Chris Neumann 00:00

If you're trying to create something that has the potential to win a winner-take-all or winner-take-most market, then the speed with which you get to that global scale matters. So, you can look at founders and you can pretty quickly tell with founders or anyone what is their speed of doing something. If they want to solve a problem, are they going to solve it today or are they thinking about possibly maybe potentially doing it in three weeks? 

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Mo Dhaliwal 00:29

Welcome to High Agency, igniting conversations with inspiring people, leading transformative change. The venture capital playbook is changing, or at least some people think that it needs to. After the gold rush of 2021, when Canadian startups raised an unprecedented $14 billion, the landscape has shifted dramatically. Global VC investment plummeted by 35% in just a few short years, and it forced a reckoning with unsustainable valuations and these growth at all costs mentalities.So in this correction, something remarkable is happening. A new breed of investors is emerging who have sat on both sides of the table. They've done the late night coding sessions and pitched to skeptical investors, and they felt the weight of making payroll on the back of a wobbly product. These former founders are transforming how venture capital works, especially in ecosystems that remain in the long shadow that's cast by Silicon Valley. Top talent continues flowing out of Canada, seeking not just capital, but the networks and mentorship that's traditionally reserved for Bay Area founders. And it's definitely a funding challenge, but it's also the challenge of building bridges between these different worlds. Today, I'm talking to someone who's lived this evolution firsthand. Chris Neumann is a four-time founder turned venture capitalist who's made it his mission to democratize access to Silicon Valley's best kept secrets. Chris is a seasoned founder and investor who brings a unique multi-dimensional perspective to the startup ecosystem. Having successfully built and sold venture backed and bootstrapped companies, he leverages his hands-on experience in software, in product development, and in delivering returns to guide entrepreneurs globally. Chris has partnered with founders across Silicon Valley in more than 20 countries, championing this accessible venture capital knowledge. So he's dedicated to demystifying this whole landscape, helping founders worldwide navigate these challenges, building successful companies, regardless of where they're located.So Chris, welcome to High Agency. 

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Chris Neumann 02:49

Thanks for having me. 

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Mo Dhaliwal 02:51

So, your life is split between this area and Silicon Valley, but where did you start? Did you start in Silicon Valley or did you start in Vancouver? 

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Chris Neumann 03:00

I'm originally from Vancouver. 

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Mo Dhaliwal 03:01

Originally from Vancouver. 

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Chris Neumann 03:01

Born and raised. 

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Mo Dhaliwal 03:02

Okay. And the way I love setting this up is kind of going really far back and saying, you're a little boy playing on the playground and you have this dream of being a tech founder and a venture capitalist. Is that the linear path that life took? 

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Chris Neumann 03:16

Not at all. 

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Mo Dhaliwal 03:17

What were you doing early on? 

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Chris Neumann 03:19

Um, you know, definitely I was interested in tech from an early age, you know, so going back to the, the early eighties, uh, you know, my grandfather was a professor at UBC and, uh, in the medical school there, uh, and had access to a very, very old, very early computer. Uh, and so, you know, starting to play around with that at a young age and see that you could do things and things would happen on, on the screen and, and sort of the era of, of Commodore and some of these early computers. Um, you know, and then we saw, we saw DOS and we saw the first Windows come up and, and, you know, I found it just fascinating to, to look at these things and say, wow, I can, I can make something happen, uh, out of, out of my mind. Uh, and so taught myself, uh, first had a program using a BASIC, back then.Uh, and then, you know, before long we saw, you know, the emergence of, of the early internet and bulletin boards and all of these other things. Uh, and some more, uh, what I'll call maybe sustainable languages, uh, you know, Pascal and C and C++, um, you know, went to, to university, uh, here at the Simon Fraser, uh, SFU, uh, in computer science. Um, didn't know what that meant from a career standpoint. You know, again, this was, this was sort of the mid 90s. This was before the dot com bubble. Uh, and so I knew that I liked computers. I had no concept of what, or if there were careers on the end of that. Um, but you know, it turned out that that, that was actually not a, not a bad decision to make. 

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Mo Dhaliwal 05:03

Mm hmm. Sounds like it. That trajectory that you just named are the languages of Basic, Pascal, C++, that's literally exactly where I started and where we went. But your early life in in being a software developer and being a coder, what was it about that experience that I guess validated your interest in tech or what did you build and who'd you get involved with at that point? 

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Chris Neumann 05:27

Yeah. I mean, I'm trying to remember the linear history of things. I was involved in a couple of what I will loosely call startups in the 90s here in Vancouver, where I think in those days, nobody really knew what the business models were. And especially as we saw the dotcom bubble go up quite, quite sharply. And for those who are too young to have experienced that, it's quite hard to compare it to anything we see now.I mean, we literally had ideas that were becoming a hundred million, a billion dollar companies. Today we see fast trajectories, but there's actually real business models behind them, or at least concepts of business models. And in those days, there was just this sort of, wow, exciting tech, and somehow we'll make money and we'll figure it out later. And it turns out more often than not, we didn't figure it out later. So I was involved in some startups here locally. I actually worked for a telco developing software to prevent the Y2K crash, again, something that- 

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Mo Dhaliwal 06:35

You did it. 

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Chris Neumann 06:36

Right. It's a mission of- If you're too young to understand, there was a global fear that the entire technology infrastructure of the world would fail because back in the day, we didn't use enough digits for years. 

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Mo Dhaliwal 06:50

It was going to roll over at 99. 

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Chris Neumann 06:52

It was going to roll over from 99 to 1900, and everything would break. And there was a lot of effort that went into making sure that that didn't happen. 

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Mo Dhaliwal 07:00

You remember they canceled New Year's in Vancouver then? I do remember. I forget who the mayor was, but they kind of got blasted, but people didn't want to blast him too much either, because it was like, maybe this is the right move. I disagree. 

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Chris Neumann 07:10

I distinctly remember how ridiculously awful my New Year's was in 99, 2000 because you weren't allowed to go downtown and they were convinced that there were going to be riots or I don't know. 

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Mo Dhaliwal 07:21

Planes falling out of the sky all the way down. 

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Chris Neumann 07:22

Yeah I do remember that. 

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Mo Dhaliwal 07:24

So after that initial sort of period of working with what we'll call startups in Vancouver in the 90s, what drew you to Silicon Valley? 

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Chris Neumann 07:34

Yeah, I went down for grad school. Was taking extended periods of time, co-op internships, and I think I spent eight months away from university at one of these companies. Went back, finished the last semester to graduate, and at that point, and we're talking kind of 2001-ish, Vancouver's nascent tech ecosystem had all but been eviscerated. And so there really weren't any careers locally.And so I did what a lot of folks did then, which was like, okay, I'll go back to school. And so I ended up applying to graduate school at a variety of schools in computer science. Was lucky enough to get into Stanford, and went down there and did grad school down in Palo Alto. 

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Mo Dhaliwal 08:22

That's a great time to be at Stanford. 

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Chris Neumann 08:23

That was a good time. 

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Mo Dhaliwal 08:24

A lot going on. 

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Chris Neumann 08:25

Really good few years, yeah.

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Mo Dhaliwal 08:27

So in that time of grad school, and I'm sure building lots of networks amongst people who probably went on to be tech founders as well, what was your first foray into starting something on your own? 

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Chris Neumann 08:42

What do you mean in Silicon Valley? There was a pretty elongated period before I founded anything. I graduated from Stanford with a master's degree. Then I went and I worked for Motorola for a few years. Back when some of you may not be old enough to remember, Motorola once upon a time was actually a cool company. They had just put out something called the Razor, which was the most exciting, coolest phone on the planet that everybody had. I went and worked on a team that was working on next generation operating systems for them, which ended up being a precursor to the iPhone. There was a joint venture between Motorola and Apple that my team was a part of. And theory was that if you combined Apple's propensity for awesome software with Motorola's ability to build awesome hardware, you would have something incredible. It turns out you had two cultures that couldn't have had less in common with each other, and it was an utter disaster, which Steve Jobs, to his credit, looked at and then went, okay, I can crush this market. We all know what happened after that. After that, a few friends of mine from grad school who graduated a year after me were founding a startup in the database space and reached out and said, hey, do you want to join us? And so faced with going to Apple or Google or one of these big companies versus joining a couple of my friends, I clearly took the conservative safe bet and decided to join a bunch of guys where we were all there on work visas, and if it didn't work out, we'd get deported. 

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Mo Dhaliwal 10:24

Okay, so history repeats itself. And that the database startup, where did that go? Was it? 

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Chris Neumann 10:32

That company ultimately was one of the companies that invented big data. So we revolutionized the entire world of database processing, and we created one of the first systems capable of analyzing incredibly large amounts of data across hundreds of physical servers. So we created all sorts of groundbreaking technology. We were responsible for the world's first 100 terabyte commercial data warehouse, which was deployed at a company that you may or may not remember called MySpace. And there was a lot of really interesting technology that came out of that company. It was ultimately acquired along with our competitors in 2011. There was a bit of a game of musical chairs where the big large incumbents, IBM, EMC, Teradata, and so forth acquired every single company that was in that space. And then a lot of us who are part of that team went off and created other pretty interesting companies. 

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Mo Dhaliwal 11:41

When was your first foray into starting something of your own? 

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Chris Neumann 11:44

Yeah. So I started the first startup down there, rolling off of AstraData. And so the founders of AstraData as a thank you gift to me arranged for me to not have to stay along post acquisition because they knew I was looking to start something.And so about a week after the acquisition closed, I left Teradata. And then the founders of AstraData came in as the first angel investors for what went on to become Data Hero. 

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Mo Dhaliwal 12:16

Incredible. And was it the feeling of, OK, I want to build something? Was it something that had been missing in your previous journey?Because talking to a lot of founders, I feel like sometimes, even if they were part of something before, if they were part of some co-founder journey, they've always had this kind of niggling thing that was kind of annoying them throughout that of, here's what it should be, or here's the thing that I want to see built. But what was the initial motivation? Did you just see a gap and you moved to fill it? Or was there something that you've been experiencing this whole time that you had a sense or an idea that I can do this better? 

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Chris Neumann 12:51

It definitely wasn't a case of I can do this better, to be clear. The team we had there went on to become one of the mafias of Silicon Valley. So when we talk about that, we talk about kind of early groups that go on to do interesting things. The first, let's call it 20 or 25 people at Astra Data subsequently went on to create about $20 billion worth of equity value, multiple unicorns, multiple public companies. And so that was an unbelievably incredible team and very difficult to replicate.Data Hero was actually created as a specific result of an opportunity of what I was seeing in that industry. So in those days, companies and particularly large companies had had significant teams that managed data warehouses and databases. And the only tools that we really had in those days, and this was about 15 years ago now, to analyze data were these data warehouses. And so what would happen is they'd have to build entire systems to pull data from servers or third party providers or whatever it is into these databases. And then they would have to figure out how to create the analysis and then they'd have to deploy business intelligence tools on top of it. And then experts in those would have to build the reports and so on and so forth. And it was incredibly difficult and frankly time consuming to add new data into that system because these were systems of record for so many things.So if somebody suddenly said, hey, I want to analyze this new data source, it might be three or six months of planning and figuring out how to do that in a way that wouldn't break everything else. At the same time, we were starting to see a shift to the cloud. We were seeing the emergence of SaaS services. And so suddenly, instead of all of these companies running on premise software for every aspect of their business and us being able to have access to the data, we were seeing piece by piece core business functions being outsourced.Starting with Salesforce and CRMs, we saw marketing automation, we started to see various analytics and things like that. And so suddenly, these purpose built tools were being adopted that were far better than the on-premise systems that were previously available. But the data inside those tools was no longer available for the companies to analyze. And so imagine you have this very, very complicated data warehouse and very thorough infrastructure, but yet all of your sales-related data is sitting in Salesforce and you have no idea how to analyze it and you have no ability to combine it with the data that was sitting in there. And then imagine that you decide to get something like Marketo or HubSpot. And so you've got this tool over here, that's your sales data. You've got this tool over here, that's your marketing data. You've got Google Analytics telling you what's happening on your website instead of the server that you used to run in-house and you can't pull any of that data together. And the only way to analyze the data in those days was to download a CSV and then try to convince the data warehouse team to go and build it and put it in there. And we kept seeing this a lot. And so the concept with Data Hero was quite simply, let's build a system where the core focus is not the data that's sitting in the data warehouse, but it's actually the data that's sitting in all of these services. And at the time this was quite controversial because the predominant assumption in all of these organizations was that the most important data was in the data warehouse. And the only justification to analyze data was to combine it with data in the data warehouse. And yet we kept seeing business users and entire units within organizations that were like, look, we want to put that data and that data together. And the business questions we want to ask neither require nor benefit from the data in the data warehouse. And so that was the genesis of Data Hero.Before we wrote a line of code, we validated that with a couple of hundred potential customers, many of the customers of Astor data, large corporates, smaller businesses. And then we assembled a team and built really quite, quite innovative software on a number of fronts where we had machine learning infrastructure, which in those days, people weren't even using machine learning that was capable of standardizing data. So if you imagine you've got three or four of these SaaS services, and as a simple example, they might store dates in a different format. And so you had to normalize all of the data without a user having to do anything so that you could then drag and drop and you could sort of start creating these things. 

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Mo Dhaliwal 17:56

Something just kind of jumped out at me when you were speaking there of the fact that you validated this. I mean, as a technical founder, like one pattern I've seen a lot is technical founders get to building pretty quick.So that, I mean, was it an urge that you had to resist or was it just obvious to you that we need to go out and actually see if we have a market, see if this is a sellable idea and then get to building? Because that's the opposite of how I've seen it. 

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Chris Neumann 18:18

I mean, look, I was a technical founder, but also a technical founder with considerable business background. So undergrad, I also studied business. I was the first developer at Astra Data, but I was also the first person in charge of business development and involved in sales ops and involved in various other revenue aspects. So at that point, whether directly or indirectly, I had enough spins around the globe that I knew that there needed to be money.But in particular, this was always going to be a B2B product. And so part of what we wanted to figure out and also knowing how funding worked in the Bay Area, in general, it's very hard to get funding for a novel idea that's going to be disruptive in terms of the business model. And so being able to have evidence that if you build this, there's somebody at the end of the tunnel willing to buy is really important. And that's not always the case. So there's an entire category of companies that are built on developers who build something to scratch an itch that they personally have. And you can kind of get a little further by saying, okay, I have this problem. You have this problem. A couple of my friends have this problem. So you don't really need to do as much discovery early if you're going down that path. But to your point, there's plenty of founders who build far further ahead before doing any validation that anybody cares about this idea other than you and your mom. 

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Mo Dhaliwal 19:56

Are there specific things that you learned during, you know, whether it was at Astra Data or at Data Hero, that you rely on today, or that like informs your decision making today when you're working with founders? 

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Chris Neumann 20:06

Oh, there's an incredible, incredible amount. And I would say going back to the experience of astro data is quite formative. One of the side effects of the mafia that came out of that is I've subsequently had a front row seat to an incredible number of unicorns being created. And many of the folks that I've worked with, I've been a part of their journey in some way or another. And so at this point, as an investor, I have a lot of data points around the behaviors and best practices that lead to that type of an outcome, right?Not guaranteed, of course, but some pretty, pretty consistent patterns. One of the blog posts, the articles that I wrote, you know, was simply titled, "Can You Beat My Friends?" And so when I'm meeting founders in other ecosystems, I'm looking for behaviors and traits that I know have led to outlier success. And quite often they're not there, right? But that's a very specific model. 

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Mo Dhaliwal 21:25

So, I mean, of course that amount of experience helps with pattern recognition. Is there anything that you're doing today that's like anti-pattern for you? Is there anything that today you look at your own life, you look at your own decision making and you think, here's a belief that I had held for a long time and actually you've reversed that belief in some fundamental way. 

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Chris Neumann 21:48

Not any that come to mind, does not say there aren't any, but... Not any that come to mind. 

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Mo Dhaliwal 21:52

So it's been mostly about the experience the patterns and then Replicating the patterns that you've seen and trying to find that in the founders that you're working with.

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Chris Neumann 22:00

Yeah, I mean, what I would say is that there's an incredible number of paths that can lead to business and startup success. So when I look for patterns in founders, they're not specific traits in terms of what school you went to or what your resume looked like or anything like that. They're far more about behavioral traits, right? So one of my core beliefs is that the most important trait for startup founders who are trying to create globally impactful companies is velocity, right?Speed. If you're trying to create something that has the potential to win a winner-take-all or winner-take-most market, then the speed with which you get to that global scale matters because inevitably there's others all over the world trying to do the same thing as you. So you can look at founders and you can pretty quickly tell with founders or anyone, what is their speed of doing something? If they want to solve a problem, are they going to solve it today or are they thinking about possibly maybe potentially doing it in three weeks? A simple characteristic that I pay a lot of attention to when meeting founders is their choice of verb tense, right? So when somebody's explaining what they're doing, are they using the present tense, are they using the future tense, are they using the past tense? Is it already done? Am I doing it now or am I going to do it? And if you pay attention to that across a 15, 20, 30-minute conversation, you can get pretty good sense of the pace at which they operate. 

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Mo Dhaliwal 23:50

I'm going to add something to that. I want to say verb tense and also presence, because I have a bad habit of doing this thing in Skyrocket, which is that I'll use like the royal "we" and I'll be like, okay, we got to take care of this. And I'll say that and walk away or we'll be like, we got to do this or we got to do XYZ. And then there's this weird ambiguity about who am I talking about when I say we and there's a bit of a disconnect sometimes of absolute accountabilities of was this an assignment?Is this a project that I'm leading? What is this royal "we"? But does that come up a lot? Is there like this idea of agency of founders being needing to do it themselves or understanding that it's just an urgency for the team? 

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Chris Neumann 24:32

Yeah, I would say at the stage at which I invest, there's no team to speak of. So it's usually the one or two or three people sitting in front of me. So I don't tend to find that early because it's sort of an assumption that it's the person sitting in front of me because there's nobody else to do it. 

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Mo Dhaliwal 24:55

So if they're using the royal "we" it wouldn't make sense. 

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Chris Neumann 24:56

They're talking about themselves. 

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Mo Dhaliwal 24:57

Yeah, fair enough. 

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Chris Neumann 24:58

That's fine.

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Mo Dhaliwal 25:00

Is there anything that I guess your colleagues, your partners, your founders, co-founders over your journey, what you do today, and they think that you're just crazy for doing it? 

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Chris Neumann 25:12

Oh, certainly. 

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Mo Dhaliwal 25:13

You know, is there anything like you got a phone call they're like man, I can't believe you're still doing this?

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Chris Neumann 25:18

I mean, I spend a lot of time traveling and I travel to ecosystems that a lot of investors don't bother to go to, and particularly investors in Silicon Valley, the vast majority of them don't travel because they are used to founders coming to them for capital. So VCs in the Bay Area, and if you think about it, folks on the outside kind of look at it as a sign of arrogance or something like that.But if you think about it from a simple human perspective, when you're traveling, you are choosing to not go home and sleep in your own bed, and there's usually some sort of sacrifice that comes with business travel. And so in Silicon Valley, you've got more than 2,100 active VC firms, and founders from all over the world come to them virtually or physically to raise capital. And so there's a pretty good number of them that won't leave the area without a very, very good reason. And there's nothing wrong with that. There's nothing irrational about that. But for me, as a very early investor, who's typically the first investor into too many companies outside of the Bay Area, there's an incredible value to me in going to different ecosystems, smaller cities, smaller towns, different countries, getting to understand those ecosystems, getting to know those founders, and having the opportunity to partner with them long before anybody in California has ever heard their name. 

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Mo Dhaliwal 26:56

Yeah, that's, I mean, a pretty unique perspective to have, and also, I think quite different because you could forgive a Silicon Valley VC for staying there, right? Like when you're... 

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Chris Neumann 27:07

Absolutely.

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Mo Dhaliwal 27:08

When you're like the supermassive black hole at the center of the galaxy, it's like, yeah, you're gonna hang out there and, you know, see what's going on. What have you... What sort of ecosystems have you traveled to? What have you noticed that surprised you? 

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Chris Neumann 27:21

I mean, I've invested in probably two dozen countries, I've helped run accelerators on every continent. You know, I've spent a lot of time in ecosystems large and small around the world. 

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Mo Dhaliwal 27:35

So you do travel a lot, you weren't kidding. 

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Chris Neumann 27:37

No, yeah, not at all. Not at all. I would say there's a couple of things that are, I believe, to be true. First and foremost, I believe that broadly speaking, there are three types of startup ecosystems in the world, each with their own sets of dynamics and characteristics. One is Silicon Valley, which is, as you alluded to earlier, is globally unique. There's nothing like it and it can't be replicated. The second one is China. China operates with a fundamentally different set of dynamics than other ecosystems, and that's its own thing. Virtually every other startup ecosystem on the entire planet operates with roughly the same set of dynamics. If you look across cities and provinces and states and countries, what you will see is very consistent behaviors in all of those ecosystems in terms of resources, in terms of how investors behave. You'll see differences around government interaction, but ratios of startups and GDP to investable capital ends up being quite comparable. 

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Mo Dhaliwal 28:52

Is that just like a natural outcome of business or is there a bit of mimicry going on of seeing what happened in Silicon Valley and how things run and trying to. 

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Chris Neumann 28:58

No, no, no. It's not mimicry at all. It's really the fundamental basics of how other ecosystems work. So as a simple example, broadly speaking, Silicon Valley and to a bit of a degree New York are really the only two capital ecosystems where founders from all over the world go to raise capital, right? So if you are a VC in San Francisco, you have frequently the best founders in your industry from all over the world getting in touch with you. What that means is that you can make decisions with high conviction because any company you've seen, you've probably seen 10 or 15 of them that are happening, right? So you have a lot of data points. If you're an investor in almost every other country in the world, you only ever see startups that are domestic, maybe regional if you're talking about an area with smaller countries like Europe, right? So broadly speaking, VCs in Canada only ever see Canadian startups, right? Startups in Nigeria or Australia or Germany aren't tripping over themselves to come to Canada to raise capital any more than Canadian startups are going the other direction. And so what that means is that investors have to make decisions with very different information and very different assumptions around likelihood of return, best case scenario, what's going on in that market. And that's true of VCs in every other country. 

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Mo Dhaliwal 30:31

Incredible. Was it any frustration with the Valley that caused you to kind of look out into these other markets? Or do you just have like a natural curiosity and thought, you know, let's let's see what's happening in the rest of the world. 

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Chris Neumann 30:42

No, not a frustration by any stretch of the imagination. I actually think the Valley is an incredible place on many dimensions. It just happened that my entry point into VC was a firm that's specifically invested outside of the U.S. And so by no intentionality, after we sold Data Hero, I ended up joining as an entrepreneur in residence, a firm called 500 Startups, which was one of the early accelerators. And in those days, you had kind of three accelerators that were prominent. You had Y Combinator, you had Techstars, and you had 500. YC was very much the quintessential Silicon Valley accelerator in that it invested basically like a Silicon Valley VC. Everyone had to be in Silicon Valley, and that was their model. Techstars at the time was going after the rest of America. So this was kind of the emergence of what was referred to down there as the rise of the rest. And so they were building programming and investing in startups in all of the other states. And then 500 Startups took a look at it and said, well, if you guys are going to take California and the rest of America, we're going to go to the rest of the world. And the thesis there was if you invest in founders from different backgrounds and different geographies, bring them to Silicon Valley, put them through a program in Silicon Valley. And then after that, they go back home and they continue building a company that there were returns to be had there. And so my entry point was very much a Silicon Valley VC who was not investing in Silicon Valley. 

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Mo Dhaliwal 32:20

Was there any hard lessons you had to learn? I mean, even with all the experience that you have, both in the tech and the investment side, what was like the hardest thing that you, or the hardest lesson to learn, or the biggest challenge you had to go through that required maybe some late stage acquisition of new skills, or maybe just a learning. 

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Chris Neumann 32:41

As like an investor, or as a personal? 

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Mo Dhaliwal 32:44

As an investor. 

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Chris Neumann 32:45

I would say one lesson that every operating investor has, and let me define what I mean by this. Investors broadly fall into two very easy categories. There are investors who have been founders and have been inside of startups, and there are investors who have not, and there have significantly greater empathy for the founders they work with, and that's an advantage.One of the things that almost all of them, myself included, have to unlearn is that the founders you work with are not going to do things the way you would, right? And so you will often, you know, earlier in your career, you know, meet a founder, they'll tell you what they're doing, and in your mind, you're basically game theorying out how you would do it. This is a great market. I do this, this, this, this, this, da, da, da, da, da, da, da. Yeah. What do you mean? You meet the investment, and they go a completely different direction, and you realize that you, oftentimes, they told you what they were going to do. You just sort of replace that with what you would do, and almost everyone I know who's made that transition has had that struggle, and I certainly had a couple of investments early on where, you know, in hindsight, the founders did exactly what everything in their, their interviews and their interactions with me suggested they would, and I made the assumption based instead on what I would do, or chose not to make an investment based on that. 

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Mo Dhaliwal 34:24

Yeah. Is there something that still, I guess keeps you up at night, that you look back on, whether it was as a founder or whether it was as an investor, you know, some key moment of like regret or insight where you think back and say, actually, here's one thing that we could have specifically done differently? 

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Chris Neumann 34:44

Oh, there's a lot of those. There's an incredible number of moments where I look back and say, wow, if I had behaved differently in this situation, there would have likely been a different outcome. But I don't tend to look back at regret because most of those moments for me were learning moments, and based on what I knew at the time, if I were to go back, I would make the exact same decision. So I think you have to have those experiences in order to evolve your thinking and your perspective of the world. I think there's very few cases where you can look back genuinely and say, ah, well, it was a 50-50 coin toss, and I just chose the wrong side of the coin. Those are the experiences that allow you to go back and say, okay, well, if I face that again, I'm going to do it differently now that I understand the dynamic. And some of those experiences have very much informed how I interact as an investor, for example.When I was a founder, I took a lot of advice from my investors and my board members with a far greater degree of gravitas, let's say, than either I should have or they meant it to be because you sort of as a founder, interacting with a very experienced or maybe a very famous investor, you sort of assume that they know everything. And when you're on the other side, you realize, no, actually, I'm only talking to this founder like every three weeks, and I know a fraction of a percentage of what's actually going on day-to-day. And I had great assumptions that assigned to my board members far more knowledge about certain situations than I ever should have assumed that they had insights into. And so after we sold Data Hero, about six months later, I had a phenomenal debrief with a bunch of my investors. And we went around and we talked about lessons and things like that and kind of had the opportunity to say, okay, you guys saw this journey over five years. Now that there's nothing fiduciary involved, tell me everything. And some of the insights were just like super, super interesting. And a lot of it was just like, oh, that totally makes sense. I never would have guessed that, but that totally makes sense. And so I think in my case, now that I'm an investor, I do try hard to, while providing insights and opinions to founders I meet, really emphasize this is based on my personal experience and also virtually no information. So please keep in mind that I'm giving you some advice based on 12 and a half seconds of what you've told me. 

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Mo Dhaliwal 37:47

Yeah. The proverbial grain of salt. 

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Chris Neumann 37:48

Yes, or a box of salt.

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Mo Dhaliwal 37:51

When you, similarly, when you look back on the other side, is there any key moment that you're really proud of? I mean, I'm sure getting Data Hero to an exit would have been a pretty incredible moment. But even as an investor, the founders you're working with, is there any moment that you look at and you say, actually, we really knocked out of the park here. 

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Chris Neumann 38:11

I would say, as I look back, the moments that I'm most proud of happen more often than not in difficult situations, whether it's helping founders or helping employees, supporting them in folks, encouraging them to start their own things if they're on the fence, or managing difficult personal situations where they just really need support. To me, the financial returns and that aspect of it comes with hard work. And over time, the folks who I think have the greatest impact are those who hold themselves with, for the most part, solid ethics and good values. I've had the privilege of working with a lot of operators and investors who've been just exemplary examples of how to do that. As I navigate the ecosystem, what I know as an investor is I'm going to invest in a fraction of a percent of the founders that I ever meet. And that doesn't mean that many of them aren't creating incredible things. And I also know as a founder, many of the greatest insights and most significant points of help from investors, in fact, came from ones who chose not to invest in me. Knowing that each and every one of those conversations is impactful, is insightful, and that founders are really putting gravitas on conversations that, for me, may be one of a dozen over the course of the day. I really try my best to bring my full and wholesome self to every conversation and really try my best to help where I can and when I can. 

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Mo Dhaliwal 40:21

So, if you're showing up as your full and wholesome self, you know, with that sort of level of authenticity and clarity, what do you want to see out of the founders that you're working with? Like, is there a particular question that you wish they asked more, is there a type of diligence? Like, what is it that you want to see out of the founders and how they show up and work with you? 

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Chris Neumann 40:42

It's a great question. It's a very hard one, right, in that as an investor, what I would love is for founders to tell me everything and be transparent so that I can help them.But I know having been a founder, there is a power dynamic that-

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Mo Dhaliwal 41:02

It creates a bit of insecurity, right?

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Chris Neumann 41:04

It creates a bit of insecurity, and it stands in the way, right? Because ultimately, there is a fundamental fiduciary relationship going on. And you don't necessarily want to tell them everything that's going wrong, right? And so I think there's a bit of a catch-22 that exists in some of those things. And so for me, what I find is that making sure that founders have a sufficient support network as they're going through. And that support network includes people within the company, ideally co-founders with whom they have high levels of trust, other founders with whom they can have conversations, and ideally folks who have nothing to do with tech, who can sort of keep them grounded, I think is very important to the ability of founders to really not only survive, but thrive in what is a multi-year, very, very, very hard lifestyle. 

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Mo Dhaliwal 42:06

Mm-hmm. Yeah, when you say multi-year, you're talking about the founder journey or 

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Chris Neumann 42:10

Yeah. Yeah, yeah. I mean, if you're trying to create a global impact for a company, you're talking five, seven, 10, 12, 15 years, right? And for a founder, it's usually a significant amount of that and a significant frequency of very high pressure situations. 

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Mo Dhaliwal 42:30

I remember reading a stat a while ago, I'm not sure if it still holds, it probably does, but it was like the average VC relationship is now longer than the average marriage in the United States. It was like 13 years for marriages and 13 and a half for VCs, so it just tipped over. And yeah, I mean, I think if you're signing up for such a long relationship and that that length of journey, then of course, how you align with your partners and how you show up is critical. From what you're observing, I mean, this is you driving your relationships with your investments, the founders you're working with, but for what you're observing, and whether it's Silicon Valley, other parts of the world, and what you describe as the power dynamic, the relationship between VCs and founders, if you could tomorrow wave a magic wand and just change one variable, change one thing, and how these groups interact and how they work with each other, what would that be? 

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Chris Neumann 43:23

I think as I look at the ecosystem, there's a dynamic that exists predominantly outside of the bay where we see a lot of people who get into venture capital without any experience whatsoever with startups. In the last decade, we've seen the emergence of VC programs in business schools and VC clubs within universities. We see folks join VCs as analysts and associates, kind of right out of school with little or no experience whatsoever. Over time, those individuals interact with startups, and unfortunately, we see some arrogance that comes out of that.In Silicon Valley, it is virtually impossible to get into a VC if you haven't actually worked inside of a startup. We don't see that dynamic, which is not to say you don't see people behave with arrogance or whatnot, but there's sort of an inherent founder empathy that comes from having been inside one of these junkie vehicles held together by duct tape that's going 100 miles an hour on the freeway. I would love to see an evolution in Canada and in places elsewhere where the rank and file inside of venture capital firms came more from individuals with experience as founders or employees at startups, and then learning the finance aspect inside the VC instead of hiring predominantly for the finance aspect and having them figure out what it means to be in startup. I think that would just be a net positive for the ecosystem. 

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Mo Dhaliwal 45:23

Yep. So it's not a shortage of technical skills. It's a shortage of experience. 

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Chris Neumann 45:26

It's just a different experience, right? And to be clear, this depends very heavily on what stage of fund, right? If you're a later stage fund that's primarily making financially driven decisions, then forget everything I said. And you want people who can crunch numbers.But if you are engaging with early stage startups, unfortunately, we continue to see inexperienced individuals who make very broad proclamations about how things are or how things should be without having any idea what they're talking about and oftentimes regurgitating talking points that they read on the internet. And I think that just does a disservice to the ecosystem. 

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Mo Dhaliwal 46:09

Yeah. What are you what are you working on right now that you're most excited about? 

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Chris Neumann 46:14

There's a lot of things I'm working on right now. 

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Mo Dhaliwal 46:16

But most excited about it, then pick one. 

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Chris Neumann 46:18

You know, the things that I'm most excited about, I can't talk about yet. So I would just say a lot of what I work on and what I focus on is trying to figure out ways to help founders outside of the Bay Area learn and understand some of the best practices that either aren't obvious or in some cases aren't accessible if you're not there. One of the unfortunate, not intentional, but just unfortunate aspects of the way Silicon Valley operates is because things move so quickly, there's an incredible number of best practices and approaches and strategies that aren't written down anywhere and you learn so much about how to do startups by osmosis, right? You know, you go down there and you are surrounded by people in the startup world. And there's things you just learn by just talking to other folks. And if you're outside of the Bay Area, even if you're doing all of the reading and all the consuming and all the listening to all the podcasts and everything, there's a lot of subtleties that just aren't apparent or advice that you might read that simply cannot be executed upon outside of the globally unique structure of Silicon Valley. And so whether it's my writing or some of the other aspects and projects that I work on, a lot of what I try to do is help founders understand or at least access some of that experience that isn't necessarily available if you don't physically go down to Silicon Valley. 

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Mo Dhaliwal 48:10

Mm-hmm. This is a very practical hypothetical. If you had to give some advice to a founder coming out of Vancouver tomorrow to the level of like, here's some cheat codes that will just help you skip a couple of levels and get a little further, what would that be? 

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Chris Neumann 48:31

Simple. Get on a plane, go to San Francisco, spend three weeks there. That's it. Talk to people. See how it operates, build some connections, get to know some folks down there so that when you have questions on whatever the topic is, fundraising, expansion, sales, whatever, you are able to access a different source of information than just the folks locally, right? I'm not of the belief that everything in San Francisco is better, but more often than not, it's different. And the ability to have a network where you can source different benchmarks, different introductions, different concepts, different ideas, and understand, okay, everybody in Vancouver is telling me to go left. All of the folks in San Francisco are telling me to go right. Let me figure out what's best for me. Generally is going to yield far better results or at least more thorough internal reflection than simply going with the prevailing local wisdom. 

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Mo Dhaliwal 49:48

Mm-hmm. Incredible. That's a pretty good cheat code. Chris, if someone wants to follow you, learn more about what you're up to, and sign up to be the first to hear your secrets at some point in the future when they're revealed, where should they go? 

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Chris Neumann 50:06

Chrisneumann.com slash newsletter 

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Mo Dhaliwal 50:09

Amazing. Well, thanks for your time, Chris. Really appreciate it. 

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Chris Neumann 50:11

Thank you for having me.

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Mo Dhaliwal 50:12

And yeah, I look forward to hopefully doing a part two of this at some point, because I feel like there's a moment that we're in Vancouver right now. And there's a lot of change that's happened and has continued to happen, especially now with what's going on in government, how we're responding to America. But I feel like the next year is going to yield some some interesting changes. Lots to see. Thanks so much. 

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Chris Neumann 50:36

Thank you. 

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Mo Dhaliwal 50:39

Hopefully we've given you a lot to think about. That was High Agency. Like and subscribe, and we will see you next time.

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