. Right.

[00:16:33] Let's just give it to you now. Right. And then they're like, oh, like, you need to go to purchasing, fill out this paperwork, and we have to put a, like, oh, my God, like, what is all this stuff, right? So we do all that, and they give us a PO, and I'm like, great, so when can I get the money? And they're like, after you do work, then you get paid. I'm like, I don't know what you're saying. Like, you said I got the project, give me the money, so I can do the project. I can do the work, right? That's not how that works.

[00:17:02] And so I told her, I was like, look, if I can get any money up front, like, I need to get some more folding tables and chairs to hire developers. Right. Shoot. I need, yeah, I might need to start my hiring process. Right. Right. And she's like, oh, my God, you don't have people? Oh, my goodness. So she somehow, like, got us $250,000. Amazing. Because she was like, I can't go back and, like, I put my neck out here. Right. Yeah.

[00:17:29] I can't go back and tell them, like, I made a bad decision, so I'll get you some money. But, you know, what I would say is, like, sometimes these smaller clients along the way are just practice for game day. Mm-hmm. And some of it is just persistence and, you know, showing up every day and being prepared, right? Preparedness. But I think some of it is, you have to take big swings. Yeah.

[00:17:58] Like, I could have said, like, how do I, you know, we can't do work for these people. We're like five people. Like, there's no way. Yeah. Right? We're building websites. Yeah. And I could have just. How long ago was this? This was 1996. 1996. Okay. Yeah. Yeah. So, I think that's where it's kind of important. Like, as you're doing the task work, you know, here's our ICP. Here's our, that is all great, right? That's about building the machine.

[00:18:27] But, I think when you look at most startups, they had those defining clients, projects, products, that kind of change everything. Yeah. Um, and there's so many stories of that, right? Slack and eBay and there's so many companies where, what they were building, what they were building towards, had nothing to do with where they ended up. Interesting.

[00:18:47] And so, you're basically, you're saying that a great path for a founder is being able to sell to these smaller clients, make some mistakes, trial and error. And then that becomes the stepping stone to having a bigger client name brand that kind of puts you on the map. Yeah. It's also good training for the founder. I'll give you an example.

[00:19:15] I had a founder, I used to like run the incubator at Georgia Tech in Atlanta and so I had founders come through all the time. And this founder comes to me and says, hey, we've got this great product that we want to get into Coca-Cola and sell them. I'm like, great. Let me call them up. I'll call the CTO up and I'll get you a meeting. So, we did. We get into the meeting, the founder comes in and says, here's how we can do things. The CTO is like, this is great. How do we move forward? And he's like, well, you know, if you send me, I'll send you a link.

[00:19:45] And it's $250 a month per account. And so it sounds like you need 10 accounts. And the CTO looks at me like, okay, great. His next contact was an IT manager. So you have to remember, like, when you're dealing with the CTO, they have to be in a room if the purchases are certain sizes. If it's too small, they delegate it to the smallest person they can delegate it to. Yeah.

[00:20:15] If he would have said like, well, it's gonna be $20 million, he'd be in with the CTO, right? Of course. He wouldn't have gotten pushed down. And so I think sometimes like, to your point, like the tactics of like, well, this is what I'm trying to do. Someone told this founder, we need to see account growth. Mm-hmm. Right? So he was thrilled he was gonna sell 20 accounts. Yeah. Right? And I was like, fatal error, man. Yeah.

[00:20:39] Like, you should have talked to the CTO and said like, the right answer would have been, hey, you're Coca-Cola. You're very special. I wish I could take my product off the shelf and make it productive to you, but you're like an enterprise client. We need to go through a discovery session and figure out what you need because you're so special, right? Interesting. That same founder probably would do that today.

[00:21:01] So as much as like, you're trying to like understand your, whether the market likes your product and all those things, a lot of founders are also learning how to engage and how to understand these things. You know, the other one is like free pilots. You see founders do free pilots all the time because they're just like, well, we just want someone. And there's nothing necessarily wrong with a free pilot as long as it's highly structured and that like the client's engaged, right?

[00:21:27] So I think there's just some, there's some general thinking around like to your point, like the step by step getting this stuff done. While it's very important, I think it's equally important that the founder knows that they're learning along the way. Yeah. I mean, I learn new things every day. Yeah. I do feel like sometimes founders feel like they need to be, especially nowadays with AI, that they need to be showing money. They need to be showing that they can, you know, build their clientele. But I don't know.

[00:21:56] I'm curious to learn your opinion because I feel like if they're really earning money and they're growing, like why do they need investors at that point? You know, essentially their clients are their investors. I mean, but I also feel like there's like a lot of pressure because a AI is allowing people to get to a further point than ever before.

[00:22:18] And so are investors waiting for like, are they just pushing the goalpost because of this now? I don't, I don't think there's a pushing at the goalposts. I think that's just competition, right? If you want to invest in the top 10 companies, the top 10 companies exhibits her characteristics. And that might be that in the first year they did 200 million in revenue. So as an investor, you're going to say, who are the top 10 companies? I'm going to bet on them.

[00:22:47] And in the world of like top 10 companies, what's that gauged on? Yeah. Well, probably revenue. What are the attributes that differentiate founders of an enduring company versus ones that may fall short? Knowing the difference between friction and immovable objects. Please explain. Yeah. Like startups are hard.

[00:23:12] There's nothing but friction, but a lot of founders will expend so many resources against something that will not move. Mm-hmm. And founders I've seen that are very good, they understand the difference. Like that is not realistic. That will not move. This is not realistic, but it might. Uh-huh. Right? And so some of it's analytical, some of it's intuitive. Mm-hmm.

[00:23:38] I think a lot of good founders speak to their customers in the market. Yes. In a way that people want them to be successful. You know, it's this idea that the universe will conspire for you. Right? Right. And I think there is something to that. And I think a lot of founders that are constantly talking, you know, I was just on the way over here. I've already had like 17 meetings today.

[00:24:08] Oh my gosh. Right? And one of my guys is like, that's insane. I'm like, what do you have meetings on? I'm like, my job is to talk to as many people as possible to understand their pain, to understand what's working, what's not working. And I'm fortunate enough that I have enough of a network now that I can always find 20 people a day to talk to. Right? Yeah. And so, but that's the job, right? The job is to understand what the market needs.

[00:24:36] And I think when you do that, you start to see the patterns pretty quickly around like, oh, this is realistic and that's not realistic. What can a founder do to open their network or to find their clients or potential customers? I mean, it's difficult, you know, especially if it's B2B, you want to get an executive on the call. They don't know who you are.

[00:25:02] I mean, everyone does say, you know, work the network that you already have. Start there and then grow out. Right? But what are some other tactics, other strategies that they can use? I think it depends on the industry. I think people, founders are spending way too much time on Zoom calls. Okay. Got to be out of the, like your job is not to be, unless you're a retail operation. Yeah. You should not be in the office. Where should you be? Out with customers. In the market. Conferences or?

[00:25:32] Maybe. I think it depends. I get 10 minutes on the market. Like what I find is construction is an interesting one. Mm-hmm. Um, when you meet people in construction, if you act like, especially if you're youngish and you act like you're learning. Like I have a product manager right now. She's three years out of college, not from the industry. She's at a conference today. Mm-hmm. And her comment to me last night on Slack was like, everybody is so nice. And I'm like, tell me more.

[00:26:01] She's like, I just told them I'm new to the industry. And they're like, oh, let me tell you. Let me help you. Right? And I think a lot of industries, people do want to share their experience, both life experience and work experience. Mm-hmm. And part of the reason they're talking to you is because you've had a different experience. Right? I always tell like my corporate non-tech friends, you need to have a nerd in your network. 100%. Right? Yeah.

[00:26:31] And I always tell founders, your job is to be the nerd in their network. Mm-hmm. You know, I have a guy, you know, he's, you know, in his 70s, he was the CEO of one of the largest companies in the world. And he still calls me. He's like, Kippy, I just saw this thing about a world model. What is that? Right? I'm like, cause like, I was like, you could call, you could probably ask ChatGPT, but Yeah. I'm happy to take your call. Right?

[00:26:59] So I think if you can be, if as a founder, if you can be the nerd in the lives of executives, I've always been that. I've always been that. Um, and so if you're the accessible nerd that's really good at explaining how things work with a lot of empathy, people keep coming back to you. Mm-hmm. And so I think, um, spending time in your office on Zoom calls, I think you have to

[00:27:24] really pick your time and spend time, you know, with customers. And that might be at a conference. That might be, you know, at some event, some happy hour. There's always something going on. Um, and I, and I think that's, that's important. Yeah. I, I agree. I, I think that I've gotten that advice from, I've heard that advice from a friend of mine, who's also an investor and was actually on the show as well.

[00:27:50] But, uh, I think like he was really pushing the fact that information is the job of most, right? Investors, executives, leadership, having quality information, fresh information, the right sources of information. Yeah.

[00:28:13] Um, what would you say is the type of information that founders should really be focused on? I think it's, um, most, you know, a lot of founders believe that they suffer from imposter syndrome and they think that that's like a unique characteristic. Every CEO I know suffers from imposter syndrome. Right.

[00:28:38] And I think they're always looking for people to be an outlet to confirm or challenge their thinking. Mm hmm. That's not their employee. Mm hmm. Um, and so I think if you can be that person, um, that that's, that's a big, a great place to be. I think the other thing that is, as a founder, right, how do you engage in the world?

[00:29:04] Is it's really easy to be very insular and just go hang out with other founders, which there's value to that, right? There's, there's a lot of value of having a lot of founders in your network and share thinking and share. But I think when you're industry focused, uh, which, which a lot of AI these days is very vertically focused, you have to spend time in those verticals and, and be a good resource in those verticals. Yeah, I agree with that.

[00:29:31] I, and I, um, I think that you're right because it's important to have a network of other founders to have the empathy of what you're going through and people, um, wouldn't feel so alone in their journey. I do think that the majority of founders should be spending their conversations with potential or prospective clients or customers, um, learning more about them, what their pain is, et cetera.

[00:30:01] Um, what would you say for an investor? Mm-hmm. What is the type of information an investor needs to be looking for in their next investment? Yeah, I think there's, there's a couple of things. It really depends on what stage you invest in. You know, I still, I still invest pre-seed and seed stage. Um, we still have, you know, we're on our second fund. So we, our team still, we're still deploying capital.

[00:30:30] Um, I think there's a few things that are happening in the world right now is it's very easy to vibe code something. Mm-hmm. Um, so that becomes less important. Like, look what I built becomes less important. I think how people think about the problem statement and how they think their first version of, of, uh, getting to it and how they're going to solve for that, I think it's important.

[00:30:58] And, um, and then there's just some people that are just kind of unstoppable. And you start to learn how to identify those people. And, um, I don't know what it is, but honestly, it's just. I'm gonna ask you, what is it? I'm sorry. I mean, I don't, I don't know what it is exactly. Um, and it's, it's a combination of confidence without arrogance. Okay. There's a lot of people that show up like, oh, let me tell you, blah, blah, blah. Mm-hmm.

[00:31:26] Um, I think pedigree and not, and not like a bad way, right? How you think about pedigree starts to matter, right? Like, where, where did you work before? Not where did you go to college, but even if like, where did you go to college? What did you do in college? Oh, I was on the, you know, the mechanical racing team. I was like, you know, what did they do, right? If it's, if you're talking about an early founder.

[00:31:51] Um, but I think how people, their experience and how they think about like their experiences and what they learned and how they share that. Um, you know, the word, the craziest thing is if you talk to a founder, like, oh, I was employee number 50 at XYZ startup. Great. Why aren't you there still? Right. And if their answer is something like they didn't get me or like, you know, better answers are usually like, no, like the founders were amazing.

[00:32:20] I learned so much from them so much so that I just had to go do my own thing. Yeah. They inspired me. Right. Well, you know, but you, you, so I don't know. I mean, I think there's a combination that like, um, that characteristic of being unstoppable, I think also comes back, we circle back to the North star. Mm hmm. Why are you doing this? You know, why are you doing this? Why do you want to do this?

[00:32:48] And, you know, part of the North star is that if you're focused on that, the business will take different forms. Right. It might start off as a SaaS business. I turn into a consulting business. I turn into a brick and mortar, but like, who knows? But if you're focused on like, here's what I'm trying to solve in the world, you know, you tend to get there. Right. I get asked a lot of times like, Oh, are you going to buy an architecture firm? I'm like, I don't know.

[00:33:17] Maybe as of right now. No. Yeah. Maybe. Are you going to buy a construction company? Not right now, but maybe like, I don't know. Right. And people get really frustrated when I say like, I don't know. I mostly just say, maybe. And they get very frustrated by that. And they're like, well, why are you like, why are you hiding? I'm like, no, I actually don't know. I know that I am trying to reduce construction costs by 30% and build things 30% faster. That's all I know.

[00:33:46] That is my, that's one of my North stars. That's the direction I'm going. Yeah. How I get there. I wish I knew exactly. And I know it's not a straight line. Like we all know it's not a straight line. Right. So I, and I think that's another thing when you start talking to founders, like, Hey, like what are they just in it? Because this AI wave and they want to monetize something, you know, is it for that or do they actually have a true point of view?

[00:34:10] I mean, I will say like, I've learned a lot just being around the hoop with general catalyst. They're very good at that. They're very good at vetting founders that really have a, an ambition. Uh, and they're very clear with their ambition and also have that like, I'm not sure how I'm going to get there, but this is what I want to go do. Yeah. I do think a lot of investors are asking that question. Like why you, why this problem?

[00:34:40] Why is it important? Um, what, I mean, I, I've heard your reason, which was, which was great. I felt like, but what is the, what are investors looking for in that conversation in regards to how the response, how their responses, is it like, Oh, from childhood, you know, this is what is, is I'm super passionate about, or is it, I discovered this in college and X,

[00:35:09] Y, and Z, or I had this issue with myself. Is it like, what are the pieces of the conversation that are saying or triggering the investor to say, I do think that this person is not going to stop until they solve this problem. I think a lot of the messaging that comes out of a founder's math, if it indicates that

[00:35:32] they're trying to build a durable business, investors are really gravitating towards that versus like, I'm taking advantage of a wave. There's an opportunity, like the opportunistic idea. There are investors that like that, like, Oh, we're going to do that. And then we're going to sell it to Stripe. Right. There are people that invest that way and think that way. I don't think it's the majority of investors. Okay. Um, I think as you start, as they talk about like, Hey, what does this business look like

[00:36:02] in five years? That's a question of like durability. Okay. Like, are you building a business? Are you thinking that far out? Are you trying to build a durable business? And, you know, my running joke with investors, uh, has been my 26 year old and 24 year old work for me in the business. I am absolutely building a durable business, right? The goal is that they get to grow up in this business and be leaders in this business one day. So that's, that's the ultimate in building a durable business.

[00:36:32] Right. Yeah. And so I think, um, I think that's one of the questions that people, the investors are really trying to ask and ascertain. Are you just trying to do, are you just trying to raise some money and make a, you know, make some quick money or do you actually have a ambition? And a lot of that is when, when you ask questions about the durability of the business. I want to flip this around and ask you about, you know, what are some good responses from investors?

[00:37:01] If a founder is going out and they're talking to investors, they're probably talking to multiple if they're raising and they're going to ask questions like, you know, what does our partnership look like? Why you as an investor? I mean, obviously if it's a really great startup and they have options, but what should founders be listening for and how investors would partner with them as part of the business? Yeah.

[00:37:30] I think depending on the business, right? Most investors have a, as a firm will have a corpus of knowledge around certain things, right? Which is a function of the experiences they've had, right? Oh, one of our GPs worked at eBay, blah, blah, you know, like you hear these stories, right? Um, I think to me, one of the signals is when they're like, yeah, I'm not really that familiar with construction.

[00:37:59] And I'm like, well, you know, here's how you ought to think about it. And then on the second meeting, they've gone down the rabbit hole. Like, yeah, you know, I was like looking at this and I said, have you heard of this company Procore? I'm like, yeah. They're like, I mean, it took them 18 years to go public. What's up with that? You know, like they run down that rabbit hole. Mm hmm. And you're not having to feed them the, like, if you have to keep feeding them the information. Yeah. That's a signal that they're really not that interested.

[00:38:28] And they're not that intellectually curious. Yeah. I mean, I kind of say like, hey, I'm just trying to transform a $64 trillion year business. That's all. So if you're not interested in learning more, right, then you're probably not a great investor. Yeah. And so I think there is a little bit of the way investors get hooked is a little bit of their existing experience, but that they're investing in something that they're more curious about.

[00:38:55] I mean, I look at like, the defense tech industry, which is a lot of my friends are in that space. And I remember when they were starting these companies 10 years ago, nobody, I mean, nobody knew anything about it. And there was no like comps. There was nothing. Right. It's like, oh, hey, andurl. And here is, you know, Lockheed Martin. Like, there was nothing. Right. Right.

[00:39:25] And there's a, but I think that the investors that got in early, I mean, there's like now it's like a, it's a ecosystem now. But I think a lot of the investors that got in early when, you know, Grim and Trey and Palmer were out there saying like, you know, it's broken. Your choice was either say like, yeah, I mean, but it's government not interested. Or you lean in and go, it's broken. Tell me more. Hmm. Interesting.

[00:39:55] That's how procurement works. That's how, you know, so I think there is a, the investors that get curious and start going down the road. I mean, it was funny. I mean, Paul Kwan, who's on my board at GC. I remember our early conversations. I would just get text messages from him. Like, have you heard of this? And I'm like, yeah. And he's like, well, what's that about? And I'm like, oh, it's about this. And he's like, oh, okay, cool. And that was like our constant texting was like, he would just see something or experience something or learn about something.

[00:40:25] And he'd ping me and say like, hey, what's this deal about? And then he started like sending me, you know, any construction tech deal he saw that GC would see. They're like, hey, take a look at this with us. Mm-hmm. And I would, and we've co-invested in a couple of deals with them. But I think it's that there's a genuine interest in like understanding your market and what you're doing, you know, versus like you're just another meeting. Yeah. I agree with that.

[00:40:55] I think it's important for not just investors, but also I hear that also in the people that you might hire on your team, right? Mm-hmm. If like a candidate comes back and they're super excited and they want to share some knowledge that they learned since the last interview or something like that. I think that's a very similar signal of basically just who you want to work with and who you want on your team. Mm-hmm. Yeah. When we came out, if it was up to me, we wouldn't have come out of stealth mode. Oh, really? Yeah.

[00:41:25] It's, I think like being visible isn't that, you get the wealth managers, you get the people trying to sell you stuff. I don't, I don't, it's just creates a lot of noise. Yeah. Um, the only reason we came out of stealth mode is my CTO was like, hey, we need to hire a bunch of engineers. Mm-hmm. I get it. You've got a great network, but we need to like be able to reach beyond the network. And I think in the first four months, in the first four to six weeks, we had like 2,500 applications.

[00:41:55] Whoa. That's a lot. Yeah. It was a lot. And it was interesting because, you know, we have something that AI that vets all the scammers and all that. It was actually like 3,500, but it was 2,500 real people. Wow. And, um, and of course you can't hire everyone. I still like every day I get people on LinkedIn messaging me saying like, hey, I thought the interviews really went well. I know you guys made some other decisions. Would you please let me know when you're back ramping up?

[00:42:26] Um. Did that work? I mean, people keep, you know, I've got the running joke internally. Uh, I think my team works very hard to keep my ego in check. Um, I've got a humble of you to be acknowledging. So I have about 150,000 sub stack subscribers. Oh my goodness. Um, and it's interesting because we're generally convinced maybe 50,000, 50,000 of those are people that want to come work for us.

[00:42:55] So I think when you're doing interesting things, when you have points of view that resonate with people and they're like, that's my, you know, we just hired someone the other day and she was sending me all these screenshots from her friends. Like, oh my God, I can't believe you got in with KP. Is he as big a jerk in person as he is online? No, I have not had that experience. At least not yet. No, no, I'm different in person.

[00:43:23] I think online, I'm just like, this is wrong. Like people will say things that are wrong and I'm like, that's wrong. This is not, this is not correct. This is how it is. Yeah. And so I think, um, what did I, I was telling someone, I've told people this a lot, like, uh, online, I try to be critical in kind. I'm still working on kind. Sometimes people just kind of say you, that's wrong. Hey, self awareness is the start. Yeah.

[00:43:50] So, so I think that there are in AI, you know, we have a, another new hire that came on a couple months ago and he was just like, man, I just love working for an AI company. That's doing real things. That's building. As we're building physical things. Mm-hmm . We're making a difference. And I think what's interesting is in most other industries, you go build things, right? You can go build the next iPhone. In three years, it's in the trash.

[00:44:21] But I still have buildings. I was very, during the Olympics, I built a lot of stuff in Atlanta. I still drive by those buildings and go, that's one of my buildings. There's still buildings. I mean, my, um, my dad was chief engineer of the MARTA, which is in Atlanta and chief engineer of a bunch of different firms. There's still a bunch of his buildings around. And so I take my kids past those buildings and go like, yeah, your granddad worked on that.

[00:44:47] We're probably one of the few industries where the artifacts of your work endure across multiple generations. Yeah. And when people figure that out, they really want to come work for you. Because everything else does not endure that. You don't get to drive by things and say, I was part of that. I helped build that. You know? And I think that's very unique to our industry. So I think that's why we've had a lot of interest in people. And like, this is so cool. Like, you know?

[00:45:17] It, it, it resonates with me because I feel like, I think the world needs balance, generally speaking. Right? So as we move deeper and deeper into this AI era, I think tangibles are going to be maybe more important, even more, you know, sentimental, if you will. Do you get that feeling too? Or? I think I just told you I buy a lot of vinyl.

[00:45:47] That's right. Right. You did say that. Yeah. Yeah. Yeah. Cause it feels that way. Right? I mean, I don't, I still love opening up an album and the, you know, the physical, you know, it's like, it's not the same as streaming. Right. But I think, no, I mean, I, I do think that people have a need to go back to some of these physical things. And I think even nostalgic things. Yeah.

[00:46:13] You know, we talk about me and my sons talk about that a lot about nostalgic things and how their generation does not have a lot of nostalgia other than ideas. Right. And so you think about things like Pokemon cards, like there's a reason why those are still so popular and people, you know, why, why are, if you think about it, a Pokemon card and an NFT, it's the same thing in terms of the economics of it all. Yeah.

[00:46:44] Economics. Yeah. It's still a piece of cardboard that somehow is worth a thousand dollars or a million dollars, right? Like this weird scarcity thing. NFT had built in tangible scarcity. Right. But it wasn't, nobody got attached to it. Yeah. But, um, so I think, I think you do have like a need for that, but I think ultimately, I mean, I just, when I talk to our software engineers that have lots of options, they can work lots of places.

[00:47:12] Um, they say things to me like we've, they feel like we're the only AI company that's actually doing good in the world. I, I hope that's not true, but. But it feels that way. It feels that way. Yeah. Right. It feels that way in terms of like, nobody can really, you know, nobody can answer what the job losses will be. Right. Everybody kind of, well, there will be no job. There'll be more jobs where some people say like everybody can do it.

[00:47:40] Everybody will be rich, which is, that's not how that works. But there's, there's lots of, but the real answer is nobody knows. Right. Nobody knows. We have educated guesses. Right. I mean, we're working on teacher housing for the Pacifica school district. Oh, interesting. We drive by it. We drive by the job site. We're providing housing for teachers because it's so expensive in California. Teachers can't afford to live here.

[00:48:09] They can't live anywhere near where they teach. Yeah. So a lot of these school districts are building teacher housing. Right. That makes sense. So it's like, we're using AI to make that project better. Right? Like that's, so I, so I think for us, it's like a direct line of sight to like how we're using AI to, to make the world a better place. It's very easy to interpret. I think some of the other stuff it's like, well, maybe possibly, you know, hard to say.

[00:48:36] Is that a big part of your investment strategy or, or maybe generally speaking the networks that you're in, you know, did they think about the morality of some of the startups that they invest in regarding AI and how it might impact? I think if you're dealing with any successful investor, they're very, very focused on that. Now there's other investors that haven't made it that are like, Hey, how can I make a buck? Right.

[00:49:07] Um, I think you're given the amount of wealth that's being created these days, given the amount of, I mean, Patrick Collison is super interesting. He's got grant money to restore like architecture in the world. He's a co-investor in one of our companies that does robots that do sculptures. Oh, wow. So if you think about classic architecture and these like fascinating sculptures that you see on the side of buildings. Right, right. They're very expensive. Yeah. So you don't see a lot of it.

[00:49:36] You see a lot of glass and steel, right? Mm-hmm. Um, so, um, so foundational, um, fundamental labs, they're doing this right there. Have robots. And so Patrick Collison and Alexi Ohaney and like all these people invested. And I was like, this is so wild that these famous tech entrepreneur investors are investing in this. And then you start reading, you start digging into it. I don't know Patrick, I've met him, but I don't know him by any means.

[00:50:04] But if you read their stuff, like they're doing grant money to like restore architecture, which is super cool. Right? So I think if you think about, um, successful people, I do think they, um, they do start to focus on these things. Barry Diller is an interesting dude. Like he's made so much money in media. Mm-hmm. All, I think most of his money's into a trust to build memorable places.

[00:50:34] Parks and, you know, outdoor art and things like that. So I think when you talk, when you talk to successful people, they're generally making more money than they can ever spend. And then they start to think about what's next. Mm-hmm. And once again, like, you know, everybody's focused on building durable businesses, but think about we deliver a durable product, things that last 50 years, a hundred years. Yeah. And so I think a lot of people do care about that these days.

[00:51:02] And, you know, um, I think people are trying to figure out, I think everybody's trying to figure out their role in all this. There's a lot of people that are famous now that I don't know that wanted to be famous. I think Elon Musk always wanted to be famous. I don't know that, you know, Dario wanted to be famous per se. You know, like, I think there's people that are kind of, and so I think they're just now starting to think about all these things, right? Like, what am I doing? Mm-hmm.

[00:51:32] And I think investors are definitely, um, because if you think about the default, when you talk about it, it's AI ruining the world. What do people turn around and say? Mm-hmm. Well, we're going to find cures for cancer. AI is going to find a cure for this. AI is going to like create a new material. Like... I actually know someone who's leveraging AI to try and cure cancer. Right. Yeah. That's their, because all the other stuff, they don't have a clear line of sight about how AI is making it better, like societally.

[00:52:02] Mm-hmm. But that, that's the go-to answer, right? Yeah. Like healthcare. Yeah. I mean, healthcare, I feel like it's its own animal. Right. It's, it impacts absolutely everyone. Yeah. No doubt. And I don't know, have you had a lot of experience in the healthcare industry? Not much. Not much, right? Just building hospitals. Building hospitals, that's still important. That's part of the industry, per se. Right.

[00:52:32] But I think if you look at like all these, you know, you see them in LinkedIn, right? Yeah. Another AI native go-to-market company. Right. I mean, it's constant. Like how do we, like how do we feel about that? Like how do we, do we feel like these people are doing something? I mean, I guess you need it, right? To get the word out for your cancer curing AI company, but I don't know. Like I just feel like the stuff that people are gravitating towards is very opportunistic and not necessarily of impact.

[00:53:02] Mm-hmm. And I, some days I feel like, you know, just AI in general, like if you're going to be in the game, like do something big, do something interesting. How do you cut through the noise? You know, I mean, as a founder, as an investor, even when looking at, you know, through the noise, what, what is the spark that's going to get someone's attention?

[00:53:25] I mean, every LinkedIn post is my AI native found startup, you know, I mean, depending on, you know, who you're connected to. But at the end of the day, how are founders supposed to truly cut through the noise if that is really everyone that you know that's doing that? Well, I think if you're doing something interesting, it's not that hard to cut through the noise. Mm-hmm. I think if you're launched another AI native CRM tool, good luck with cutting through the

[00:53:55] noise, right? Right. But guess what? You're also not doing anything interesting. Mm-hmm. So I do think you cut through the noise based on doing something that's not, that's interesting and meaningful. And I think sometimes like, you know, like I'm also cognizant I'm 55 years old, right? So I look at things of like, I'm only going to do meaningful things. Mm-hmm. That's just where I am in my career, right? Yeah. I get it if you're 20 something and you're just trying to like, do your first successful

[00:54:25] startup to go do your second successful startup. Like, you do what works, right? Sure. And there's nothing wrong with that either, right? But I think, I feel like a lot of what you build with AI is just so powerful and then we're going to use it to increase your SEO or something. Like, I mean, I get it. Not my thing. Maybe bringing like the mission or the vision to the forefront and helping people, kind of

[00:54:55] bringing people along with their journey and where they're headed. I also think there's certain things with AI that shouldn't be easy. Like, someone was talking about some of these like new dating apps that use AI to perfectly match people. And I'm like, the whole point of dating is the imperfection. Like, it's not like that. It's the imperfection of people that's interesting. Yeah. You know, like, yeah.

[00:55:24] So like, why are we taking away? It's a little bit like we're taking the journey away. Yeah. Like I told my team yesterday, it was kind of funny. We had our leadership meeting. I was like, just every once in a while, don't put my writings through AI and say, give me the highlights because I'm meeting with KP. Like, actually read it. Right. Actually read it. It's funny, my 26 year old, all of a sudden, reading books. Physical books. Okay. He's reading physical books again.

[00:55:54] And I was like, it's funny. He walks around with his book and a highlighter. And he- I used to be that person when I was young. Yeah. He was never that person. Oh, okay. Right? He's 26. He grew up with iPads and Kindles and everything else. Right? So it was funny. He was on a flight today and he sent me a picture of him highlighting a section of a book that he thought it would be interesting to me. And so he took a picture of it and sent it to me. And I'm like, this is so cool. Right?

[00:56:22] But I wonder why is he gravitating towards reading physically? Like he loves like all the Stripe Press. Have you seen the Stripe Press books? Yeah. And he's like a huge fan of everything they do over at Stripe Press. Um, but he's just in it and he's got a bookshelf and he's really in it, you know, reading it. And I think like, why is he doing this? And I think it's a little bit of like, you know, do I really just want to ask, you know, Claude about something or do I want to understand the entire story? Yeah. Yeah.

[00:56:52] It's, it's almost like, it's almost like absorbing it in a different way. Right? And feeling like disconnected from the notifications and the sounds and the, uh, the bright screens. Yeah. And, and almost trying to like be on your own island of peacefulness. I mean, that's kind of how I would see it. If I, you know, sat down and I mean, I do, I sit down with my kids every night and I read with them. Mm-hmm.

[00:57:20] And it is truly one of my favorite moments of the day. And not just because they're reading to me, but I get to just have this focus time. Yeah. That's uninterrupted. Yeah. It's funny. I do that with my, I have a four year old as well. Oh, you do? I have older ones and I have a four year old. Oh, so you know. So I read to him like almost every day. But the biggest thing we've started doing is I make up stories. And then he makes up stories. Oh, I love this. And he asked me the other day, he's like, why do stories always start with once upon a time?

[00:57:50] Now do you make up stories like, because like AI has made a story or do you make it up with your imagination? I just make it up with imagination. Okay. Same reason why we mostly use Amazon cardboard to build forts. Oh, a hundred percent. Yeah. I mean, let's get the Amazon box. Yeah. What doesn't matter what's in the box. Right. This is the big one, you know? Yeah. Exactly. And I mean, that's a toy for at least a week. Yeah.

[00:58:17] So I think, but I do think generally like, I mean, even like my age group, right? We had cliff notes. So in high school, I don't want to read the whole book. Mm-hmm. I don't want to read the Odyssey. I'm going to read the cliff notes. Right. Right? Get me there faster. And then I think when I was like about 25, I went back and bought like all the books I was supposed to read and read them for real. Wow. Good for you. Right?

[00:58:45] And so I think what happens, it's like in work, right? Everybody's trying to get the TLDR out of Claude. A hundred percent. From their boss or a white paper. Just scroll down. Yeah. Scroll down. Right. Or a white paper, but that's to do their work. I also think you can enjoy some things at work. It doesn't have to just be about productivity. Yeah. Like maybe actually, you know, I was talking to my assistant. I was like, hey, I need a new printer. And she's like, what?

[00:59:12] I was like, some of these white papers, I want to start printing out and highlight, tactically read them. Yeah. And she was like, okay, I'll go find you a printer. Like, I guess I'll go online and find you something, you know? Like, because I think, I do think that people are craving that. They're craving, I think AI is taking the experience away, whether it be in the form of a dating app. Like, no, you have to go have, you have to go meet a lot of imperfect people. Mm-hmm. So you find your people.

[00:59:41] I think the same thing with most things is you actually want to have the experience. And I think AI sometimes robs us of that. I think I know AI robs us of that time. But I also feel like it has become that much more special. You know, the tangible things, the focus time, you know, with books. I hope libraries get more attention soon. Oh, we love our library. Yeah. We have a great library in Half Moon Bay.

[01:00:11] Oh, is it in Half Moon Bay? Oh, that's right. Oh my God, we have an amazing library. Really? I have to come out there. I go library hopping a lot. Yeah. Yeah. It's an exciting place with no screens. Yeah, we were at the library a few weeks ago. And they, not in Half Moon Bay, I think it was in Menlo Park. We just happened to be walking around and, oh, there's a library, let's go pop in. And they had a newspaper and magazine section. And I sat there and read the physical Wall Street Journal.

[01:00:42] Wow. I flipped through car and driver physical magazine, right? Right, right. I was like, this is so much fun. And my wife was like looking for me. She's like, where did you go? I was like, I was reading newspapers and magazines. Does she read? I'm just curious. No, she's a massive reader. Oh. Yeah. Yeah. I think like the library thing comes from her. Yeah. Yeah. I would think so too. Yeah. I mean. She loves libraries. I know. She and I need to go to a library one day.

[01:01:13] We go to New York and she's like, the libraries and the museums. Oh, yeah. Yeah. Of course. I would love that. Okay. So we've talked a lot about zero RFI. We've discussed tangibles and libraries. Mm-hmm. One thing that I really enjoyed hearing from you was that you run CEO, AI run hackathons. Mm-hmm.

[01:01:37] I would love to learn your perspective on what comes out of that. Like what kind of perspective from a founder or CEO that goes through in a hackathon and then leaves and kind of gets a new look at things, a new, from a new lens. What does that look like? Yeah. I think most CEOs either get told no a lot or they get told yes and then nothing ever happens. Yes. Yes.

[01:02:06] And so what I hear from the C-suite around AI, oh, well, my CIO says we can't do that. No. Or my head of innovation says we can, but I haven't seen it. Head of innovation? Right. Right. Exactly. So a lot of that they struggle with.

[01:02:25] So my whole point of like hosting these hackathons for non-coders is I think once you can be on the keyboard and spend the day building something that you wanted. And many times it's something that the IT department told you you couldn't do. You can't do that. And you do it. Yeah. The CEO walks away with like it can be done. I understand the possibilities.

[01:02:53] It's not another McKinsey white paper or a Harvard Business Review. Yeah. I am on the keyboard doing things. I think it's super interesting. And one of the things I talk a lot when I do these like leadership talks to these CEOs, I was like, you understand I have a four year old. He will not ever learn how to use a keyboard. There will be no reason. That's an interesting thought. Right. Yeah.

[01:03:22] I mean, I think in the next year, right now, AI is transcribing our words. In the next year, we'll actually learn and understand our words. Mm hmm. Right. So why would he ever learn how to use a keyboard? Right. Which, you know, I'm gonna teach him cursive handwriting anyway. But they don't get that. And then you start showing them like one of the guys on my team, one of my software engineers, he like voice codes. I think it's bizarre. But he taught like he talks to Claude code. Right.

[01:03:53] And that's how he codes. Yeah. And so when he's around these executives and he's just like talking to Claude writing code, they're like, what just happened? Like what is happening? Right. So I think they experienced that. And then they get supported by our team. One of the guys on our software engineering team is a former middle school teacher. And I always say like, you are the best because he leads these. Mm hmm. We're doing one in Atlanta, I think next month, another one.

[01:04:19] And he's very good because he's like makes he's very empathetic with people. He doesn't try to make, you know, we give them a laptop to work on because God knows IT has locked down everything on their machines. Of course. Naturally. But I think what it is, it's I think we are living in a time of show me, don't tell me. Mm hmm. And I think AI is allowing us to do that.

[01:04:44] And so for a CEO to be power pointed by their head of innovation or their CIO or their CTO about AI, what are they actually walking away with? Right. Some talking points. Right. Versus, you know, there's a company that I'm friend of mine's on the board of public company. I said, look, you should send your whole board to one of my hackathons because they're saying their boards trying to make decisions about AI.

[01:05:11] Not one person has done any AI coding, has built a skills file, has automated like they haven't actually used it. If you ask them, like, what have you done? Like, oh, I've got chat GPT. Like, what do you do with it? I'll make my grocery list. Perfect. Right. And so you're trying to make the decision for a Fortune 500 company about where you're going to do it. What direction AI goes. Right.

[01:05:35] And I just think we live in a time where you can experience these things yourselves and draw your own conclusions and have a point of view and not have to listen to everyone else. Yeah. Well, it's an immersive experience. Yeah, it is. I think that I had somebody on the show a few weeks ago and he was a CEO who didn't code. And his story was really about his aha moment on his CFO coding something for him.

[01:06:02] And then he himself began coding and it was just a 180 for him and his business. And so I think that that is an incredible experience that you're offering. And so thank you. Thank you so much for being here and sharing your incredible knowledge and your experiences. And I hope that people who are listening really understand how to move forward as a better leader. All right. Thanks for having me. Yeah, my pleasure. Thank you. Thank you. Thank you. Thank you.