Industries that resist embracing digital transformation face potential extinction. But change doesn’t come easy to everyone. In this episode, Dr. Jeannette zu Fürstenberg reveals how her venture capitalist fund connects existing economy leaders with emerging digital disruptors to future-proof their processes. She also explains why an entrepreneurial mindset is key to overcoming resistance to change.
Press play to hear Jeannette’s thoughts on…
The Conflict Between Old and New
“If you put two groups together, one has everything to lose. Why? Because [established companies] are at the height of their success and every potential change or disruption could mean a risk to the company. And if you look at startups, it's a very different dynamic, right? They have everything to win and everything to gain.”
Investing Early
“That's what you do as a seed stage investor, you have to tune into the vision and always assume you're the stupidest person in the room. And then these people really have something very, very unique to what they're doing. And obviously you are mindful of asking all the right questions, but typically the best entrepreneurs have thought about them 10 times over before you even ask them.”
The Emerging Global Workforce
“What's so exciting about technology is that code is really a lingua franca. It's a way to tie talent together in a global way. Global talent is becoming a reality. It's great to see teams that interact from all over the world across different time zones, across different continents, different cultural backgrounds, but all unified by a common mission and a common vision.”
There's always this fear within
Speaker:organizations of not hiring IBM,
Speaker:of not going with the blue chip
Speaker:that is already available and
Speaker:existent and betting on a player
Speaker:that may not be around a couple
Speaker:of months or years from now.
Speaker:You need that backing and that
Speaker:halo from the leadership of the
Speaker:C-level to say, "You know what?
Speaker:We want you to do that because
Speaker:that's what change will look
Speaker:like for us. That's what's going
Speaker:to make us competitive five
Speaker:years from now."
Speaker:That's Jeannette von Fürstenberg,
Speaker:the founding partner of La
Speaker:Famiglia, a unique venture
Speaker:capital fund based in Berlin.
Speaker:Unlike traditional VCs, La
Speaker:Famiglia looks to connect old
Speaker:economy giants in Europe with
Speaker:young digital disruptors. So far,
Speaker:the fund has raised more than €
Speaker:100 million and invested in
Speaker:almost 50 companies, 3 of which
Speaker:are unicorns. Before La
Speaker:Famiglia, Jeannette worked for
Speaker:Ernst & Young, Synthesis and AXA.
Speaker:She also founded AMAZE, a
Speaker:shopping app for smartphones
Speaker:geared toward fashion bloggers.
Speaker:Not only is Jeannette active in
Speaker:the startup ecosystem, she also
Speaker:has a deep understanding of the
Speaker:historical trends that drive
Speaker:business and holds a PhD in
Speaker:philosophy and entrepreneurship.
Speaker:In today's episode, we'll hear
Speaker:how Jeanette and her team at La
Speaker:Famiglia are transforming the
Speaker:way traditional companies and
Speaker:startups build networks and work
Speaker:together to create radical
Speaker:change. This is Daniel Saks, co-
Speaker:CEO of AppDirect, and it's time
Speaker:to decode new innovation in the
Speaker:old economy. Welcome to "
Speaker:Decoding Digital," a podcast for
Speaker:innovators looking to thrive in
Speaker:the digital economy. I'm your
Speaker:host, Daniel Saks, and I'll sit
Speaker:down with other founders, CEOs
Speaker:and changemakers to decode the
Speaker:trends that are transforming the
Speaker:way we work. Let's decode.
Speaker:Jeannette, I'm so honored to
Speaker:have you on Decoding Digital.
Speaker:Welcome.
Speaker:Thank you, Dan. I'm honored to
Speaker:join you today.
Speaker:We first got to know each other
Speaker:as you graciously hosted the Y
Speaker:NOW conference in Germany
Speaker:connecting multi-generational
Speaker:industrial leaders to tech
Speaker:startups. Many of those startups
Speaker:are disrupting or striving to
Speaker:disrupt the incumbents, so it's
Speaker:pretty interesting that you
Speaker:brought these two groups
Speaker:together. Can you share your
Speaker:vision for why bringing these
Speaker:groups together would be
Speaker:beneficial?
Speaker:Yeah, I think there's actually a
Speaker:lot that they have in common.
Speaker:It's entrepreneurs that are very
Speaker:much in the process of running
Speaker:and growing their own companies.
Speaker:What's interesting about that is
Speaker:if you put entrepreneurs face-to-
Speaker:face, they may have grown in a
Speaker:different generation, but they
Speaker:always have the best interest of
Speaker:the company at heart. If you
Speaker:put them together in an intimate
Speaker:environment, where all the
Speaker:management levels below that
Speaker:fade away and it's all about
Speaker:ideas, and it's all about
Speaker:progress, and it's all about
Speaker:change that everybody opens up.
Speaker:That's how you bring them closer
Speaker:together and that's very, very
Speaker:needed driver to make digital
Speaker:transformation in reality here
Speaker:in Europe.
Speaker:It's very powerful and I was so
Speaker:grateful to be there and some of
Speaker:the relationships I've built end
Speaker:up being business contacts,
Speaker:friends, and it's an incredible
Speaker:network. Many times in
Speaker:technology, we interface only
Speaker:online especially in this era,
Speaker:but the importance of deep
Speaker:relationship is important. Can
Speaker:you tell me when you're advising
Speaker:your companies and the people
Speaker:you interact with across Europe,
Speaker:how did they build this network
Speaker:and how did they get to know
Speaker:each other?
Speaker:It's an interesting question. A
Speaker:part of the reason why Renee and
Speaker:I got together and said we need
Speaker:to do something about the
Speaker:ecosystem there is that they
Speaker:seem to be very separate for a
Speaker:long time. There was not many
Speaker:interfaces where they would
Speaker:actually meet. Question is
Speaker:always, if you put two groups
Speaker:together, one has everything to
Speaker:lose, because they're at the
Speaker:height of their success and
Speaker:every potential change or
Speaker:disruption could mean a risk to
Speaker:the company. If you look at
Speaker:startups, it's a very different
Speaker:dynamic. They have everything to
Speaker:win and everything to gain.
Speaker:That's where in those different
Speaker:speeds and those different modes
Speaker:of emotion you can create
Speaker:friction. It's very important
Speaker:that you have a trusted
Speaker:relationship environment, where
Speaker:you can interact and where
Speaker:everybody opens up to actually
Speaker:embracing change and embracing
Speaker:potentially new or even
Speaker:disruptive ideas. I think the
Speaker:idea was very much born from the
Speaker:way that we host friends as a
Speaker:family, where it's about
Speaker:intimacy, it's about trust, it's
Speaker:about also having fun together,
Speaker:it's about sharing memories.
Speaker:That's the base as to how, we're
Speaker:now came into being and also,
Speaker:the way we try to now have our
Speaker:portfolio companies be connected
Speaker:to potential customers, connect
Speaker:to potential partners. It's a
Speaker:very necessary aspect of our
Speaker:European ecosystem to bring
Speaker:these two groups into a closer,
Speaker:codependency or core
Speaker:relationship, simply because I
Speaker:think Europe will only survive
Speaker:if we manage to shift the
Speaker:existing value creation that is
Speaker:very much existent in our many,
Speaker:many industry fields, from
Speaker:process industry, to
Speaker:manufacturing, to automotive,
Speaker:etc. These are very, very
Speaker:native and rich industries where
Speaker:a lot of the knowledge is locked
Speaker:up in processes and industry-
Speaker:specific knowledge that is now
Speaker:being transitioned and being
Speaker:formed into digital products.
Speaker:The more those two generations
Speaker:of entrepreneurs intersect and
Speaker:the more they cooperate, the
Speaker:stronger the outcome will be for
Speaker:Europe eventually.
Speaker:Certainly. We have a fundamental
Speaker:belief that digital
Speaker:transformation is not just about
Speaker:technology, it's about the
Speaker:people. Oftentimes, it comes to
Speaker:those human relationships. The
Speaker:example that you gave, you
Speaker:mentioned René. For those
Speaker:listeners, we had René Obermann
Speaker:on the podcast earlier in the
Speaker:season. He was formerly the CEO
Speaker:of Deutsche Telekom and is now a
Speaker:partner of Warburg Pincus and
Speaker:chairman of Airbus. René and
Speaker:Jeannette hosted Y NOW, which
Speaker:was a conference bringing
Speaker:together these different leaders.
Speaker:It's such an example of how
Speaker:people are able to open up. René
Speaker:and I got to know each other
Speaker:when we were innovating at
Speaker:Deutsche Telekom and enabling
Speaker:them to digitally transform to
Speaker:offer cloud services. Those
Speaker:relationships are what drives a
Speaker:proliferation of technology.
Speaker:That's what Jeannette did with
Speaker:La Famiglia. Can you tell us a
Speaker:little bit more about how you
Speaker:became a venture capitalist and
Speaker:your vision behind it?
Speaker:Yeah, super happy to. I was
Speaker:always driven and motivated by
Speaker:entrepreneurial vision as a
Speaker:major force of change, in a way.
Speaker:What's interesting, especially
Speaker:about seed-stage companies, is
Speaker:that they're almost like a
Speaker:seismographic anticipation for
Speaker:societal change and for what
Speaker:will manifest into an economic
Speaker:reality three to five years from
Speaker:now. By being very close to
Speaker:that pulsing element of what the
Speaker:future will become, you're
Speaker:automatically in a position
Speaker:where you have some degree of
Speaker:influence. I don't want to
Speaker:overplay it, but you take at
Speaker:least ownership of what this
Speaker:future could look like. That's
Speaker:from a very macro philosophical
Speaker:perspective. That's what would
Speaker:drives me into the sector. Next
Speaker:to working alongside very
Speaker:talented entrepreneurs, they
Speaker:have incredible energy and
Speaker:incredible vision that deserves
Speaker:so much respect and deserves all
Speaker:the support they can get. Now,
Speaker:that brings me to the support
Speaker:angle. When we first started La
Speaker:Famiglia, now almost five years
Speaker:ago, the idea was very much to
Speaker:see where we could build bridges.
Speaker:Especially for B2B founders, we
Speaker:could enable them to speak to
Speaker:partners in the industry to test
Speaker:their product, to run initial
Speaker:PoCs, get customer feedback and
Speaker:validation on the products that
Speaker:we're building. Initially, what
Speaker:you see within the start-up
Speaker:ecosystem, you typically have a
Speaker:strong founding team and
Speaker:potentially great technology.
Speaker:You have what seems like a great
Speaker:and big market, but you're
Speaker:always missing investment in
Speaker:seed stage. You're always
Speaker:missing these initial revenue
Speaker:validation points that larger
Speaker:investors are then looking for.
Speaker:The earlier you can bring those
Speaker:to the table, the faster these
Speaker:companies typically get to early
Speaker:product market fit and from
Speaker:there to scale. Doing that, by
Speaker:helping them build these bridges
Speaker:early on, is a better use of the
Speaker:capital invested. Time is money.
Speaker:Also, for these founders, the
Speaker:earlier they can actually get
Speaker:their product into motion, the
Speaker:more chances they stand. Also,
Speaker:from an international
Speaker:perspective, to become the
Speaker:winner in there, the finance
Speaker:sector. That's why La Famiglia
Speaker:was created. It's very much the
Speaker:essence of our platform, is to
Speaker:connect established industry and
Speaker:the startup ecosystem, making
Speaker:sure we use the tail-end to
Speaker:prevent for both sides to make
Speaker:bend the change, for what's
Speaker:possible in Europe.
Speaker:I've been proud to watch La
Speaker:Famiglia grow over the years.
Speaker:You've built up an incredible
Speaker:portfolio. Can you share some of
Speaker:the companies that you have in
Speaker:your portfolio?
Speaker:Yes, sure. I'm happy to. One of
Speaker:the more notable ones would be a
Speaker:company called Personio, which
Speaker:is an HR platform for SMBs,
Speaker:similar to Workday in the US,
Speaker:but for smaller and medium-sized
Speaker:businesses. That is doing
Speaker:incredibly well. Another one
Speaker:would be Forto, which is a
Speaker:freight forwarding company
Speaker:essentially digitizing logistic
Speaker:workflows, or the freight
Speaker:forwarding services. Mainly, now,
Speaker:between Europe and Asia, but
Speaker:potentially also, going global
Speaker:as a next step. We've pre-seeded
Speaker:them. Especially for this
Speaker:company, it was so important to
Speaker:get connections and warm leads
Speaker:as they scaled from the initial
Speaker:Amazon power seller to a smaller-
Speaker:sized business, to medium-sized
Speaker:businesses, to larger-scale
Speaker:businesses. It's important you
Speaker:get the volume right. You
Speaker:initially needed the trust of
Speaker:entrepreneurs who went to their
Speaker:freight forwarding department
Speaker:and said, "You know what? We may
Speaker:not give them 100 percent of our
Speaker:rate capacity, but we can give
Speaker:them 10 percent." I'm just
Speaker:curious to see what it will do
Speaker:to the transparency in my supply
Speaker:chain, what it will do to my
Speaker:freight cost, and what it will
Speaker:do to the overall transparency
Speaker:and views we get from a shipper
Speaker:perspective." Hadn't we had the
Speaker:buy-in of these founders
Speaker:initially, that made sure they
Speaker:elbowed this into their
Speaker:organization and work that
Speaker:muscle, it probably would have
Speaker:been a lot harder for these guys
Speaker:to get to initial customers.
Speaker:There's always this fear within
Speaker:organizations of not hiring IBM,
Speaker:of not going with the blue chip
Speaker:that is already available and
Speaker:existent, and betting on a
Speaker:player that may not be around a
Speaker:couple of months or years from
Speaker:now. You need that backing and
Speaker:that payload from the leadership
Speaker:of C-level to actually say, "We
Speaker:actually want you to do that.
Speaker:That's what change will look
Speaker:like for us. That's what's going
Speaker:to make us competitive five
Speaker:years from now." That was a win-
Speaker:win. It was a win for the
Speaker:companies that embraced Forto
Speaker:early. It's a win certainly for
Speaker:Forto as well, because they've
Speaker:now become a big player here in
Speaker:Europe and continue to scale at
Speaker:a massive speed. That would be
Speaker:another example. I could keep
Speaker:going and going. There's so many.
Speaker:These are two great examples to
Speaker:start with.
Speaker:Forto is such an incredible
Speaker:example. We've noticed, when
Speaker:we're trying to drive digital
Speaker:transformation within an
Speaker:enterprise, is that it takes a
Speaker:certain set of characteristics
Speaker:of an individual in order to
Speaker:drive that transformation. We
Speaker:call those people digital heroes.
Speaker:Those digital heroes can exist
Speaker:at any part of the organization.
Speaker:In many cases, they can be the
Speaker:CEOs or the owners. In other
Speaker:cases, it could be people on the
Speaker:ground that are going to
Speaker:champion this innovation. To
Speaker:have a culture of innovation at
Speaker:a large enterprise, it does
Speaker:require some level of risk-
Speaker:taking and alignment. 10 years
Speaker:ago, when we were working with
Speaker:businesses in Europe, there were
Speaker:very few companies that had the
Speaker:commitment of both the executive
Speaker:leadership as well as the
Speaker:innovators on the ground to take
Speaker:that risk to work with a startup.
Speaker:What I found is that there's
Speaker:definitely been an acceleration
Speaker:in innovators in Europe
Speaker:recognizing that they need to
Speaker:disrupt themselves. Is that a
Speaker:trend that you've seen? How
Speaker:often do your companies still
Speaker:face disruption or challenge?
Speaker:It's interesting to hear your
Speaker:perspective. You are obviously
Speaker:very established. You've been
Speaker:around for many years now.
Speaker:Looking at the learning curve
Speaker:that I had when we first started
Speaker:out five years ago, a lot of B2B
Speaker:companies we went to and we
Speaker:confronted with a problem, they
Speaker:were like, "Well, that is all
Speaker:B2C phenomenon. Like Uber and
Speaker:everything you're telling me
Speaker:about what's happening and
Speaker:disruption on the consumer side,
Speaker:has nothing to do with my
Speaker:business, right? We're going B2B."
Speaker:At the time, it was very hard
Speaker:for them to embrace the idea of
Speaker:how software is eating the world.
Speaker:Now, five years forward. what
Speaker:we're seeing is that is no
Speaker:longer even a question. It's not
Speaker:even a question of whether
Speaker:software is eating the world. It
Speaker:has eaten the world. Everything
Speaker:is being defined by technology
Speaker:these days. It's no longer a
Speaker:single vertical, but actually
Speaker:completely horizontal and going
Speaker:a lot across all layers of value
Speaker:creation. That's where some
Speaker:people, and that goes to your
Speaker:point then around innovation
Speaker:mindset and culture, if you're
Speaker:open-minded. Most entrepreneurs
Speaker:remain curious until they're
Speaker:very, very old. They drive that
Speaker:curiosity into the DNA of their
Speaker:company. That's what makes them
Speaker:remain competitive. We have a
Speaker:couple of people we work with
Speaker:where the founding entrepreneur
Speaker:is still very much up and
Speaker:running. He's maybe above 70,
Speaker:but they're still embracing
Speaker:change. They want to learn
Speaker:about what's going on. They may
Speaker:not understand the full depth of
Speaker:it, but they want to make sure
Speaker:that part of the people get it.
Speaker:To your point about the digital
Speaker:hero, that's one group.
Speaker:Certainly, you have the other
Speaker:camp that sees that as well, but
Speaker:is in denial with regards to
Speaker:what it will mean for their
Speaker:business. It's still not
Speaker:sensible. It's a little bit like
Speaker:popcorn. You put it into the
Speaker:microwave and for 5 minutes,
Speaker:nothing happens. All of a sudden,
Speaker:everything explodes. That whole
Speaker:disruptive element, it's very
Speaker:hard for them to sense because
Speaker:they've come from a motion.
Speaker:That's an interesting historical
Speaker:fact. They've always grown by
Speaker:capturing markets. The whole
Speaker:innovations always geared to
Speaker:conquering something new. They
Speaker:were never confronted with a
Speaker:disruptive innovation force they
Speaker:just had to react to all of a
Speaker:sudden, that just put the whole
Speaker:organization under pressure. For
Speaker:them, it's much harder to get
Speaker:to that level of change.
Speaker:Another aspect of the mindset
Speaker:that I've observed in many cases
Speaker:is that if you look at post-war
Speaker:Europe, a lot of the companies
Speaker:that we see now being really,
Speaker:really successful were formed
Speaker:then. They were formed in a very
Speaker:decentralized fashion.
Speaker:Especially in Germany, we have
Speaker:these hidden in the rock market
Speaker:champions that sprouted in the
Speaker:middle of the Black Forest. You
Speaker:would find a world market leader,
Speaker:the brand you know, but you
Speaker:would never find your way into
Speaker:that little village, which is
Speaker:great, right? It certainly has
Speaker:nurtured our so-called
Speaker:Miittelstand that is so globally
Speaker:well-perceived. What also is
Speaker:interesting about these types of
Speaker:companies is that they have very
Speaker:much grown from an idea of
Speaker:patent-driven innovation. Like I
Speaker:come up with an idea of anybody
Speaker:wants my new screw. Because the
Speaker:screw becomes a huge success, I
Speaker:patent it for 20 years. I milk
Speaker:the cow. I develop the next
Speaker:screw. I damn well make sure
Speaker:that I have the walls up. Nobody
Speaker:sees the drawings while I think
Speaker:about my third screw. I
Speaker:definitely don't want to share
Speaker:any insights about that because
Speaker:that's where my bread and butter
Speaker:will be born. For these people
Speaker:to transition in their mindset
Speaker:into an open innovation
Speaker:ecosystem, it's terribly hard.
Speaker:It's a technique so deeply baked
Speaker:into their DNA that when you
Speaker:tell them about a platform, even
Speaker:if they get the other platform,
Speaker:they go, "We need to build our
Speaker:platform." No. You're not
Speaker:building your platform because
Speaker:it's very hard for you to build
Speaker:your own platform. Try to
Speaker:understand what part of your
Speaker:value creation do you actually
Speaker:think you can retain five years
Speaker:from now and what part will just
Speaker:go away. What is it may be
Speaker:about what you're doing right
Speaker:now that there's so much core
Speaker:understanding and knowledge in
Speaker:the process that could
Speaker:potentially transfer into some
Speaker:degree of digital service,
Speaker:digital revenue? Where is it
Speaker:that you may want to partner
Speaker:with a startup or invest into a
Speaker:platform and to then partner
Speaker:with my next? This whole mindset
Speaker:and ecosystem of innovation is
Speaker:something that is utterly
Speaker:foreign to them. That needs to
Speaker:change.
Speaker:A lot of enterprises that are
Speaker:cash flow rich and used to
Speaker:generating cash flow have a hard
Speaker:time taking bets and investing
Speaker:in partnering with third-party
Speaker:platforms that may not see a
Speaker:return in the next year or two.
Speaker:Do you see that across the
Speaker:industrial companies? Is that a
Speaker:barrier to their innovation?
Speaker:Yeah. That's definitely a part
Speaker:of it. Even though that is even
Speaker:stronger within traditional
Speaker:investors, what's interesting is
Speaker:that the US ecosystem has
Speaker:produced so many winners already
Speaker:that there's a very broad base
Speaker:of investors that have seen
Speaker:success of the asset class over
Speaker:and over again. They just are
Speaker:very eager to participate and
Speaker:are very much attuned to the
Speaker:of the future
Speaker:discounted cash flow. In Europe,
Speaker:it's very much not the case.
Speaker:Everybody that did an industrial
Speaker:company, or private investor, or
Speaker:an institutional, they're always
Speaker:used to the notion of cash-flow-
Speaker:based investing. They will buy
Speaker:the running company. They will
Speaker:potentially buy a competitor,
Speaker:but then they want to have a
Speaker:multiple that is somewhat in a
Speaker:size or range that they feel
Speaker:comfortable with. I've heard
Speaker:this over and over again, "Oh,
Speaker:my God. Valuation is crazy." Why
Speaker:are you trading at a 10x
Speaker:multiple to revenue? That's
Speaker:insane. People have said that
Speaker:over and over again. This grand
Speaker:slam nature of large tech
Speaker:platforms and how they have
Speaker:evolved over time and how they
Speaker:keep getting bigger once they
Speaker:hit scale and escape velocity is
Speaker:something that is very foreign
Speaker:to our understanding. We haven't
Speaker:seen that many in front of our
Speaker:doors yet. Think, you look to
Speaker:the US, and you feel like this
Speaker:is a very different kind of
Speaker:unicorn landscape if we even
Speaker:want to call it that. What we
Speaker:have here is substantial
Speaker:production companies that know
Speaker:how our products are shaped and
Speaker:done. For them, this whole
Speaker:digital nature of products and
Speaker:the way they work is nothing
Speaker:that they've seen manifested yet
Speaker:in success stories to the same
Speaker:degree.
Speaker:It's interesting. I've observed
Speaker:many more companies in Europe
Speaker:becoming global leaders, very
Speaker:much so, because of your local
Speaker:investments in cultivating of an
Speaker:ecosystem. Is that something
Speaker:that you see on the ground as
Speaker:well as more efforts to start
Speaker:global companies from Germany?
Speaker:Yeah, if you look at the
Speaker:founders we're backing, a lot of
Speaker:them are...Actually, I think
Speaker:maybe one-third are guys that
Speaker:maybe they're underground in
Speaker:Germany or Europe, but then they
Speaker:all went to the US. They were
Speaker:semi-US educated, went to
Speaker:Stanford, and then work one of
Speaker:the Big Five's, if that's where
Speaker:they smell the air of digital
Speaker:products and scale. They've all
Speaker:come back to Germany or Europe
Speaker:to double down on the
Speaker:opportunity that we have here.
Speaker:For us, the opportunity is very
Speaker:much based in the fact that we
Speaker:have a very strong university
Speaker:landscape. We have an incredibly
Speaker:strong educational ecosystem
Speaker:across Europe. It's not a
Speaker:centralized as in other
Speaker:countries. Especially if you
Speaker:looked in Germany, we have at
Speaker:least 15 technical universities
Speaker:that have been or absolutely
Speaker:global significance in the
Speaker:research that they do. That is
Speaker:one fundamental building block.
Speaker:The second fundamental building
Speaker:block that these founders relate
Speaker:to is the fact that you have
Speaker:these companies that we
Speaker:mentioned before and all of them
Speaker:are either nurturing talent
Speaker:within them through the
Speaker:apprenticeship programs that
Speaker:they have. Also, then go again
Speaker:in these universities and
Speaker:partner with them and they have
Speaker:co-development programs. That
Speaker:just creates a very specific
Speaker:process understanding and
Speaker:process knowledge that is needed
Speaker:in order to build a digital
Speaker:product in the space. I don't
Speaker:think you would have the same
Speaker:degree of understanding or the
Speaker:same degree of ability to
Speaker:potentially disrupt like the
Speaker:chemical industry or automotive
Speaker:manufacturing, because it's so
Speaker:complex that you really have to
Speaker:understand what you're doing.
Speaker:Technology is not so much a
Speaker:differentiator. The
Speaker:differentiator then becomes that
Speaker:process know-how. Then you build
Speaker:it on top of TensorFlow maybe,
Speaker:or you have toolsets and
Speaker:infrastructure, but that is more
Speaker:of just the enabler or the
Speaker:building block. The core
Speaker:differentiator of what will make
Speaker:them successful and what will
Speaker:give them defensibility is that
Speaker:degree of understanding and
Speaker:being able to translate that
Speaker:into the nature of digital
Speaker:products. I think that's what
Speaker:we've seen mainly, is that being
Speaker:the fundamental driver for our
Speaker:ecosystem build-up here.
Speaker:Very powerful. On your website,
Speaker:it says, "We believe contrarian
Speaker:investments outperform
Speaker:conformist investments." Why do
Speaker:you believe that's the case?
Speaker:I believe that if you look
Speaker:at a lot of the
Speaker:founders, if you look at great
Speaker:leaders in general, they have an
Speaker:ability to see 10
Speaker:or 15 years into the future.
Speaker:They have a fundamental...I
Speaker:would almost call it a reality
Speaker:distortion field around what the
Speaker:future should look like. Then
Speaker:where they become strong leaders
Speaker:is the ability to break that
Speaker:complexity down into something
Speaker:that we can grasp today that we
Speaker:think we can somewhat follow
Speaker:them, not only us as investors
Speaker:but also the team and potential
Speaker:customers. What's interesting
Speaker:is that if you listen to some of
Speaker:these ideas now, they seem
Speaker:almost surreal, and I think lots
Speaker:of people maybe listened to them.
Speaker:It's a little bit like an art
Speaker:painting, right? If you look at
Speaker:a Picasso drawing, some people
Speaker:will say, "Oh, my God. This
Speaker:doesn't look like a bird or like
Speaker:a woman." But then you could
Speaker:also look at it and say, "Well,
Speaker:there's actually just a new
Speaker:language there. There's
Speaker:something that's being created
Speaker:here that is utterly unique, and
Speaker:that hasn't been done before."
Speaker:That's what you do as a seed-
Speaker:stage investor. You have to tune
Speaker:into the vision and always
Speaker:assume there is the stupidest
Speaker:person in the room. Then these
Speaker:people have something very, very
Speaker:unique to what they're doing.
Speaker:Obviously, you're mindful of
Speaker:asking all the right questions,
Speaker:but typically, the best
Speaker:entrepreneurs have thought about
Speaker:them 10 times over before you
Speaker:even ask them. That's what I
Speaker:find incredibly unique and
Speaker:powerful, and that's where I
Speaker:think often these ideas seem
Speaker:contrary in the beginning,
Speaker:because in the beginning, not a
Speaker:lot of people will be willing or
Speaker:able to follow them. That's
Speaker:where the stage is particularly
Speaker:exciting, particularly
Speaker:interesting.
Speaker:I love your art analogy. I know
Speaker:you did your dissertation on art
Speaker:and entrepreneurship in the
Speaker:Renaissance. Are there any
Speaker:timeless lessons that were just
Speaker:as true then as they are today?
Speaker:There's so many, to be honest. I
Speaker:really think we're living almost
Speaker:through a new Renaissance now.
Speaker:One thing that I thought was
Speaker:incredibly interesting is the
Speaker:notion of the word disegno which
Speaker:is a term that was originally
Speaker:used by artists to describe
Speaker:their just grab a drawing. They
Speaker:would call it the disegno. What
Speaker:they also meant by it is the
Speaker:transformative process that you
Speaker:actually do whilst taking an
Speaker:idea that is very ephemeral at
Speaker:the beginning. Then, you
Speaker:transform that into something
Speaker:that others can see, or can feel,
Speaker:or can touch. I then thought
Speaker:that is actually in essence what
Speaker:an entrepreneur does. When in
Speaker:the beginning, it all feels
Speaker:ephemeral. It all feels like
Speaker:it's building blocks and little
Speaker:facets of something that could
Speaker:become a reality. That's one
Speaker:term that I've always loved and
Speaker:I've taken to heart since my
Speaker:dissertation. Going a little
Speaker:bit more concrete into the
Speaker:Renaissance, what was
Speaker:interesting or what spurred this
Speaker:whole ecosystem at that time was
Speaker:very much the fact that they
Speaker:lowered the barriers to entry
Speaker:for different crafts. Before,
Speaker:if you were born into a wooden
Speaker:craftsman family, then you would
Speaker:only do wooden craftsmanship.
Speaker:You weren't allowed to paint.
Speaker:You weren't allowed to weave or
Speaker:do other crafts. In that sense,
Speaker:Leonardo da Vinci's the best
Speaker:example of what happened when
Speaker:you unleashed someone and
Speaker:allowed them to take a different
Speaker:skill set and give them a
Speaker:profession that they have
Speaker:learned in one field and apply
Speaker:that idea to other areas that
Speaker:intersect with other areas.
Speaker:Therefore, you had this very
Speaker:strong boost of cross-
Speaker:pollination. That spurred trade.
Speaker:That made them a lot more
Speaker:innovative in selling and buying
Speaker:goods. From that initial wealth
Speaker:that was generated, they had the
Speaker:urge to say, "Hey. Now, we are
Speaker:also rich. How do we make sure
Speaker:we can show that in an
Speaker:appropriate manner?" Art was in
Speaker:the beginning, definitely, the
Speaker:initial instinct was one like, "
Speaker:We just hire the best artists."
Speaker:By being wealthy and by then
Speaker:inviting these global-wheeled
Speaker:artists into Florence and Sienna
Speaker:at that time, you all of a
Speaker:sudden have this incredible
Speaker:density of talent that was
Speaker:rapidly innovating. If you look
Speaker:at the whole way art history in
Speaker:the time evolved, it made a huge,
Speaker:giant leap step forward. By
Speaker:having this increasingly dense
Speaker:competition of artists, you also
Speaker:had a higher intersection or a
Speaker:lot more meetings that took
Speaker:place between patrons and
Speaker:artists. At that time, the
Speaker:artist was not so much
Speaker:considered the genius yet. He
Speaker:was more the craftsman that was
Speaker:hired by the patron. Patron, in
Speaker:that sense, was often the
Speaker:entrepreneur. The Medici then
Speaker:are a great example of how they
Speaker:almost became, there's a term in
Speaker:German, we say congenial. I
Speaker:don't know how that would
Speaker:translate into English. It's
Speaker:almost this way of...there are
Speaker:many letters between Cosimo de'
Speaker:Medici and Donatello, for
Speaker:example, where they talk about
Speaker:the nature of the painting, what
Speaker:they want it to be, and what
Speaker:they want it to look like or a
Speaker:given famous door, that type of
Speaker:relationship that unfolded there.
Speaker:There are many letters stating
Speaker:of how they spend the whole
Speaker:dinners together and how the
Speaker:dinners were always populated by
Speaker:people that were not purely
Speaker:bankers or not purely artists.
Speaker:It was this wild mix of
Speaker:scientists, craftsmen, artists,
Speaker:and entrepreneurs. If you then
Speaker:look what that did to the way
Speaker:the Medici operated as
Speaker:entrepreneurs, it was
Speaker:interesting. They didn't invent
Speaker:something new. The bill of
Speaker:exchange existed already 150
Speaker:years ago before they actually
Speaker:said, "Hey, we were not allowed
Speaker:to officially give out credit,
Speaker:but that material, that bill of
Speaker:exchange would allow us to give
Speaker:out credit without this being
Speaker:considered a sin." Which is why
Speaker:before that everybody would turn
Speaker:to just Jewish community for
Speaker:credit, which was very much
Speaker:forbidden. All of a sudden, they
Speaker:took this invention. They saw
Speaker:how an existing product could
Speaker:basically be used as a means and
Speaker:as a lever to accelerate their
Speaker:own business. That was the key
Speaker:element that boosted their
Speaker:entire banking system and
Speaker:banking infrastructure across
Speaker:Europe. Taking that analogy,
Speaker:it's interesting to see how
Speaker:artists operate in exactly the
Speaker:same way. Say a painting, while
Speaker:it's always paint and canvas or
Speaker:whatever, you think the
Speaker:materials don't necessarily
Speaker:change so much. It's more about
Speaker:what is it that they actually
Speaker:see different. They have a
Speaker:different perspective, a
Speaker:different passage with which
Speaker:they view the world. That's what
Speaker:made the Renaissance. That is
Speaker:also essentially what defines
Speaker:our tech ecosystem now. It's all
Speaker:code, if you like. It's the way
Speaker:they used that as a means to
Speaker:express something new and to
Speaker:redefine the way we live, the
Speaker:way we work, the way we interact
Speaker:as humans. I find that
Speaker:fascinating.
Speaker:It's so fascinating. In Silicon
Speaker:Valley, we saw people coming
Speaker:together in an interdisciplinary
Speaker:way. There's a technology and
Speaker:entrepreneurial renaissance. Now,
Speaker:I definitely feel it's much more
Speaker:global. Do you believe that the
Speaker:location still matters? Do you
Speaker:believe we're seeing a global
Speaker:renaissance in terms of
Speaker:innovation, creativity, and
Speaker:technology?
Speaker:I actually think it's a
Speaker:completely global renaissance.
Speaker:That's what's so exciting about
Speaker:technology. That is somewhat
Speaker:like code is lingua franca. It's
Speaker:a way to tie talent together
Speaker:in a global fashion, in a global
Speaker:way. That's one of our thesis,
Speaker:is also having fun. We've been
Speaker:investing into future of work as
Speaker:we call it already since five
Speaker:years. Looking at a company
Speaker:like deal within our portfolio
Speaker:that promotes or allows you to
Speaker:hire employees all over the
Speaker:world, tie them into your
Speaker:payroll infrastructure, and just
Speaker:making sure you're compliant
Speaker:with local rules, etc., which
Speaker:has always been an impediment
Speaker:with this type of global scale.
Speaker:It's the rapid growth of that
Speaker:company is basically just an
Speaker:index of how fast this global
Speaker:workforce and this global talent
Speaker:is becoming a reality. I find
Speaker:that actually really beautiful.
Speaker:It's a great way to see teams
Speaker:that interact from all over the
Speaker:world, from India, to Israel, to
Speaker:America and across different
Speaker:time zones, across different
Speaker:continents with different
Speaker:cultural backgrounds. They're
Speaker:all unified by a common mission
Speaker:and a common vision, which is
Speaker:what is so great about strong
Speaker:founders, they can do that. They
Speaker:can rally these very different
Speaker:people behind them and give them
Speaker:the North Star to which they're
Speaker:bringing in the entire
Speaker:capabilities. It's a beautiful
Speaker:evolution to see.
Speaker:Jeannette, you're such a
Speaker:pleasure, chatting with you on
Speaker:so many topics. I could see your
Speaker:passion for connecting people,
Speaker:for entrepreneurship, and for
Speaker:creativity all coming through.
Speaker:Our viewers are going to enjoy
Speaker:this. Thank you again for
Speaker:joining.
Speaker:Thank you so much, Dan. It was
Speaker:good to see you.
Speaker:Good to see you, too.
Speaker:On the next episode of Decoding
Speaker:Digital...
Speaker:When you go deep on a vertical,
Speaker:there is huge opportunity to
Speaker:expand wallet share and expand
Speaker:your average revenue per
Speaker:customer over time. Furthermore,
Speaker:what's become really clear over
Speaker:the years is that you can drive
Speaker:much more efficient customer
Speaker:acquisition economics in a
Speaker:vertical plate versus a
Speaker:horizontal plate.
Speaker:Co-founder and CEO of Clio, Jack
Speaker:Newton.
Speaker:Thanks for listening to Decoding
Speaker:Digital. Make sure you never
Speaker:miss an episode by subscribing
Speaker:to the show in your favorite
Speaker:podcast player. To learn more,
Speaker:visit decodingdigital.com. Until