The Refusal to Lose: Tenacity, Storytelling, and Founder Leadership

In this episode of the Leadership Quotient Podcast, Ben Narasin, Founder of Tenacity Venture Capital, shares how a lifetime of entrepreneurship shaped his view that the true differentiator between success and failure is not just intelligence, opportunity, or even vision, but tenacity. Drawing on his path from early ventures as a child to building FashionMall.com and later launching one of the earliest institutional seed funds, Ben explains why the entrepreneurs worth backing are the ones who simply refuse to stay down. Ben and Lindsay explore how disdain for losing, frugality, and resilience show up in founder behavior, why great leaders must lead from the front, and how storytelling is not a soft skill but a core leadership capability that drives recruiting, fundraising, sales, and culture. They also discuss the dangers of tolerating weak links on a team, the difference between founder-led and founder-managed companies, and why the best startup leaders hire people strong enough to challenge them. The conversation closes with Ben’s perspective on AI as a transformational force, the importance of protecting time and focus, and the enduring reality that great companies are built by people willing to fight longer, learn faster, and tell a compelling story along the way.

Transcript

SPEAKER_01 0:00

Welcome to Leadership Quotient, a podcast by The Crucible, where we explore how leadership teams and investor-backed companies are built, aligned, and scaled for impact. I'm your host, Lindsay Gazowski, and in each episode, we'll talk with the people shaping value behind the scenes, from investors to operating partners to C-suite executives, about what it really takes to drive performance through leadership. On today's episode of the Leadership Quotient Podcast, I chat with Ben Narrison, founder of Tenacity Venture Capital, about the element that predicts the difference between success and failure, how to gauge if you're taking enough risk, and why storytelling is leadership. Ben, welcome to Leadership Quotient. I'd love to hear a little bit about fashionmall.com and how all of that came about and your entrepreneurship journey as it relates to, you know, getting your career kicked off.

SPEAKER_00 1:08

Sure. Well, it started a long time before Fashion Mall, if you want the journey. It started when I was 12. So I took my first job when I was 11. I worked for 25 cents an hour in credit at a bookstore so that I could build up a larger comic book collection. Now I had had some little entrepreneurial efforts before I was 11, but those were literally like taking notebooks of stickers to school and selling them to kids, like buy a sheet for a dollar and sell each sticker for 25 cents, even though there were 20 stickers. But that business, that opportunity led to me starting my first true company when I was 12, which was a comic book dealership that would go to Comic-Con and buy and sell comics. And that was a very profitable business for me. And it really helped me understand a lot about the basics of entrepreneurship because comic books are effectively a commodity that vary in value based on rarity and popularity and other things. So a lot of macro lessons from that. So for the next 25 years, I was an entrepreneur exclusively. Literally, the only thing in my life was my own entrepreneurial journey and dating until I married and then my family. So, you know, it's there was a short, well, six or eight year window when I retired where I thought I would have a more well-rounded life, but I decided that wasn't actually for me at all. I still like being obsessed with only entrepreneurship and my family. There's nothing really else that's interesting enough for me. I'm not into sports or music or anything. It's just sort of I play a video game or two, usually with an LP or a or uh one of my CEOs. So Netnet, that long journey of 25 years as an entrepreneur was basically me starting something I found interesting, getting bored of it, and then taking 100% of the money I made in that business and investing it in the next one. That culminated in me starting fashionhall.com in 1993. I had been an internet user before the web when Berners Lee came out with WWW. I thought, oh my God, this is going to change the world. This is going to be the biggest thing in my lifetime. I have to have my piece of it. Now, at the time I was running a menswear company. Did not really enjoy the category. It's not the most professional industry. Um, but after a lot of work and research, I decided it was the only place I could start. And the reason for that was my very first idea on the internet was I should rent software online. Now, it would have been pretty cool if I'd done that because then I would have fundamentally been the inventor of SaaS. But my thought process was well, I can't do this because obviously all the big players, the Lotuses and the IBMs and all these software providers will be online competing with me almost immediately. I was wrong by decades. But my second idea, having worked at a bookstore once and knowing that so books are on wheels, meaning you can have unlimited amounts of books, and if you don't sell them, you can send them back. So I thought, well, I could create a bookstore online. But once again, I thought, well, you know, Borders, Barnes and Noble, W.H. Smith, companies that don't even exist today, they'll all kill me. I was wrong about that too, but Jeff would have killed me, so good thing I didn't pursue it. I met him early on, and maybe that helped me not do that category. Um, so I thought, you know, the internet, at least the web, the metaphor I used, I always find mental models useful for my way of thinking. Maybe it's just wherever I am on the spectrum. But, you know, I thought this is California real estate. This is California when gold was first discovered. And that metaphor resonated with me because what I thought about was the people that discovered the gold weren't the ones that got rich. It was the people that came after them that killed them and took their land. You know, if you call Buster Scrugs, there's a great little example of that. So anyway, I thought I need to not just find the gold, I need to be able to protect the gold. And the industry of fashion was the only industry where I at least had a network and knowledge that allowed me to believe I could protect my land. So I launched fashionwall.com originally to be a commerce company. I very quickly realized way too early for that. We pivoted into being a portal almost immediately. Um, in the end, we were bigger than AOL, excite, and Yahoo combined for every category they did. We built out e-commerce for all three of those. Uh, and it was a great, great run. I took that guy, I started the company in 93, took it public in 99, never raised venture capital, so never had any experience with VC, but still had enough control of the business that when the bubble burst, I was able to navigate us to a very healthy landing for everybody involved. Okay, so now jump forward. That was all in New York. I moved to California. I get here about 22 years ago. Um, in between, by the way, yes, I did take some time off. I moved to Nevada, Incline Village, beautiful place, took up tennis and golf and made friends, and later realized no, those things are really interesting to me. And so moved back to what I do now, which is stay focused on entrepreneurship. Got to California and in 2007 saw there was this huge gap in the market. Venture funds had gotten huge. Angels were slow and inefficient. If you had a great idea and only needed a million dollars, no real place to go for that. So I started what ended up being the second institutional seed fund in the world, as far as I know, right after Josh Kopman, who beat me to market by one week, which still upsets me because I should have worked just a little bit harder and been able to say, I was the first. But it was a great run. And we can talk about, you know, I'll let you sort of frame where you might want to go from here. But yes, the entrepreneurial journey helped me think a lot about how I invested. And yes, it helped me understand how to look for certain types of entrepreneurs. And, you know, I saw data that supported that my experience was useful in my ability to pick, and the outcomes tell me that those picks were good. So anyway, there's a lot more to be said there, but I could talk forever and you'd get bored.

SPEAKER_01 6:36

Well, I would love to hear a little bit about how your learnings from being an entrepreneur contributed to the early stages of picking other entrepreneurs in whom to invest.

SPEAKER_00 6:51

So it was an interesting learning for me because while I do believe I'm relatively self-aware, um, I know I am a quirky dude and I'm aware of most of those quirks. And my wife tells me about all the other ones I might have missed. I, you know, no one could be 100% able to understand themselves in every possible way. And I was talking to a friend, a guy who I've actually now back twice and is currently running a wonderful AI company, um named Moonjal Shaw, who I'd met through my father early on when he was working at IBM. And we really hit it off. He was great. We almost started a company together. He became an entrepreneur in his own right. And I was talking to him about three years into my journey. I'd started the seed fund, I was investing. And I said, Munjal, I don't know, you know, it's been three years. And by the way, in 2007, what we called seed then is what people call pre-seed now. This was smart guys and gals with PowerPoint slides and nothing else. And I said, it has been three years and I have not had a single company fail. And I was funding sort of seven to ten companies a year. And I said, that really concerns me because it feels to me like I'm not taking enough risk. If I'm funding PowerPoint slides and nobody's going out of business, what am I doing wrong here? Like I must be missing something. I must be missing riskier opportunities that could have huge outcomes. And also, I just don't understand it. How could how could that be? Wasn't proud of that number. I was scared by that number. He said, Oh no, I get it. What do you mean you get it? I'm me. I don't get it. How do you get it? He's like, no, no, you just fund people just like you. I was like, what do you mean? And he said, look, you will never give up, you will never quit. So you're funding those people. They're not failing because they refuse to. Now, in fairness, not failing and not succeeding isn't particularly useful for anybody, although there's learnings to be had. But I thought about that ever since. I mean, that was a solid 15 years ago, and it still resonates to me. That, and by the way, my fund is called tenacity venture capital. So, you know, it really talks about what I believe is the only secret to entrepreneurial success. Brilliance is assumed. You have to have it, or nobody's going to fund you. Great ideas, once again, assumed, or nobody will fund you in huge markets, nobody will fund you without them. But the difference between success and failure can often be attributed to the person that is unwilling to die. If you are willing to metaphorically step into the ring as a lightweight with the heavyweight fighter of the world, and every time he knocks you down, you get back up, you have a shot at winning eventually. Um, and that's what it takes. And I think that was a huge part of what has helped me have better conversion rates and lower failure rates than the vast majority of venture. Now, the other thing I've figured out, I think, is that I was an entrepreneur for so long. One of my friends coined the term wontrepreneur, Brian Staly, when he was MDB, um, which is somebody that wants to be an entrepreneur, but it's really just a game in their mind. They just read TechCrunch and thinks this will be cool. I'm pretty sure you can't bullshit me into believing that you could be an entrepreneur if you can't be. Entrepreneurs are born, they are not made. Now, the fact that you were born with the tendencies that allow you to be an entrepreneur does obviously mean you can learn an enormous amount. But if you weren't born to live this life, you are not going to learn how. You don't take, you know, it just when I was, I went to school at Babson. I remember I was talking to somebody there. Babson's like the ultimate home of entrepreneurial training. And I was talking to this other student, and I was like, why'd you come to Babson? He said, Well, I'd like to learn how to be an entrepreneur. I remember as a person in college thinking, yeah, I don't think that's how it works. You know, if you're an entrepreneur and you want to learn all kinds of things about how you can be a better entrepreneur, fine. And maybe you will never know, but you've got to be ridiculously tenacious and driven and focused and hardworking and everything else. And and I think that I am so accustomed to living that life. What's the old saying? Like game meets game or game knows game, something like that. Although I think that's about con men understanding other con men or something. But that net, if you're just playing the game and not actually a player, I'm pretty sure I can sniff that out.

SPEAKER_01 11:00

Interesting. I I find the same is true of people that just seem to have that natural inclination toward certain features and facets that can be further developed then, but in terms of those entrepreneurial skills. One of the things we test with the crucible is success orientation. And it's in two realms competitiveness and disdain for losing. And that disdain for losing tracks very closely with your refusal to die concept there. Because it's people who just will not stop until they achieve some level of success. It's not that you're gonna hit the home run every time, but you will not allow that match to end.

SPEAKER_00 11:46

You know, I think it's nature, I think, psychology studies out there that show that people's fear of loss is much greater than their excitement for winning. But the visceral disgust of what loss represents, I think, is another level. I was I was playing pickleball with somebody and we lost, and I his quote was great. He said, I hate losing so much more than I like winning. And I've noticed in little small, like very occasional, I'll play poker. I'm a good poker player, I'm not a great poker player. I think I care too much. I think even though the money won't impact my life, I'll give you two examples. So I think I played, my wife was out of town. I went and played on a weekend, lost $600. That bugged me for like a month. I won a tournament where I won $5,000. That was exciting for me for a day or two. So is $600 going to impact my life? Absolutely not. But it lived rent-free in my brain for quite a while. You know, and then I'm overanalyzing. I'm thinking, do I do this right? It's a lot easier when you do the right thing and lose, because that's the nature of probabilities, than when you make a mistake. You know, I'm a solo GP. Sometimes I'll be talking to someone and they'll, you know, like, what's the team? I'm like, you're looking at the team. There's three of us, me, myself, and I. And yes, we argue a lot, but at the end of the day, I have no choice but to argue with myself because who else will argue with me? And I do reach out to others for, you know, views and expertise and the diligence process and everything else. But at the I'm always trying to say to myself, what did you right here? What did you wrong here? I'm much more focused on what did you do wrong. You know, it's like I had a coach when I was at NEA and he's like, let's focus on the stuff you're good at. I'm like, yeah, I'm good at what I'm good at. Let's just help me get better at what I'm not good at. And, you know, he's like, well, I'm really focused on the positive. I'm like, good to know. Tell me the negatives. Like, I don't need you to blow smoke at me and tell me how great I am at X, Y, or Z, even if you're being honest. Like, thank you for the compliment. Now, what did I screw up? What did I do wrong? What did I miss? What did I not notice? Because that's something I've really tried to train myself on, is not just looking for my own flaws, but trying to encourage others to point them out for me. That's why it's good to be married, because no limit on the number of flaws pointed out. But yeah, there are a lot of traits, and a lot of it's just subtle. You know, like often I'm asked when I'm talking to a potential LP or somebody that's intrigued by my investment process because I'm a very high volume in, very low volume out. Meaning, um, Lex Wexner, who ran The Limited, used to say, eat like an elephant, poop like a bird. And so, you know, I say this a lot, you know, over a period of two years, we saw 10,000 pitches and funded six. So we're eating 10,000 pitches and we're pooping out six investments. Not a huge conversion rate. But so sometimes people are just fascinated by that. One of my entrepreneurs said to me, I don't understand how I don't know anybody that grinds harder at trying to find deals and yet you do so few. And I'm like, look, you got to keep the bar high. But I think a lot of that is just how to figure out whether this is the right fit in the first place. And so often to get to the point, people say, Well, you know, how do you solve for that? How do you solve for tenacity? Uh, and I'm like, look, I'm not one of these checklist guys. It's not like I have 17 questions I'm gonna ask you, and then I'm gonna put it into an AI algorithm and ask it if you're tenacious. It's literally just how much time can I spend with you and figure out if there's some clue, some clue from your past, some clue from your behavior. Poker is actually a great way to understand a little bit about people, not the tenacious side, but more other elements of them. Uh, pickleball, sometimes, you know, it's one of the very few things I have as a random other thing. I wanted to get rid of the grass. My wife didn't. So we we uh compromised on putting in a pickleball court. Having an entrepreneur over to play pickleball, great. Uh, how hard are they willing to go for that ball? Just a random example. I did fund a guy, I was probably gonna fund him anyway, but he was learning to play pickleball. My court is built so that there's no fences, you can go forever. You can run and run and run. Because that's my big advantage, is I can actually sprint pretty well. So I hit a ball he couldn't get to, and he went so hard after that ball, he faceplanted into a bush and came out bloody. And I was like, that's what I'm looking for. Because I do believe it's stolen from my CrossFit coach, how you do anything is how you do everything. And so if you can see that element of refusal to lose, you may still lose. Look, losing is part of life. But the difference between losing with self-respect and without it is whether you gave your absolute all. If you left something behind and then you lost, that's probably gonna haunt you, at least if you're the type of person I'm accustomed to dealing with. And if it doesn't haunt you, I hope I never invest in you.

SPEAKER_01 16:14

So that's fascinating. Um When you're thinking about how your evaluation of entrepreneurs has changed over the last 20 years, are there any nuances that used to be important that you've learned from or things that you find more valuable now?

SPEAKER_00 16:35

That's a really intriguing question. I like questions that make me actually think, which are rare, by the way. So I learned that on my IPO roadshow and when I was raising money for the fund. In each case, there were one or two LPs or potential IPO investors that actually asked me something. I'm like, wow, I have to think about that. I'm not sure. It is uh it's a question I will spend more time thinking about after this interview. Um I guess the point on tenacity probably crystallized for me about eight years ago, and that is a change. I this was that during that period when maybe longer, maybe 15 years ago. So, as I mentioned to you, I had three years where no one had failed. My very first company failed. And I came home from the office and I was feeling really down, and my wife said, What's wrong? And I said, Oh, I'm just sort of sad. My first company ever went down. And she said, What happened? And I said, Well, it's been a long, you know, it's been hard. It's been a year, and and before I got the words out, my wife said, A year? I was like, Oh my god, you're right. He gave up. And I became angry at that entrepreneur. I never said anything to him, but he gave me back 12 cents on the dollar. He gave up. I that was infuriating. You don't give 12 cents back, but you try another 12 cents worth of effort. I have entrepreneurs that have used all the money and found a way to keep going for six months with a team that was willing to work for Equity. And what I realized is he gave up, and I don't know whether he would have ever succeeded, but he definitely failed when he stayed on the mat and didn't get back up to continue the fight. And I think that hyper focused me in on never wanting to see that happen again. You know, like you you learn from mistakes, you learn from pain. That was in its own way a type of pain. Like it was a because at first I was very compassionately like feeling sympathetic towards him. And then I was like, no, you're right, honey. That this is not something where I should feel bad for him. I should feel bad that I chose him. And I did start to think about like when I made the original choice, and there were definitely some things in that that were not the typical reasonings, and you know, sometimes look, he was way too early, but everybody's too early. It's just the nature of life. And so I guess I realize that since everybody's too early, you got to make sure they can stick it out until they're too right on time. Um, beyond that, uh, I mean, I've become a little more cautious in trying to understand more of the nuts and bolts of things that I think a lot of VCs don't actually look at. Like, show me your actual budget for spending, show me what payroll looks like. You know, sometimes entrepreneurs will get ahead of themselves, they'll think because they raised a couple million dollars, it's time to give themselves big raises. Well, there's a lot of reasons that causes challenges. You know, it makes it harder for you. Look, you can compete with big companies for people at the payroll that they provide. So you have to pay people less than they had before. And if you can't lead by example, that's a problem. Also, I learned that the hard way myself. We had a year when um, you know, when you're a I had a variety of what people would now call lifestyle businesses. I didn't realize at the time that's what they're called. But, you know, with a business like that, a lifestyle business, your accounting is handled where you sort of do accrual for one purpose and you do cash-based for the other to optimize for tax. And at the finally, after like eight years of not having to pay taxes, I paid all my bills and pushed out all my receivables, which is the typical but and legal and appropriate way to do it. I had a year where I couldn't do that enough and I was gonna have a profit and I was gonna have to pay tax on it. And so I decided instead to spend that money and I bought new computers for everybody. Six months later, we were at risk and not being able to make payroll. And I was trying desperately to sell those computers for any amount of money I could, and no one would buy them. And it was a reminder to me wow, you you let yourself slip. Frugality is a crucial element of entrepreneurial success. It's not that you don't spend money, you invest in logical things, but you really, really, really have to be careful with every dollar, pay attention. Um, not to the point of parsimony where you're not making investments you need to, but you know, there's just not room for fluff.

SPEAKER_01 20:57

So you have a pretty well-honed sense of the people you're investing in. They have to build a team across this timeframe as they're building their companies. How do you advise these entrepreneurs in crafting the team around themselves to ensure that they're well supported and also finding the right people who aren't going to give up either?

SPEAKER_00 21:20

That's an interesting question as well. I don't think it's an area I spend enough time on. And to be honest, like what I've learned is that entrepreneurs at the seed level often want feedback, guidance, and advice. But you need to focus on the things they're asking you for. You know, when I was at NEA doing series A, B's, and C's, I'd go, you know, and I still do this. I want to go on site, I want to meet the team. But at the end of the day, I have realized I fund the alpha. If there's three co founders, I'm gonna spend time with all three co founders. But at the end of the day, like I really only have two rules. One is I have to see you once a month, you can see me anytime you want. And the other is I'll help you raise your series A with the 300 plus tier one people I know if you're ready in my eyes, not ready in your own eyes. Um, but you know, those monthlies are with one person. Oh, is the alpha? And so I tend to overstandardize on the alpha and believe that if they are strong enough, they will attract the kind of high quality talent that I need them to have. Now, when they ask for advice on this topic, you know, there's one, the classic hire slow, fire fast. In sales, I'm a little more flexible. I'm like, look, it's okay to hire four salespeople and end up with two. They are not gonna be surprised. They won't be happy, but if they have the period of time that's appropriate to learn and the period of time it's appropriate to hit quota, and they don't, you give them a warning and you put them on a pip. And then if they don't again, maybe they get a second warning, maybe they don't. But like everybody knows where this is going. This is a coin operated part of the business. You need to deliver X dollars, you didn't deliver X dollars, let's fix that. Oh, you didn't do it again. Let's try one more time. Oh, you didn't do it again. I'm so sorry. Must not be the right place for you. So, you know, that's key. Also, on the flip side of that, because often entrepreneurs will come to me and say, Oh, I'm thinking about whether I should part ways with so and so. And my response is always the same. If you're even thinking about it, you're already too late. No one in the history of time has ever said to themselves, darn, I wish I waited longer to fire that person. And uh, you know, like one person said, Yeah, but it was their co-founder. They were like, uh, you know, it was years in, and we were having lunch. And he's like, you know, I need your advice. I don't know, this guy is just not productive. And, you know, I think he's impacting culture, and you know, I just think I've got to part ways with him. And I was like, I won't name him because we'll be super obvious because his name's quite novel. Said so-and-so, I'm glad to hear it. He said, What do you mean? I was like, I've known that was the weak link in your company since I funded you four years ago. I'm a little surprised it took you four years, but more power to you. He's like, Well, I think I should give him to the end of the year. I'm like, absolutely not. Okay, this is like a gangrenous arm. You cut it off. You don't wrap a bandage on it and hope that it heals. Well, what about morale? I'm like, dude, if you finally figured out it's time for him to go, you think everybody else isn't watching, you carry him. Literally calls me the next day, oh my God, you were so right. Everybody's so excited. Like, it nobody nobody should be gleeful that you fired somebody, but there are people that impact culture. Everybody's watching and paying attention. And when they're busting their butts, which is what it takes to grow a startup, and somebody is getting by on less, that can't make people happy. Showing that you are rigorous in your defense of the quality of the organization is critical. I often point to the movie The 300. I don't know if you've seen it, but there's a hunchback that comes along, and he really desperately wants to be part of the crew. And he's, you know, his father was part of the crew, and he has his armor, and the guy's like, Lift your shield, and you can't lift his shield. And he said, I can't let you on the team. You basically, we will die because if you we fight as a phalanx, you are the weak link. You will be the place they put through. Unfortunately for me in the movie, if you've not seen it, he goes on to betray them and they all die anyway. It would have been much better if there was a metaphor fix at the end of that movie. But net, net, you cannot allow weakness into your team. And if you do so by mistake, you need to cure it. You have to be ruthless. It is like a cancer in every possible way. It starts small and it grows and it can kill you. You just have to be harsh. Better to be a little too harsh than a little too little. Your best performers will leave if you are not calling the hurt. So, you know, you also have to hire for, I'm a little like quote unquote hire for the culture that you are. Hire for the company that you are is also hiring for the culture that you are. I'm not, I, you know, I do a lot of um, like I just came back from appearing doing a fireside at the annual meeting of one of my startups. I do this a lot and basically telling these people, you're incredibly lucky to be here. This is a phenomenal opportunity. Don't underestimate how great it is that you're here, because I get that when you're in the forest, every tree is just right in front of your eyes, but you're in a very, very, very special and magical forest. And I want to help you understand that. Um, but every once in a while, you know, the topic that I despise work-life balance. Yeah, forget it. It's not part of startup life, it doesn't exist. If that's what you need, you need to go somewhere else because you will hurt this company. Can you imagine if you went to work at Google at the beginning and decided you need work-life balance, you only wanted to work nine to five. So then they fired you and you didn't get to be part of that phenomenal team. You have to give it all. You are birthing something new and raising it. New parents don't get to just hang out, right? When the baby cries at night, you wake up and take care of it. Like you don't get that luxury. So if you want that luxury, go somewhere else. Find a big, dung, happy company that'll take you in or a big smart company that doesn't mind if you work nine to five. I don't know who those companies are. But you know, old school companies, I'm sure there are plenty. And then you can just clock in, and you probably might as you mentally, you're probably just thinking of yourself as a time clock pusher anyway. So it's you've got to find people that fit the entrepreneurial mold, but I think that's self-curing. Because if they're not, they're not gonna last. If they think it's all gonna be fine when they work nine to five and take limits to the airport and fly first class and all of a sudden discover none of those things are true anymore, they're gonna leave on their own. And if you notice that sort of behavior, you're gonna push them out.

SPEAKER_01 27:22

So, where do you see the next wave of value creation coming with these entrepreneurs that you're looking to invest in? Are there any exciting pockets that you see or ideas that you're particularly excited about right now?

SPEAKER_00 27:38

Well, last year I only made one startup investment and one fun investment, which is an all-time low for me. And the one that was a startup was uh it's called Wildfire Robotics out of Canada. It's in Wildfire Tech. It's an autonomous robot or semi-autonomous robot that goes in, slithers in like a big snake, and delivers flame retardant and water to the fire and can fight fires at night. Very cool. And I do think wildfires is a category, need I mean, they haven't changed their firefighting technology in something like a hundred years. I mean, maybe they added the plane that dumped water. Okay, wow. But it's I think that's interesting. In general, though, I am not a thesis-based investor. It's not like I'm searching for the next great chair, right? I'm sitting in a nice chair, so I'm that what came to mind. But it's it's more I'm listening to an unlimited number of stories looking for an entrepreneur that makes me say, wow. And when I say wow in the first meeting, we have a second meeting. You remember I told you I saw 10,000 pitches in two years and funded six? I would guess four or five dozen of those pitches went to a second conversation. So I've got to be really excited at concept right from that first meeting, or we're not gonna have another conversation. And by the way, I try to be very clear. I tell you if I'm not gonna fund you in that first meeting, I tell you why. If I can be helpful within the time frame of the meeting, I will be. Um, but you can't take 10,000 pitches and then have follow-ups from the 9,950 you're not gonna follow up with and then write a bunch of emails back. I don't know how long it would take to write 9,950 emails that say, I'm so sorry, but this isn't a fit for me. I'd rather just say it in the meeting and save me that number of typing strokes. Um, if you're an entrepreneur, kudos to you. Like a true entrepreneur like that deserves the respect and time that I have to give you, and I will give it to you when it's a fit for me to take that time. But beyond that time, I need to protect my time very, very aggressively. Um, in terms of where value will be accretive, obviously, even if they're the year before that I did three investments, they were all AI specific companies. Now, it's not that I'm looking just for AI companies, but right now you have to have an AI strategy because AI either lowers your costs or increases your sales, or is a competitive edge, or it's just baseline stuff you have to have. The difference between now and in the past, like in the old days, people would say, why would so-and-so not do this? And well, because they're a big dumb slow company. Today, you're not competing with big dumb slow companies. You're starting competing with big, enormous multi-trillion dollar value startups. And they are also going to do this stuff. So, you know, you have to have a smart strategy because you know they're throwing an enormous amount of time and money into this to try and figure out how to make it work. I have a company in New York called Vendelux, which is sort of Salesforce for in-person marketing, trade show events, finding the right trade shows to go to, finding out who is there, finding out who to meet with, et cetera, et cetera. It's literally a trillion dollar TAM. Um, that business started out with the software being provided to the um trade show attender or exhibitor to be able to make better use of their time while they were at the trade show and to be before, during, and after. What they determined was companies that use their system well always renewed and got lots of meetings. Companies that didn't use their system well didn't renew. So they built out an AI tool which books the meetings for them. And that has absolutely taken off huge growth. And I was introducing them to some of my LPs. I, as a fund, only do one investment, and then I take Paratarites to give to my LPs if they choose to take advantage. And once, well, how big can this be? That's where I figured out actually it is a trillion dollar TAM. Um, and someone else said, Well, why won't Salesforce do this? And I was asking them, the uh CEO, to help me with that answer. And he's like, Well, you realize Salesforce is a client. I was like, Oh, great. But you always have to wonder like how the Salesforces slash Microsoft's, Google's, Facebook's of the world will consider this something they want to compete in. Realistically, sometimes they'll just find the startups or buy from the startups or eventually try to acquire the startups. But you know, you've got to find novel niches where you're gonna have enough time to build something that's case specific enough to create value to be able to fight the big folks. So I think AI will impact everything. It's the I thought the internet was the biggest thing, the web was the biggest thing that I'd ever see in my lifetime. Then mobile came along and I thought it was big, but not as big. I never bought into Web3. AI, yeah, okay. We get to see two things that are the biggest thing in my lifetime ever. In some ways, they're related, right? Everything we did to build the internet out created the ability for you know LLMs to actually work. One thing stacks on top of the other. You know, we go all the way back to clean tech. Solar cells are cheap now because billions of dollars were funded into building startups in the cleantech era that were lost, but the world's better for it and our energy grid is better, and there's a lot of value that's been created over time. That was a random sidebar. I'll come back to our conversation now.

SPEAKER_01 32:16

Well, in wrapping this up, um, what's your best advice for entrepreneurs who want to develop their leadership skills, not the tenacity, not the refusal to lose, because those are entrepreneurial skills. What's your best advice in developing leadership skills?

SPEAKER_00 32:32

Well, I do think they're linked because you must lead by example, you must lead from the front. Right? In a classic old movie of a king charging into the battle at the head of the Legion of Knights on a horse, right? Like when your people see that, they will follow that. If they don't see you fighting the battle without pause, unwilling to die, they will not do the same. Um, I think another part is storytelling. I used to think I undervalued or overvalued storytelling because I was a journalist for a long time. What I've realized is you cannot overvalue storytelling. Storytelling is how you lead, it's how you recruit, it's how you get clients, it's how you get investment, it's how you get media. Like it is super critical. You need to be the teller of your story. It needs to be consistent. It's the only thing I will say positive about a politician. I despise politicians. I think they're almost, I think there's two politicians I've ever come across that I believe are honestly trying to do the right thing for their constituents in their country. The rest are lying scumbags, whichever side of the aisle they're on. Okay. But one thing they are exceptionally good at is it always comes back to their story, no matter what. And, you know, if I'm running for office, which is not in my plan, and you my whole mandate is to lower your taxes, and you come to, oh, well, Ben, we're glad to have you on the show. You know, we're very concerned with the state of, I don't know, pick something, homelessness in San Francisco. That's a great question. You know, Lindsay, I want to tell you the way we're gonna solve the homelessness crisis in San Francisco is we're gonna cut taxes. Because when we cut taxes, people have more money to be able to donate to the shelters. They'd have more money to take on the things they want to do. We need more money in the hands of our citizens to be able to take care of our citizens. It is not the government's job. We are going to cut taxes. Well, Ben, how does that help homeless people? I mean, these people have mental challenges and they need help. Absolutely, they do. And that's why we're gonna cut taxes. Because when you cut taxes, people have more money to deploy to other things that they are excited about, people that want to support those institutions, et cetera, et cetera. Like it doesn't matter what the question is. Why did you murder 17 kittens last night on national television, Ben? Well, because that's how we get people to pay attention so they pay taxes. By the way, I've uh fostered over 300 dogs. We currently have a mom with 12 puppies that we just saved from euthanasia. So the cat kitten thing was a terrible, terrible analogy. Sometimes I get off on rants and I tend to pull stuff out of my head and it's not the best one.

SPEAKER_01 34:58

So it's how you get people to pay attention.

SPEAKER_00 35:01

That is true. I doubt anybody will not have their ears perk up to that particular part. I'd rather you cut it from the interview, to be honest, but net, a little bit of weirdness goes a long way in getting people to pay attention. So storytelling is critical. Um, like people have even written articles. I'm not an F bomber for the most part, but when you're not an F bomber and you use it, wow, people just pay attention because, like, whoa, where did that come from? This must be some. They don't consciously say this must be something I must pay attention to, but they do. So lead by example, be a great storyteller. If you're not a great storyteller, if you're not a great public speaker, figure out a way to do it. Go to Toastmasters, like, you know, do small interviews before you can do big interviews. I do a lot of TV and I think I'm very comfortable with that. And I just always want to be comfortable going out and telling my story and the story of how I think about entrepreneurship because I hope all of that eventually brings me better entrepreneurs, or at least has a better entrepreneur's think about why I'm the person they should partner with. But, you know, also here's another thing hire smarter than you if you can. You know, the entrepreneur or the leader that hires people that are never a threat to them will ultimately die. You have to hire people that are possibly the next CEO, because that's how you build phenomenal teams. And if you think about it, this is a board level. If I know you're never going to be willing to hire your replacement, eventually, I mean, I've never fired a founder of my own choice, um, I am gonna have to replace you. And this is not my role, and this is for later stage in a company. But, you know, it's just you have your sets of belief, you have your northern light. Every entrepreneur needs a northern light to navigate towards. And you lead and hire against that northern light, and you make that all-encompassing. It is absolutely positively fun. By the way, I'll say one last thing. I'll use this, I always use stories because made-up stories, the kittens, or real stories like this one. I once funded a Green Beret leader. Now, the first time he pitched me, I passed. I didn't think the opportunity was big enough. But I thought about it a lot and I said, Ben, and I do actually do this in my head. I say to myself, Ben, this is exactly the kind of guy you want. I mean, he led a Green Beret battalion. What could be better for tenacity? His life was so hard, this should be easy for him. I was concerned about the business because it would need to grow nationally, and there was a lot of physical moving parts. And I thought, he's the right guy to do that. So I funded him. And we sat down for lunch a couple, whatever, a quarter or two later, and he said, you know, I'm having this challenge with the team and managing. And I'm like, what do you mean? He said, Well, when I went to HBS, I learned X. And I was like, Whoa, whoa, whoa, what are you talking about? He said, Well, best management principles are. I'm like, dude, you have a team of 12. I did not fund you to manage, I funded you to lead. Okay. How could you jettison the real world learnings of being a battalion leader in the Green Berets for something you learned in school? What did you go to HBS for? They want to introduce you to McKinsey. Okay. They're not building entrepreneurs. I spent one semester there and I was like, wow, because I'd come from BAPS and I was like, huh. Anyway, it's great school, great school, great school. I'm not trying to discredit HBS, but it is not about being an entrepreneur, being a leader. And trying to manage and trying to lead are two very different things. And if you get overly obsessed with, you know, checking a bunch of boxes, that there was an entrepreneur, the same one that asked me about firing his co-founder and came to me. He said, Okay, Ben, right at the beginning of the launch, what should I be focused on now? And I'm like, Well, we haven't done the update. Tell me about the company. He's like, No, no, no, I just mean we're at 42 people now. What should I be focused on? Like, what are you talking about? He said, Well, should I be hiring an HR lead? I'm like, Do you think there's a book? Do you think there's a book of here's what you do at 40 people, here's what you do at 80? You lead your company, you look for where your needs are, and you fill those. There is not a magic formula. You are writing the book. Okay. Yeah. You write the book. You actually write the playbook sometimes, so you can have it for the next person in terms of let's say you're rolling out to one city, how it's easier to roll out to the second. But he, I mean, he was young and he did have a great success, but he really believed like I've got a lot of books behind me. There are no books here that I know of that have the checklist of what to do when you've hired one and then 10 and then 25. And you know, if you look at organizational behavior, which would be in a book, you do see there are major breakpoints in the culture and reality of a business. The difference between a one-person business and two is huge, two and ten is huge, uh, 10 and 50, and then I think you go to about 200. So, yes, it might be useful to you philosophically to be aware of where things change in your world, but if you I generally believe you look at the most successful companies in the world ever, founder led, not founder managed, right? So I'm a huge fan of strong founders. I want them to run their companies. I think the biggest and best outcomes come from those. And it's only in this one of the things you may not have noticed. I sort of talk to think as much as I talk to answer the question. Founder led, right? Not founder managed. I love that. Right. It's so accurate. Whoever said, well, Steve Jobs is a great manager. Okay, you think so? I'm actually not sure he was, but I've only met him once. It was but he was a great leader. He got his own people to fight each other. That's a weird style of leadership. Um, so Netnet, it is, I think, a different trait. It doesn't mean you shouldn't learn from great people, but you're not trying to be Leah.

SPEAKER_01 40:37

And that wraps up another inspiring episode of Leadership Quotient. Grateful to Ben for a substantive and candid discussion. To our listeners, if you found this conversation valuable, be sure to subscribe to Leadership Quotient wherever you get your podcasts. You can also learn more about The Crucible and how we're helping investor-backed companies align leadership teams for scale at thecrucible.com. We'll see you next time for more real conversations on leadership, talent, and value creation.