JE016: 12 episodes of Christmas

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Jay Clouse 0:28
Hello, hello, hello. Welcome to this very special holiday episode of Upside. I am Jay Clouse, as always, and today I’m joined by old St. Richolas himself, ‘Ric Hornung.

Eric Hornung 0:40
I thought we weren’t supposed to do nicknames on this.

Jay Clouse 0:42
I didn’t, but you gave me that nickname. We’re signing the squad cast right now and you signed in as old St. Nicholas.

Eric Hornung 0:48
Well, I figured we were doing a Christmas episode. I needed to be festive. I needed to be jolly. So who’s more jolly than a fat old white guy named St. Nicholas. I switched it up. I’m St. Richolas. Not saint. Probably shouldn’t use saint. But, you know.

Jay Clouse 1:02
Does anybody call you Rick besides you?

Eric Hornung 1:04
No, no, no one calls me Rick besides me.

Jay Clouse 1:08
I’ve been there. I’ve tried the start my own nickname, try to make it stick place, but it just doesn’t work so.

Eric Hornung 1:13
Well, you tried to go with a pretty intense nickname.

Jay Clouse 1:16
Rumble.

Eric Hornung 1:17
Yeah.

Jay Clouse 1:18
Everybody calls me Rumble.

Jay Clouse 1:20
Rumble & Rick.

Eric Hornung 1:23
Welcome to Upside with Rumble & Rick.

Jay Clouse 1:25
Wow. Well, as you guys are probably accustomed to at this point, on national holidays, we don’t do our traditional episodes. Instead, we do a one-on-one with Eric and I, and we’ve really gotten into frameworks. So today, Eric, we’ve got a new framework. Last year, our Christmas episode was Eight Crazy Months of Upside.

Eric Hornung 1:44
And this year, we’re doing 12 Jays of Christmas.

Jay Clouse 1:47
Hmm, can we handle 12 Jays?

Eric Hornung 1:50
I can barely handle one Jay

Jay Clouse 1:51
Yeah, that’s a lot.

Eric Hornung 1:53
Yeah, that’s a lot of rumbling

Jay Clouse 1:55
Ugh. 12. 12 Days of Christmas. 12 episodes of Christmas. Today we’re going to highlight 12 episodes of Upside from our first almost two years. We’ve got what, 112 episodes at this point, close to 115.

Eric Hornung 2:11
We really suck at milestones. I mean, usually you hit your hundredth episode you call it out, you tell the world. It took Nathan, our amazing, incredible sound engineer who makes this podcast actually work to go, hey guys, did we hit 100 yet, for us to even realize that we hit a milestone.

Jay Clouse 2:28
We did a good job of celebrating our one year, though. We did a whole three week celebration of our one year.

Eric Hornung 2:34
Yeah, that’s a hard, that’s a hard one to miss though. You know, when you’ve been around for a year. I mean, when you’re around for a year, it’s very simple. You, you celebrate yourself and you also celebrate anything that’s been around for a year. A dog, a podcast, other humans, doesn’t matter. One year is a big thing.

Jay Clouse 2:49
Well, we’ve taken that 112 or 115 episodes and cold them down into 12 that we’ll alk about today as episodes that we’re proud of. We’re proud of all of our episodes, but he are 12 that we think have a unique reason to re-listen to if you have some time over the holidays or early on in 2020.

Eric Hornung 3:08
Yeah, and this is also good, if you are a new listener of the show,as we continue to grow our listenership through referrals from current listeners, and just the ways of the internet, Jay, you don’t always go back and know which episode you listen to. So this gives you a little bit of guidance. We also took those 12 episodes and we bucketed them into three categories. So the first are what we’re calling re-listenables. The second deal with some companies that have new or different business models. And the third are some big announcements that have happened since we interviewed companies on this show.

Jay Clouse 3:43
All of these episodes will be linked in our show notes to the web pages for them, but you can find them on any podcast player that you’re listening through. We will also include the episode number, either CC for coffee chat or Up for a standard episode with the founder as we call these out. So Eric, what do you think. Want to get started?

Eric Hornung 4:04
Let’s do it. I know that this first episode is one that you loved. This first episode is with Alex Rubalcava of Stage Venture Partners out in Los Angeles and it’s coffee chat number 33. Jay, what do you love about this episode?

Jay Clouse 4:18
This episode got pretty nerdy pretty quick. I really liked it, but it wasn’t inaccessible. It was just very well articulated, thoughtful research from Alex Rubalcava, who has clearly just spent his entire life trying to become as financially literate as possible in both the public and the private markets. He’s out in Los Angeles and he also invested in Balto, a company that’s been on the show, and spoke to why he invested in Balto, all those reasons why I really liked this episode. Next up, we have an interview with Blake Lawrence, the founder and CEO of Opendorse, Up Episode 50. Eric, would did you like about this episode with Blake?

Eric Hornung 5:01
Well, I think it just starts with the energy that Blake brings to an interview because he just really brought it, you know? I mean, we listened to these episodes three times each. You listen to it when you’re doing it, you listen to it when you’re editing it. And then usually I listen to it when it comes out live on the stream. And Blake’s interview is one that I think I’ve gone back and listened to, again, because he has so much insight, he has so much energy and excitement about what he’s doing. And they’re doing something really cool that is very public facing with athletes. And now every time I see an athlete’s Instagram or Twitter, or Facebook or whatever it is, I think, I wonder if Opendorse is behind that.

Jay Clouse 5:39
Blake also keeps us in his monthly investor updates, which I really, really appreciate. And it’s been really fun to see their growth and success since the recording of this episode. But maybe my favorite part of this episode is that I think our episode here with Blake has the distinction of being my very favorite opening clip of an episode, which is really a testament to Nathan, our audio engineer more than anything else, but it is definitely my favorite opening to an episode.

Eric Hornung 6:06
So go check that out. That is up Episode 50 and our next episode our next re-listenable is one that I don’t think Jay has stopped talking about since we recorded it. It comes from the concept of platform and venture capital when we talk with Stephanie Manning of Lerer Hippeau. Jay, I kind of alluded to it a little bit, but what did you like about this episode?

Jay Clouse 6:29
We talked to Stephanie at Lerer Hippeau about platform, platform became one of those baad-en Meinhof… bought and baader…?

Eric Hornung 6:36
Baader. Badder Meinhof.

Jay Clouse 6:38
Baader Meinhof phenomenons, where now I see platform talked about all over the place. And I don’t know if it was timing and the team at Lerer Hippeau and New York kind of leading the charge of platform as part of venture firms. But I see it all over the place, even to the point where front of the podcast Siby just got a role leading platform at Earnest Capital, which is awesome, very excited for him. But platform as an idea, to me really stretches further than just the the role at venture firms like layer Hippo, or like Ernest capital. Platform is something a lot of people do for free as community builders in their community. And I think more and more as people really build out capabilities of leading platform teams and thinking about a portfolio as a platform, we’re going to see that concept taken and applied in different ways in the startup space.

Eric Hornung 7:31
And you wrote a little article about that, didn’t you?

Jay Clouse 7:34
I did in the update issue two, why we need platform in startup communities. Would love for you guys to check that out, if you haven’t read issue two and its entirety. Fourth on the list here is a coffee chat with Kate Shilo Beardsley of Upslope Ventures. It’s Coffee Chat, Episode 32. Eric, what stood out to you about this episode in this conversation with Kate.

Eric Hornung 7:54
It’s just really cool being able to hear about the history of specific cities in their startup journeys because we talk with founders, community builders and investors from all over the country. We’ve talked with people from, I believe, 65 cities at this point. And most of them are not as advanced as New York City is. But Kate was there when Lerer Hippeau was still Lerer Ventures, and she was there on day one. So she saw the New York ecosystem beginning and blossoming. I think when we hear from people like Alex Rubalcava that LA now has 250 venture capital firms and 10 years ago, it had less than a handful, it’s cool to be able to talk to the people who were there when it was less than a handful. And Kate is one of those people, and she had some awesome insight. So when we look at the rest of the country, and the growth that is going to happen, or that is happening, that’s where we are now.

Jay Clouse 8:47
Really liked the what felt like real authenticity in this conversation. I was looking for a word that wasn’t authentic, but I just couldn’t find it.

Eric Hornung 8:54
Yeah, there’s nothing better than the redundancy of real authenticity.

Jay Clouse 8:59
There just wasn’t the posturing that you hear sometimes when people are talking about their thesis or what they’re trying to do. You know, at one point we asked Kate, why do you still invest at the early stages when you’ve built such a pedigree, you can invest probably at any stage you want. And she said, because that’s what’s interesting to me. Very simple answer.

Eric Hornung 9:16
All right, Jay. So that wraps up our four re-listenables for this episode. I will say that I think majority of the Upside episodes are re-listenable. I think you can go back and listen to the whole catalog and you get to know Jay and I very well, and you’ll know that we hate each other.

Jay Clouse 9:32
Hmm..

Eric Hornung 9:33
Yeah, just absolutely despise each other.

Jay Clouse 9:36
Oh, Merry Christmas to you, too, Eric.

Eric Hornung 9:38
It’s been great. It’s been a lot of fun. But we gotta move on, Jay. We got to push forward through this framework of the 12 Days of Christmas. And we’re going to get into our next segment, which is new business models. I don’t know how this came up. Maybe it was organic. Maybe it was your interest. Maybe it was my interest. But whenever there is a pitch that is Hey, something is structurely going to be different in this business model, that’s interesting to me, and that’s interesting to you. I can tell because we have a lot of those companies on.

Jay Clouse 10:09
And we’re looking for more. But our first of our three French hens here, our three new business model episodes to highlight, is Josh Chapman of Convoy Ventures, this is coffee chat 24. Convoy Ventures invest in Esorts in gaming. Eric and I spent quite a bit of time trying to find someone in the Esports and gaming space that was not based in Silicon Valley. Struggled to find that person for quite a while until we got connected to Josh, and boy, did he deliver, because coming from a place where we didn’t know much about the space at all, it seemed like he came with structured notes or an encyclopedia or something, he just really gave us a ton of great background and context. So if you haven’t really dove into the world of Esports and gaming, really recommend Episode 24 Coffee Chat 24 with Josh Chapman.

Eric Hornung 10:55
In the world of financings, specifically alternative financings, we’ve had a few companies on the podcast to date. But the one I want to talk about first is the one that I think was my favorite episode ever to actually record, which is Up Episode 43 with Johann of inKind. Now, it was a little unfair because he brought us wine to the recording. So you know, he definitely stacked the deck in his favor there. But also the business itself was awesome. Jay, What did you like about this episode?

Jay Clouse 11:30
Yeah, when when someone walks in the recording room with a bottle of wine, we know it’s going to be a special episode. And I also know that I’m immediately going to be out of my element as Eric dives in and talks about wine. Business model was fascinating and it really took me a while to wrap my head around it. Eric jumped to it like a fish to water. But what I really liked about this episode was Johann’s background and, and how generous he was in sharing his story going through the first batch of techstars and investing in the first TechStars fund. And you know why he spends his time on things he spends his time on and how inKind has evolved based on his own interest and what he’s seen working. So very unique business model, very unique guy. Really recommend checking out Episode 43 with Johann, Eric. And next up we have Tyler Tringas and Kevin McArdle, one of our few episodes where we have two guests on at the same time talking about Earnest Capital in Coffee Chat number 16. What stood out to you about this episode?

Eric Hornung 12:24
I think this is our most downloaded episode of all time.

Eric Hornung 12:27
It’s in the top two. And it’s for good reason. Tyler is kind of the Twitter poster child for–and he’s going to hate that I call it this–but the whole alt-VC movement, which is, there’s this traditional Silicon Valley based venture capital financing regime, and then there’s people trying to do other things outside of it. And that’s, I think people call that the not VC movement. I could be wrong there. The way that Tyler went about it and the whole seal agreement that they created, I think is fascinating. I think when you have Kevin there from Sure Swift, who is working in a profitable, SAS-based, private equity, acquisition company that actually bought Tyler’s company, we just had some incredible conversations that are so different than what you’re getting in your traditional venture capital, here’s how to go pre-seed, seed, A, B, C, growth, blitzscaling, etc.

Jay Clouse 12:27
It’s in the top two.

Jay Clouse 13:26
And extremely founder focused. Everything Tyler and Kevin talked about was very much to the lens of this is what we find a lot of founders wanting and unable to get in traditional venture capital markets.

Eric Hornung 13:38
And I think that’s an area that if you’re interested in it, I think is only growing because not every startup company is a venture capital backable company. And we talked a lot and this is a little bonus episode out there but in the Zive episode, which is Episode 49. Wow, you didn’t see that coming, Jay. A little tie in, a little tie in outside of the 12 where there isn’t this market for fundraising for companies that want to be $300 million exits.

Eric Hornung 14:05
All right, Eric, we’ve made it through our four calling birds, the re-listenables, our three French, hence the new business models. Now here comes our Five golden rings, five episodes involving founders or investors who have made big announcements in the last few months. I think this category is really cool. And it’s something that I really like about Upside and what we’re doing here because whenever you see one of our podfolio companies in the news, you can go back and see what that company was like 6, 12, 18 months ago, and further as we keep on going with this podcast. And it’s cool to see their evolution and the way that they think in the way that they change and the way their company has grown. So as we get further and further out from recordings, there’s going to be more and more value to seeing how these founders were thinking at an early stage versus the narrative fallacy of, Oh yeah, here’s what I was thinking.

Jay Clouse 15:02
And our first episode here is with Haley Keith of Mito Materials, Episode 46. At the time, they were working through some pilots and doing a lot of research, they had a lot of grant funding. Since we’ve talked to Haley, they have joined and completed Demo Day of TechStars, which is a great sign for them. Eric, this is one of our hard sciences company, and I know you love interviewing founders in the hard sciences.

Eric Hornung 15:26
It kind of plays into that, not VC space, too, because the hard sciences are a completely different venture capitalist investment than your traditional software. And I like the hard sciences because I think that it’s real innovation, it’s building something that’s doing something demonstrably, physically better. And I think when we started this podcast, we were big fans of Josh Wolf, I think that still holds and this is the space that he plays in which is like far off hard sciences. And it’s just hard. It’s it’s a harder thing to do.

Jay Clouse 16:00
Also has a unique twist of Haley’s cofounder being her husband. And we talked about that a little bit in the episode as well. So if you’re interested in hearing how a founding team may also be a married team, that’s a little tidbit that I enjoyed in that conversation.

Eric Hornung 16:15
All right, then we have to jump to, I think what we said was our best interview to date at the time we finished the recording here, Jay. And best interview means that this guests just carried us. He absolutely carried us. as Ezra Galston of Starting Line recently raised $17 million dollar fund. Some of his earlier investments included cameo and some other big investments from around Chicago in the Midwest and he is doing consumer in the Midwest. Jay, What did you like about this must listen to interview?

Jay Clouse 16:50
Well, Ezra also has the distinction of being the guest that turned us down the most times before getting on the show. He’s the contrarian in our, our guest portfolio. And I think that just underscores the way Ezra thinks about everything, you know, he was thinking about his time when we first reached out to him and what he was focused on. And he said, now’s not the right time. But Ezra just thinks differently than most, which shows in this thesis of, I’m going to invest in consumer companies here in the Midwest, which is not historically the hotbed of consumer companies. So this interview got pretty deep and even personal hearing about Ezra’s his background a little bit. He has a an explicit focus on mental health for founders. And since that time, he’s even put on an event talking about how awards shows for founders of early stage companies is a bad idea. And I just liked that contrarian thinking that Ezra carries through his investment thesis, have you?

Eric Hornung 17:47
Yeah, I think I mentioned most of the things that I liked about it. I think he said that some of the questions we asked kind of felt like a second or third date. So that’s kind of how deep that episode gets. His wife also does Psychological Services, that might not be the right term, but for startup founders, so I said it in the outro of, of that episode, but I would like to have her on to talk about her work and what she’s seeing with founder psyche.

Jay Clouse 18:15
Next up we have an early, early episode, our first live podcast and interview with Corbett Morgan of Loop Returns. That was episode eight. It’s been a long time since we talked to Corbett. But recently Loop Returns just announced a $10 million series A and Eric, what really stood out to me about this interview was I think we use the word in the deal memo. Everything Corbett was saying just felt prophetic, you know, talking about what returns was going to look like as an experience for consumers on small platforms with small merchants all the way up to Amazon and how the small merchants could compete with Amazon. It just felt like he was very, very well versed in the history and potentially the future of e-commerce. And it seems like investors are agreeing because they’re, they’re backing with returns with a $10 million series A, which just close here in this past November of 2019.

Eric Hornung 19:07
also highlight something cool that happens in the Upside network where we talked about Stephanie Manning from Lerer Hippeau, and Lerer Hippeau was an investor in Loop Returns. So we see kind of those little crossovers happening all the time behind the scenes, and it’s really cool. So if you want to hear how Jay and I think on our feet, he mentioned, it’s a live podcast episode. Our first one, Jay, that was a, we’re young bucks.

Jay Clouse 19:32
Doing quite a few now. But that was fun. It’ll hold a special place in my heart as being our first live episode here in Columbus, Ohio.

Eric Hornung 19:39
Alright, so let’s jump into our penultimate. Do you like that word, Jay? Penultimate. You weren’t expecting that?

Jay Clouse 19:45
No. Well, a lot of times you just say words and say, I don’t know if that’s the right word.

Eric Hornung 19:50
Most the time, I don’t know if it’s the right word. Our penultimate episode, which is Rachel Carpenter of Intrinio, Upside Episode 24. Rachel just closed a series A, and she’s building a financial firm outside of New York City. Jay, what did you like about this episode?

Jay Clouse 20:12
I loved how unapologetic comes to mind. Rachel is very proud of the fact that she was building this company in, in the Tampa Bay, St. Pete area in Florida. She thought it was ridiculous the way that the current state of financial data and information was and really set out to change that. And since our interview with Rachel, like you said she’s raised a $5 million series A, they’ve completely rebuilt their website. She’s been named a Forbes 30 under 30. She took part in our panel at South by Southwest in 2019. She’s been on a little bit of a war path in the best way. So I really love seeing how quickly this company is innovating in a space where I have to think there are a lot of aggressive competitors with deep pockets who will do what they need to do to try to squash a company like Intrinio. And yet here they are continuing to be division.

Eric Hornung 21:00
Yeah, if you were to look at the internal website and just say, okay, who founded this company? My guess is, you’d come up with a computer science engineer who worked at Goldman for five years and lives in Greenwich Village in New York City. It wouldn’t be Rachel, who was sleeping on her co-founders couch for a year and a half, prototyping and hacking this together with no professional financial experience, and then moving to Tampa, instead of New York City. So awesome story about relentlessness and building for the future of financial data. And Jay, that brings us to, drumroll please. [drumroll] No, it’s Christmas, dude, you got to pa rum pa pum pum. Like, c’mon. Our final episode.

Jay Clouse 21:47
This episode was an interview with Marcus Carey of Threatcare. It was Upside Episode 42. This happened at South by Southwest the same time that we interviewed Johann, but this was in Marcus’s office, he very graciously let us set up shop for a couple of days and the Threatcare conference room, interviewing founders at South by Southwest from Austin, Texas, and Eric, Who would have guessed that Marcus Carey and Threatcare was the first company in our podfolio to reach an exit.

Eric Hornung 22:17
I wouldn’t have guessed first just because of you know, the way time works, but I would definitely have guessed that, man, why would you not want to acquire Marcus? That dude is sharp. He’s put together he was building something amazing. He told me that aliens don’t exist. So you know, I really learned a lot.

Jay Clouse 22:35
Love that little bit of our episode, and I think there’s an Easter egg at the end of the Threatcare episode, just some rapid fire, okay, Marcus, you’ve worked at the NSA and you seem to probably have a lot of access to things that I want to know. What’s the truth about this, and aliens was one of the first things in mind. Were there aliens, and he just said no. He said if, if there were aliens, then Snowden would have talked about the aliens. But we’re happy for Marcus. We’re very excited to have the first acquisition in our podfolio. And that is a trend that I just assume will be stronger and stronger in 2020 here in the coming year for us at Upside.

Eric Hornung 23:09
And I think some other trends that you can expect from us on Upside are further dive into our e-commerce blitz.

Eric Hornung 23:15
The blitz.

Eric Hornung 23:16
Talking more about geography and what it means for your company. Do you have to move to a different city like our friends at Oros did? Or can you buck the trend like our friend, Rachel carpenter? We’re going to probably dive into more hard sciences companies and companies that don’t fit the traditional venture capital model. I’d love to do a b2b SAS company that is operating in a pure bootstrap mentality, we’re probably going to talk a lot about communities that are in their infancy so we might get even more niche and more fringe than usual and talking about things like Sioux Falls, you know. We’re going to get down into maybe what some people will consider the tier five of venture capital communities in the United States. We’re also going to look at more alternative business models. That’s something that Jay and I really enjoy. Of course, we’re going to stay in the fringe, in the niche, and anything that seems like no one’s talking about it, that’s where we want to be. And then we’re going to keep our eye on emerging VC trends and what’s going on in New York and Boston and San Francisco and how those can apply to the rest of the country.

Jay Clouse 24:20
We’re going to be moving around. We’re gonna be back at CES this January. We’re going to be back at South by Southwest. This March.

Eric Hornung 24:26
We’re going to be in Mexico City. Well, I will.

Jay Clouse 24:29
And we might even be at a few other cities showcasing our film “Test City, USA.” So if you want us to visit you or visit a founder or an investor in your community, tweet at us as always @upsidefm or email us hello@upside.fm. If you have any thoughts on these episodes that we shared in our 12 episodes of Christmas today, we’d love to hear them. We’d love to hear your favorite episode of the year, again, just tweeted us @upsidefm or email us hello@upside.fm. Thanks for listening this year, and we’ll talk to you in 2020.

Happy Holidays from the upside team!

Last year, we shared an episode called: JE006: eight crazy months of upside. This year, we’re back and sharing the 12 episodes of Christmas — 12 exceptionally notable episodes we recommend listening to again.

The episodes mentioned, in order:

  1. CC033: Alex Rubalcava of Stage Venture Partners // investing in early-stage enterprise software
  2. UP050: opendorse // helping athletes share more content (feat. Braxton Miller of the Philadelphia Eagles)
  3. CC007: the rise of platform in venture capital // a Coffee Chat with Stephanie Manning (Lerer Hippeau)
  4. CC032: Kate Shillo Beardsley of Upslope Ventures // scaling early stage investments across the country
  5. CC024: investing in the picks and shovels of esports and gaming // a Coffee Chat with Josh Chapman (Konvoy Ventures)
  6. UP043: inKind // redesigning restaurant financing with House Accounts (feat. Kevin Tien of Himitsu and Hot Lola’s)
  7. CC016: a new source of funding and optionality for early stage founders // a Coffee Chat with Tyler Tringas (Earnest Capital) and Kevin McArdle (SureSwift Capital)
  8. UP024: Intrinio // powering fintech innovation with access to financial data
  9. UP046: MITO Material Solutions // chemical additives for tougher composites
  10. UP042: Threatcare // automated third-party threat detection
  11. CC017: building a world class venture firm in Chicago // a Coffee Chat with Ezra Galston (Starting Line)
  12. UP008: Loop Returns // creating the perfect ecommerce customer returns experience (live from Columbus Podcast Festival)
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