Klaus Hommels: Why "Portfolios are Merely a Construct to Make LPs Happy"? | E1231

Intro (0s)

• Venture is not about sitting in a nice office with borrowed power from Limited Partners (LPs) and making decisions like in ancient times, but rather about finding cool companies that make a difference (10s).
• The focus should be on finding companies that have the potential to make a significant impact, and if one or two such companies are found, every portfolio looks great (15s).
• It is believed that when the right company is identified, a lot of risk and over-proportional risk should be taken, without being price-sensitive (24s).
• The conversation is with a guest who has become an icon, and the host is excited to have them on the show after wanting to make it happen for quite a few years (43s).
• The guest is referred to as an icon, and the host is now the underdog in the conversation (55s).
• The host wants to start with a crucial first question (1m2s).

Adidas or Puma: How Puma Sparked Klaus’s Investing Journey (1m3s)

• The question of Adidas or Puma is not about sports shoes, but rather a life lesson, with Puma having a significant impact and being a "Halo moment" in one's life (1m8s).
• Growing up in the German countryside, near Mönchengladbach, as the son of a farmer, one was familiar with hard work in the fields from a young age (1m34s).
• At 16-18 years old, one knew a lot about working in the fields, but was lucky to have a grandma who wanted to teach a lesson about banks and investing (1m43s).
• The grandma gave 20,000 bucks to buy stocks, with the condition that if there were gains, they would be kept, and if there were losses, she would cover them (2m0s).
• The initial plan was to go to the local savings and loan bank, get a stock recommendation, lose the money, and be mad at the bank, but things turned out differently (2m7s).
• Due to an affinity for football and Mönchengladbach, who played in Puma shoes, one invested in Puma's IPO, going in fully leveraged, and made 100,000 in three months (2m22s).
• This experience led to a decision to become an investor, with the goal set for the future, and two phone calls resulting in 100 years' worth of pocket money (2m36s).
• The grandma was delighted with the outcome, although for the wrong reasons, and one still went on to do a banking apprenticeship, which she probably disliked (2m50s).
• Fortunately, the grandma lived long enough to see part of the story develop and the impact of the investment in Puma (3m5s).

Am I a Good Investor? Dealing with Early Career Challenges (3m13s)

• Many young investors go through a "trough of disillusionment" early in their careers, where they make mistakes that lead them to question their abilities as investors (3m14s).
• This period of self-doubt can be triggered by a series of mistakes or losses, which can be painful regardless of the amount of money involved (3m47s).
• One strategy for dealing with early success is to pause and reflect, rather than getting caught up in the momentum of a winning streak, in order to avoid making silly mistakes (3m58s).
• However, some investors believe that success is the time to "double down" and invest more, as they are less afraid of the downside and can see the potential in companies that others may overlook (4m26s).
• There are different types of investors, including those who invest based on momentum and those who focus on the technology or founder, with the latter approach being more scalable and personal (5m1s).
• For some investors, the key to success is finding that special moment or connection with a founder or business, which can drive their investment decisions and lead to a deeper level of involvement (5m9s).
• This approach requires a personal connection and a willingness to spend time with the founder and business, rather than just focusing on the financials (5m22s).

Why Klaus is an Outsourced Business Development Guy (5m28s)

• Venture capital is not about sitting in an office with borrowed power from limited partners (LPs) and making decisions like a ruler, but rather about supporting entrepreneurs who are passionate about their ideas and advancing society (5m31s).
• The entrepreneur is the star, as they have a single asset at risk and are dedicated to their idea, whereas venture capitalists are just a feature to increase the odds of the entrepreneur's success (5m46s).
• When picking an entrepreneur to support, it's not always clear what might be missed, as every situation is different (6m3s).
• There is a high correlation between people who use social media a lot and a lack of efficiency, which is something to be despised (6m15s).
• Mistakes aren't inherently bad, but rather an opportunity to learn and find rules to avoid making the same mistakes in the future (6m35s).
• Making mistakes is a natural part of the process, and not making mistakes means missing out on potential successes, as some companies that ultimately succeed are only invested in because of lessons learned from previous mistakes (6m47s).

Handling Transactional Founder Relationships (6m57s)

• Founders in the industry have become increasingly transactional, making quick decisions and having a short time to build relationships and conviction, which can be challenging for those who value building connections (7m7s).
• Not getting involved in many companies is a deliberate choice, and it's acceptable if a founder rejects an offer for any reason, as there are often many new things coming to them at the same time (7m27s).
• It's more satisfying to see top entrepreneurs who have been backed in the past come back for future investments, such as with SumUp, Niiko, or other businesses (8m5s).
• The frequency of tweeting, posting, and content creation has become a significant aspect of the venture industry, with many investors becoming content creators to promote themselves and their businesses (8m21s).
• Having a clear mission that requires reaching a broader audience can justify being more outspoken and using content creation as a methodology to achieve that aim (8m56s).
• However, self-promotion and pretending to be a cool entrepreneur is despised, as it's seen as unnecessary and unproductive, and there are more urgent things to do as a VC (9m18s).

How Is Venture Misunderstood on Macro-Level Today? (9m51s)

• Venture is misunderstood on a macro level in that societal progress is closely tied to a society's ability to handle risk, and Europe has historically been successful in financing innovation, with banks playing a key role in the past, particularly in the 1950s, 60s, and 70s, with investments reaching 4% of GDP (10m8s).
• However, regulatory changes have led to banks no longer financing innovation and startups, and the current regulatory framework only allows for venture financing, resulting in Europe underfinancing innovation by a factor of eight, with current investments at 0.5% of GDP (10m57s).
• It is unlikely that banks and government institutions can fill the financing gap, as they lack the necessary training and experience in early-stage financing, and the banking side is not well-suited for this type of financing (11m30s).
• To create wealth, it is essential to get the financing equation straight, and underfinancing innovation by a factor of eight is unlikely to lead to the same level of success as in the past (11m49s).
• Examples of successful companies that were financed through the old system include Bosch, Porsche, and others, which were able to innovate and grow with the support of bank financing (10m41s).
• The current underfinancing of innovation is a significant issue, and it is unlikely that Europe can achieve the same level of progress and wealth creation as in the past without addressing this issue (11m54s).

Is Europe Overfunded & Lacking Quality Startups? (11m57s)

• There is a significant imbalance in Europe between the amount of funding available and the number of high-quality startups, leading to exorbitant prices for deals (12m6s).
• This imbalance is partly due to a cyclical element in the market, with phases of high liquidity and exuberant pricing, but it is also a structural issue (12m18s).
• The European startup ecosystem has changed significantly since the 2000s, with more technical founders and genuine technological innovation, rather than copycats (14m6s).
• The quality of technical talent in Europe is high, but the quality of local liquid markets is poor, with the German and Amsterdam stock markets being particularly underdeveloped (14m30s).
• The lack of liquidity markets in Europe is a significant problem, particularly in Continental Europe, where financial illiteracy is also a major issue (14m51s).
• Financial illiteracy is evident in politicians and other instances, where there is a lack of understanding of how to use money effectively, unlike in the US (15m0s).
• The culture of the European financial industry is also a problem, with examples such as the Frankfurt Stock Exchange charging exorbitant fees for services, such as 400,000 EUR for a photo opportunity (15m52s).
• This culture is seen as awkward and out of touch with the needs of startups and entrepreneurs, who are often taken advantage of at their most vulnerable moments (16m38s).
• The European startup ecosystem needs to develop a more supportive and understanding culture, with better liquidity markets and financial literacy, to help startups grow and succeed (16m33s).

What Can Europe Learn from the US? (16m39s)

• Europe suffers from the heterogeneity of its continent, which affects its financial literacy and the way it handles stock exchanges, unlike the US, which has a more unified system (16m56s).
• Having multiple stock exchanges in Europe is not ideal, as liquidity is crucial, and a single European Stock Exchange would be more beneficial (17m15s).
• A previous attempt to create a unified European Stock Exchange was blocked by politicians due to regional egoism (17m19s).
• Europe lacks deep capital pools, unlike the US, which has a well-established system for investing in venture funds, dating back to the 1974 Arisa act (17m36s).
• US pension funds invest around 10-13% in venture funds, whereas European pension funds invest only 0.02% (18m5s).
• This disparity in investment leads to a significant difference in returns, with US pension funds potentially earning 3.5 million dollars per worker, compared to 750,000 dollars in European funds (19m5s).
• Forcing pension funds to invest in venture funds could lead to higher returns, solving problems with the retirement system and financing innovation (18m40s).
• A concern is that pension funds need to write large checks, often investing in massive funds that may not perform well, but even mediocre funds can provide better returns than the current system (19m55s).
• The lack of liquidity in venture states is not a major concern, as good companies will always be worth something, and there will always be an exit market for them (20m49s).

Is Defense Too Small to Build a Venture Portfolio Around? (21m15s)

• The quality of assets in the defense sector is a topic of interest, with some people believing it is not a large enough category to build a venture portfolio around, but this perspective is not shared by everyone (21m15s).
• The defense market has the potential to be massive, with a lot of money coming into it and creating opportunities, as seen in the example of Uber's revenue growth in San Francisco (21m51s).
• Building portfolios is not the primary focus, but rather finding cool companies that make a difference, and having one or two successful companies can make a portfolio look great (22m20s).
• There are many unknowns in the market, and building an ecosystem is crucial, which is why serving as a chairman of the NATO Innovation fund is important to support this effort (22m34s).
• The idea of building portfolios is seen as a means to an end, necessary to attract institutional investors, but it requires making concessions and following rules that may not be directly related to investing in companies (22m59s).
• The traditional portfolio approach, with 20 to 40 companies for diversification, can lead to a focus on management fees and investment grades rather than the companies themselves, which is not ideal (22m51s).
• The goal is to find successful companies, and if that happens, the portfolio will look great, regardless of the number of companies in it (22m25s).
• The NATO Innovation fund is an example of an effort to build an ecosystem and support innovation in the defense sector (22m41s).

How Klaus Views Capital Constraints Per Company (24m4s)

• Founders Fund's great performance is attributed to the fact that they do not have capital constraints on a per company basis, allowing them to concentrate huge amounts of money into the same company, as stated by Brian Singman (24m4s).
• This approach enables them to invest large sums in a single company, which is a strategy that is considered effective (24m18s).
• There is a belief that if the right company is identified, it is beneficial to take a lot of risk and overproportional risk in those companies (24m43s).
• Some investment firms have rules in place regarding capital constraints on a per company basis, but being more generous with these rules can be beneficial (24m34s).
• Regularly reviewing and adjusting these rules with an investment advisory board can help in making more informed investment decisions (24m29s).

How Geopolitics & NATO Are Shaping Defense Startups (24m50s)

• Part of a venture portfolio is building an element of why a company is more exciting today, specifically around defense, due to the worsening perceived risk from Russia and changing support for Joint Defense in NATO (24m50s).
• Defense investing is not necessarily categorized as such, but rather as deep Tech, with one customer emerging: the Ministry of Defense (MODs) (25m16s).
• The reason for this focus on MODs is the need to think about technical sovereignty and capacity to defend oneself, as classical equipment has limitations in terms of building or buying quickly (25m32s).
• There is a significant difference in efficiency between different technologies and established equipment, with examples including a €100,000 drone being able to take out a €10 million tank, and a €500,000 unmanned submarine being able to take out a €500 million classical submarine (26m5s).
• The Ministry of Defense needs to allocate resources effectively and recognize that deep Tech can make a big difference in these mechanics (26m24s).
• As a result, there is a commitment at the NATO level to invest in technologies and enhance the defense capacity of NATO member states (26m36s).

What Must the Electorate Understand About Defense? (26m44s)

• The electorate needs to understand the severity of the current defense situation, which has been masked by a long period of peace and the "peace dividend" (26m50s).
• The situation has changed with the ongoing war in Europe, making it essential to think about self-defense, and the current state of defense capacity is alarming (27m11s).
• Russia's defense spending is often underestimated, as it is comparable to the combined defense spending of all NATO member states when considering purchase power parity (27m44s).
• The dependence on technology, such as the internet, is a significant concern, as seen in the example of Elon Musk's control over satellite internet availability (28m1s).
• A consistent strategy is needed to enhance defense capacity and reduce dependence on external factors (28m18s).
• Germany and the UK have limited ammunition to defend themselves, with estimates suggesting only four days' worth of supplies (28m37s).
• The development of hypersonic missiles has significantly reduced reaction times, making it essential to think more technologically about defense (28m55s).
• The ownership and control of military equipment, such as US fighter jets, can be limited by the manufacturer, compromising national sovereignty (29m31s).

Will Defense Winners Be Nationalized or Continentalized? (29m48s)

• Continental security winners will emerge due to the sovereignty of providers, with the US and Europe having their own winners, which will significantly influence the industry (29m50s).
• The European aerospace industry, such as Airbus, is a prime example for sovereignty investing, and the space sector will be a crucial technology ecosystem to co-own (30m8s).
• The Starlink satellite constellation has the potential to make the entire European telecom industry obsolete if it can connect to mobile devices like Apple, highlighting the importance of access to such technologies (30m28s).
• The European car industry's ability to compete with Tesla may be hindered by limited access to Starlink and the difficulty of launching their own satellite constellation due to restricted access to Space X and the lack of European launch capacity (30m48s).
• Currently, Europeans rely on Space X with its restrictions or Ariane, but Ariane has sold 100% of its defense or transport capacity to Amazon, limiting European ability to launch satellites at their own discretion (31m21s).
• This limitation is expected to last for six years, prompting the question of whether Europeans should wait or speed up and build their own champions to guarantee technical sovereignty in various fields (31m42s).

Does Europe Truly Understand & Prioritize Its Defense Needs? (31m56s)

• The main concern is the lack of a unanimous European view on what is important, and the need to act on it and support it, specifically in regards to defense spending (32m1s).
• The current state of defense spending in Europe is considered "conceptually wrong" as a significant portion of the budget goes towards salaries and pensions rather than equipment and defense capabilities (32m47s).
• The idea of increasing defense spending is often met with resistance from the electorate, who may not see the need for it if they believe war is unlikely (33m46s).
• However, with current global conflicts such as Israel-Gaza and Russia-Ukraine, there is a growing need for increased defense spending (34m11s).
• The electorate's view on defense spending may change if they are made aware of the current threats and ammunition levels (34m0s).
• The ministries of Defense are not incentivized to purchase the best military equipment, as they may be more likely to choose established brands like Lockheed rather than trying new and potentially more effective options (34m48s).
• The current equipment being used is not sufficient, and there is a need to move towards a different "asset class" of defense equipment (35m34s).
• Increasing defense spending from 2% to 3.5% of GDP may be a realistic goal, as suggested by a commissioner study (35m51s).
• The need for increased defense spending is being made more visible to the public through initiatives such as Ry mital's sponsorship of Bia Dortmund (34m27s).
• European countries have historically spent around 3.5% of their GDP on defense, with Poland and the Baltics spending more, and Finland also spending a higher amount, while Germany's current spending is lower (36m10s).
• Increasing Germany's defense spending to 3.5% of GDP would require an additional 100 billion euros, which could have a significant impact on the economy, with potential GDP effects of 80-110% and immediate tax effects of 25-30% (36m34s).
• The increased spending could also have a positive effect on household income, with around 40% of the spending going back to households, and the net effect on Germany's debt would be an increase from 63% to 68-69% of GDP over four to five years (37m2s).
• The decision to increase defense spending is a choice that will be made in the coming months, especially if the US reduces its defense subsidies to Europe, and investing in sovereignty would require providing additional funding (37m35s).
• The allocation of the additional 100 billion euros would need to be done effectively, taking into account constraints and efficiency, with a focus on areas such as drones, electronic warfare, and technical equipment (38m4s).
• The development of drones and electronic warfare is expected to continue, with the potential for swarms of drones and attacking and defending swarms, requiring foresight and investment in these areas (38m24s).
• Deep tech investors with ties to the Ministry of Defense (MOD) have a good chance of benefiting from the increased defense spending, with potential market caps of 150-500 billion euros (39m3s).

How Many European Investors Are Linked to MODs? (40m3s)

• Currently, very few investors in Europe are closely tied to Ministry of Defence (MOD) in the way that is required for investing in this category, which is fundamentally different from Enterprise SaaS investing. (40m3s)
• The main difference between MOD investing and Enterprise SaaS investing is the customer and procurement process, with MOD having a very special and complex procurement process that investors need to learn. (40m45s)
• The hardest thing to achieve in MOD investing is reinventing an ecosystem where startups, primes, and MODs work together, as there are very few startups that have worked with primes and MODs, and vice versa. (41m1s)
• The development of this ecosystem is still unknown, but it may resemble the pharma industry, where large organizations handle distribution and regulation, but not invention, and startups may need to cooperate with primes to accelerate innovation. (41m34s)
• The question remains whether startups will become sizable companies and primes in their own right, or if the market will resemble a farmer's market with many innovative startups cooperating with primes. (42m26s)
• It is too early to tell if a new generation of primes will emerge, with companies like Hings and Endals potentially becoming large players, but the capital requirements for this to happen are still unclear. (42m48s)

Do Defense Startups Need Bigger Seed Rounds? (42m55s)

• Venture capital as a product may need to change to fit the changing landscape, especially considering the larger seed rounds of companies like Hing's and Andel's first rounds, which are significantly more than traditional seed or pre-seed rounds (42m56s).
• The process of providing gross capital also needs to be considered, as relying on US investors at this stage could lead to a loss of sovereignty and influence from big investors with potentially different interests (43m18s).
• The US defense budget allocates 14% to R&D, resulting in $94 billion in annual R&D spending, which is much higher than Europe's 4% allocation, resulting in $9 billion in R&D spending (43m51s).
• Europe has a higher necessity to cooperate with the VC world and VC-financed innovation due to its lower R&D budget (44m15s).
• The biggest mistakes that can be made in this field include jeopardizing the fragile trust level between defense startups and investors, which can happen if protagonists enter the game without being serious, sober, and honest players (44m55s).
• It is crucial to maintain this trust level, especially in the beginning, to ensure the success of defense startups and their relationships with investors (45m11s).

Is Founder Skill Set the Key Challenge for Defense Startups? (45m15s)

• The founder of Andrel, Trey, attributed the company's success to the unique combination of skills within the team, including a product genius, an operations expert, and a phenomenal CEO, highlighting the importance of a diverse skill set in achieving success in the defense market (45m15s).
• Many defense companies struggle to sell their products to governments due to a lack of understanding of the sales process, despite having product expertise, and often lack CEO ability (45m34s).
• The biggest challenge for defense startups is the unique skill set required of founders to effectively sell into the market (45m43s).
• Founders with the right skill set can fast-track the development of the ecosystem, bringing trust levels and facilitating the growth of dual-use companies (45m53s).
• The NATO Innovation Fund aims to bring trust levels and accelerate processes, enabling entrepreneurs to start dual-use companies and receive financing, which was not possible before (46m23s).
• The ecosystem will develop as processes are accelerated, and early innovation is adopted, with some people in the Ministry of Defense (MOD) now responsible for embracing early innovation (46m51s).

What Drove Klaus’s Conviction in Neko Health? (46m57s)

• Defense and health are two huge areas of expenditure for governments and individuals, with health being a significant area of investment, as seen in the investment in Neko Health. (46m58s)
• The investment in Neko Health was driven by a combination of factors, including the entrepreneurial spirit, the ability to make fast decisions, and a personal connection to the company's mission. (47m30s)
• A conversation with Daniel, the founder of Neko Health, about potentially opening up the company to investors led to a rapid decision to invest, with a term sheet being issued on the same evening. (47m54s)
• The investment was also influenced by uncorrelated experiences, such as regular visits to a clinic in Germany that emphasized the importance of preventive examinations and tracking health parameters over time. (48m16s)
• The product offered by Neko Health, which provides a comprehensive report on health parameters and explanations of the results, was seen as very cool and having the potential to be used by many more people, making it a big market opportunity. (48m56s)
• As a product guy, the investor fell in love with the product and was not price-sensitive, believing that good companies are worth investing in even if they are 30% more expensive. (49m34s)
• The investor prioritizes right judgment over valuation, believing that even if a company is mispriced at the beginning, it doesn't make a big difference in the end. (50m4s)
• Valuation is seen as a hygienic factor, with the investor looking for a decent price that honors the founder's aspirations and perceived execution skills. (50m23s)
• Ownership is important, but not the primary focus, with the investor seeking to ensure that their investment makes a difference if they are right, rather than just investing small sums in many companies. (51m4s)
• The investor views themselves as an outsourced business development guy, with a limited number of hours available to help companies, and therefore needs to ensure that the compensation level is right for both parties. (51m45s)

Early Investing in Spotify, Airbnb, Revolut, Facebook (52m8s)

• Klaus Hommels was an early investor in Spotify, having previously invested in Stardoll, where Daniel Ek was the CTO, and Ek asked Hommels to join the board of Spotify, which was not an obvious company to build due to music rights and IP challenges (52m12s).
• Hommels notes that many of his successful investments, such as Skype and Airbnb, were not obvious ones at the time, and he invested in Skype when it had no business model and in Airbnb at a very early stage (53m2s).
• Hommels invested in Airbnb after a discussion with Guy Oseary, the manager of Madonna, who heavily advertised the company and convinced Hommels to invest (53m40s).
• Hommels considers Revolut a blessing to the European ecosystem and initially missed the opportunity to invest, but his son introduced him to the app, and he ordered his team to get into the cap table (54m7s).
• Hommels invested in Facebook after following the social media space and seeing the rise and fall of companies like Fra, Myspace, and then Facebook, which introduced a clear name and API, making it easier for innovation to happen within the network (55m4s).
• A connection was established with Cola through a coincidence at Benchmark, allowing for the purchase of shares that Cola could organize (56m34s).
• The commonality amongst successful investments is that they often involve "tweener rounds" and serendipitous events, making something happen when a round does not exist (57m7s).
• The ability to make these investments is also influenced by personality, with a desire to have something now and a willingness to preempt it (57m18s).
• In the past, the market was not as professional as it is now, leaving room for unconventional investors to get into situations in different ways (57m31s).
• The Indian market is completely different from the European and US markets, but fintech is a sector of interest, and a connection with Shandra Singh from Sequoia helped facilitate involvement in the Indian market (57m48s).
• This connection led to early involvement in the Indian market and investments in companies, including one founded by Kunal Shah, who was happy to have the investor on his cap table again (58m16s).

What Was Klaus’s Biggest Loss and Its Impact (58m23s)

• Not all investments can be successful, and sometimes wrong decisions are made, with the biggest loss being a valuable learning experience (58m25s).
• The mentality of dealing with losses is shaped by one's upbringing and environment, with the people from Cologne, Germany, being easygoing and accepting that sometimes not getting what you want can be a good thing (58m37s).
• Growing up as the son of a farmer, there was uncertainty about future career paths, and despite applying to several top companies like Goldman, McKinsey, and Morgan Stanley, none of them offered a job, which turned out to be a blessing in disguise (59m6s).
• The biggest loss was investing in a company called Wonder Loop, a cookie-based advertising platform that was too early for the market, resulting in a 60% loss of wealth (59m55s).
• However, the experience of working with Wonder Loop led to meeting a future business partner, and together they founded a company in Turkey called Marafon, which was later sold for $150 million, compensating for the initial loss (1h0m24s).
• The experience taught the importance of being ethical, friendly, and open to new opportunities, as luck can come from unexpected places and turn losses into positive outcomes (1h0m42s).

About the Timing When to Sell (1h0m55s)

• When looking back at successful investments that became losses, the key consideration is the timing of when to sell, as many investors have experienced missing out on significant returns due to selling too early, such as in the cases of Clubhouse, Hopping, and B Real CL, where selling at 20-30 times the initial investment was possible (1h0m56s).
• A personal example of this is the investment in King.com, which was entered at $2.5 million and sold at $100 million, but could have been sold at $5 billion, highlighting the difficulty in making the decision to sell at the right time (1h1m18s).
• The decision to sell King.com was made at a time when the company was still in its early stages and Candy Crush had not yet been developed, making it a more arguable call at the time (1h1m36s).
• Despite missing out on further returns, the team at King.com is considered fantastic and deserving of their success, and there is no regret over the decision to sell (1h1m43s).
• Not selling at the optimal time is a common criticism that investors face, but it is not a major concern in this case (1h1m52s).

How Do You Instill Ambition in Children from Affluent Families? (1h1m57s)

• Raising children in affluent families can be challenging in terms of instilling hunger, ambition, and a strong work ethic, but one family's approach involved having a very normal and tight family life despite their affluent status (1h2m8s).
• The father made a conscious decision to be at home with his children during the 2000s, spending time with them from around 5-6 pm, having supper, doing homework, and then bringing them to bed before resuming work at 9 pm (1h2m37s).
• This approach, combined with the love and home environment provided by his then-wife, likely contributed to the children's development and ambition (1h3m7s).
• The importance of discussing work with the children is emphasized, and they were all given the opportunity to gain exposure to different experiences through the "grandma test" to see what they enjoyed (1h3m22s).
• The family has open discussions about work and ambitions, allowing the children to explore their interests and develop their own goals (1h3m35s).

Quick-Fire Round (1h3m37s)

• The most respected venture investor is Lee Fixel, who had an impressive track record with investments in companies like Tiger, Yandex, and Flipkart, and demonstrated exceptional persistence and patience in his approach to conquering markets (1h3m47s).
• Working with Daniel Ek, the founder of Spotify, taught the importance of persistence, patience, and uncompromising ethics, and he is considered a fantastic guy with a strong character (1h4m21s).
• The single best-performing investment is not measured by returns, but rather by the impact made on people's lives, with the most valuable currency being thank-you emails from founders who appreciate the help and support provided (1h5m8s).
• The most meaningful measure of success is not the returns on investment, but rather the impact made on people's lives, and the ability to look back and say that one's life has been lived for something meaningful (1h5m47s).
• The heaviest things in life are not material possessions, but rather unmade decisions, and it's essential to be at peace with the choices one has made (1h6m8s).
• When it comes to building a company, it's possible to do so in Europe, but it's essential to maintain a balance between work and personal life, as being an entrepreneur is not the only aspect of one's life (1h6m42s).
• The American perception that Europeans do not work hard is not accurate, and the work ethic in Europe is more nuanced, with a stronger emphasis on balance and quality of life (1h7m9s).
• The broader base under the bell curve is more complacent and entitled, with more discussions on ESG and other topics, which can be seen in different geographies (1h7m37s).
• When asked which investor's portfolio they would swap with, the response was that if they saw the portfolio, they wouldn't have asked the question, implying the portfolio's quality (1h8m18s).
• As an angel turned venture investor, the element of being an angel that is missed the most is the freedom to make decisions without needing to do fundraising, allowing for more flexibility (1h8m52s).
• There are advantages to being an angel, but platforms also have their benefits, and there may be a right time for being one or the other, as seen in Mark Evans' successful transition from Benchmark to being an angel (1h9m15s).
• Neco has a high chance of becoming super big due to its execution skills, proven track record, and the larger market size in the health industry compared to music (1h9m51s).
• The health market is significantly larger than the music market, with the US spending on heart diseases and medication comparable to Apple's worldwide revenue (1h10m22s).
• A question that is not often asked but should be asked more is what makes someone happy over a long period, including what they individually make out of their journey and what they're proud of (1h10m58s).
• Happiness can have many facets, and it's not just about being successful, but also about designing one's life to achieve happiness and pride (1h11m46s).
• Having friends 10-15 years older who have mastered prioritizing the pros and cons of the next 10-year period is considered a luxury (1h12m1s).
• Many people have a mindset of "I'll be happy when I achieve X or Y," but this mindset is flawed (1h12m15s).
• Two things that can bring happiness are being proud of one's achievements and having shown integrity with the people one has worked with, their partner, and their family (1h12m32s).
• Being proud of one's 8-year-old self for achieving their dreams and being proud of one's 80-year-old self for showing integrity are considered guiding principles for happiness (1h12m35s).
• Integrity is a key factor in achieving happiness, particularly in relationships with others (1h12m49s).