EP 170 - Jim Pulcrano: Why Most Venture Capital Fails And What Europe Still Gets Wrong

Nine out of ten startups fail, yet Europe keeps funding them the same way.
Governments replace judgment with bureaucracy, capital replaces experience, and failure is misunderstood instead of learned from.

This conversation exposes why venture capital is a profession, not a policy tool — and why getting this wrong quietly kills innovation.

In this episode, Jim Pulcrano, Adjunct Professor at IMD and longtime venture investor, explains why most venture capital systems fail before capital is even deployed.

Drawing on four decades across Silicon Valley, Europe, and academia, Jim dismantles the myth that VC success comes from spreadsheets, credentials, or government programs. Instead, he shows why pattern recognition, lived experience, and exposure to failure are the real differentiators.

As Jim puts it:
(01:13:27) “Silicon Valley is the world’s capital of failure — and also the capital of learning.”

That mindset difference explains why Europe struggles to scale founders, why governments unintentionally create zombie companies, and why operators consistently outperform theorists when backing the next generation of companies.

This is not a motivational episode.
 It’s a structural diagnosis of how innovation ecosystems actually work — and where Europe still gets in its own way.

💡 What You’ll Learn in This Episode

1️⃣ Why most venture capital fails long before money is invested
2️⃣ Why governments cannot replace judgment, experience, or risk-taking
3️⃣ Why operators outperform bankers as investors
4️⃣ Why failure is data — not stigma — in high-performing ecosystems
5️⃣ What Europe must change to unlock its next innovation cycle

👤 About Jim Pulcrano

Jim Pulcrano is an Adjunct Professor at IMD with over four decades of experience across venture capital, entrepreneurship, and executive education. He has worked extensively in Silicon Valley and Europe, advising founders, investors, and institutions on scaling companies, leadership development, and venture capital as a professional discipline.

💬 Quotes 

(01:13:27) “Silicon Valley is the world’s capital of failure — and also the capital of learning.”
(01:33:58) “You have to be there at midnight when you’re trying to make a decision on Sunday night.”
(01:40:14) “I’ve never met a successful entrepreneur who hasn’t been weeks from running out of money.”
(01:23:21) “A government purchase order is worth more than the same amount in cash.”

🧭 Timestamps

(00:04:25) Why most startups fail — and why that’s not the real problem
(00:09:55) Why Europe still misunderstands venture risk
(00:16:42) Why founders matter more than ideas
(00:24:13) Why governments create zombie startups
(00:32:34) Why operator VCs outperform financial engineers
(00:40:14) Failure as data, not disgrace
(00:48:26) Why venture capital cannot be taught without simulation
(01:04:48) What LPs should really look for in fund managers
(01:19:46) Government as customer vs government as controller
(01:30:10) Why young people should not rush into VC
(01:32:38) Why empathy separates great investors from average ones
(01:45:13) Leadership shifts from startup to scale-up
(01:50:06) Three changes Europe must make now

🎙️ Beginner’s Mind

Top 10% globally. The

Transcript

00:00:00:04 - 00:00:14:13

Christian Soschner

Most societies don't fail because they lack talent. They fail because people stop believing that building something extraordinary is even possible.

00:00:14:15 - 00:00:36:05

Christian Soschner

When belief disappears, ambition shrinks. Founders. They choose safety. Investors. They decide for comfort. And institutions protect what exists. Instead of packing what could exist.

00:00:36:07 - 00:00:39:06

Christian Soschner

And slowly, innovation starts.

00:00:39:08 - 00:00:43:24

Christian Soschner

You have to be there at midnight when you're trying to make a decision on Sunday night, and there's

00:00:44:04 - 00:01:00:21

Christian Soschner

In Europe and in the United States. We talk endlessly about strategy, capital and frameworks. But almost nobody talks about what actually separates real company builders from people who only comment from the sidelines.

00:01:00:23 - 00:01:09:20

Christian Soschner

The loneliness, the pressure. The moment when nobody's watching and the outcome still depends just on you.

00:01:09:24 - 00:01:12:23

Christian Soschner

If you've never built something from scratch, how would you understand that?

00:01:13:03 - 00:01:22:10

Christian Soschner

This episode is about why venture capital, entrepreneurship, and leadership cannot be learned from slides or boardrooms alone.

00:01:22:16 - 00:01:34:23

Christian Soschner

It's all about judgment earned and the real pressure about failure as data, and about why stories of success matter more than policies ever will.

00:01:35:00 - 00:01:37:05

Christian Soschner

We never had our Netscape moment.

00:01:37:07 - 00:01:39:20

Christian Soschner

And I don't see one on the horizon. Honestly,

00:01:39:20 - 00:02:02:14

Christian Soschner

My guest today is Chamber Chrono, professor of Entrepreneurship at IMT business Code, three time founder, operator, investor and one of the rare people who has left all three builds academia in the arena as entrepreneur and backing them as investor.

00:02:02:18 - 00:02:14:20

Christian Soschner

This conversation is not about ideas. It's about belief, scars and the quiet decisions that determine whether societies move forward or standstill.

00:02:14:23 - 00:02:18:06

Christian Soschner

Welcome to Beginner's Mind and today's episode. Enjoy.

00:02:18:08 - 00:02:21:01

Jim Pulcrano

Jim, it's great to see you.

00:02:21:03 - 00:02:22:16

Christian Soschner

Oh, thank you for having me.

00:02:22:18 - 00:03:04:21

Jim Pulcrano

You're very welcome. You're very welcome. You're on beginner's mind today. Life on LinkedIn. And you have an extremely amazing career. Serial entrepreneur, IMT professor, consultant to sports. And you practice basically every single side of the venture game, from entrepreneur to teaching to consulting. And everything is in your books. Thank you very much for joining me. Before we dive into this sessions session, what are the three most important key takeaways people will get in this episode?

00:03:04:23 - 00:03:05:04

Christian Soschner

These

00:03:05:04 - 00:03:35:02

Christian Soschner

are things I'll probably repeat later on, but I'll say the first one is I have a firm belief that the society needs entrepreneurs to move forward. Without entrepreneurs, we inertia takes over and entrepreneurs need capital. And so the role of venture capital in helping entrepreneurs move forward is primordial for me. So that's one of the first things, and this is something that I've lived with, I work with, and I firmly believe that.

00:03:35:04 - 00:04:02:21

Christian Soschner

Secondly, I'd like people to understand whether they are considering quitting their job and becoming an entrepreneur, or getting their MBA and someday becoming a VC. To understand that both of these professions, if you want to call them professions, are not for the faint of heart. Both are extremely hard. Both are professions that you learn by doing. You don't get it from reading a book or a website.

00:04:02:21 - 00:04:28:14

Christian Soschner

I mean, you can inform yourself, but they're really, really, really hard. And then the third thing I guess I'd say is I do a lot of work with large corporations and they do amazing things, and people in large corporations can innovate and have an impact. It's just that it's going to be slower. The impact on the world will be less, and the impact on you as an individual will be less.

00:04:28:16 - 00:04:47:08

Christian Soschner

That doesn't mean it's not a good thing to do, but just recognize there is a difference between innovating and creating something. As an entrepreneur, with the help of VC and doing it inside a large corporation. Neither is right or wrong, it's just different. So those would be the three things I would see as important.

00:04:47:10 - 00:04:56:22

Jim Pulcrano

Jim, we are in Europe. I'm curious to hear your opinion. Which one of these three is most important for Europe to.

00:04:56:24 - 00:04:57:05

Christian Soschner

Let's

00:04:57:05 - 00:05:23:23

Christian Soschner

see, the very first one. We seem to believe that government will get it done for us and not just our own national governments, but Brussels. And yeah, I listen. I have a firm belief that we need government to keep us from our excesses, to give us a a little bit of a push in certain times to make sure that we have a level playing field, but to expect government to solve our problems and move us forward, I think, is completely false.

00:05:24:00 - 00:05:33:10

Christian Soschner

We need the crazies to do things, and in Europe we're kind of a little bit less, accepting of the crazies.

00:05:33:10 - 00:05:43:20

Christian Soschner

And when I say crazies, I mean both the entrepreneurs and the venture capitalists, because if you're a VC, you have to accept that you're a little bit odd yourself if you work with entrepreneurs. So we need that.

00:05:43:20 - 00:05:44:02

Christian Soschner

We need

00:05:44:02 - 00:05:58:00

Christian Soschner

more of that and we need to celebrate that. Again, not demeaning what government does or what large corporations do, or even small and medium sized enterprises. But we we have to stop expecting the government to do things for us.

00:05:58:02 - 00:06:00:16

Jim Pulcrano

Why do we need crazy people in entrepreneurship?

00:06:00:18 - 00:06:01:07

Christian Soschner

Oh, because

00:06:01:07 - 00:06:12:16

Christian Soschner

the odds are so against success that you know, why would you do this? Hi, I'm launching my seventh startup,

00:06:12:18 - 00:06:29:22

Christian Soschner

and okay, I'm in a different situation. I'm late in my career. Financially. We're secure. I'm not going to go too far and mortgage the house or anything, but. But still, what I tell people, they you can see them scratching their head thinking, is he nuts doing this again?

00:06:29:24 - 00:06:55:09

Christian Soschner

And you have to be part of it? Is your belief in yourself and your belief in your idea. But even that if you poke hard in people who have normal lives, they can change really easy, whereas an entrepreneur grabs hold of something and then goes for it. Maybe there's a different word from crazy, but there's this kind of, you know, belief that I am going to make this work.

00:06:55:09 - 00:07:05:10

Christian Soschner

I may pivot 180 degrees, but I'm going to make this work and I'll find the resources. I don't have any of them today, but I will find them. That's not normal.

00:07:05:12 - 00:07:29:23

Jim Pulcrano

Yeah, and it's the crazy ones. There's a beautiful poem, us poem of a writer of the 50s and 60s. I unfortunately forgot the name. I have to look it up, and, we drop it down in the comments onto the live stream. He was talking about the crazy ones and, how society needs that. And this is also one of the reasons my personal opinion by the counterculture to the establishment back in the 50s started in Silicon Valley and the United States.

00:07:30:00 - 00:07:38:07

Jim Pulcrano

But why don't we have that in Europe? In your opinion, why is Europe, not on the same level like the United States?

00:07:38:09 - 00:07:38:13

Christian Soschner

I

00:07:38:13 - 00:08:01:14

Christian Soschner

mean, there there are better people to explain that. But my take is we are just too comfortable. Yeah. Okay. I'm sitting in Switzerland and I know we have four people. I know we have problems. I know we have criminality. I know we have. But at the level that we live at, life is wonderful. So when you've got such a good life, why would you want to disturb it?

00:08:01:14 - 00:08:25:00

Christian Soschner

By taking a leap into the unknown and maybe being seen as a fool? I mean, if I go back to my first real startup where I took a job in a startup, I was I came in as the first professional. My classmates from my MBA looked at me and said, Jim, are you nuts? Is there a problem? Why don't you just get a job with Nestlé or one of the Swiss banks?

00:08:25:00 - 00:08:45:01

Christian Soschner

I mean, that's the normal thing to do. Why would you want to go to a a small medtech startup in Geneva? And what they hadn't didn't know is that I had made a decision that that's what I wanted to do, that I did not want to get a job with a large multinational. That's unusual because we have a good life here.

00:08:45:03 - 00:08:48:00

Christian Soschner

Why take a risk?

00:08:48:02 - 00:08:51:18

Jim Pulcrano

You don't think it's risky? Doing a corporate career.

00:08:51:20 - 00:08:51:24

Christian Soschner

But

00:08:51:24 - 00:09:11:15

Christian Soschner

there's some risk. Of course there is. And we know the statistics that, you know, the average life of a CEO in a in a large company or even anybody, you know, there would be a reorg, there'll be change, but it's much less than the entrepreneur who bets everything and says, I'm going to go do this. And then there's the the label that you get.

00:09:11:17 - 00:09:28:12

Christian Soschner

Oh, so you did a startup and now you want to recuperate your finances by coming to work in some large corporation. We know what you're going to do. You'll stay here three years and then go out and do your own thing again. That's a risk to say that I'm going to have that label applied to myself.

00:09:28:14 - 00:09:45:08

Christian Soschner

Oh, so I do think people do take risk in large corporations. And you know I see it here at IMD, you know tons of people who had great careers. And then suddenly there's change. New CEO maybe. And you're out. You know you put on garden leave which is still pretty nice, but you're out and you have to start the search.

00:09:45:08 - 00:10:07:15

Christian Soschner

It happens all the time. So I'm not diminishing that. I just think it's different when you say, okay, there's no cushion. If if this doesn't work and we shut down, I start from scratch. And if you're at least in Switzerland, if you're a director of the company, you don't get unemployment benefits. So there is no cushion.

00:10:07:17 - 00:10:23:05

Jim Pulcrano

Yeah, that's true, that's true. Starting from corporate career into a startup, people realize very, very quickly that there is no cushion, that there's nothing that protects you. And it's just, you know, this way or it's the way out and.

00:10:23:07 - 00:10:23:17

Christian Soschner

And

00:10:23:17 - 00:10:47:03

Christian Soschner

building on that, in case you have people in your audience who are in corporate careers thinking about quitting tomorrow and taking the leap into the unknown, one of the things I've seen is the the psychological burden, a psychological challenge, if you like. When you you quit, you start your company and you start going out to call on people who were your former friends and colleagues in your previous life.

00:10:47:03 - 00:11:15:18

Christian Soschner

When you were a senior vice president, and large company X, they take your first call because maybe they don't know that you're out on your own now. But getting the second call because and then you start discovering they valued me for my title at this large company more than for my brain, my personality, with my capabilities. And that can be really psychologically hard for people to realize that, you know, this has all been a bit of a.

00:11:15:20 - 00:11:35:14

Christian Soschner

You know, I don't know what the word is a charade amongst people as to why they took your meetings, why they respected you, said great things about you. Maybe I'm being extreme, but I think that's something that if you're in a large corporation, think about it. It's going to be psychologically hard. The first time that somebody says, no, I don't have time for a meeting with

00:11:35:16 - 00:11:36:14

Christian Soschner

you.

00:11:36:16 - 00:11:49:16

Jim Pulcrano

You know, both ecosystems, the US ecosystem and the European one is this part that you mentioned that, people honor titles and not the person behind the title is specific to Europe? Or do you see the same dynamics in the in the United States?

00:11:49:17 - 00:11:49:22

Christian Soschner

It

00:11:49:22 - 00:12:20:05

Christian Soschner

does apply in the US as well, but there's also more of an acceptance that people make changes. I'll give you a small personal anecdote when I say I'm independent now. I went independent in 2012 from a Very good life here, and I had a full time paycheck every month. Wonderful colleagues and I decided I wanted to see what would happen if I quit, if I became a consultant times and did other things here in Switzerland, my my colleagues and friends didn't really, you know, you just bought a new house.

00:12:20:07 - 00:12:37:23

Christian Soschner

You still got three kids. When I said it to my friends in Silicon Valley, finally, finally, you should have done this years ago. And it was just a different perception as to, you know, the the risk I was taking or the opportunity I was creating for myself.

00:12:38:00 - 00:12:57:12

Jim Pulcrano

While at the end of the day, I mean, it's a good example for a different mindset in Silicon Valley and in Europe, even in Switzerland. And the success of the ecosystem speaks for themselves, in my opinion. How would how would you define your mission today?

00:12:57:14 - 00:12:57:20

Christian Soschner

I

00:12:57:20 - 00:13:32:20

Christian Soschner

want to make it easier for those in the entrepreneurial ecosystem. So they're I'm including investors as well as founders to be able to do what they what they should be doing, whether it's creating new products, creating new platforms, new services, pushing us forward. So whether that's through education, in the programs that we run at IMT, our venture capital asset management program, for example, helping LPs to understand venture capital as an asset class or the work I do with our executive MBAs, our MBAs and others to help entrepreneurs move forward.

00:13:32:21 - 00:13:51:17

Christian Soschner

So some of that is learning, you know, content. Give them a two by two matrix and see if that helps their lives. But also the other is inspiration and coaching. Two weeks ago, while I was hiking in the Alps, I got a text message from a founder that I'd worked with saying, Jim, I desperately need to speak with you.

00:13:51:19 - 00:14:09:02

Christian Soschner

So I waited until I had a break and was able to get a signal and called him. And you know, he was in the middle of a crisis with his board, etc. I don't know if I gave him an answer, but I tried my best to analyze the problem, to give him inputs, to give him inspiration, to be able to hopefully move on with the problem.

00:14:09:04 - 00:14:13:15

Christian Soschner

I see that as my job is to help them to do better.

00:14:13:16 - 00:14:28:14

Jim Pulcrano

It's now so tempting to ask one question with this record that you ask at this point, are you ready for it? Go, go, go ahead. And why are you the right person to do this? Sorry for that. But because I know.

00:14:28:14 - 00:14:28:24

Christian Soschner

That's that's

00:14:28:24 - 00:14:55:15

Christian Soschner

a really good question. Okay. Today I can say partly the reason is just plain experience. That's that I've been in many startups myself. I run the IMD startup competition, where I've looked at thousands of business plans. I've coached a lot of startups, a total lot of startups. Yeah. So there I've gathered knowledge and expertise, but also I think there's a personality thing in there.

00:14:55:17 - 00:15:04:09

Christian Soschner

I have never liked having a boss. Every boss I've had has probably hated working with me. The boss I had here at IMD for 15

00:15:04:13 - 00:15:13:16

Christian Soschner

years, he fired me five times. Okay, I got back in the very next morning, but there's something there. I,

00:15:13:18 - 00:15:22:24

Christian Soschner

I don't accept the status quo. I think I'm better at voicing it today than I was, say, ten, 20 years ago.

00:15:23:01 - 00:15:43:12

Christian Soschner

But maybe that's part of it is if you're an entrepreneur, you're willing to say I disagree with that, or I think I've got a better way. Some people see that as arrogance, and probably it is. It's a certain level of arrogance that I believe there's a better way. So maybe it's maybe it's partly in personality.

00:15:43:14 - 00:16:07:19

Jim Pulcrano

Yeah. That's great. That's great. We have to always find better ways to move forward. Let's roll a little bit with these crazy ones we've discarded. And dive into your beta, how you became who you are. And we go back to the glorious year, 1984, when Steve Jobs had this famous speech where he labeled, I think it was IBM as the bad guys.

00:16:07:23 - 00:16:28:16

Jim Pulcrano

Right? Apple came to rescue humanity a little bit crazy. And you also did something crazy in my opinion. U.S. citizen into entrepreneurship and venture capital comes to Europe to graduate from the IMT. Why? Why Europe?

00:16:28:18 - 00:16:29:10

Christian Soschner

Well,

00:16:29:12 - 00:16:50:08

Christian Soschner

okay, the the pieces of the answer are disconnected. So first of all, why IMT why do a degree in Switzerland? I was already working in French speaking West Africa at the time as an engineer, and I realized that my career is probably not going to be a domestic American career. I just enjoyed working with people from all over the world.

00:16:50:10 - 00:17:11:07

Christian Soschner

And so I did apply to various schools in the United States, including Harvard. But I looked at Ivy Insead as being the leading European schools. And then when I came to visit, each of the schools found that IMT was the best place for me because it was small, it was focused, it was. And it was also a bootcamp.

00:17:11:09 - 00:17:27:10

Christian Soschner

You know, I kind of prided myself on doing the hardest jobs possible. I was working as an engineer in Africa. Yeah, I like that. And IMT seemed to offer that to me. The next step is middle of that year, July. So it's a one year program.

00:17:27:12 - 00:17:30:21

Christian Soschner

I'm sitting with one of my classmates who was probably one of the smartest people I know.

00:17:30:21 - 00:17:41:09

Christian Soschner

She was a partner at Bain. And she says to me, Jim, you're not a corporate animal. You know, I know you're in an MBA program. And, you know, that's why we do MBA is because

00:17:41:09 - 00:17:51:12

Christian Soschner

you want to work in large corporations. That's who comes to recruit here. This is not you. And I remember, you know, I can actually look out at the spot here where where that conversation happened.

00:17:51:12 - 00:18:05:04

Christian Soschner

I remember like a light bulb going on over my head. Exactly. That's where my difficulties were in my first job, which was in a French multinational. And I've always joked, I don't know if it's because of their French or because it was a multinational, but

00:18:05:06 - 00:18:10:05

Christian Soschner

yeah, I understood the you know, that the politics, etc. were things that I did not enjoy.

00:18:10:05 - 00:18:16:15

Christian Soschner

I wanted to be able to see if I could have an impact immediately. And that's what started getting me to think, okay,

00:18:16:17 - 00:18:31:21

Christian Soschner

what does that mean? That means small, medium sized companies. Oh, even better if I get into a startup. And it wasn't long after that, after graduation that somebody approached me and asked me, we've got this startup that our private bank is thinking about investing in.

00:18:31:23 - 00:18:54:04

Christian Soschner

Could you do an analysis for us? And I did, and of course, I criticized something like a good MBA. I ripped everything apart, and they were the ones who said to me, okay, you think you're so hot, would you like to run the company? And that was my real, real, entry into entrepreneurship to suddenly sit there at the desk and figure out, now, what do I do?

00:18:54:06 - 00:19:08:14

Christian Soschner

So yeah, these were not things that I sat down and did a nice decision tree analysis and figured it out, figured out by trying things and having a career, then having smart people around you who are willing to be honest with you.

00:19:08:16 - 00:19:42:01

Jim Pulcrano

That's an amazing story. Let's dive a little bit deeper into that. You're in Switzerland, 1984, graduating from IMT, and you get this information. You are not a good fit for a corporate career, but you are in Europe. And when I think back in knowing my early 50s and, 86 or some score 90s university, the general expectation towards young men after graduation was get the corporate career, go work in a bank with an MBA and work yourself up the ladder.

00:19:42:03 - 00:19:52:18

Jim Pulcrano

And if you don't succeed on that path, there is no other option and you decide to go into a startup. But even the term startup was not coined yet.

00:19:52:20 - 00:19:54:01

Christian Soschner

Correct?

00:19:54:03 - 00:19:59:22

Jim Pulcrano

What was the internal conversation with you that you had, to make that decision without the decision tree?

00:20:00:03 - 00:20:00:07

Christian Soschner

You

00:20:00:07 - 00:20:27:07

Christian Soschner

know, actually it wasn't very difficult. And it wasn't a long conversation. So the project I did to evaluate the startup took me about three months. And I remember all during that time I'm speaking with my new wife. We just got married and she found it interesting, exciting, and I think she could see that this excited me. The idea that they might offered me the job of running the company never occurred to us until the day I made my presentation at lunch.

00:20:27:09 - 00:20:50:01

Christian Soschner

They invited me to this. I don't think it took me more than 24 hours to say yes. You know, there was a discussion about, okay, shares, salary, stuff like that. But the idea of, yeah, this is what I want to do. And it was in a field where I knew very little medtech. I, I earned my medtech MBA in that job.

00:20:50:05 - 00:21:06:08

Christian Soschner

FDA approvals, building the next generation clinical trials, all of that. I just knew that this is this is what I wanted to do and not necessarily because it was medtech, but because I could see the entire I could see the entire venture

00:21:06:10 - 00:21:19:20

Christian Soschner

from, you know, raising money, which in those days was not with real venture capital. To working with people at the FDA and USAID at the time.

00:21:19:22 - 00:21:23:23

Christian Soschner

That's interesting. Yeah.

00:21:24:00 - 00:21:40:24

Christian Soschner

But but I was involved in every single piece of it. We were a small corporation, I think at the at the largest, we probably employed 25, 30 people, but I was involved in every piece of it, even though I had this big title. Managing director. Yeah. I just

00:21:40:24 - 00:21:43:05

Christian Soschner

knew it was the right thing for me.

00:21:43:07 - 00:22:06:10

Jim Pulcrano

It was the 80s, I mean, USAID, just to get it off the list, would be another podcast, I guess. So we just skipped the topic and, let's get into politics around that. Let's stay with the ecosystem. You were in Switzerland in a med stack company. Managing director at the time when startups didn't exist as a term, venture capital was pretty new in Silicon Valley back then.

00:22:06:12 - 00:22:06:22

Jim Pulcrano

I think it

00:22:06:22 - 00:22:22:15

Jim Pulcrano

was, or even called it venture capital, until the 70s. And pitching to PCs was not something that someone could learn from the internet, because the internet disinfected. How did you approach this challenge?

00:22:22:17 - 00:22:23:15

Christian Soschner

Well, first of

00:22:23:15 - 00:22:43:16

Christian Soschner

all, I had a very strong board of wealthy individuals who were willing to act as angels. We didn't know they were called angels back then. They were also willing to help me get loans from the local bank, which again today that you know, doesn't exist. If it wasn't for those individuals, we couldn't have gotten it.

00:22:43:18 - 00:23:06:22

Christian Soschner

But I was invited to get to know venture capitalists, and I still, I think I may have mentioned this to you. I still remember the first time I pitched to real VCs. It was a it was a meeting. But an hour from here, somebody to organize a group of people that call themselves venture capitalists. And I was invited to attend, that's all.

00:23:06:24 - 00:23:21:22

Christian Soschner

And I remember sitting in the in the back of the room and the leader of the group said, okay, today we're going to try something new. We've invited an entrepreneur here to pitch to us, and they were going to ask him questions. And I'm thinking, oh, this is going to be cool. I can't wait to see who it is.

00:23:21:24 - 00:23:43:04

Christian Soschner

He says, Mr. kernel, could you come forward? And so literally I had, what, 20m from the back of the room to the front of the room to figure out my pitch? Luckily, I had my product in my pocket. It was me, and I was wearing a suit on top of it. Amazing. And I got up there and I did my pitch, and then I got tons of questions.

00:23:43:04 - 00:24:02:19

Christian Soschner

And it was it was exhilarating. And I think I felt like, okay, I handle all the questions really well. This is great. The calls are going to come in tomorrow and nothing happened. And so like two weeks later, maybe I called up the person who had organized the meeting to say, you know, can you explain what was going on there?

00:24:02:19 - 00:24:23:21

Christian Soschner

Because, I mean, there was lots of enthusiasm and then nothing is oh, what you didn't realize is they were all trying to impress each other with the questions they were asking you. It wasn't about you. And, you know, that was kind of my first contact with venture capitalists and saying, okay, this this doesn't work. This doesn't make sense.

00:24:23:21 - 00:24:31:10

Christian Soschner

But again, it was Switzerland. It was the late 80s. We didn't even know what real venture capital was at the time.

00:24:31:12 - 00:24:34:22

Jim Pulcrano

What did you learn out of this experience?

00:24:34:24 - 00:24:55:11

Christian Soschner

First of all, not to take the words seriously, and then it's up to me to follow up me kind of naively sitting there thinking, they want me so badly they're going to call even today. No good entrepreneur would do that. You have to follow up yourself and they can still say no to you. But if you don't ask, you're not going to get anything.

00:24:55:13 - 00:25:07:20

Christian Soschner

So I say those are the first the two main things, which today seems almost silly that I didn't understand it at that stage. But like I said, entrepreneurship is a learning by doing trade. I

00:25:07:20 - 00:25:09:04

Christian Soschner

learned.

00:25:09:06 - 00:25:14:08

Jim Pulcrano

What you do to an extent with this company. I mean, this first one failed. And what was your next move?

00:25:14:10 - 00:25:15:07

Christian Soschner

So I

00:25:15:07 - 00:25:38:13

Christian Soschner

stayed with the company. We made a ton of progress, and then a large multinational decided to step into our space, and I thought we could collaborate with them. I even thought, okay, this is this is our exit. Even again, I didn't know what an exit was, but the it was obvious they should acquire us and take advantage of the five years of work that we've done in the markets.

00:25:38:13 - 00:26:03:09

Christian Soschner

We built up the channels we'd created, and they decided to do it themselves. And I knew pretty much at that stage we were dead. And totally by coincidence, I got a call from my IMT, one of my former professors, saying, hey, listen, we've just gone through a merger. We're now going through the post-merger restructuring. There's blood on the floor everywhere.

00:26:03:11 - 00:26:27:16

Christian Soschner

We need somebody who knows how to grow the market. And you stood out both as a student and as an entrepreneur. Would you consider coming back to him, to his director, Mark? And the way they sold it to me was every entrepreneur, every manager needs a turnaround on their CV. This one will be yours. And I said, no.

00:26:27:18 - 00:26:49:23

Christian Soschner

But then my father had a conversation with me. He said, you know, Jim, that's fine being the entrepreneur. But now you've got two kids, a wife, you have responsibilities. And worse, you've become one of the world's experts in a niche that is so narrow. You know, there's maybe you and three other people, because I had, again, FDA approval.

00:26:49:23 - 00:27:13:18

Christian Soschner

I had, let's call it, peer reviewed journal articles, etc.. And I realized my father was right, that, you know, it's either I go even deeper and narrower and what can I build on that? Or I come to M.D. and broaden myself and I accept to do that, along with the challenge of the turnaround. Yeah. I, it was a good move.

00:27:13:18 - 00:27:39:16

Christian Soschner

I'm thankful to my father for that. But I think that also shows one of the problems of an entrepreneur. You get so deep into things, you can't see what's outside. And again, when I look at my role with entrepreneurs, sometimes it's to help them to see things, not because I want them to stop, but that they see what's out there that they didn't notice themselves because it's so laser focused on the problem they're trying to solve or the customers, etc..

00:27:39:18 - 00:27:43:14

Jim Pulcrano

Such an amazing story. And it's good for empty that it got you. My opinion.

00:27:43:15 - 00:27:45:09

Christian Soschner

I like to believe that.

00:27:45:11 - 00:28:06:24

Jim Pulcrano

Oh, absolutely. I mean, the empty, empty stands out. Still today. And I think its fame has grown over the decades. It would be when we go back to the 80s. I mean, it was probably unfortunate. As far as I understand your stories, your company basically failed because a huge corporation stepped in and adjusted it to themselves and not acquire your company.

00:28:07:01 - 00:28:31:23

Jim Pulcrano

While in comparison, at the same time, Genentech, for example, in the United States, with an investment from Kleiner Perkins basically established the entire VC industry in biotech. And this could have happened also in Switzerland with just this big corporation acquiring your company. What was the difference, in your opinion, between these two ecosystems?

00:28:32:00 - 00:28:33:08

Christian Soschner

Yeah. I

00:28:33:08 - 00:29:00:17

Christian Soschner

mean, even in the 70s, when Genentech was first founded, there was already a feeling like anybody can do anything. Partly that's an American thing, but also the West Coast, like you mentioned earlier, the hippie culture, the, the culture of 1968, etc. have really taken root there. And you have this wonderful mix of, if you like, the hippies together with the technologist, where in a sense they, they inspired each other.

00:29:00:19 - 00:29:24:09

Christian Soschner

We had nothing similar to that in, in Switzerland, maybe some parts of Europe that I'm unaware of. But yeah, all through my time in that first company, I remember, you know, I, I always felt like the odd person when I'd go to, any kind of dinner or lunch or whatever, that, you know, I'm the guy running this tiny little company rather than trying to conform.

00:29:24:11 - 00:29:52:18

Christian Soschner

Yeah. Yeah. The idea that we'd let a little company disrupt the world, I don't think people were against it just would have been strange. You know, we've got all these wonderful Swiss companies that are, you know, Nestlé. I just came from Nestlé this morning, know, doing amazing things. Why would a little startup do other things? And for many, many years here in, Switzerland, Switzerland, whenever we talked about entrepreneurship, we would talk about a company called Logitech.

00:29:52:20 - 00:29:58:15

Christian Soschner

I'm sure you've probably got a Logitech mouse, etc. and that was is it.

00:29:58:17 - 00:30:04:17

Jim Pulcrano

No. Yeah. Yeah yeah it is, it is, it is. But it is a very old one. So I think it really works well.

00:30:04:20 - 00:30:05:19

Christian Soschner

If you think about that.

00:30:05:19 - 00:30:17:00

Christian Soschner

So for I'd say a decade at least, whenever you mention startups in Switzerland everybody would talk about Logitech one. And yet in on the on

00:30:17:00 - 00:30:28:09

Christian Soschner

the West Coast, even in the 70s and 80s, you could already start naming tens, hundreds of them or at least people who had tried here in Switzerland. You didn't have those stories.

00:30:28:11 - 00:30:45:09

Christian Soschner

And society needs stories. We need stories that help us to believe something is possible. And if you don't have stories of friends and neighbors and people you've heard about who have done great things as entrepreneurs, you start to believe that it can't happen.

00:30:45:11 - 00:31:14:24

Jim Pulcrano

Yeah. That's great. And when we look, further into your story, you came out of the startup, got a call from IMT, and although your heart was saying found the next company. You've got a tough conversation, I guess, with your father. And he said, take your responsibility, young man, and go down the safe route. How did it feel for you, this decision then, to to pursue a corporate career in a traditional form?

00:31:15:01 - 00:31:16:07

Christian Soschner

Well,

00:31:16:09 - 00:31:35:14

Christian Soschner

you know, I kind of lied to myself. I, I knew he was right. Again, my wife was very accommodating. She she would have gone with whatever I decided, even though there were times where I didn't have a paycheck. I mean, because the way it worked was every couple of weeks I'd sit down with our accountant and say, okay, how much money do we have in the bank?

00:31:35:14 - 00:31:53:18

Christian Soschner

Which bills can we pay if we don't have enough to pay my salary, we don't pay. It's she got used to that. Even she didn't like it. But what would I say? I lied to myself. I told myself it's the turnaround. This is no different than doing a startup. So I convinced myself that this was, a good undertaking.

00:31:53:18 - 00:32:20:17

Christian Soschner

And it was my alma mater as well. So if I could help save my alma mater, this was a worthwhile thing. And then as I stepped into the role, I realized I had means within this larger organization that I never would have had in a startup. As far as cash, people around me who had great skill sets, etc. the brand, etc. and that I could do things there that I could never do in a small company.

00:32:20:19 - 00:32:34:03

Christian Soschner

So that was the way I kind of lied to myself and said, this is the worthwhile thing to do, but I'm only going to give them 3 to 4 years of my life, and then I'm going to go do something else. That was that was the story going on in my head.

00:32:34:05 - 00:32:36:13

Jim Pulcrano

But you are still there.

00:32:36:15 - 00:32:38:03

Christian Soschner

Yes. Yeah. I mean.

00:32:38:05 - 00:32:40:18

Jim Pulcrano

So the technical.

00:32:40:20 - 00:32:42:15

Christian Soschner

Yeah. So at

00:32:42:15 - 00:33:07:10

Christian Soschner

the 3 or 4 year point, it took us about 18 months to see that the turnaround was working. And I still remember the, the chart where I was plotting cost against revenues and realizing for the first time they're, they're, they're breaking away as they go. Okay. And I remember the excitement of that. So the things we did had an impact and literally was 18 to 24 months and we knew it was going to work.

00:33:07:12 - 00:33:26:05

Christian Soschner

So I started looking for a job. I started talking to people to see, okay, what opportunities are out there, maybe to do another startup. Did I have any ideas? And lo and behold, the head of faculty approached me and said, hey, we're going to create the first new innovation that I do since 1972. It's our executive MBA program.

00:33:26:07 - 00:33:47:08

Christian Soschner

We want entrepreneurship to be one of the red threads of the program. Would you take responsibility for that? And again, they seduced me saying, you know, this will be your chance to bring this into a major part of our curriculum. I had a great mentor who taught me how to teach or help me to learn how to teach.

00:33:47:10 - 00:34:13:09

Christian Soschner

And, then inertia took over. I did get to step out a few times to do another startup. Step out partially. So, you know, academia gives you that opportunity. You know, you keep doing your job. But these possibilities have flexibility and inertia. Just took over, having a salary at the end of every month, a big bonus in March every year.

00:34:13:11 - 00:34:38:09

Christian Soschner

Wonderful colleagues to work with facilities. And you see why when somebody goes to work for a large corporation, how it's enchanting. It's wonderful. Until one day I started looking around and thinking, okay, I'm in my 50s, finished my doctor doctorate, saying, what's next? I mean, seriously, I mean, the only reason I did my doctorate was I needed a new challenge.

00:34:38:11 - 00:34:50:13

Christian Soschner

It wasn't because I thought one day I need Dr. in front of my name. It was more of I want a challenge. And so I finished that and then, okay, what's the next challenge. And I decided the easiest thing to do would be to resign

00:34:50:15 - 00:34:56:12

Christian Soschner

easy. I mean, the thing to do would be resign and see what happens, because now you're on your own.

00:34:56:12 - 00:35:07:16

Christian Soschner

You have to make this work. So yeah, it was a long period that I am de but, and I don't regret it at all. I learned a lot from a lot of people, including

00:35:07:20 - 00:35:18:06

Christian Soschner

the customers of IMT. But I also don't regret the decision in 2012, 2013 to walk away. I mean, I'm still I'm at IMD right now as we record this.

00:35:18:08 - 00:35:25:04

Christian Soschner

I was teaching in the programs last week. I but the independence, the freedom, the liberty

00:35:25:08 - 00:35:27:22

Christian Soschner

is something I'd never trade again.

00:35:27:24 - 00:35:45:06

Jim Pulcrano

I, I totally agree. I mean, this is something that people realize when they work in a big corporation or an institution like yours that they have a way to take a risk. They have a lot of budgets to take a risk at the company. And, when it fails and to have a good management failure doesn't mean it's the end.

00:35:45:06 - 00:35:52:03

Jim Pulcrano

But in a startup, it means it's all, well, it's really game over and it can be horrible.

00:35:52:05 - 00:35:54:16

Christian Soschner

Yes.

00:35:54:18 - 00:36:12:06

Jim Pulcrano

When we look at your career, you have IMT and then you always tried to start other startups. How did it work together on the one? On the one hand, you are in a big corporation or in bigger corporation in an entity. And on the other hand, you always took some risk.

00:36:12:08 - 00:36:12:15

Christian Soschner

Yeah.

00:36:12:17 - 00:36:14:03

Jim Pulcrano

How did it work out for you?

00:36:14:05 - 00:36:15:07

Christian Soschner

Well, I mean, a

00:36:15:07 - 00:36:41:09

Christian Soschner

couple of small things. One is I had it written into my contract right from the very beginning that I could spend a small portion of my time outside my M.D. so contractually I didn't have any problems, which I it's a small thing, but it's important because normally when you work for an organization, they own all your IP, etc., etc. so that I was lucky enough to have, you know, gotten that into my contract right from the beginning.

00:36:41:11 - 00:37:02:06

Christian Soschner

Secondly, I kept hitting my numbers. So even if I reduce the amount of time that I was sitting at my desk and in MD, I made sure I hit my numbers and on on whatever it is I was supposed to be doing for for the school. But what that means is you work 18 hours a day, seven days a week.

00:37:02:08 - 00:37:32:04

Christian Soschner

And there and there, I learned there that there's that risk of burnout. And I only now do I think looking back to I realized that I was in burnout trying to do both at the same time and not being willing to compromise on the quality with either of the, that's not sustainable. And I did that. The last time I did it was for almost two years, and I wish somebody at that point had had that conversation and said, you know, this is not good for your health.

00:37:32:04 - 00:37:38:00

Christian Soschner

It's not good for your family, not good for your startup, etc.. But I did,

00:37:38:02 - 00:37:42:17

Christian Soschner

so I probably should have made a choice at that stage. And I did.

00:37:42:19 - 00:37:47:05

Jim Pulcrano

Yeah. Two jobs and family is, it's really through the heart thing. And,

00:37:47:07 - 00:37:56:00

Christian Soschner

We had and we had a child born during that period as well. So it was a difficult pregnancy for my wife. And yeah, I did not make good choices.

00:37:56:02 - 00:37:57:17

Jim Pulcrano

But it all worked out fine.

00:37:57:19 - 00:38:20:23

Christian Soschner

It did work out in the end. I'm d was happy. Our son is now 24 years old and healthy and happy. The startup we actually sold it to, three years ago now, the engineer that I'm one of the engineers I'd hired became the CEO of the company. All good. In the end, but I did pay a price physically during that period.

00:38:21:00 - 00:38:27:07

Jim Pulcrano

To once to talk about, this price that you pay. Can we dive into that or just move?

00:38:27:09 - 00:38:27:15

Christian Soschner

Yeah.

00:38:27:15 - 00:38:49:09

Christian Soschner

No, I think it's something that should be talked about. It's funny, when I did the research for one of the programs that I've run here, DMD for scale ups and looked at the topics that we should included, it, physical and mental health was never one of the topics. But over the last 18 months, I've listened to my participants start bringing it up in class.

00:38:49:11 - 00:39:12:13

Christian Soschner

So this year, for the first time, we actually had it as a as a session. And I don't know if it's because burnout didn't exist in the past. I think it did. We just weren't willing to talk about it because, hey, as entrepreneurs, we can handle everything. And I think it's only in the last couple of years that we've been able to say, you know, there are limits, there are physical, mental limits.

00:39:12:15 - 00:39:34:17

Christian Soschner

So I'm glad that we're we're willing and able to talk about it. But I think there's still even amongst female founders this March on this, I can handle everything. You want me to work 18 hours a day, seven days a week, 30, 65 days a year? I can do it. And our investors encourage us to do that because they all they care about us being successful.

00:39:34:17 - 00:39:55:16

Christian Soschner

They don't care about us being healthy. They just got to get a good exit and a good return. So I think it's something that entrepreneurs should talk about. They should take care of themselves more and more. I'm seeing good entrepreneurs saying, you know what? Tonight is for the family. I can't make the meeting. Sorry. Or, you know, I've just had three weeks of, you know, fundraising.

00:39:55:16 - 00:40:19:22

Christian Soschner

I have zero energy left. Call me next week. Let's not talk now. And I think that's good. I think it's a healthy thing. I think in long term we'll have more successful companies because you think about how much depends on the health of that founder, especially in the early days. So if he or she is suddenly sick for a month, the company comes to a standstill and we can't afford that.

00:40:19:24 - 00:40:25:14

Christian Soschner

So hopefully this will be good for everybody to be willing to talk about it and do something about it.

00:40:25:16 - 00:40:45:20

Jim Pulcrano

I would love to talk a little bit more about it if you are open to that. Oh, we can, just for fun. I mean, if that doesn't happen in mental health and physical health is important, especially for VCs, because the alternative is that the founder fails. But I do understand it fails. And, the wisdom is lost to know how it's lost.

00:40:45:24 - 00:41:10:01

Jim Pulcrano

The leadership is lost. And, when you look at startups, the only thing they are is actually the team. And when the team burns out, the whole value is gone and it's not in the IP. In your opinion, with your experience, how would you explain to a we see that mental and physical health is important in that profession, similar to formula one drivers.

00:41:10:03 - 00:41:27:23

Christian Soschner

Yeah okay. You could do this is a good question. I hadn't thought about for you could do it from a very, you know, personal side that, you know like what I care about my team. I, I want them to, you know, stay with me for, you know, for the next couple of years. I don't want to lose people.

00:41:27:23 - 00:41:49:15

Christian Soschner

That's one way you could take a different approach and say, okay, let's look at the product roadmap. Okay. Does it have to be this way over the next 18 months, or could we extend things by, you know, six weeks here, three weeks there, etc., to allow for people to be healthy all the way through it? I think you could go both ways or even with the VCs.

00:41:49:15 - 00:42:16:13

Christian Soschner

Okay, we've asked you for enough money that gets us, gives us a runway of 14 months. Why not give us enough to get us through to 16 months? And that way kind of reduce the stress, but do it in a way with numbers they can understand whether it's the product roadmap or the funding. And I think a lot of VCs are starting to understand this as well, that, you know, they don't want you dying in the office because that's not to their benefit.

00:42:16:15 - 00:42:20:09

Christian Soschner

Yeah. No, I think you I think you can make the argument today.

00:42:20:11 - 00:42:35:10

Jim Pulcrano

Yeah. But I think we have to talk more about it than I'm reading currently. The book, the Nvidia Way, written by Ty Kim, and I'm at this part of the book where he describes the work ethic of Jensen Huang, and it's completely the opposite. He's a.

00:42:35:11 - 00:42:42:17

Christian Soschner

Workhorse. Did you you know what I don't people who are workhorses, people will tell you I'm a workhorse,

00:42:42:17 - 00:42:48:00

Christian Soschner

but that's a choice you make. But you you still need to know where are the limits of

00:42:48:03 - 00:42:58:17

Christian Soschner

my my workaholism. Because. And maybe you need somebody to to tell you that, you know, I recognize it now much more than I ever did in the past.

00:42:58:19 - 00:43:19:01

Christian Soschner

You know, when I'm really getting to the end, I think, okay, I'm not paying attention in meetings. I'm losing focus. I'm not asking as many good questions. I wake up tired in the morning, and when I recognize that, I do something about it. And I would encourage others to. But that doesn't mean you can't be a workaholic. I love my work.

00:43:19:03 - 00:43:21:19

Christian Soschner

That's why I work so hard.

00:43:21:21 - 00:43:47:09

Jim Pulcrano

This is something I've never understood. Why we missed that part in entrepreneurship and venture capital. I had a job in the 90s at a formula one. This was a security guy, so nothing important. But I had the chance to observe the drivers and the teams and from what I learned in Formula One was that every single second of the day is organized and optimized for the success of the driver and the team.

00:43:47:09 - 00:44:19:08

Jim Pulcrano

Of course, including health. So partying, overworking is not included in that. The sleep is optimized, exercise is optimized already in the 90s, and I think now it's even gotten better. And in entrepreneurship, or when I look into the corporate world, it seems to be completely ignored for decades. Did you did you find a time? Did you do we have some theory why that part of health, mental and physical health got completely ignored in the corporate?

00:44:19:08 - 00:44:40:23

Christian Soschner

I'm not an expert, but I'll just give you my point of view. I think it's still partly that macho ness about we can do anything. I mean, if you talk about formula One, think about top athletes. And yet we as business people should be treating ourselves at least as good as maybe not the top top athletes, but one level below recognizing that training is necessary.

00:44:40:24 - 00:44:51:11

Christian Soschner

Sleep is nation, nutrition everything. And we don't think about how most business people eat. It's all for this is it just makes

00:44:51:15 - 00:45:07:00

Christian Soschner

absolutely no sense the way we even take in nutrition. We fly all over the world and get jet lagged. And then for the next six days, you know, can't get good sleep rather than say, okay, I have to be ready for whatever's next.

00:45:07:02 - 00:45:29:12

Christian Soschner

And I'm perfectly willing to say, okay, we push the limits, but for how long? Okay, maybe there's, you know, for this, the end of this quarter, we have to do X, Y, and Z to get there. But recognizing that, okay, the first week of the new quarter, take a break. We don't do it. I think a lot of it is our belief that we can show people we can do everything, not just entrepreneurs, but also corporate animals.

00:45:29:14 - 00:45:46:20

Jim Pulcrano

Well, this is the alpha male or alpha person thinking. So it's, I am the toughest guy in the room and I have to prove it to everybody. But at the end of the day, it destroys value. You mentioned top athletes. Really? Look at me. Conor McGregor, for example. Of course. I mean, you can you can drink whiskey all the time if as long as you want to.

00:45:46:21 - 00:45:53:18

Jim Pulcrano

But when you have a fight coming up and you are completely wasted, there is no way that this person wins.

00:45:53:20 - 00:45:54:16

Christian Soschner

You know, I did some work

00:45:54:19 - 00:46:13:21

Christian Soschner

with UEFA, the European Football Association, several years ago, where they invited me to teach in a program for, former international stars. So these are not the Mrs. of the world who can just coast on there with the money they've earned. So they're good. You know, my wife would often ask me to get their autographs.

00:46:13:23 - 00:46:31:11

Christian Soschner

But they they have to get a job. And I often said to them, you know, you guys are actually better suited for management than most of the managers I meet with. Number one, you've probably been captain of the team at some point, so you have some sense of leadership. Number two, you've been part of the team. So you know what it's like to work on the team.

00:46:31:13 - 00:46:46:13

Christian Soschner

But most importantly, you know how to take care of yourself because you know that every Saturday or 2 or 3 times a week, you have to get out on that pitch and perform and you take care of yourself. Whereas most of the managers I work with, that's not even a second

00:46:46:15 - 00:46:48:22

Christian Soschner

thought.

00:46:48:24 - 00:47:08:02

Jim Pulcrano

At the end of the day, in my opinion, the only thing that we have in IT management level, at executive level, and at what level is the quality of decision making. And when they don't take care of the health of the mental and physical health, the decision making chose doing, it's just not as good as it could be.

00:47:08:04 - 00:47:20:10

Christian Soschner

Yeah. If your mental health is not good, if you're tired, fatigued, hungry sick you can't make good decisions. It's just it's improbable. You might get lucky, but it's improbable.

00:47:20:12 - 00:47:24:04

Jim Pulcrano

Then we have to be a little bit louder with mental and physical health.

00:47:24:09 - 00:47:26:14

Christian Soschner

Yes, definitely.

00:47:26:16 - 00:47:41:17

Jim Pulcrano

When we look back to the 80s and your career, let's talk about strengths in Europe. I'm a European. I love to rant about Europe and what goes wrong, but let's take the other route. What strengths do you see in Europe in entrepreneurship and venture capital?

00:47:41:19 - 00:47:42:06

Christian Soschner

Well, one

00:47:42:06 - 00:48:07:13

Christian Soschner

is, I think, the obvious diversity. And here I'm not talking about D. I just say, you know, we got 27 different minimum 27 different views in the world. If you go deeper and even look at Switzerland, we've got another four different ways of looking at the world. That right there should make any product that comes out of this part of the world stronger, better, much use, more useful for global world.

00:48:07:15 - 00:48:30:02

Christian Soschner

And yet I don't think we take advantage of that. Yeah, we tend to, you know, we start in our home country and then immediately go to the United States because it's large, 330 million, you know, consumers, part of that. So again, now I'm going to touch on weaknesses, the fragmentation of Europe with, rules and regulations that don't make it easy to work across borders.

00:48:30:04 - 00:48:54:24

Christian Soschner

If we could reduce just a few of those, we could have European products that are just as strong as anything coming out of the United States. But so far, I don't see us doing enough of that. But I do think that the diversity of Europe, whether it's languages, the different points of view, the different cognitive mindsets, is what we need to create even better products that are created in the United States.

00:48:55:01 - 00:48:59:11

Jim Pulcrano

Yeah, the average European kids these days speaks at least 3 or 4 languages.

00:48:59:13 - 00:49:12:00

Christian Soschner

Yeah, my kids are a perfect example of that. And it's for them. It's perfectly normal. And I just think that's a benefit that American kids will will never have. Yeah.

00:49:12:02 - 00:49:12:11

Jim Pulcrano

It's the

00:49:12:11 - 00:49:35:10

Jim Pulcrano

whole it structures the whole brain in a different way, in my opinion and understanding of different cultures. And to say that there was but, I was in your at university in the 90s and I would like to find out whether my view is distorted or not. You had your career in the 80s and 90s already in venture capital, entrepreneurship and the IMT.

00:49:35:12 - 00:49:52:21

Jim Pulcrano

When you think back to 1989, it was this glorious time when the Soviet Union failed and Europe could unite again. The Germany was the first country that integrated East Germany into West Germany and formed Germany again, something people wanted to do for decades.

00:49:52:23 - 00:49:54:17

Christian Soschner

Right?

00:49:54:19 - 00:50:30:24

Jim Pulcrano

The whole Eastern Europe bloc moved towards the European Union. And we had this, this spirit of, awakening in Europe. It was positive. It was an entire continent. Moving forward, we made peace with Russia. This was something unthinkable. In the 80s, Russia became part of Europe. We had economic relations. When I think at my first, internships in the 90s, it always included something in Eastern Europe, Hungary, Czech Republic, Slovakia, Romania or Russia.

00:50:31:01 - 00:51:02:16

Jim Pulcrano

Did w w w the enabling technology of the internet evolved out of Switzerland and they always had the feeling that Europe, with this tremendous energy, with this tremendous positive energy, was at least at par with the United States. Also in entrepreneurship, it was a little bit structured differently, but they always think every company that evolved in Europe, we had to count, in the United States with a counterpart in Europe, the mobile industry, Europe was leading in the mobile.

00:51:02:16 - 00:51:05:17

Christian Soschner

Industry back then. Yeah.

00:51:05:19 - 00:51:32:11

Jim Pulcrano

And then 2000 happened, 2008 happened. And suddenly I woke up in 20 1819, in fact, what the hell happened in the last 20 years? We lost it. The United States is just moving forward. Europe seems economically on a different direction. What happened? 80s, 90s. And then 20 years later, what's your what's your opinion? Was it is it is my perspective wrong of the.

00:51:32:11 - 00:51:32:23

Christian Soschner

No no

00:51:33:00 - 00:51:57:13

Christian Soschner

no no. Well let's start with the fall the the the wall, etc.. I think we were so excited by that that the thinking of. Oh, and now business wise, what could we do? Oh, we can, we can start building products and selling them all across Europe, etc.. I think we were so exhilarated by

00:51:57:15 - 00:52:06:01

Christian Soschner

the idea of freedom and the fall of the Iron Curtain and etc. that these other things didn't just weren't in our consciousness.

00:52:06:03 - 00:52:12:08

Christian Soschner

But on the other side, you think of the mid 90s. I'm sure you remember Netscape.

00:52:12:10 - 00:52:13:18

Jim Pulcrano

Yeah, yeah, yeah, yeah, sure.

00:52:13:23 - 00:52:15:13

Christian Soschner

When, when Netscape went

00:52:15:17 - 00:52:36:20

Christian Soschner

public, suddenly the world saw something that they'd never seen before that a company with very little revenue, no profit, just based on intellectual property, could go public and people could profit from that. And it was in the U.S. that people really got that lesson. And that gave us the dotcom bubble in Europe.

00:52:36:22 - 00:53:00:06

Christian Soschner

I don't think any of us believed that that was possible. Those crazy Americans. Yeah. What are they up to? But but it triggered this belief that you could start with a blank sheet of paper, create a company, technology, etc., and you could be wealthy and successful. I don't think we ever had that moment in Europe ever. We we know Spotify and we've had other companies that have done very, very well.

00:53:00:07 - 00:53:10:22

Christian Soschner

But, the idea that a normal person, okay, maybe with a computer science degree, an engineer or whatever, a normal person could become a gazillionaire

00:53:10:23 - 00:53:19:04

Christian Soschner

and have an impact on the world. We never had our Netscape moment.

00:53:19:06 - 00:53:21:01

Christian Soschner

And I don't see one on the horizon.

00:53:21:03 - 00:53:22:18

Christian Soschner

Honestly,

00:53:22:20 - 00:53:40:23

Christian Soschner

this thing that then gives everybody, whether it's a young person or somebody in the corporation, the belief that I can do that to or is in the US that has been digested and become part of the DNA, anybody can do this. And that's I think that's still missing.

00:53:41:00 - 00:53:43:05

Jim Pulcrano

Netscape was market reason.

00:53:43:07 - 00:53:45:16

Christian Soschner

Right? Yeah. And then Horvitz.

00:53:45:18 - 00:53:54:10

Jim Pulcrano

I've been I was was that so defining was that, when when you read in the books, it was just like, yeah, it's it's not a company that took off, is it was so defining for the culture.

00:53:54:12 - 00:53:56:13

Christian Soschner

Psychologically.

00:53:56:15 - 00:54:22:15

Christian Soschner

It was huge. I mean, the fact that. Well, and there's two big part of it also was it gave us as mere humans access to the internet. Before that, you, you had to figure it out where suddenly you had this browser allow you do it. And at the same time, these two individuals from University of Illinois, I mean, who never heard of Illinois, that they could come to California and do this.

00:54:22:17 - 00:54:23:23

Christian Soschner

And

00:54:24:00 - 00:54:36:22

Christian Soschner

now you look at Andreessen Horowitz as a venture capital firm, and you work it all the way back to that. Now it seems all logical, but the fact that that could happen, I don't think we ever assumed it could happen in Europe.

00:54:36:24 - 00:54:48:04

Jim Pulcrano

So basically, a simple program back in the day made two people rich that then started investing into other teams.

00:54:48:10 - 00:54:48:21

Christian Soschner

Yes.

00:54:48:21 - 00:54:57:13

Jim Pulcrano

And this defines the culture from the 90s forward in Silicon Valley. And we didn't have that simply in Europe.

00:54:57:15 - 00:54:57:23

Christian Soschner

Yeah. And

00:54:58:01 - 00:55:13:21

Christian Soschner

not just made two people routes, but it made their entire team rich. So you know there's stories not just not just Netscape but like for example when Apple went public, you know that the receptionist is suddenly a millionaire on paper. You know that kind of thought

00:55:13:23 - 00:55:17:14

Christian Soschner

that this is possible. We didn't have it here.

00:55:17:16 - 00:55:22:21

Christian Soschner

Maybe you have to have the American DNA to even think it's possible.

00:55:22:21 - 00:55:37:17

Christian Soschner

But they had these events that showed people it's possible. And again, we are a storytelling, storytelling creatures. We hear these stories, we hear other stories, and we start to believe.

00:55:37:19 - 00:56:02:04

Jim Pulcrano

Yeah, absolutely. I think this stands out, this, spirit of participation in a company, not only the founders, think the European story is still founding team. And the investors take basically over the minutes to invest and get 60, 70, 80% of the company. Modern mindset. And Silicon Valley did it differently. They

00:56:02:06 - 00:56:03:19

Jim Pulcrano

handed out stock options.

00:56:03:21 - 00:56:04:11

Christian Soschner

Right.

00:56:04:13 - 00:56:17:11

Jim Pulcrano

And devices let the founders live. Did you ever find out where this came from. Did you hear about it. Do you have a theory that this spirit came from.

00:56:17:13 - 00:56:17:21

Christian Soschner

Well I

00:56:17:21 - 00:56:34:20

Christian Soschner

think it's you know, it's basically financial mechanics. I can't pay you very much. So I'm going to give you equity. And you know, you're going to feel like an owner of the company. And I know we hear this from other companies, like, I want everybody to act as an owner. But when, you know, instead of

00:56:34:23 - 00:56:42:15

Christian Soschner

being paid 100, you're being paid 70, but you got these options or whatever they may have given you, suddenly you do work differently.

00:56:42:17 - 00:56:47:00

Christian Soschner

Now, nine out of ten of these startups will fail, and those options are worthless.

00:56:47:02 - 00:56:58:14

Christian Soschner

But when they do work again, it's a story that everybody else hears. Okay, it didn't work in my last startup, but maybe this one will be different and that inspires people.

00:56:58:16 - 00:57:16:00

Jim Pulcrano

Yeah, but but the payment in Europe is generally not good as well. So it's a back in the 90s, even especially for young people. What do you expect from, from from it from a paycheck. Not much. In Europe. The story was very often be happy that you have a job.

00:57:16:02 - 00:57:17:13

Christian Soschner

Yes. Yes.

00:57:17:15 - 00:57:38:22

Jim Pulcrano

At least you have one. And other people are worse. So don't ask for more. But then you look over to the stories of Silicon Valley and they said, yeah, well, okay, we can't, we can't, can't pay you well, but you get stock options. And if this works, you're rich. And this twist, I think this little twist, at the end of the day, it makes a huge difference.

00:57:38:24 - 00:57:59:20

Christian Soschner

the thing I'd add to that is, other than during the pandemic, Silicon Valley has never known unemployment. So, you know, if I want you to work in my unemployment, so maybe 2 or 3% max for qualified people. I'm not talking about service workers, but anybody with an engineering degree or physics degree or whatever.

00:57:59:22 - 00:58:19:24

Christian Soschner

So if I want you in my company and I can't afford to pay you the going rate, I have to offer something. There is no choice. And that kind of basic financial mechanism still exist. But again, here in Europe, if you can get paid a couple of hundred thousand to work for a large corporation, do you want to take a risk on your Esop?

00:58:20:02 - 00:58:23:22

Christian Soschner

Yeah, I'll just take the salary. 60 staycation.

00:58:24:03 - 00:58:42:03

Jim Pulcrano

That's a the end of you don't have any. So. Because it's, not possible, I think maybe you're restrictions still. So there is a lower salary, higher risk. And, then there is the high paycheck at the corporation, but it's changing. I heard on the Olympics or Jason Calacanis in this week in startups.

00:58:42:05 - 00:58:42:17

Christian Soschner

Yeah.

00:58:42:19 - 00:58:56:08

Jim Pulcrano

Where he suggested that, the Silicon Valley startups should hire in India to just cut their company salary expenses. So there is a window of opportunity. Also, the mindset in Silicon Valley gets a little bit less, a more greedy.

00:58:56:10 - 00:59:04:15

Christian Soschner

Yeah, I, I do have views on Silicon Valley at the moment. And it's, it's not the Silicon Valley that I started working with 26 years ago.

00:59:04:17 - 00:59:09:16

Jim Pulcrano

But isn't it dangerous for, for, the, the United States in the end of the day.

00:59:09:16 - 00:59:10:01

Christian Soschner

I think it's

00:59:10:01 - 00:59:31:07

Christian Soschner

dangerous for the world. I mean, obviously Silicon Valley is not the only place where entrepreneurship flourishes and where innovations come out. But if we lose that engine. Unless somebody rises up to take its place of the world, loses, and the United States first. And

00:59:31:09 - 00:59:40:11

Christian Soschner

I do think this is a real risk. A colleague of mine just wrote an article based on an interview with me in Forbes magazine, where, I mean, he was politically correct.

00:59:40:11 - 01:00:00:11

Christian Soschner

So. But, you know, I think there are real problems with the way Silicon Valley is functioning, too, even though I would never say there's any kind of central government that runs Silicon Valley, there's an ethos that has changed over the last 8 or 9 years, and it's accelerated this last six months.

01:00:00:13 - 01:00:02:17

Jim Pulcrano

What is the new ethos?

01:00:02:19 - 01:00:29:06

Christian Soschner

Well, I think one of them is incumbents trying to protect themselves, whether it's the Nvidia's, the Intel's, the apple's, etc., trying to put up barriers to, you know, the upstarts or the startups, taking their place, trying to use government to protect themselves or to give them opportunities. The cost of living has continued to skyrocket there, which makes it really difficult for startups to do anything.

01:00:29:08 - 01:00:55:13

Christian Soschner

And then last but not least, and this is just over the last four months, five, six months visas, I mean, Silicon Valley, not just visas, but and the acceptance of foreigners. Silicon Valley has always been a magnet for the best talent in the world, whether it's because they come to Stanford or Berkeley to do their PhD and then stay or get hired by Apple from wherever, whether it's French or Indian or Chinese, we're losing that.

01:00:55:15 - 01:01:16:18

Christian Soschner

I mean, most obviously under the Trump administration, where, you know, if you're a Chinese physicist, maybe it's easier just to stay in in China or come to Switzerland. We're much more welcoming than the United States now. So I do see this as being a potential problem for for the United States and for Silicon Valley.

01:01:16:20 - 01:01:27:14

Jim Pulcrano

Yeah. This is the interesting thing that, there is a bit of fear towards China lately when I listen to podcasts. So strange, but it's a great opportunity for other ecosystems to step up.

01:01:27:16 - 01:01:28:03

Christian Soschner

Yeah. I

01:01:28:03 - 01:01:50:01

Christian Soschner

mean, we always have these discussions. Whenever I have a class where we discuss Silicon Valley, they always say, oh, you know who's going to take Silicon Valley's place? And again, up until recently, I'd look at say, no, Silicon Valley is still the Mecca, attracting money, talent, ideas, etc. but other places have risen up. I mean, in the United States, you can even talk about Austin and other places.

01:01:50:03 - 01:02:12:03

Christian Soschner

Now the question is, will other places continue to rise and Silicon Valley will come down? I don't know. People have been predicting Silicon Valley's demise for decades, but recently I started looking into the history of other places like Babylonia or the Industrial Revolution in London, or the Renaissance with the Medicis in Florence, and

01:02:12:03 - 01:02:16:06

Christian Soschner

seeing how all of these eventually ended.

01:02:16:08 - 01:02:19:10

Christian Soschner

Very often it was due to war or to other

01:02:19:13 - 01:02:30:24

Christian Soschner

reasons. This one seems to be self-inflicted. And that's where I think the difference is compared to previous centers of innovation that have have died.

01:02:31:01 - 01:02:56:06

Jim Pulcrano

Let's keep this for the future prediction of the end at the end of the recording. And let's move forward in our conversation to the part where we talk about venture capital as a professional discipline. And I think at IMT you promote that venture capital. It's not for amateurs, not for professionals. Why is that?

01:02:56:08 - 01:02:56:16

Christian Soschner

Well,

01:02:56:16 - 01:03:21:06

Christian Soschner

part of it is what I said earlier about it's a it's a profession that you learn by doing. You can you can study it and people should study it to learn, you know, whether it's the formulas, the various I mean, there are there's there is real content, but it's also a craft. And, you know, the some of my favorite VCs will say to me, I'm no smarter than anybody else.

01:03:21:06 - 01:03:42:23

Christian Soschner

I just have good pattern recognition because I've spent the last 20 or 30 years doing this, and I can see stuff that will work and I can see stuff that won't work. But having said that, I think, you know, somebody coming out of an MBA and I hope too many of our MBAs aren't listening to this and thinking automatically, I can be a good VC.

01:03:43:00 - 01:04:09:12

Christian Soschner

Maybe, but it's unlikely. You know, I'll give you a little anecdote. I was in China two years ago in Shenzhen, and we had a program for a large corporation that I do a lot of work with, and we invited in a bunch of Gen Z, young people to talk about their careers, the way they see the world, etc. and afterwards I'm talking to one of them, and I asked him and he looked to be about 25 years old.

01:04:09:14 - 01:04:28:00

Christian Soschner

And I asked him, I said, so what do you do? He says, I'm a venture capitalist. And I was less than impressed. Okay, chatted with him, but then I went over and talked to somebody else in the room who was an experienced VC and I said, that guy over there says he's a VC, and he said he didn't even ask the guy's name or anything.

01:04:28:00 - 01:04:49:20

Christian Soschner

Says no until you've lost $15 million of your LPs money and been through at least one business cycle, you cannot call yourself a venture capitalist. Now, we can try to speed that process up by exposing them to different situations, by helping them to understand the mindset of the entrepreneur, by helping them to understand how do you manage a fund.

01:04:49:22 - 01:05:08:22

Christian Soschner

And that's the part that a lot of people don't see. Think about it. The sexy part, or at least what's perceived as sexy of being a VC is I get to pick and choose the entrepreneurs and to put money into that. I sit on their board. I help them devise their strategy that that and that is sexy and necessary and useful.

01:05:08:24 - 01:05:31:15

Christian Soschner

But then there's a whole other side of managing the fund you've just invested in, I don't know, 14 companies. Which ones do you reinvest in? Which ones do you stop investing in? Which ones you try to merge with others? Do deals with, etc. that's a part of it that's more like financial management and even that you have to learn by doing.

01:05:31:17 - 01:05:44:08

Christian Soschner

So I think it is a profession that, you know, you can try to learn by books, etc., but you're going to learn even more by doing it.

01:05:44:10 - 01:05:46:23

Jim Pulcrano

Doesn't that collide with the European mindset?

01:05:47:00 - 01:05:47:14

Christian Soschner

Yes it

01:05:47:14 - 01:06:10:17

Christian Soschner

does, yes. Because we believe we go off to school, we take our courses, we get our diplomas, and now we're ready to do, maybe that works if you go into government employ, but even if you go to work for a corporation, you're going to spend the first six months learning the trade. And it's no different with venture capital or as an entrepreneur, you got to go in and do it.

01:06:10:19 - 01:06:33:04

Christian Soschner

I mean, why do we invest more in serial entrepreneurs than new entrepreneurs? Because they've already made the mistakes and they've made the mistakes on somebody else's money. It's the same with the VC. I you know, when I'm looking at GP's, I'm looking at what did they do in their previous funds that hopefully they've learned from it and will not do those same mistakes in this next fund.

01:06:33:06 - 01:07:00:13

Jim Pulcrano

I just imagine a conversation with a big corporation and maybe walking into. Into a recruitment situation. And so I spent the last two IMT got my MBA. I think they would say, well done. This is the role we have for you. And then I imagine another person stepping in, walking in and ask him, what did you do the last ten years?

01:07:00:13 - 01:07:09:14

Jim Pulcrano

And this is, I've worked with seven companies, with seven companies in ten years. What did you do? Startups. Oh, okay. Startups.

01:07:09:16 - 01:07:18:13

Jim Pulcrano

Which one was successful? And he says none of it. What this person perceived as an addition as a useful addition to the company.

01:07:18:16 - 01:07:19:05

Christian Soschner

Well it

01:07:19:05 - 01:07:37:08

Christian Soschner

depends on how good that recruiter is. If I was that recruiter I'd go three each. Those seven terms. Show me what you learn from this. Because, you know, think about it. You've just, you could say, made seven mistakes or seven failures, but you could also say you've gotten seven MBAs. You know, maybe you've learned different things and different ones.

01:07:37:08 - 01:07:58:00

Christian Soschner

Hopefully you didn't make the same mistakes twice. But just think of the richness of that wealth. Now, whether the entrepreneur, former entrepreneur is willing to admit mistakes and show the learnings, etc., that's a different question. But a good recruiter. So you're going to find all kinds of nuggets. We say, oh yes, we need that. We need that.

01:07:58:00 - 01:08:08:11

Christian Soschner

We need that because you're now a proven talent rather than the newly minted MBA who's got all the theory is now going to go out and test the theory.

01:08:08:13 - 01:08:29:08

Jim Pulcrano

Is this already ingrained in our mindset, in our European mindsets that, VCs learn better with entrepreneurs learn by doing, and even fail even if it failed and produce no returns for that piece is something that people could use to learn something. Is this still is this already perceived as an asset?

01:08:29:10 - 01:08:53:02

Christian Soschner

I mean, let me just say again, I'm I'm older. So, you know, I've got experience. If I go back to the 80s, you know, failing in a startup or failing with a fund meant you, you would never work again. You'd never get a loan again from a bank, etc. today it's accepted. It's not liked but is accepted. And that's I'd say that's over the last 20 years.

01:08:53:02 - 01:09:11:17

Christian Soschner

It's become like that, you know, maybe not quite as it is in Silicon Valley, where it's a badge of honor, but people have stopped having white space on their on their CVS. You know, if you look closely at the dates on a CV and you suddenly said, wait a minute, there's a gap here between that. Sometimes it's a startup.

01:09:11:19 - 01:09:31:05

Christian Soschner

Maybe it was around the world trip to who knows? But nowadays I think people are more willing to put that forward and say, and this is what I learned there, these are the task I had, which probably were more broad than anybody who had had just a normal corporate job. So a good recruiter should be able to see these things.

01:09:31:07 - 01:09:55:20

Jim Pulcrano

I think that Warren Buffett would agree at the end of the day, also Charlie Munger with the, that it's how do they call it? It's not learning one thing, but, several things. And when we I mean, just think about the corporate world again. And you mentioned that venture capital should be a professional. It's a professional discipline.

01:09:55:22 - 01:09:56:11

Jim Pulcrano

And I

01:09:56:11 - 01:10:17:17

Jim Pulcrano

can imagine that a corporation, just as we need to CVC, it's hip, it's good for our brands. And let's just assign 20% role in the company. How would you explain to such a corporation that they should rather consider this more as a full time role, and not something that you just at?

01:10:17:19 - 01:10:39:12

Christian Soschner

Well, I would first push and ask why they're creating it. I mean, too often I think it's a vanity project by the CEO. Yeah. We have to show our shareholders. We have to show the market that we're innovative. So let's create a corporate venture capital arm. That's the worst reason to do it. Maybe it helps with employee branding and it helps with your share price for a short while.

01:10:39:14 - 01:11:01:21

Christian Soschner

The other side of the coin of saying we're doing it for financial reasons, I also think that's false because if it's a large corporation, no matter how successful the CVC is, it's going to be a tiny little tick on the revenue or the profit. It's got to be more of, you know, there's innovations happening out there that we're never going to see unless we put some money on the table and actually work with these people.

01:11:01:21 - 01:11:25:22

Christian Soschner

And to do that, we need people doing this professionally 100%. It's not a hobby. It's it's part of growing the company, whether it's because we're going to find innovations that we bring inside or maybe we. Cisco's a great example of it where we invest and if it works and it fits with our product roadmap, we acquire it and bring it inside rather than relying totally on our own R&D.

01:11:25:24 - 01:11:40:07

Christian Soschner

Having that as a reason for CVC, I think, makes perfect, perfect sense. But you need professionals doing it, not just have your head of R&D doing it on the side that I can't imagine that working.

01:11:40:09 - 01:11:46:22

Jim Pulcrano

But it's it's tempting. Think innovation. What makes the venture mindset so special?

01:11:46:24 - 01:12:14:18

Christian Soschner

Curiosity, perseverance, acceptance that failure is a data point. It's not failure. And this is really hard to be. None of us, like failure or failure is horrible. But if you go in, say, listen, part of what I'm doing here, whether it's the business model, the technology, the market, whatever part of what I'm doing has never been done before, there's no way you can assume perfection on all of that.

01:12:14:20 - 01:12:34:18

Christian Soschner

So we accept that, you know, part of what we're doing is not going to work. Then when it doesn't work, you're you, you're okay with it. And now you've gathered data that will help you to do something differently. Like, I'm going through that process right now with our with our latest startup because we really don't know what our best market is.

01:12:34:20 - 01:12:52:16

Christian Soschner

So I'm just having conversations and I had one last Friday where I was talking, this would not be of interest to us, but he said something else. Later on. They said, oh, maybe that's the piece I want to go down. And I just have to accept that. That's going to be a lot of my conversations right now.

01:12:52:18 - 01:12:53:02

Christian Soschner

Yeah.

01:12:53:07 - 01:13:04:19

Jim Pulcrano

So it's interesting to satisfy your mindset that, you can that failure is an indicator of success and not, losing, but losing a game.

01:13:04:21 - 01:13:29:00

Christian Soschner

Yeah. I mean, even, you know, what we think about Silicon Valley, people see the headlines of corporations making tons of money, valuations out the door, etc., etc., etc. but again, if we take the metric that nine out of ten startups will fail or not have good returns, that means Silicon Valley is the capital of failure. Now that's not the headline that we read.

01:13:29:02 - 01:13:47:13

Christian Soschner

But think about that. And if you're if you're not a cynic you say it's also the capital of learning. So yes it is successful big headlines. But underneath that is a ton of experiments that did not work. And underneath that is a ton of data that says I've learned from those experiments.

01:13:47:15 - 01:14:17:23

Jim Pulcrano

Just depending on what you said. Enough reading, the Nvidia story, because this is basically a story of failure, failure of the failure. And Nvidia was obviously a success story. I think it started in 2023. And when I look back to the 90s, graphics cards for computers, nothing special. 2000 gamers. Yeah, exactly. If you bought bets and it was just a cyclical stock up to 2022 and then it skyrocketed.

01:14:17:23 - 01:14:19:19

Jim Pulcrano

So it takes it a lot of time.

01:14:19:21 - 01:14:42:07

Christian Soschner

Well, it takes time, but also luck if you call it timing. If you like. But if ChatGPT hadn't come along would Nvidia be worth what it is today? I don't think so. You know, I we've been talking about AI my entire career. I remember the first time I heard it was back in 1980. It's got its moment right now.

01:14:42:07 - 01:14:46:13

Christian Soschner

And Nvidia is so perfectly positioned for this year.

01:14:46:13 - 01:14:51:04

Jim Pulcrano

And the book explains why. But you said you need a little bit of luck.

01:14:51:06 - 01:14:52:22

Christian Soschner

You.

01:14:52:24 - 01:15:06:16

Jim Pulcrano

But the interesting thing is when someone invests in a company like Nvidia, it's not obvious for a very long time that such a lucky moment will appear.

01:15:06:18 - 01:15:35:15

Jim Pulcrano

And when they look at the corporate they will be familiar LPs. For example institutional investors, big corporations, family offices, business angels. Who wants to invest in VC funds. How can they evaluate the fund. What's what's the success criteria that you would give them. And they say, look, I mean it. Take Nvidia. It takes 40 years. And a VC investing in Nvidia in the early days, waiting for three decades of course to have successful.

01:15:35:17 - 01:15:47:15

Jim Pulcrano

But when it went back to the 90s and to see a venture fund and say, okay, they invested in an obscure company and video, who knows that? How should I know that this is a good fund.

01:15:47:17 - 01:15:47:21

Christian Soschner

Or

01:15:47:21 - 01:16:12:20

Christian Soschner

you can't, you can't. Yeah. I mean, and I'm sure I don't know enough about the, the Nvidia story to know how many other companies were, say, equal to Nvidia at the start and then died for whatever reason, ran out of capital. They had a founder who couldn't persevere. I don't think you can know, any part of it.

01:16:12:20 - 01:16:44:01

Christian Soschner

Maybe understanding the founder and his or her team and thinking, how do they get the best return on luck? And luck could be good and bad, you know? So how do I know that they are the kinds of people that when an opportunity comes along or a failure occurs, they'll get the best out of it. And that's one of the things I probe for when I'm talking with entrepreneurs is not just tell me all the good things that you've done and the success, but what about when the bad things have happened?

01:16:44:03 - 01:17:03:14

Christian Soschner

Then what did you say? Okay, that's it, move on. Or did you try to learn from it again? I don't know if Jason was one of those people who's done. Jensen is one of those people who's done it. But that's what I'd be looking forward to be able to evaluate the the ventures that my funders put money into.

01:17:03:16 - 01:17:10:12

Jim Pulcrano

Okay. That's that's interesting. So it's really it's really hard to bet on the right team.

01:17:10:14 - 01:17:37:12

Christian Soschner

That's also why you have a fund. So, you know, one of the things that I always say to LPs who are considering investing in venture is don't try to do this directly into startups yourself. So you make one bet on one startup that fails. You've lost everything. But, you know, use the diversity, the you know, if you like the the rigor of a portfolio, the circuit, this portfolio should give me a good return.

01:17:37:12 - 01:17:54:04

Christian Soschner

I mean, this is basic finance. I'm hoping I can convince LPs or I. I made the mistake myself of choosing one startup as an angel investor and hoping it's going to win. That's crazy. I've stopped doing that.

01:17:54:06 - 01:18:14:19

Jim Pulcrano

Yeah, it's a success. Chance and startup is less than 1%. I'm hoping. And so it depends when you come in, but it's really less than what percent embedding the farm on the 1% chance. It's interesting. Why is venture capital important for an economy?

01:18:14:21 - 01:18:40:01

Christian Soschner

Well, if we didn't have venture capital, who would fund the innovators? Government. I mean, we have wonderful governments in Switzerland. I think we have too much in the way of government support for startups. There are a lot of companies that should die, but they don't die because they get so much government support. We derisively refer to them as zombies.

01:18:40:03 - 01:19:04:00

Christian Soschner

And then what happens is these good people are locked up in these companies and they don't get dispersed into other companies. So I think we need the VCs because we don't want governments doing all the funding just because I think they'll be ineffective at it or be less effective at it, because VCs bring something else. They bring that experience.

01:19:04:00 - 01:19:21:14

Christian Soschner

They bring the networks. They bring, you know, all the things that they've seen others do. They help you hire people, you know, so the VC job is more than just dispensing money. They're not an ATM. You know, the the that plus the good ones, a ton of advice and a great network.

01:19:21:16 - 01:19:47:10

Jim Pulcrano

Yeah. And to kick people together should be at the end of the day, when you look at the Silicon Valley ecosystem, it's what you describe. It's we see investing in companies and entrepreneurs. When you look at Europe, it's actually governments investing in entrepreneurs via public funding. What is your advice to European governments, why they should change that?

01:19:47:10 - 01:20:06:00

Jim Pulcrano

Because interview it works. So to have a lot of startups, they provide public funds to have extremely good numbers. How much private capital comes with government funds. What's your. And you said governments shouldn't be involved in that ecosystem. So what's your why as why does it why why does it.

01:20:06:02 - 01:20:06:08

Christian Soschner

Yeah.

01:20:06:08 - 01:20:32:24

Christian Soschner

No they they should be involved. And you know, we tend to forget that in the United States we have the Small Business Administration. That was one of the triggers. I can't remember the exact date. I want to say it was late 70s that, you know, helped to get things going in the United States with funding, etc. not quite at the level of what we do in Europe, but there was something to help small medium sized businesses to to be supported.

01:20:33:01 - 01:21:01:07

Christian Soschner

I think governments in Europe should continue to invest in research. So the research that's in a great universities I think that should continue. And in the US that has always been there. That's been part of the success of the US. Again it's in danger right now. But I think that's a role that government can still play. Is put money into basic research that helps universities not only discover knowledge, but create technologies that then can be spun out into companies.

01:21:01:09 - 01:21:14:18

Christian Soschner

But after that, I would put my money, I would put their money into venture funds. Yeah, put it into a VC fund and let them, as professionals make the choices of which startups get the money.

01:21:14:20 - 01:21:38:13

Jim Pulcrano

There's this interesting discussion here in Austria when I look at, at the United States ecosystem, it looks like, VCs invest in companies and the government plays the customer role. So basically, if you follow Palantir, for example, I mean, policy contracts, even Elon Musk. I know it's a controversial figure these days, but, Elon Musk got a lot of government support on the customer side.

01:21:38:15 - 01:22:04:01

Jim Pulcrano

When you look at the European ecosystem, even when the idea is to start to receive fund, it's mostly a discussion about government control so that government also has a role on the board seats. And it's an Austrian and European. I know this means that, it never evolves into a real VC fund. What argument can we give our politicians to say, look, it's not the right way to do that.

01:22:04:03 - 01:22:04:16

Christian Soschner

So,

01:22:04:18 - 01:22:26:22

Christian Soschner

I mean, I think you touched on something that's really, really important about the role of government. For example, in Silicon Valley. And this did not become clear to me until a couple of years ago. Again, little anecdote. I was teaching a program here at Imda with Chinese bankers. Okay, so Chinese, that means their government, very senior people, very smart people.

01:22:26:24 - 01:22:50:03

Christian Soschner

And at one point, the most senior person in the room asked me, you know, what's the role of government in Silicon Valley? And I remember I very flippantly said it has no role whatsoever. But then I after I finished the class, so am I right? And so I started looking. And for example, you cited Elon Musk without the $400 million loan from the U.S government, Tesla would not exist.

01:22:50:05 - 01:23:22:16

Christian Soschner

If you look at, SpaceX without NASA budgets, SpaceX does not exist. So the government or like the, the venture, the CIA's venture capital arm, the defense, what's it called? The Defense Innovation Unit, but they're not there to subsidize that. There is customer research partner, intellectual property. Yeah, they're there for a real role, not just say, here's $10 billion, go do something.

01:23:22:18 - 01:23:38:05

Christian Soschner

And I think that is substantially different from the way we've tended to do it in Europe. So, yes, governments should be involved, but in the right roles, if I can get a purchase order from the government, that's worth more than the government, give me the same amount of money in cash.

01:23:38:07 - 01:24:02:06

Jim Pulcrano

Can we stay with this point a little better? Because when I talk with people I know from from my community to sit in their offices and really see the entrepreneur and to their opinion is just okay. I mean, why does this make such a difference? They get 10 million when I purchase something for them, but I don't need it because it's not a product that I can kind of that I can use.

01:24:02:08 - 01:24:16:19

Jim Pulcrano

So I rather give them a loan or a grant that they can produce the product first. And if it's called, identify it. Why is this such a huge difference in the mindset of an entrepreneur?

01:24:16:21 - 01:24:35:15

Christian Soschner

Well, okay. Let me say one thing. I think that's very easy is that, you know, being able to say, I've got a customer allows you to get other customers, and it doesn't have to be the government. Let's say that, you get a Po from BMW. Now you're able to say that it doesn't matter. Maybe it's only half $1 million.

01:24:35:17 - 01:25:00:14

Christian Soschner

You've got BMW as a customer. This thing gives confidence to others to work with you. And then it's the, you know, the virtuous cycle that takes off. I think it's the same thing with governments. I mean, they should not be buying things they do not need. But I mean, right now, you know, with the militarization of Europe, this is a great opportunity for entrepreneurs.

01:25:00:16 - 01:25:24:04

Christian Soschner

I gotta be honest, I do not like the fact that we have to build up our militaries. I think it's a useless way to be spending our money. On the other hand, we do have a need, okay? We can't can't ignore it. So here is an opportunity for governments to work with entrepreneurs, rather than waiting for their own processes to take ten years to come up with the next round.

01:25:24:06 - 01:25:43:21

Christian Soschner

Earlier this year with my MBAs, we worked with a drone defense company, and it was just fascinating to see how even on the Swiss side, we're starting to get more supple and flexible as to the ability to work with small companies. I think that's only a positive thing for Europe, and hopefully we'll do more and more of that.

01:25:43:23 - 01:25:53:00

Jim Pulcrano

Yeah, I totally agree, I totally agree. And so we have unfortunately to deal with human nature. And as long as humans exist, we have a need of US Army and defense. So there are.

01:25:53:05 - 01:25:53:21

Christian Soschner

Yeah.

01:25:53:23 - 01:26:19:08

Christian Soschner

If you want to be anti cynical. So optimistic you could even look at what Trump's doing with tariffs as an opportunity for Europe. Say okay, if we can't supply all the pharmaceuticals to the United States, that because suddenly they're too expensive. Let's take care of ourselves. Let's see know antibiotics. Antibiotics are a product that normally you don't make money on, but we still need them.

01:26:19:08 - 01:26:27:24

Christian Soschner

Otherwise we all die. Let's do it ourselves. Let's not wait for somebody in the United States to figure this out.

01:26:28:01 - 01:26:41:03

Jim Pulcrano

Yeah, yeah. There's a lot of opportunity in the world right now. And we just have to grab it and use it and move it forward and take it. Do you see, do you see Silicon Valley moments in Europe.

01:26:41:05 - 01:26:43:19

Christian Soschner

How do you define Silicon Valley moments?

01:26:43:21 - 01:26:44:03

Jim Pulcrano

When

01:26:44:03 - 01:27:15:01

Jim Pulcrano

I look at Silicon Valley in the last 30 years, it's basically this, this, you mentioned you coined the term internal combustion engine. It's the engine of entrepreneurship. So it this heart or let's maybe even say heart of entrepreneurship globally. If this heart stops beating, we have a problem globally because innovation dies. And, the next round of Nvidia's apples, Alphabet's Teslas will not come to life, which means innovation slows down and they don't invest in other companies ecosystems forward.

01:27:15:01 - 01:27:20:01

Jim Pulcrano

And, a lot of instability and, taxes that we miss.

01:27:20:03 - 01:27:30:02

Jim Pulcrano

Do you see such moments that in Europe, such hearts start beating or such engines start running that could evolve into the next Silicon Valley?

01:27:30:04 - 01:27:58:17

Christian Soschner

Well, I'm always careful about your last statement evolving into Silicon Valley, because I don't think Silicon Valley can or should be copied. I think you could have bleeding hearts of entrepreneurship. Not necessarily Silicon Valley model. I mean, I'll take my my local region here, the canton of Vo in the French speaking part of Switzerland together. So we have a joint venture with the canton to help scale ups.

01:27:58:19 - 01:28:17:02

Christian Soschner

And the reason we have it is because we do have a lot of small startups. And the government said, okay, what else can we do besides giving them money? Because we try not to to help them get through the scale up phase. And that's where they asked us to create a program that would do that. And I see it around me all the time now.

01:28:17:02 - 01:28:37:22

Christian Soschner

Maybe I'm much more aware of it than other people might be, but I see more and more people who are willing to be entrepreneurs who then are willing to persist with it to get through the scale up phase, and who see this as a viable career path. Because, again, this is something that's taken a long time, but I think it was 2001 or 2002.

01:28:37:24 - 01:29:01:01

Christian Soschner

The University of Lausanne asked me if I would come in and speak to the undergraduates about entrepreneurship in Silicon Valley, etc., and I remember asking them why? Why? I mean, Silicon Valley had just crashed. And they said, it's very simple. We want them to see entrepreneurship as a valid career path. We're not telling them to kind of want to become entrepreneurs.

01:29:01:03 - 01:29:27:07

Christian Soschner

We want them to see that this is just as valid as going into banking, insurance, food, whatever and that. Yeah, and that was the early 2000, and now it's become a normal thing, perfectly normal. When one of my son's friends says that, you know, he's joined a startup. For me, that's that's wonderful, just as much as it is for somebody who says, I'm getting my law degree and I'm going to be a lawyer, and I think that's the way it should be.

01:29:27:07 - 01:29:39:02

Christian Soschner

So even within my tiny little region here, I do see a, a beating heart of entrepreneurship. And I'm sure there are many others that exist around Europe.

01:29:39:04 - 01:29:59:09

Jim Pulcrano

Yeah, a lot, a lot of moving forward in Europe in the right direction. We talked about entrepreneurship and Silicon Valley and I can imagine that a lot of young people these days take it a step further and say I don't want to become an entrepreneur. I want to skip that. I don't want to have a corporate career either.

01:29:59:11 - 01:30:11:07

Jim Pulcrano

I want to go directly into venture capital, because I feel that investing in the next round of startups is the right thing for me. What advice do you give these people?

01:30:11:09 - 01:30:39:05

Christian Soschner

Don't do it. No, seriously. Yeah. Have patience and and earn it. Join a startup first. Understand. Or if you don't want to join this or go into a venture capital firm as an analyst, start at the bottom. Just like in any of the big consulting firms, you're going to work 80 hours a week. You're never going to get to be the one who does the presentation or makes the big decisions, but you'll learn it from the bottom up.

01:30:39:07 - 01:30:57:20

Christian Soschner

You know, I don't think there's I don't believe there are any shortcuts to this. Unless you come from a rich family and you get them to subsidize your hobby. But I would much more on the side of joining a startup. This is something that I think we haven't talked about. This. This is something that I think we lack in Europe.

01:30:57:22 - 01:31:23:01

Christian Soschner

We don't have enough operators or former operators. As venture capitalist, we have far more in comparison to Silicon Valley ex bankers explaining to analyst etc. who say, well, I understand how the money side of this works, so therefore I can be a VC. But again, they they don't recognize that that's only one small portion of it. What we need are more operators, entrepreneurs, whether they're successful or not.

01:31:23:01 - 01:31:44:22

Christian Soschner

But they've been there, they've done it and they bring that to their decisions on where to invest. And we just don't have enough of those. Part of it is time and volume. But if we had more operator VCs, we would be more successful. I firmly I don't have any data to back that up. Sorry, but I firmly believe that.

01:31:44:24 - 01:32:03:04

Jim Pulcrano

Let's dive a little bit deeper into this. Even if it's without data and just experience, because this was the next question I had in mind. And, you tapped right into that. When I look at my experience with risks, I think it's really rare to see an operator on A, B, C level.

01:32:03:06 - 01:32:03:12

Christian Soschner

Yeah.

01:32:03:16 - 01:32:10:12

Jim Pulcrano

Why is this important to have someone with operational experience at the VC fund?

01:32:10:14 - 01:32:10:18

Christian Soschner

And

01:32:10:18 - 01:32:40:03

Christian Soschner

part of it is empathy. And I don't mean it's because they become best friends and love with each other, but they understand what the entrepreneur is going through. And that's something that unless you've been through it, you you can't understand it. You can you can sympathize with it. But that doesn't help very much. What you want is empathy, that you have some sense of what's going through that person's head as they try to make these tough decisions, or why they're arguing with you, or why they're doing whatever.

01:32:40:05 - 01:33:00:03

Christian Soschner

That's what number two is understanding all these tiny but millions of details and decisions that have to be made. You know, when you're sitting up on the board, you know, you meet once a quarter, once a month, and it's all these big decisions which are important. These are the door number one decisions where, you know, if we walk through this door, we can't walk back.

01:33:00:05 - 01:33:20:09

Christian Soschner

But there are hundreds of small decisions there that the entrepreneurs taking every single day and wrestling with. And I'd want my investors to be able to help me with that. And that requires an operator mindset. I mean, certainly there are people who are ex bankers who are great VCs because they understand the financial mechanics, and we need that to.

01:33:20:11 - 01:33:43:01

Christian Soschner

But it's hard for them to understand what the founder of a company is going through. And also, I think, hard for them to evaluate is this founder just a great founder or is he or she also a great company builder? Because, you know, as a as an investor, you don't make money on just a great founder. You make money on a great company builder, organization builder.

01:33:43:03 - 01:33:57:04

Christian Soschner

So unless you've been inside that, how can you evaluate this person has to he or she is going to be able to pull together a group of people, aligned them and execute perfectly. That's hard to see unless you've been there.

01:33:57:06 - 01:33:59:12

Jim Pulcrano

Why is that so hard to see?

01:33:59:14 - 01:34:01:24

Christian Soschner

You have to feel it. You have to be

01:34:02:02 - 01:34:06:02

Christian Soschner

there at midnight when you're trying to make a decision on Sunday night, and there's

01:34:06:02 - 01:34:20:08

Christian Soschner

nobody around to help you decide to see what people go with that you have to be there where you know, you've got your engineers sleeping on the floor in the conference room as you try to hit a deadline for, you know, bringing the prototype to a client meeting.

01:34:20:10 - 01:34:23:00

Christian Soschner

I mean.

01:34:23:02 - 01:34:46:08

Christian Soschner

I mean, these are things I've been through. So they're they're very they're seared into my memory that how could somebody who's only seen my company from the clean boardroom discussion ever understand how hard that is and the, the, the skill set that's required in a founder to get his team to get through those moments and to get himself through those moments.

01:34:46:10 - 01:34:59:05

Christian Soschner

Yeah. I mean, it's like an academic trying to, you know, to tell somebody who, you know, here's my two by two matrix and what you should do, it's great guidance. It doesn't help you make the final decision. Yeah.

01:34:59:07 - 01:35:24:15

Jim Pulcrano

I think this is one of the most important points. And everybody wants to invest in the next Amazon or the next and the next or the next Microsoft at the time when they start, because in retrospect, you see the huge returns to generated. And when I think back to the 90s, I mean, a lot of people started companies and Jeff Bezos did nothing special back in the 90s who started an online bookstore.

01:35:24:17 - 01:35:30:20

Jim Pulcrano

And he was not the only one. Definitely there were online bookstores in Europe and in Austria.

01:35:30:22 - 01:35:48:22

Jim Pulcrano

And the question I it was like back then, but my big question I guess was what makes the difference between a Jeff Bezos who built Amazon and the guy who started like but failed out of Austria. But what was the difference in personality.

01:35:48:23 - 01:36:18:08

Christian Soschner

Oh something. One part of it is something we've already said is, look, you know, this is having the right luck or Bill gates having his mother talked to the people at IBM because she happened to be on their board. I mean, there's no I mean, that's why when I, when I meet people who have tried and failed, I would never look down on that because, you know, if they'd just gotten the right timing, the right moment, you know, things that are out of their control, they could have been Jeff Bezos.

01:36:18:10 - 01:36:41:12

Christian Soschner

Jeff Bezos may have been some guy that we never, ever heard of before. Again. I think that can't be underestimate. But then you add on top of it the persistence, the willingness to just keep at it. You know, I have to change. I have to do this. I have to fire half my team and bring in somebody else because we've just pivoted, you know, those kind of that kind of persistence and courage.

01:36:41:14 - 01:36:44:06

Christian Soschner

Not all of us have it.

01:36:44:08 - 01:36:50:12

Jim Pulcrano

And you can only evaluate it and see it when you have lived through it at the end of the day and experience.

01:36:50:14 - 01:36:51:01

Christian Soschner

Yeah. In

01:36:51:03 - 01:37:14:24

Christian Soschner

my opinion, yes. Maybe if you've been a VC for ten, 20 years, you, you've seen enough that you start to understand it. But again it goes back to learning by doing. How are you going to be a great VC unless you've had the chance to see an entrepreneur fall apart or see one that was maybe not the best, but succeeds and then start to understand, okay, what are the things below?

01:37:14:24 - 01:37:23:03

Christian Soschner

Is it just pure luck or is it something else? But you need to have those that raw material in order to learn from it.

01:37:23:05 - 01:37:23:13

Jim Pulcrano

Yeah. I also

01:37:23:14 - 01:37:44:04

Jim Pulcrano

think we need more respect for operators. And in Europe, when if value were speaking, you was just trying to come up with a big VC fund that came from a European like mindset in the United States with, bankers only, or the children of rich families, at the end of the day, inheriting the wealth.

01:37:44:04 - 01:38:01:07

Jim Pulcrano

And then the 25 year old girl or boy sits on boards of the next round of startups because, her family brings in 100 million in that fund. Yep. When you think to the US funds, market interest and Ben Horowitz operators.

01:38:01:09 - 01:38:01:15

Christian Soschner

Yep.

01:38:01:18 - 01:38:13:10

Jim Pulcrano

Of course, all the paper guys that started funds later on, Peter Thiel operator operators. I think there is more respect in the United States for operators than we have in Europe.

01:38:13:12 - 01:38:15:01

Christian Soschner

Yes.

01:38:15:03 - 01:38:42:04

Christian Soschner

Yeah. It's interesting. I get I'm sitting in Switzerland where banking is like the ultimate profession you can have here. Still. I'm sure I'm going to anger some people, but I've not met very many bankers who actually understand business. And I don't mean they don't understand how a bank works. They do far better than ever I could, but the actual I build, I sell, I make a profit, I build a team.

01:38:42:06 - 01:38:51:13

Christian Soschner

There's not many and they don't need to understand it in their role. So that's where the problem occurs is when they step into a VC role, then they do need to understand it.

01:38:51:15 - 01:38:55:10

Christian Soschner

If you've never built something from scratch, how would you understand that?

01:38:55:12 - 01:39:06:20

Jim Pulcrano

Yeah, the evaluation process is different. When I look at, public companies, you usually have a stable environment around this company, and you make investment decisions based on existing assets.

01:39:06:22 - 01:39:09:08

Christian Soschner

Machines, tourist data. You got lots

01:39:09:08 - 01:39:27:08

Christian Soschner

of history. It's really easy to kind of draw a trajectory, lie and say, okay, this and this and this adds up to that. With a startup, you have none of that. You're talking to a human being who's got a great idea or has an idea, and he's got the energy, the desire, etc. those are things that we can't quantify.

01:39:27:08 - 01:39:29:08

Christian Soschner

So it is difficult.

01:39:29:10 - 01:39:51:10

Jim Pulcrano

So one path to set is luck, but the other parts are how does this person deal with people? How does this person motivate people to move through a very difficult situation? How does that person deal with people close to bankruptcy? Can this person be positive when everyone else of and everything around them is falling apart? And this comes from experience?

01:39:51:12 - 01:39:54:04

Jim Pulcrano

Yeah, not so much from books.

01:39:54:06 - 01:40:08:17

Christian Soschner

No. And you know, I've never met a single successful entrepreneur who hasn't had the experience of being three weeks from running completely out of money and not being able to pay his staff, and sometimes several times. And yet they keep the people

01:40:08:17 - 01:40:15:23

Christian Soschner

motivated and they get through it, they find the money, whatever. That's just part of the that's part of the deal.

01:40:16:00 - 01:40:26:21

Christian Soschner

Don't do this unless you're willing to go through that. And not paying yourself and trying to explain that to your spouse, that's, that's part of the life.

01:40:26:23 - 01:40:38:10

Jim Pulcrano

So it's pretty much final piece. When they evaluate the fund, it means talk a little bit with the fund managers about their experience, because it increases simply the stakes of, the odds of success. Yes, for them.

01:40:38:12 - 01:40:39:20

Christian Soschner

Very much so.

01:40:39:22 - 01:40:47:03

Jim Pulcrano

That is great. When we, we are. Time flies when you have fun. I really enjoyed this conversation with you, but I see that we are ten minutes.

01:40:47:09 - 01:40:48:00

Christian Soschner

Yes.

01:40:48:02 - 01:41:06:08

Jim Pulcrano

Come close to the end. Have two sections open, if you don't mind. Future outlook and a little bit talking about IMT. What's your all time TS and what's the future of IMT looks like and what IMT can do for entrepreneurs and VCs and LPs?

01:41:06:10 - 01:41:06:20

Christian Soschner

Okay,

01:41:06:20 - 01:41:31:14

Christian Soschner

so I've got several roles at IMT that involve entrepreneurship in addition to the work I do with corporations. One is I run IMT startup competition, where I look for 20 to 30 Swiss startups to work with our MBAs and MBA every year. So free help to these startups to try and accelerate them. Number two, I run the scale up program that we run with the canton.

01:41:31:16 - 01:41:51:23

Christian Soschner

Where we're trying to help these companies go from being, you know, a small startup that's raised $1 million, got first companies to get through to the next stage, which is really a leadership program more than anything. Is am I the right person to take us to that next stage? Do I want to go through that next stage?

01:41:52:00 - 01:42:20:23

Christian Soschner

We do try to give them lots of content, but we're also just trying to help them look at themselves and say, am I the right person? Do I want to do this and build up a network of people like them so they have somebody to call on? And then the third programmatic thing we do is the venture capital asset management program became we call it where over four days we're trying to help people understand really how venture capital works from the point of view of the nuts and bolts of it to how to pension funds.

01:42:20:23 - 01:42:42:05

Christian Soschner

Look at, venture capital as an asset class to how do we make decisions on exits, how do we make decisions on valuation and then pull all that together into a two day simulation, hands on living through the life of a ten year fund and doing it competitively with other teams in the room where you never have enough information.

01:42:42:07 - 01:43:05:07

Christian Soschner

Time is short, everybody is very stressed, and somehow you have to be the one that comes up with two unicorns, a dragon, whatever. So it's both picking the startups, picking the LPs, but then also managing the fund. It's really it's fun to do. So those are the three key things that we do as far as entrepreneurship and venture capital that I'm d.

01:43:05:09 - 01:43:26:00

Jim Pulcrano

There are two questions. Let's start with the first one, leadership development for entrepreneurs from startup to scale up. Why is this so important for entrepreneurs to look more inwards about, towards their personality and wishes and to want in the future and not just, a theoretical program, how you.

01:43:26:00 - 01:43:27:13

Christian Soschner

Can scale up? I mean, let's,

01:43:27:17 - 01:43:48:18

Christian Soschner

let's think about the typical tech startup. Somebody finishes their PhD, they've got an amazing thing in their dissertation and decide to turn it into a product. If they can't pull a team together around that and align them and get them to believe in the vision and get motivated, there will never be a startup, much less a successful startup.

01:43:48:24 - 01:44:11:18

Christian Soschner

So there's so much of it is less about your technical ability. I mean, in a sense, you've already proven that maybe there's still a lot of technical work to be done, but until you can align people and get them to move forward in kind of a single view of what our vision is, you can't be successful. And that's about leadership, about understanding yourself, understanding how other people see you and motivating them.

01:44:11:20 - 01:44:17:18

Christian Soschner

So for me, that's why leadership is such a key part of anything we do in entrepreneurship here.

01:44:17:20 - 01:44:22:07

Jim Pulcrano

And, that's it. Why does it change from startup to scale up based as a whole?

01:44:22:07 - 01:44:23:03

Christian Soschner

Because it gets.

01:44:23:05 - 01:44:41:18

Christian Soschner

Yeah, because it gets much more complex. You know, think about it at the beginning, it's you and three others, you know, you're sitting in the same room. You understand it. Maybe you have one customer now suddenly you've got four customers, five customers, six customers. They're more complex. They make more demands on you. Now you start getting departments in your organization.

01:44:41:18 - 01:45:07:01

Christian Soschner

You don't know everybody in the team by first name, their birthdates, etc. it becomes harder to do. And yet as we rise up psychologically, we get more worried about dropping down below. So we get even more. You know, we push ourselves even harder because when you're at the beginning, you have nothing to lose. When we get to the scale upstairs now, we've got something to lose and we don't want to lose.

01:45:07:01 - 01:45:14:08

Christian Soschner

So we push ourselves harder, we push everybody else harder. And that requires a whole nother level of leadership.

01:45:14:10 - 01:45:19:01

Jim Pulcrano

What are the three most important leadership lessons for scale ups?

01:45:19:03 - 01:45:19:11

Christian Soschner

Know

01:45:19:11 - 01:45:45:18

Christian Soschner

yourself. Have empathy for the people around you. And again, I'll emphasize that it's not about liking people or having you sympathy, but understanding them and then being willing to let go. Because at a certain point you are the bottleneck. You say oh why isn't our company growing fast enough. Probably because you're taking every decision. Now I know there's this fad right now by owner, you know, founder mode and I believe in it.

01:45:45:20 - 01:46:02:23

Christian Soschner

But to a limit, if you're going to grow, you do need to let great people make great decisions. And probably they know more about the decision than you do because they're closer to the customer, they're closer to the technology. Let them do it, but make sure they have an understanding of where you want to go.

01:46:03:00 - 01:46:23:21

Jim Pulcrano

That's great. While you were speaking in presenting the IMT programs about venture capital, I was thinking, wait a minute, didn't Jim just tell me before that we see cannot be taught. You need to practice it. And then you just that I was I was switching off already. Then you said we role play with the people.

01:46:23:23 - 01:46:24:22

Christian Soschner

Exactly. So that's why

01:46:24:22 - 01:46:45:17

Christian Soschner

we bring in the simulation. Yeah. When we first did it we didn't have that. And it was good but not good enough. And we run the simulation and now I see a completely different outcome on it. People are both excited, they're confident, but also they understand, okay. Taking those slides and turning it into a successful fund is really hard.

01:46:45:19 - 01:46:56:01

Christian Soschner

So I'm now very comfortable with the idea that you can learn, but you learn by doing, and we can help you do it in a program.

01:46:56:03 - 01:47:05:21

Jim Pulcrano

Does that make such a difference? Theoretical knowledge compared to the simulation phase is this you saw both sides.

01:47:06:00 - 01:47:07:02

Christian Soschner

The outcome. You

01:47:07:02 - 01:47:24:02

Christian Soschner

need some kind of framework before you could do. I mean I guess you could just blindly go in there and say, okay, let me see what happens if I do this. But when you've got some frameworks and you've already heard from some experts on how they've done it, then you can apply it. And then you say, I did this, it worked or I did this.

01:47:24:02 - 01:47:41:05

Christian Soschner

It didn't work. I learn from that. And you do it rapidly so that you go through at least three, 4 or 5, six, seven learning loops during the program itself. And then hopefully by Sunday night you're both exhausted. But you've got so much learning. I

01:47:41:07 - 01:47:42:14

Christian Soschner

think that's how it works.

01:47:42:16 - 01:47:45:01

Jim Pulcrano

And you put a whole fund life into a simulation.

01:47:45:04 - 01:47:46:04

Christian Soschner

Yes.

01:47:46:06 - 01:47:56:05

Jim Pulcrano

So that when people run through the simulation they have to make, they have to raise capital, they have from Alps, they have to invest in startups or scale ups.

01:47:56:07 - 01:47:57:09

Christian Soschner

Yep.

01:47:57:11 - 01:48:04:20

Jim Pulcrano

And they have to make decisions what to drop, what to let go. We have to double down and also promoted to our offices.

01:48:04:22 - 01:48:27:15

Christian Soschner

Right. And yeah, maybe do alliances with a VC with another fund. Then all of these I mean all of this was developed by a friend of mine, Chris Wrangham, in Norway. And it just works beautifully. You know, it's it's it's a simulation, but so real that you see people get into it. They forget that this is a classroom.

01:48:27:17 - 01:48:48:18

Jim Pulcrano

Yeah. Games. Games have, tremendous occasional value already sold in the 80s with the with the business simulations and chess can put people through an experience and they make decisions differently. Then at the end of the day, that's that started last minutes future. Future. Where do you see the future of venture capital in Europe?

01:48:48:20 - 01:49:29:01

Christian Soschner

Well, I think I hope it's going to become more like the United States, but with a European touch in a sense of more operators making decisions or more non operators understanding the value of the operators. So maybe lowering the hubris a little bit, you know, have a little bit more humility in the way they work with entrepreneurs. I hope with what's going on right now that European entrepreneurs see that we can do great things here, you know, and I hope that the bureaucrats in Brussels, in their own national governments, understand that they have a role to play in breaking down some of the barriers so that entrepreneurs can make Europe great again.

01:49:29:04 - 01:49:31:04

Christian Soschner

How's that?

01:49:31:06 - 01:49:34:05

Jim Pulcrano

Yeah. I don't know if all of our politicians selected slogans.

01:49:34:10 - 01:49:36:12

Christian Soschner

I know, but I can't, you know.

01:49:36:14 - 01:50:07:11

Jim Pulcrano

Yeah, absolutely, absolutely. When you look at Europe, let's just assume let's take I think I think fair is a politically safe. So we can use a very example. Let's assume a ferry comes to you tonight and says, Jim, you can change three things in Europe to produce a better outcomes for entrepreneurs. And we see in ten years, which three things would you change right now.

01:50:07:13 - 01:50:29:24

Christian Soschner

So one would be what we've talked about is, you know, breaking down some of the regulatory barriers in every industry that allows us to work across borders more seamlessly. It doesn't have to be drastic to some small things. Secondly, the same thing on the financial side that, you know, we have we should have a European financial community, not 27 different financial communities.

01:50:30:01 - 01:50:47:14

Christian Soschner

And then third, the movement of people, you know, we're putting up more and more borders, barriers to people moving around. Entrepreneurs should not have to worry about these things. They should be able to get the best talent they need from wherever it is. I mean, that's always been the secret of Silicon Valley's success attracting the best people in the world.

01:50:47:16 - 01:50:49:22

Christian Soschner

We should be able to do that here as well.

01:50:49:24 - 01:51:12:19

Jim Pulcrano

Yeah, I don't like respect to the last point. It's so hard to get people into Europe on a legal way for work paying taxes, and this should be much easier. Yeah, Jim, I had so much fun in this conversation with you. I really enjoyed every single second. How can people reach you best if they have follow all questions?

01:51:12:21 - 01:51:27:23

Christian Soschner

They I mean, if you put in the show notes, put my email address, I'm happy to have them contact me there. Okay. That's I mean, people contact me often through LinkedIn. I'm more likely to respond to email than LinkedIn. So that's by far the best way to reach me.

01:51:28:00 - 01:51:49:18

Jim Pulcrano

Okay. If you don't mind, then I use the email address and put it in the description of the podcast so that people can directly reach out to you with their questions and one of your programs. And Jim, keep up your great work. Keep up motivating people to become entrepreneurs, become venture capitalists, and motivate also our politicians to change the regulations.

01:51:49:20 - 01:51:50:12

Christian Soschner

Yes.

01:51:50:14 - 01:51:55:08

Jim Pulcrano

Yes, Jim, thank you very much. Have a great afternoon and I'll talk to you soon.

01:51:55:10 - 01:51:58:00

Christian Soschner

Okay. Thank you. Bye bye.

01:51:58:04 - 01:52:15:03

Christian Soschner

If there is one single thread running for this entire conversation, it is this. Great companies are not built by spreadsheets. They are built by people who have been tested when nothing was clean, certain or safe.

01:52:15:05 - 01:52:48:20

Christian Soschner

Jim reminded me that like matters, of course, but only to those prepared to endure uncertainty. That venture capital is not about spouting perfect ideas, but about backing founders who can survive the nights. Nobody sees. And that leadership, whether in start ups or scale ups, is not learned in theory. It's forged only under real pressure. And that's what this podcast, Beginner's Mind, is all about.

01:52:48:22 - 01:52:57:11

Christian Soschner

Not hype, not shortcuts, but understanding how real decisions are made when the stakes are real and extraordinarily high.

01:52:57:13 - 01:53:20:23

Christian Soschner

If this conversation challenges how you think about entrepreneurship, investing, or leadership, then please take 10s now. Follow the show wherever you listen to it. Share this episode with someone who's building something hard and come back for the next conversation, because we will keep exploring how progress actually happens behind the scenes.

01:53:21:00 - 01:53:21:22

Christian Soschner

Until next time.