The Entrepreneurs for Impact Podcast: Transcripts
$3B of VC Lessons to Share with Climate Tech – Brad Feld, Cofounder of Foundry
PODCAST INTRODUCTION
Chris Wedding:
My guest today is Brad Feld. Brad, who some of you may already know, has been an early-stage investor and an entrepreneur since 1987. He's the Co-founder of Foundry, Mobius Ventures, Intensity Ventures. The author of eight books and the Co-founder of Techstars, a leading startup accelerator that has accepted almost 3,000 companies into its programs with a combined market capitalization of $70 billion or more. I'm sure those numbers just keep growing.
02:18
In this episode, we talked about his investments into climate tech VC funds, such as USV, Moxxie Ventures and Lowercarbon. His direct investments into climate tech companies. The importance of being obsessed with your startup's mission. Where capital is and is not available today for climate startups. Lessons learned from the tech industry, the general tech industry that is. Mental health and maintaining balance through it all. Advice he'd give his younger self, book recommendations and a whole lot more. Hope you enjoy it and hey, give Brad a shout-out on LinkedIn or Twitter by sharing this podcast with your people. Thanks, y'all.
PODCAST INTERVIEW
Chris Wedding:
Brad Feld, Co-founder of Techstars and Partner at Foundry, awesome to welcome you to the podcast.
Brad Feld:
Chris, it's a delight to be hanging with you virtually.
Chris Wedding:
Hear, hear. I was joking, I'm glad the tech actually worked for this to happen. The battery died, the home slash office Wi-Fi died and now I'm in my 16-year-old son's bedroom recording this. If only he knew what was happening right now.
Brad Feld:
I had no comment.
Chris Wedding:
Yeah, totally. All right, so what I normally start with is the elevator pitch for let's say in your case as an investor, the fund. Of course, you have many more things than just Partner at Foundry and Co-founder of Techstars, written seven books, some other things. How would you describe who you are to listeners who may or may not be yet familiar with your work, Brad?
Brad Feld:
Sure, I've been an investor for a long time now, but I came to it by being an entrepreneur. I started a company. I sold it to a public company. This is in the 1990s. I then did a bunch of angel investments and ended up then becoming a venture investor, but along the way, I started some other companies. The most recent company that I co-founded, which now is a long time ago, was Techstars, which we started in 2006. But at this stage of life and work, I've been investing as a VC for 27 years, I guess, would be the formal thing. I was doing the math in my head. I mean, almost 30 years now, which makes me feel old.
04:39
Chris Wedding:
No, not at all.
Brad Feld:
But I've also been for many years, going back to the late 90s, in LP and other venture funds. Personally, I enjoy basically being in the middle of helping founders be successful. Ultimately, the way that translates as an investor, either being an early-stage investor who gets actively engaged in the company, he’s not a control investor, not trying to own a majority of the company, but I have a simple motto, which is as long as I support the CEO, I work for her. And if I don't support the CEO, it's my job to do something about it, which is not fire her, but try to get back to a place where I support her.
With the universe of venture funds that I'm an LP in, having now been a VC for a very long time, I like to think that I can be helpful, especially to first time GPs or GPs that are building and scaling their firms. Not necessarily knowing what the right answer to things are, but just having experiences that I can share and be an easy resource for people to talk to.
Chris Wedding:
Well, certainly investing for 27, almost 30 years in both funds and companies gives you the right or the ability to be helpful. It's also not lost on the listeners that you said, “Look, as long as I support her,” the CEO, her, we're getting there, but far from that being as normal as it should be. I also want to level set for listeners.
So, for our listeners who are pretty purely focused on climate tech and sustainability type startups and investing, they may or may not know about your work over these three decades, but across that portfolio work, very well known in the venture space broadly, less activity so far, but more to come in the climate space. So, I think one benefit of our conversation today is, hey, what did I learn from outside climate tech to bring to climate tech?
Because look, climate tech is not really a sector. It's a lens or a horizontal application across all sorts of sectors or business models. And boy, the companies you back or the pitches times a thousand, you've seen all the business models out there. Well, gosh, how many of those should be or should not be relevant to climate tech? I think as listeners hang on with us here, that's a cool perspective we rarely have on the show.
Brad Feld:
Yeah, and hopefully that'll be additive and helpful. Just for precision, we have a handful of investments that founders make directly in climate tech. The two that probably some people may know are Running Tied and Sofar, but we're LPs in a bunch of funds that have a climate tech focus. Most notable ones are probably Union Square Ventures climate fund, Chris Sacca’s Lowercarbon funds. A few of the funds that we are investors in that are more broad-based also have some climate focus like Moxxie.
07:43
Then Techstars had a relationship for a number of years with The Nature Conservancy. My wife, Amy Batchelor, is on the global board and the two of us worked with The Nature Conservancy and with Techstars to put together a program that was called the Techstars Sustainability Accelerator. Of the 30 or so companies, we funded through that over a couple of years probably a quarter or more climate related.
Then the last, which is an interesting history lesson that a lot of people have forgotten, or maybe they never experienced was, while it wasn't called climate tech, in the 2005 to 2008 timeframe, there was this huge focus on cleantech from the venture community that was largely a debacle. I mean, there were some amazing companies that did come out of it and some very significant successes that eventually emerged.
Tesla is probably the one that people point to the most in terms of just the impact on the world and building a very large company, but through that period of time, there were many, many companies that were funded with the idea that that was going to be the next wave of innovation. And like so many things in innovation, there's some element of too early.
There was a dependency cycle in that time period on both government funding to support the companies or larger companies and the engagement with those larger companies in the ecosystem, which either helped or hurt. Then the scaling up of capital needed for many of those companies far outreached the supply of capital that was available as those companies tried to scale. So, there's a lot of interesting lessons from it, which I would say so far some of them have been applied to this cycle of climate investing with the new climate bill yesterday or whenever it happened, the other day that the US government just passed.
I just saw an article this morning about the new boom in climate innovation because the government's going to dump a gazillion dollars into all this stuff and we'll see. It could be helpful or it could be hurtful, but there's no question that there's a lot of energy and activity around it in 2022 against the backdrop, frankly, of a lot of dislocation in other parts of the tech sector.
Chris Wedding:
You mentioned in there that in cleantech 1.0 versus let's call it climate tech or really cleantech 2.0 almost, that lots of companies got funded, but as they grew, there was not the amount of capital at those other stages in the life cycle of a company. I think as we reflect on where the capital is or is not today in climate tech, my read, but I'm curious to get your perspective would be lots of capital in the earlier stages, far less capital in the growth stages.
Then once you go from VC to project finance, the FOAK, first-of-a-kind financing, very, very little for great reasons. Once the tech has matured, boy, there's just gobs and gobs of capital ready to scale things like storage or EV. How do you see the landscape, Brad, of capital availability or lack thereof at the different stages of your companies that are growing?
Brad Feld:
Well, I think it's a really good way to describe it. One of the interesting challenges, and I think it's a continual challenge that's important to process, is this idea that different types of capitals needed for different stages of things. So, if you use project finance as an example, venture capital is really bad for that stuff.
11:25
Chris Wedding:
Terrible.
Brad Feld:
It is and that was one of the reasons I think so much of the first iteration of cleantech stuff didn't work is because it was project finance based. The capital required and then the return on that capital just was not compelling. At the other end of the spectrum, right now, there is a ton of early-stage capital, whereas even three or four years ago, there wasn't that much.
I think, part of the reason you've seen so many existing platforms like USV that have a dedicated partner or partners who are motivated right now in terms of their investing activity to be around climate at that early stage. That middle part, which you describe as a harder part, I think that's shifting and I think it's shifting for a couple of reasons.
One is, you've got a number of investors who are lifecycle investors who are used to raising money at those mid and later stages and being part of those financings and are used to that. You just have to have enough at the early stage to be able to then have enough that gets to that stage where now you have a supply demand feedback loop that works.
If you go back far enough in tech, you had the same problem. There was a lot of early-stage investment, but as you got later in the life of the company, until you became a clearly successful company, the financing was hard. You might have, it's called product market fit, but you hadn't really scaled the business yet. There was some point in time, a while ago, where all of a sudden that type of capital started to really emerge in an institutional way for software, hardware type businesses. I think that's happening now in and around climate tech and it'll be interesting to see how it plays out.
There was this massive overfunding at the late stage in traditional tech over the last couple of years in the private markets as evidenced by the collapse in the public markets eventually rolls through to the private markets. It has a delay. I'm not going to be a predictor. I'm not interested in prognosticating about what's going to happen, but if history is a guide, 2023 for tech in the private markets will be harder than 2022. The second half of 2022 is going to be harder than the first half of 2022, which is really the point at which all the public market stuff collapsed.
However, there is still, even with everything that just happened, an enormous amount of capital, especially at mid and later stages looking for risk and looking for a return based on more risk. I think the timing for climate-related investing is quite good because, if you just had your head handed to you as a mid-stage to late-stage investor in traditional tech because you're in a way overpaying for everything, and then things didn't work and blah, blah, blah, blah, whatever it is, well, you still have the capital.
And if all of a sudden you're seeing this wave of new innovation in an area that is climate tech, if you're a climate denier, it's not going to be compelling to you. But if you're somebody who thinks that there are issues and that as a society, we need to do something with it, and you have a lot of capital seeking return and you're looking for more risk, all of a sudden that zone where you're no longer at the inception stage, the seed Series A stage, but you're also not at the company's public, I think there's going to be an increasing amount of real capital there for these types of companies. That’s the zone that needs to mature, but I think the winds of change are blowing in the right direction for lack of a better cliche.
15:06
Chris Wedding:
Yeah. Depending on which side of the table you sit on, that wind is totally messing up your hair or it's like winning your sales baby. Right?
Brad Feld:
Yeah, there you go.
Chris Wedding:
It’s not the same kind of wind for sure. Well, correct me. It sounds like part of what I hear is tech investors are saying, “Oh shit, some of those things didn't work out. Let's take some of this capital and put it in climate tech as it matures at more reasonable evaluations now.” Does that suggest that most of the capital flowing into climate tech companies will continue to be generalist investors, not thematic climate only funds?
Brad Feld:
I think the starting point is climate is at the early stages, so you've got a bunch of climate focused funds at the early stages. It'll be a blend at the mid stages because I think that as the climate related companies raise more money, the investors themselves that are in that area start to focus on making sure they have bigger pools of capital for later stages and there's already examples of it.
I mean, Lowercarbon or Chris's fund, he raised early-stage funds, but he also raised some growth funds. His investors who are investing in him and the team that he's built are believers that they see something and they're moving towards something in a real way. I just give as one example. So, I think it's both. I don't think it's A or B.
In addition, I think climate as a category is taking on a pretty broad set of subcategories or themes, ranging at one end as hardware companies and at the other end as purely financial activities like monetizing carbon sequestration activity and everything in between. So, you're going to get people from different places that are paying attention to those types of investing.
And so, an example would be, I know of a couple of companies like this. I'm not big fans of them, so this is not me being super excited about it, but there are a handful of companies that are in climate at the intersection of something to do with climate transaction activity and crypto. They’re really crypto companies, but with a climate focus, so they’re climate companies that decided to create some sort of crypto coin ecosystem.
When I say I'm not a fan, it's my own biases rather than whether I think it's a good or a bad thing, but that's going to get different types of mid-stage investors who might be financial investors or might be crypto investors who might not otherwise have necessarily focused it. There's a great book that probably a bunch of people listening have read by Kim Stanley Robinson called Ministry for the Future.
Chris Wedding:
I've read it. Yeah.
Brad Feld:
The whole second half of the book is on changing the global economic system by using a climate coin, and the coordination with central banks and complete disruption of the existing incentive system for carbon sequestration and people that were extractors and that sort of thing. So, I think there’s a lot of stuff like that.
18:19
By the way, I think the global communication via the internet or whatever we want to label it today is accelerating that activity versus in the 2005, six, seven timeframe where the internet existed, but the content on the internet and the usage of it for communication and coordination between people and different projects wasn't nearly as prevalent.
Chris Wedding:
One question later in these podcasts is for book recommendations and there was a period of time during the show where it seemed like three out of the six guests were recommending that book.
Brad Feld:
Ministry for the Future?
Chris Wedding:
That's right.
Brad Feld:
Well, here's the other one. Hopefully a bunch of people recommended was Termination Shock.
Chris Wedding:
I've not read that one.
Brad Feld:
Termination Shock was Neal Stephenson's book, most recent one. It's outstanding. Then there's another really good book that's not so much climate related, but has some climate elements to it that I just read called the Immortal King Rao, R-A-O. It's also an entrepreneurial tale at some level. There’s a bunch of other writers. I mean, Eliot Peper, who's a really good friend of mine, he's not super well known, but he's becoming more well known. He wrote a book called Veil that has some great geo engineering, bio engineering stuff in it.
I think as the theme becomes more embedded within science fiction, that actually is a positive feedback loop for people, because if you're seeing something more in science fiction that's near term, science fiction projecting out five, 10 years in the future, it usually means that there's more energy around it.
Chris Wedding:
Well, I think also seeing is believing and we can't see those things described in the books. But boy, if you're a great writer, you can make things feel a lot more damn real than those of us who are not creative writers and science fiction writers.
Brad Feld:
You also allow us to suspend disbelief. We can have the completely dystopian cataclysmic future upon us without having to live it by reading it, and we can also read ways out of the completely cataclysmic dystopian future well before those things have happened, which gives us ideas or reinforcement around things to try, whether they actually work or not.
Most entrepreneurs and most innovation, even though it's not science fiction, it's coming from a premise of something that's going to have some kind of transformative impact in the future. In this particular category, the transformative impacts are less about, I have an app that gets my food delivered to me faster or helps me run my enterprise better and much more about something that fundamentally changes the way as a species we inhabit this planet, which is pretty cool.
21:23
Chris Wedding:
Yeah. Well, it reminds me of, well, you live this, but as an early-stage investor, you're not investing for the TAM now, you're investing for the TAM in five years as this technology finds product market fit as it scales. I think the other interesting thing about science fiction writers is the anecdotes that I hear about, say large corporates, let's say hiring science fiction writers who say, “Hey, help us imagine the future so we can create products and services around that.” It's like these folks, they're not pure entertainment. They're seeing things we can't see just yet.
Brad Feld:
Yeah, it's interesting too. Maybe it's my bias again on that. I think large companies that try to do that generally are completely ineffective at capitalizing on it, but I think entrepreneurs who put energy into that often capitalize very substantially. I think the reason large companies can't capitalize on it or generally don't is because it is intellectually stimulating, but it's never really taken and incorporated as a strategic imperative of the business. There are probably exceptions to that, so it's not an absolute statement.
I know the number of times where I've heard about a large company that hired so-and-so and now has a special mission on such-and-such. I can almost imagine the meetings that are now slowing down things and how everything feels like an episode of 30 Rock versus the four or five founder entrepreneurs at a company that are all obsessed with a particular book or a writer or thematic focus. It's fueling their creativity rather than trying to remove it from somebody else.
Chris Wedding:
Yeah. Let's go to, again, this translation you're able to do from lots of non-climate tech investment activity to where we are today with climate tech. You have seen lots of great CEOs. You've seen CEOs less great and you've seen those that have learned from mistakes to become, remain maybe great CEOs. Are there a couple of lessons you might mention to those listening as founders in the climate tech space potholes to avoid that you've seen time and time again?
Brad Feld:
I'll use something that might be a Brad cliche, but I think the best founders are obsessed about what they're doing versus passionate about what they're doing. I think passion is really easy to fake, especially if you're an extrovert, very hard to fake. If you're an introvert, then I think you can be at any end of the spectrum as a founder and be very successful. So, I like to focus on obsession.
There's a lot of unhealthy elements of obsessive personalities, but there's some very powerful ones as well. For me, the way I translate it to entrepreneurs is asking the question, were you put on planet earth to work on this problem? If you were put on planet earth to work on this problem, then you can be obsessed about it and if you're not, you can't be. So, I think entrepreneurs who are looking for a problem to build a business around, but they don't have obsession around it, that's a very, very difficult and problematic thing.
24:54
I'd also say, especially for entrepreneurs who are climate focused, that want to do good for the planet or whatever, pick your phraseology that doesn't sound as cliche as what I just said, I think it's even more important that the thing you choose to work on, you're obsessed about. Because the amount of domain knowledge you need to have and the changing exogenous factors, whether they're the things that are happening that are impacting the area you're playing with, or the change in the way government prioritizes.
I mean, think about the difference between the Trump administration, the Biden administration in terms of their own priorities around this sort of thing, those things, you have to transcend that. You have to be willing to work on this problem independent of what's happening, and recognize that that's going to shift. By the way, generic feedback. This is a category.
Another pothole, especially in categories that aren't particularly well defined, I think a lot of times entrepreneurs and investors get sucked into a hype cycle. Very classic in the tech world, a Gartner hype cycle. If people don't know it [inaudible – 00:26:07] Gartner, G-A-R-T-N-E-R hype cycle. What it is, and you see it over and over again, is people get very enthusiastic about a particular category or thing. Evaluations go up like crazy, so you have this big upward slope, tons of funding goes into the area. Then you hit this peak, and then it collapses and you have a trough and I think it's called the trough of despair or something like that.
Chris Wedding:
I think it is. Yeah.
Brad Feld:
It goes below where it was before. Like everybody's all of a sudden, “Well, this is all bullshit. It doesn't work. Nothing's going to work,” but that's not right. It's making progress, you just have the wrong curve, so then it starts trending back up. The less clear the business model or go-to-market or the monetization dynamics or the productization of something or who's going to actually pay for the thing in the end, the less clear that is, often the higher the hype part of the curve is and the lower the backlash of the trough of despair.
And so, as an entrepreneur, the pitfall would be being seduced by the hype cycle. If you're obsessed about it, you're going to be working on it well past the trough of despair. But if you're seduced to something by the hype cycle and not obsessed about it, you're going to be disappointed at some point in the not-too-distant future when it's out of favor.
Recent examples in tech of this, I couldn't give you climate examples, but in traditional tech, AR and VR, virtual reality is a great example where my own view is that virtual reality is compelling for games and not compelling for much of anything else, except maybe training. There was a period of time where VR was going to be used for everything and we were going to get rid of all our computers and we were just going to strap these things on your faces all day long. You're going to lay in [inaudible – 00:28:01]. We're comfortable and we're going to get fed intravenously and we'll have a thing snaked into us to take out all the waste.
It’s a good dystopian science fiction future, but it's complete nonsense, that's not going to happen and yet, I don't know the number, five, $10 billion, $20 billion gets thrown at all kinds of VR stuff that's speculative, content, games, technology, product. Today, seven, eight years later, it's interesting for video games. There's a couple of applications that are interesting. Not surprisingly, a lot of the challenges of the technology have now become anchored in a couple of companies and the next iteration of what people come out with, like what Apple's rumored to come out with soon-ish or someday with VR glasses, who knows?
28:59
It’s a thing, but it's not the thing at the level that people thought it was a thing two years ago and then on this continuation curve. It takes much more staying power to build real businesses and real value. In this category, five years ago, there were no VCs that made dedicated climate investing. Now, probably, I don't know the number, but 15, 20. There’s lots of people who are talking about raising pools of capital for climate and all good, but that balance is always going to be someone out of balance.
Chris Wedding:
Yeah, I've got a bunch of thoughts here on what you just said. On the virtual reality, you're right, there are some use cases for sure, but it'd be nice if we all enjoyed reality. Let's figure out how to enjoy reality sometimes.
Brad Feld:
This is an interesting backlash. I mean, when COVID hit, as a species, we spent two years not having enjoyment of reality and for somebody like me who likes to be alone and is happy to interact with people through a screen, and if there's more than four people sitting at a table, it's too many people for me, the current state that we're in or emerging from is very compelling.
I’ve got a long list of friends who can't stand the idea that they can't go to a live concert and now they do, and can't stand the idea that they're not traveling to Europe. I mean, I don't know how many people traveled in the US to Europe this summer instead of buying shit for their house. They've been buying shit for the house for the last two years because they couldn't travel to Europe. So, you have disposable income and you buy a new couch, you redo your room, you buy a Peloton, you do this, you buy your kids that. Oh shit, you know what, let's go on a vacation to Europe this summer instead of buying all that shit that we don't really need.
Chris Wedding:
Yeah, I hear that. On the obsession part, obsession versus passion, I like the difference you're drawing there. It reminds me a little bit of the Ashoka Fellows program, which you may or may not be familiar with. But when they talk about their interview and filtering process to pick these Ashoka Fellows, there's a similar focus there on obsession, like they have to solve this social problem or else, hell or high water. I'm sure you've seen some similar results from what you do on the investment front, but for the Ashoka Fellows, there's some ridiculous percentage of Ashoka Fellows who end up changing national policy, having backing from the program.
The other on obsession, you mentioned there were pros and cons to being obsessed about things. How would you talk about, yes, obsession is great, but oh, sometimes folks that are obsessed with this problem, they're bad leaders? They push their team too hard or they have these different balance or health dynamics that in the long-term do put their company's success at risk? Is that part of this discussion or unrelated?
Brad Feld:
Well, it's related, but I'd separate the two different examples you gave and let's just play with each of them. I think there are many bad leaders that's completely independent of whether somebody has an obsessive personality.
32:17
Chris Wedding:
Agreed. Yeah.
Brad Feld:
I'm sure there's some academic studies from somewhere exploring that, but my general view is that the being obsessed with an idea and trying to get something, again, go back to my simple metaphor, were you put on planet earth to work on this problem, I would say that that's totally different than quality of leadership. And so, I would segment that out.
I think the other side of it, which is mental health or mental fitness is much more interwoven with one's personality. I think that the general dynamic around this is important for people to reflect on. 10 years ago, or even five years ago, there was an enormous stigma associated with mental health. When I was a young entrepreneur, the cliche around it was you couldn't show weakness, you had to be strong if you're a leader. Leaders lead from the front and they're the ones that carry all the responsibility on the shoulders.
Well, when I was in my 20s running my first company, I had a two-year depressive episode, my clinical disorder, having done plenty of therapy is obsessive compulsive disorder. A very specific type of anxiety disorder, which when I was in my 20s was not well understood. Today it's much better understood. And so, I had this two-year period where I was incredibly ashamed of being depressed.
I was CEO and I was very functional. I could get out of bed in the morning and work, but it took me all my energy to get to work and then at the end of the day, I wanted to do nothing other than lay on the couch and stare at the ceiling or bathtub. It was complete absence of joy and the anxiety behaviors got in my own way, probably more than they did interfere with the team and the company.
If I fast forward, even in my 30s, I had a pretty major depressive episode after 9/11 and then in my mid-40s, I had a significant depressive episode that lasted six months against the backdrop of, if you looked at my life, my life was going great. My business was good. Foundry was doing great. Techstars was great. My marriage was great. I was healthy, but I had worn myself out physiologically. I was completely and totally exhausted. This time I didn't feel the shame.
I was blogging and writing regularly and my own conclusion was, if I'm not open about this, then I'm just bullshitting myself, it's not going to be helpful for me. I would say when that happened, that was around 2013, I learned an enormous amount about myself, but also about mental health and entrepreneurs, and anxiety and how that impacts people. I think that in some ways, I'm sure there are some founders that don't feel anxiety and that don't feel stress, but generally speaking, most entrepreneurs have very significant loads of stress on them. The way they deal with it varies widely and that way that they deal with that stress can either help or inhibit their business.
It's something that in 2022, the stigma associated with talking about it and addressing it is much lower than it was in 2013. It still exists, but it's much less. Fortunately, I think as a society, especially around an entrepreneurial ecosystem, there's a better understanding that a lot of it are things that you can improve. You can deal with, you can understand in a way where you can be a better leader, even if you're facing these kinds of challenges. So, that's where I think it plays and I think it's highly relevant versus are you a good leader or a bad leader? I mean, I've seen people who are completely obsessed be amazing leaders and people who are completely obsessed be horrible leaders.
36:12
Chris Wedding:
Yeah, not correlated.
Brad Feld:
Yeah. The self-awareness of your own skills as a leader or a manager and how much you're investing in being a better leader or a manager as an entrepreneur is important. And of course, anybody who's an entrepreneur knows many other entrepreneurs who said, “You know what, I'm not the right person to be the CEO of this company. I should be the CTO,” like my partner, Mary, or, “We need to hire somebody. Oh, this guy Joe is going to be a really good CEO for us.” It doesn't mean that you're not being successful if you're not in that seat and that's self-awareness of both working on yourself, but then understanding what your company needs at different stages of time is really important.
Chris Wedding:
Yeah, I appreciate you sharing all that. The self-awareness in order to grow and know whether you're the right person or how to be the right person as your company grows, that's a benefit of these climate CEO peer groups that we run at Entrepreneurs for Impact. I'm curious, for the companies that you invest in, how do you encourage, teach, entice those CEOs to be more self-aware, to work on personal development, to take care of their mental health, et cetera?
Brad Feld:
Well, some of it is I've tried to model it through my own behavior and this is back to a few minutes ago, by being real about what my own struggles are, creates a willingness or a vulnerability on my part to listen and engage.
Chris Wedding:
Absolutely.
Brad Feld:
I try to personally develop real relationships with the founders and the leaders that I work with, not just relationships that are functional business relationships, but relationships that go the next level down in terms of emotional involvement. It doesn't necessarily mean that we become best friends and we spend all kinds of time hanging out together. A lot of its personality.
I'm thinking of an entrepreneur who's very successful, who I've been involved with on a couple of companies, and the most recent thing we worked on together was extremely successful. We're very good friends, but we spend no time together because our lives are totally different. Like his idea of a good evening starts at around 10 o'clock and if I'm not asleep by 10 o'clock at night, something's deeply wrong somewhere.
Chris Wedding:
Yeah. Sounds like me too.
Brad Feld:
This is an example. So, it's not that you have to be buddies, but that you have to have this deep emotional respect and engagement for each other, recognizing that we're all different.
38:45
Another thing that I do is, I don't force it on anybody. I don't say, “Okay, look, I need to do a psych study on you before I make my investment and here's my recommendation and da, da, da, da, da.” But I'm very supportive of people having coaches and people being parts of peer groups. When someone's struggling with their own specific mental health issue or has a family member die or has their own serious health issue, I try to lead with empathy. I try to lead with listening and I try to be helpful versus optimize for, the, “Okay, well you're not being a productive person on the team therefore we need to move you off to the side.”
A lot of times the conclusion is, even by the person, “I need to take a break or I need to go do something different,” but it's a very different conversation if you start with a directive versus you start with some empathy.
Then the last comment I'd make on it is, I think everybody is wrong about a lot of things. No matter how accomplished you are, no matter how successful you are, no matter how capable you are, you're wrong a lot. I'm wrong a lot. I'm not A plus, but I'm pretty good at separating between a command and data or an assertion. I would say the vast majority of things I provide to other CEOs when I'm an investor is data, but I want them to incorporate into their own thought process and make their own decision.
Occasionally, I have to be directive, but in the context of that, for somebody who you perceive as struggling with, whether it's anxiety or depression, I'm not going to over optimize on being an armchair psychologist, but if you know anything about borderline personality disorder, you know when you're in a relationship with somebody with BPD. I mean, you might not know it at the beginning, but after a while, you know it because of their own cycles.
Is it helpful to say to the person, “Hey, I think you have borderline personality disorder and you should really go see a psychiatrist,”? Well, there might be certain situations where that's useful, but for somebody that has BPD, I can guarantee that the next thing that will happen is that you're now their enemy because that's the essence of that disease.
Chris Wedding:
Sure.
Brad Feld:
So, just trying to be aware of that, whether it's somebody who's got hypomania or is bipolar, and in my own interaction with them being sensitive to my perception of what's going on, not from a diagnostic perspective, but trying not to -- I'll use the metaphor Amy and I use. Amy's my wife, we've been together, married for over 30 years. We each have a big red button in the middle of our forehead. I know exactly what I need to do to press her big red button and make her freak out, and she knows exactly what she needs to do to do the same to me.
Both of us are very conscious of trying really hard not to press the big red button in the other person's forehead. And every now and then, either you can't help yourself, the setup is so magnificent, or you're tired or you're just being a jerk. When it happens, it's like, “Well, I'm sorry.” In my relationship with Amy saying, “I'm sorry,” one time is not acceptable. I need to say, “I'm sorry,” a lot of times and I have to then show that I'm actually sorry. Well, I know that.
41:59
Same thing with the relationship with the entrepreneur investor dynamic, it's like, I'm going to fuck up and when I fuck up, owning it versus trying to push it back on you or avoid it and vice versa. Building that layer of comfort, I think is really helpful, especially around the issues that are loaded like one's own mental health.
Chris Wedding:
Yeah. I can imagine founders listening, thinking, “All right, I'd like an approach from my investors that is, ‘Hey, here's the data,’ versus, ‘You really should do the following.’” Right?
Brad Feld:
I have so many great stories about screwing up and telling people you should do this, you should do that and even from my present, I'll screw up. But generally, I think the vast majority of investors are bias towards telling what to do versus being really clear that what they're doing is presenting data. Even if it sounds like they're telling you what to do, the best investors are just giving you data. It's the CEO's decision. It's not my decision as the investor. I only have one decision. I said to you, do I support the CEO? That's the only decision I ever really want to make in the context.
Chris Wedding:
Yeah. I can also imagine that it's a relief to hear an investor with your experience to be like, “Look, I'm not always right.” Now, there's some give and take here on what the future should be. Somehow, Brad, we only have three minutes left, which is deeply saddening. However, let's try another one here. What are some habits or routines that keep you healthy, sane and focused all these years of startups and investment?
Brad Feld:
I've gone through lots of phases. I'm 56 and a half, so this is in this phase of my life. I no longer sleep with an alarm clock. I wake up when I've had enough sleep. I've been doing that since I got depressed in 2013. I used to be the guy that woke up no matter what time zone I was in at 5 o'clock in the morning. Sleeping till I wake up has been transformative.
I love to run and I've learned how I love to run. I love to run alone. I generally don't listen to anything. Sometimes I'll listen to a book, almost always science fiction because I think that I just want to—
Chris Wedding:
I can see that. Yeah.
Brad Feld:
But I love to run and I love to get lost in the mountains for long periods of time. I used to travel 75% of the time. I stopped doing that before COVID. Now that the whole world has understood that you can actually work via video conference, I would say that's been another significant thing for me, which is adjusting and shifting my priorities around physically schlepping my meat puppet all over the planet, and instead going somewhere deliberately when I want to.
Then maybe the last is, I do create enough time and space for me. Running is some of it, but I love to read. Amy and I, our idea of a great time is either laying on the couch reading together or laying on the couch watching mindless TV together. I would say that making sure that there's enough space in the work for that has been important because when I was running my first company, I worked all the time. I worked, I don't know what the number was, a hundred hours a week.
45:18
People say, “Well, would you have changed how you worked back then?” And the answer is, “Yeah.” I mean, I still would have worked a lot and I still work a lot. I like to work, but I wouldn't have worked the way I did. I didn't prioritize myself. I didn't prioritize my partner and I would have changed that looking back on it, because that would have made me much more effective in the work I was doing day in and day out.
Chris Wedding:
Yeah, I'm sure that's also a relief as well. I mean, work hard, but you can't ignore this this meat puppet in which we occupy to get done. Yeah.
Brad Feld:
I believe we're all going to die and when we die, it's over. Everybody can have their own beliefs about what happens after you die, but from my frame of reference, it's the experience that we're having, not the outcome that we're shooting for. Because the outcome is uncertain, but the experience is the thing that's happening to us right now.
Let's get that experience, knowing that there's lots of good and bad in it as a human being. It's not always going to be good, it's not always in a business up into the right or whatever the right cliche is. There's a lot of challenges, a lot of disappointments, a lot of things that don't work the way that you want them to, that's part of the experience. Have the experience because that's what we’ve got.
Chris Wedding:
Yeah, I like it, very much living in the now. It also sounds a lot like the kind of cosmic insignificance theory of the author of the Four Thousand Weeks where if you think about the vastness of the universe -- Coincidentally, before our call today, my son was connecting with my college roommate who's now an astrophysics professor, they were talking about these big, big celestial topics and I felt it, I had some stress earlier. I was like, “Man, this makes those things feel a little less important.”
Brad Feld:
I mean, we’ll end with this, the utter irrelevance of us, in the grand scheme of things, none of this shit matters. I mean, the rocks are going to be here long after we're gone. The trees are going to be here long after we're gone and oh, by the way, we're on this tiny speck at the bottom of a gravity well, at the edge of a galaxy that's at the far end of a cluster of things. That’s one of maybe an infinite number of possible universes. Just look at some Webb telescope pictures and then just realize, that thing 10 million years ago that I'm now looking at now, that didn't care about me then and it certainly doesn't care about me now.
Chris Wedding:
Yeah. Well, I'll do the improv thing. Yes, to all that and we got to fix the fucking climate. Right?
Brad Feld:
Absolutely. Like, just because we're irrelevant doesn't mean that we don't want to make sure our species continue.
Chris Wedding:
Totally. Well, Brad, I'm going to encourage folks to check out Foundry, of course, Techstars, which many know, Sofar and Running Tides. Some of the portfolio companies focused on climate, USV’s climate fund, Lowercarbon, Moxxie, in which you all are investors. And your book, Startup Boards, I believe, to figure out how to run good boards. Hey, great chatting, Brad.
48:26
Brad Feld:
Awesome, Chris. Thank you.
Chris Wedding:
All right, cheers. Talk soon.
Thank you so much for listening. Seriously, the world needs you and I know your time is super valuable. If you want more content like this, please subscribe to our weekly newsletter at entrepreneursforimpact.com. If you liked this podcast, please subscribe and leave a review on Apple Podcasts or Spotify. I read every single one, I promise. These reviews are the number one way to draw more attention to the world-changing climate CEOs and investors that I am lucky enough to be interviewing on the show. And each month I pick one listener review for a one-on-one brainstorming call with me. Who knows what can come of those?
Finally, if you're a growth stage climate CEO looking for a confidential peer group to share best practices, expand your network and scale your business, then please apply to join our Climate Mastermind programs at Entrepreneurs for Impact where our current amazing members have created over $4 billion in company value to mitigate climate change. Until next time, keep on fighting those good fights.
ABOUT OUR PODCAST
We talk about #ClimateTech #Startups #VentureCapital #Productivity and #Leadership.
And we’ve become one of the top 3% most popular podcasts in the world.
Why do climate innovators love us?
Because of our inspiring guests — dozens of climate tech CEOs, founders, and investors that are raising or investing tens of millions of dollars and removing millions of tons of greenhouse gas emissions from the atmosphere.
Why should you listen?
To start, grow, and invest in businesses with impact, meaning, and profit.
Learn about our guests’ career paths, founder stories, business strategies, investment criteria, growth challenges, hard-earned wisdom, productivity habits, life hacks, favorite books, and lots more.
Who is the host?
Dr. Chris Wedding is a 4x founder, 4x Board member, climate CEO peer group leader and coach, Duke & UNC professor, ex-private equity investor, ex-investment banker, podcast host, newsletter author, occasional monk, Japanophile, ax throwing champ, father of three, and super humble guy (as evidenced by this long bio). 😃
Learn more here:
Climate CEO peer group community: www.entrepreneursforimpact.com
2-minute newsletter: https://entrepreneursforimpact.substack.com
DIY course about startup capital raising (170 slides, 70-item library, 250-investor list): https://t.ly/QCcl5