 Niko, this is a very special one. What many of you don't know is I've interviewed 2,500 VCs, and one of the first three that I ever, ever interviewed was Niko. So this is a special round two for me. So Niko, for... Hopefully this makes me a good VC by now, right? I've got the second chance. Fingers crossed. OK. I want to start, though, Niko. How did you make your way into what I always call the wonderful world of Venture and what was really that entry point for you really into VC and general catalyst? Sure. So, you know, most VCs have had an amazing career before Venture because this is what is the street cred and what they use to source and win investment opportunities afterwards. But I wasn't nobody before joining the exciting world of Venture Capital. I was a failing student entrepreneur at Stanford University. Like anybody who goes there basically needs to have a startup on the side. Otherwise, it means they're not doing the right thing, you know, for their lives. But during that experience, as I was trying to build a social network back in 2010, again, not a unique idea, I met a lot of VCs and got really excited by the intellectual stimulation and the impact that the job has to offer. So when our company failed miserably within a year, ended up getting an invitation for an interview by Chris Farmer, who is now the founder CEO of SignalFire and met the rest of the partnership at our firm, General Catalyst. And got inspired by the individuals at the firm. Everybody was a different character, one of my partners. You know, if you look at him, he looks like Woody Allen. Another one is very similar, you know, to Gordon Gekko from the Wall Street, the movie. Third one is a polymath and she's collected like five, six degrees from MIT. And I was like, wow, you know, that's a really carefully curated group of partners. So they gave me the opportunity. So, you know, it's like going to a business lounge at an airport, in venture, you know, you need to be given the opportunity. And I took a leap of faith and joined the firm eight years ago. Can I ask, and this is off schedule, but you mentioned that maybe the business that didn't work out. And I interviewed Julia earlier on stage and she said that we maybe don't talk enough about things that don't work out. How is that for you? How is the rebound personally? And how do you think it may be more meta about kind of how we approach failure today as an ecosystem? Absolutely. So spending a year trying to build a social network in 2009, 2010, again, not a unique idea, probably was five, six years too late. But we were one of the first three teams that decided to leverage LinkedIn's API and build a product on top of LinkedIn. Turns out that taking platform risk is a lot of risk. And that's something I learned, you know. Whenever you decide to build on top of somebody else, it may make life easier in some instances, but in many other dimensions makes it very, very risky value proposition. The second thing I learned is building a team. And again, being a graduate student at Stanford, we ended up attracting a lot of resume collectors, like people who wanted to join. But essentially, they were not that keen on going the extra mile and do the crazy sacrifices that becoming a startup founder requires. So that's the second thing I learned. And third and probably the most important one for me as a venture capitalist now is having empathy for all the ups and downs and craziness that the founder needs to have. And different people call it in different ways. Is it authenticity or a north star or paranoia to solve a problem your own way? Like you need to have that. In our team, we didn't have that. But I now have the empathy, you know, for the founders who pitch me every day and some of them we work with. As far as failure is concerned, it's a necessary part of startup life. Like it's 1,000% something that we embrace, especially in Silicon Valley. Like a lot of the founders that we invest in are folks who tried something before. They learned from their lessons. Hopefully they didn't engage in any criminal activity that we're aware of. Sometimes it happens, of course. But a lot of the founders we invest in, you know, often are second timers and had singles and doubles. And that's what makes Valley and other ecosystems work really, really, really well. In my home country, Greece, if you run a business and then you go bankrupt, most often you end up in jail. Clearly that's a problem, you know? But not the case in Silicon Valley where we're investing. So the fact that there is no stigma associated with failure is amazing. I do want to jump on the element of team building that because we're going to focus on scaling and scaling team, business model, and product today. Those three core elements. On the scaling of teams, you mentioned obviously your personal experience there. You've worked closely with the Snapchat team through scaling, the Livongo team through scaling. Are there commonalities in those that have really scaled team and personnel very, very well? Yeah, so it's almost like a mindset that the founders need to have from day one and spend a lot of time, of their personal time on the recruiting front. Like in the beginning, you know, if you don't spend like half of your time on recruiting, it's not going to happen. You're doing something wrong. And sooner or later, you're gonna be facing a ton of bottlenecks. So I've seen it again and again, even with teams that have three to four founders that can cover a lot of surface area. Like they have the tech lead, they have the product person, they have a growth hiker. They can cover a lot of ground, but as soon as the business is scaling a little bit, when they haven't made the right hires, they start struggling. So being very thoughtful and meticulous about recruiting and building pipeline, doing activities at the office, building a person about yourself and the business so that you can have a steady flow of the right talent can pay a lot of dividends in the long run. And then the other part of it is around leveling up as a startup founder because the job description changes every six months. Like what do you do to invest in yourself? And the very, very best founders, like the founders of Stripe and Livongo and some of our other portfolio companies, they're very aware of that. So they get like a business code, they have mentors who've been there done that, they work with some advisors in all their respective functions that they need to hire. And they ask them simple questions, like, hey, I'm going to hire VP of engineering. What are the mistakes that probably I'm going to make that I should be aware of? And if you have a couple of high-quality VP of engineering folks that can help you interview the person that you're going to bring on board, this is going to save you from a lot of trouble. Yeah, absolutely. I love the way they say about meeting as many domain experts as you can to really become one yourself as much as possible. Totally. I do want to also, and especially for many founders in the room, if that's kind of how to do it right, you also see a ton of other companies in market who maybe don't do it so well and fall for maybe more common pitfalls. What are those pitfalls that you see them falling for in the scaling team phase? Yeah, so I mean, you hire a lot of your friends. OK. Patrick Collison tweeted the other day something really interesting. He said, before you decide to bring on board one person, be prepared that there are going to be 10 others exactly like him or her who are going to join your company before you know it. So be very thoughtful about who you want to bring on board. So basically, that's a common saying, hire A players because they're going to hire other A players, especially around the technology team. This could make a huge, huge difference. The biggest mistake I see is people who don't enjoy hiring for whatever reason, they put it off and they think that their board is going to do it for themselves or they're going to hire a recruiter who is going to take care of it and it never really happens. The other mistake I see all the time is individuals who suck at management. And we don't expect, of course, when we invest in a company that especially with first timers that they're going to turn out to be unbelievable managers. We don't expect that. But sometimes, or frankly, most times, you see founders who are not great managers. And even if you get it right on the hiring front, then the retention and the productivity is not that great. Can I jump in and ask that? For you as a VC and off schedule, sorry for that one, when you see someone who maybe isn't the transition manager that you thought they could be, how do you see your role as the VC? Is it to aid and support them in as much as you can with mentorship and guidance? Is it to bring in an alternative and place them in a different role? How do you view your role in that case? Yes, as venture capitalists at times, we're cheerleaders, which is like, you're doing great. Please do more of it. The plan is working. What can you do to go faster? And at other times, we're, wait a second, are we sure about the plan? Are we sure about our team? I mean, a good, for me, heuristic is especially with companies that start with many founders. There should be one person on the team who is like the ruthless business person that is constantly thinking about leveling up the rest of the team. So I've seen that again and again. And frankly, now it's almost like a heuristic of future success. If you start as a founding team of three to four and three years later, everybody continues to have the same ridiculous titles, like co-founder, CEO, co-founder, president, co-founder, CEO, co-founder strategy. Come on, which company has a VP of strategy from day one? But if everybody continues to have the same ridiculous titles and they're not either home or individual contributors, you're doing something wrong. So every, you know, like every second board meeting I always ask, you know, who has left from the team that we didn't want to see them leave? Who is somebody that probably is underperforming? What are we doing to make sure that the whole team has KPIs and OKRs that they can work on? And then the most expensive currency that startups have is their own equity, the stock options. So especially with the early, you know, team members that have so much in stock options, are they really worth what is promised to them? Are they leveling up themselves or not? And this is where being a good manager or becoming a good manager is a huge asset because you cannot have individuals who are on a good chunk of the company and not be effective leaders. Yeah, no, I couldn't agree more. I do want to slightly transition to the business model itself now from the team. When we chatted before, you said about sustainable business models. Can I ask, how do you really infer and interpret sustainable business models from a starting point? I mean, the easiest way to think of a great sustainable business model is one, you know, that produces unbelievable cash flows like the Dropbox one, right? This is like, or the Google one. Like these are companies that got started. They raised one or two rounds of capital. Google only raised 25 million bucks and then they went public because they started printing so much money so quickly or Dropbox, you saw, you know, from the S1. Unfortunately, we're not investors, but that's why we're in the valley right now. They were producing so much freaking money from a very scalable business model that is not one that causes issues with the future growth of the business. And it's not one that's running out of steam. Yeah, no, I get you. In terms of kind of sustainable business models, it's not, we don't see it in every business today. And sometimes it comes over time. I'm really interested, when is the timing for the implementation of sustainable business models and kind of scalable unit economics? And does it have to be from day one? It would be ideal if it's from day one, but most often it's not. You know, the history of consumer, most often the last decade, it's like, grow pretty big and then you'll figure out how to monetize. Of course, this assumes that distribution is really easy. In the last few years, we've started saying a lot of interesting subscription business models. Or in marketplaces, it comes, you know, from day one. And that's one of the advantages that today online marketplaces founders have over the others that can afford to make money from day one. And as a result, they can afford to spend on customer acquisition from day one. But in some instances, if you have a product that is not essentially offering a lot of value to the consumers or to enterprises, you can't monetize. So you need to create a lot of goodwill with your users in order to turn them into customers. And that goodwill, you can spend it either through having them pay you, which is revenue for your business, or spend the goodwill in order to get them to invite other friends of theirs, refer you to new customers. So it's growth for you. Speaking of kind of growth engines there, when we spoke before, you said about building a fundraising machine. Can I ask, how do you think about- Huge asset. Sorry. It's a huge asset. So how do you think about building a fundraising machine, the first steps to get that on board? And maybe who's done it particularly well in your mind over the past few years? Yeah, so it's something that we're looking for, frankly, when we're evaluating founders to invite them to our portfolio. So like, are they amazing at presenting their business? And if they can indeed, you know, get us really excited. If they can get the greed and the fear, emotions to come up. Because, you know, if we don't invest, we're gonna miss out on a multi-billion dollar return for us, or if we don't invest, our competitors are gonna make so much money and it's gonna be even worse. So like, this is something very important. Their ability to fundraise is also a proxy for future ability to recruit incredible talent, the ability to get the press excited, which could mean interesting business opportunities over time, or also the ability to do really interesting business development. So how do you build the fundraising machine? Sometimes it starts with the individual. There are individuals who enjoy fundraising because they love the feedback that they're getting. You do it for a few weeks and you walk out with tens or hundreds of millions of dollars. Of course, some of them enjoy too much and they end up doing it all the time at the expense of their business. You need to have a good team that can support you with all the materials. So a few of the high-level pieces of advice I'd offer, if you know your customer really, really well and you can think that you're like your customer, that's a huge asset. Secondly, if you have a plan for your business and you do more of that plan, and this is what VCs wanna hear, you have something, it's working, we give you more money and immediately afterwards start growing, that's a huge asset too. And lastly, individuals who can create a reality distortion field and create this very detailed picture of the future. It's something that few individuals have, but whoever has it gets VCs, especially down VCs, really, really, really excited. Can I ask, combining team and then the VCs that back the company, how much of a role do you think the VCs that back the company impacts potential candidates joining the firm? I often hear founders say, oh, if I get general catalyst, I'll be able to get A-star players. How much role really do you think that makes and is that a fair assessment that it does have that much gravitas? It plays a shitload, huge role, massive, massive, massive role because a ton of people wanna work for companies that are perceived as safe, but especially if you wanna attract individuals, not in the very beginning, but over time from the bigger companies who have very strong paths, they make a lot of money, knowing that an amazing VC firm has backed a specific early-state startup or mid-state startup makes a huge difference. And the other thing is that when you raise from a top tier VC fund, stats show that it's over 50% likely that you're gonna have your next round be done. So the combination of the two is very, very powerful. The press is more likely to talk about your company, which always helps with recruiting. Sure, in terms of kind of getting those best investors, kind of predictability, repeatability often was associated with getting the best. How do you think about kind of startup planning? What kind of good structure looks like within that and how it can entice the best? Yeah, again, it starts with the individual. So certain people are incredible at networking. They have the unique ability to just find one or two mentors who can connect them with anybody. And that's, you know, the key thing in startup life. If you manage to find one or two really amazing people, then you can connect to anybody else within a few weeks. And as a founder, if you're the kind of individual who is always passionate about your space, knows your customer really well, I mean, come on, you can't convince one person to really take a leap of faith and pay it forward for you. So if you have this kind of individual who can connect you to everybody else, then the doors start opening and it's a matter of time till you get in front of the right people. So if you are prepared during that pitching process, if you are indeed, you know, one of the founders who is ridiculously ambitious can go the distance and is a learning animal, most likely you will end up with a few good offers. And then I want to finish today with what I call a quick fire answer. I say a short statement Niko, you know how this goes. And then we've got three minutes and 30 seconds for five questions. So about 45 seconds per one, are you ready? Let's do it. Okay, so your favorite book and why? What must everyone here be reading? My favorite book and why? One of my favorite books is The Ascent of Money by Neil Ferguson, which talks about the history of money in all of humanity. And if you want to be in finance, it's a mastery. We're not in a bubble, but we're in a secular shift towards technology and in favor of technology. Agree or disagree? I agree, we're definitely in that overheated, you know, part of the cycle. So we're not in a bubble, but things are a little bit crazy. Okay, and then what do you know now that you wish you'd known at the beginning of your time with GC? It's all about the people that you work with. So individuals who are learning animals can go the distance. Individuals who have an insane sense of urgency. When I got started, I wanted to invest in all of my friends. Then I also wanted to give a lot more chances to people. And then let's do pros and cons of taking startup, pros and cons of taking startups, taking multi-stage VC money. Maybe earlier as well. So pros is if you want to shoot for the moon and you have a plan that you do more of and things work out really well, all of your future fund raisings can be taken care of. And the signaling in that regard, it's much, much stronger. And negative is if you want to have your first timer, you want to have an exit of 50 to 100 million bucks, which is very meaningful for most people. Taking money for multi-stage VC is not a great idea because they're not going to pay attention. The fund return is not going to be there for them. And then last one. And if you want to do a party round also, you know, not necessarily a great idea. What do you think of party rounds? Hate them, complete waste of time. Hate them. Yeah, hate them. Okay. And then final one, most recent investment. And why did you say yes and get so excited? Most recent investment is in the founder from the UK, who's trying to reinvent the death industry in California. So ridiculously ambitious founder who left Britain to move to the US to go after the big leagues. Why did I say yes? Very unsexy theme. Inspiring individual who can create a category defining business. Nico, it's been such a pleasure having the chance at a second round. So thank you so much for joining me today. Thank you, Hari. Thanks for the attention. Go. Great to hang out.