Joe Mussleman – The Power of Affects in Venture Capital

Joe Mussleman – The Power of Affects in Venture Capital - Joe Mussleman is back on the Break It Down Show with Pete A Turner. This time diving down to look at the rest of the iceberg when it comes to start-up funding.

Joe's latest enterprise is Fathom Venture Capital. Their approach to VC? "Fathom exists to be servant capital for the greatest generation of founders the world has ever seen."  

Joe previously discussed the Honor Foundation, his non-profit that helps operators discover who they are and what they want to do and how they are going to transition from the SOF world to business.

Haiku
Venture Capital
Teams, Leadership and Culture
The amplifier

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Executive Producer/Host/Intro: Pete A. Turner
CoHost: Brooks Crenshaw
Producer: Damjan Gjorgjiev
​Writer: Bojan Spasovski
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#humanconnection #affects #business #fathom #venture #leadership #veterans #transition #ceo #startup #lookingforbombs #TLC #quantifyculture
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Transcription

Pete Turner  0:00  
Everybody Pete, a Turner, executive producer and host of your break it down show. Our guest today is a returning guest and a friend Joe muscleman, who started the honor Foundation, which was an organization that helps special operators transition into their next life, their business life, find themselves, make a path and execute on that path. Pretty cool. We've talked about that in the past numbers, you go check out that episode with Joe. Today, we're talking about his newest thing called fathom venture capital, where they invest in people, TLC teams, leadership and culture. And that's right up my alley. ​

Pete Turner  0:00  
Everybody Pete, a Turner, executive producer and host of your break it down show. Our guest today is a returning guest and a friend Joe muscleman, who started the honor Foundation, which was an organization that helps special operators transition into their next life, their business life, find themselves, make a path and execute on that path. Pretty cool. We've talked about that in the past numbers, you go check out that episode with Joe. Today, we're talking about his newest thing called fathom venture capital, where they invest in people, TLC teams, leadership and culture. And that's right up my alley. That means we're talking about effect over effect. And that's where Joe and his team go out with other venture capitalists and say, let us take this aspect, the TLC part and let's invest time and effort here on this endeavor to take this startup to the next level. I mean, think about someone who's young graduates or Stanford. It literally never led a company before they're in their early 20s. You get them that knowledge, a specific trading thing. become great leaders and all of a sudden you bet on a company that's a lot better positioned to succeed. Alright, so that's Joe muscleman what we're doing with him today, by the way, recording this episode in New York City, it's noisy there are sirens there are people honking the horns, there are airplanes flying overhead and there are birds chirping so if you don't hear that stuff, that's the power of the bulletproof podcast rig, zoom, h6, and my sure sm 35 microphones, you guys should definitely check that out. Not endorsement. Not a paid endorsement. Just an actual endorsement from me trying to help you guys out a sports show. or break it down. show.com Subscribe, click rate review, buy the shirts, do all those things. And the last thing that I always close with is save the brave, save the rave.org go to the Donate tab, put a small amount of money in each month, and you'll be doing a lot to help us help veterans with PTSD. If you guys are already on board and already doing these things. Let me stop right now and say thank you. I see you and I appreciate it. There are so many of you out there supporting the show. Joe's good people you're gonna love this episode hiccups Yo muslin lions rock productions

Unknown Speaker  2:06  
This is Jay Morrison. This is Jordan. Dexter from the offspring Navy Sebastian yo this is Rick Murat

Unknown Speaker  2:11  
Stewart COPPA. This is Mitch Alexis

Unknown Speaker  2:13  
Andy somebody there's a skunk Baxter

Unknown Speaker  2:15  
Gabby Reese is Rob bell.

Pete Turner  2:16  
This is john Leon gray and this is Pete a Turner.

Unknown Speaker  2:21  
This is Dr. wil Riley of the Kentucky State University. You're listening to the break it down show as always with Pete Turner.

Joe Mussleman  2:32  
Hey everyone, this is Joe muscleman and you're listening to the break it down show.

Pete Turner  2:35  
The last time I was here we were here with Scott and we kind of covered like the basics of who you are what you do the the charity that you started, that's now like running on its own power, which is already By the way, any exit even if it's a charity exit is great. Like you're not these guys going and doing things. It's remarkable. But when we were connected by Greg Hurwitz, who's a famous Hollywood Hills writer, he just wrote a book. He's on his book tour now you guys check out orphan But he connected us, I think in his head partly because of our veteran connection and our passion for those things. Maybe he knew a little bit about the other stuff. But what made us five was our human connection 100%. And I'll say this so and this drives people crazy, but it doesn't it still true effect is greater than effect. And if I can create an effect in you that I desire, even if I create the wrong effect, at least I'm focusing there instead of, you know, I can mail you 15 letters, I can, you know, stand in front of your house, like I just didn't want to say hi to you. It doesn't work that way. Like you have to create that effect. So that's what I really think, is where we locked in. Okay, there's more conversations to be had.

Joe Mussleman  3:41  
Yep. And at that time, I don't think Greg even knew the kind of the purpose of the venture fund which is all centered on effect of ti leadership and culture. So when we started talking about that, what's interesting is a veteran community. It's like the biggest fraternity and sorority in the world so like that's the immediate connection. Oh you were in the army the Navy

Pete Turner  4:03  
I know someone in the eye right exactly

Joe Mussleman  4:05  
like oh do you know Bob Smith Of course I know Bob Smith like everyone knew Bob so but the the the real the next level stuff is it typically does in fact go oh you were a veteran great you get through the pleasantries and the courtesies aboard you serve? Or would you deploy? Would you do this that the other? Yeah. And then you go to like, Oh, so what's next? What are you doing now? Yeah, then it's always so exciting to hear what comes out of every veterans mouth because they're usually continuing their service in a different way, in the world, doing extraordinary things. And that's when we connected it's very similar about talking about your experience and getting it for, you know, working to get information aspect over effect. How do I find the x you said, You told me something I'll never forget. You find the bomb by not by by looking everywhere else for it to find it. Yeah, right. When you said that that made total sense to me that when you want to pull something out of someone, no matter what that is, because I was talking about all the interviews I've done with startups. founders and capitalists up in Silicon Valley. And I was trying to pull out the real raw material behind what makes great teams in startup environments. How do you sharpen leadership skills? And how do you begin to quantify something like culture? And you told me to ask everything else around that. And I did. And I got to the core. So it was funny.

Pete Turner  5:20  
Yeah. would that mean that's exactly right, though. And there's certain Hallmark questions I'll ask and certain situations that I've built over time, and like one of them is, when I walk into a to shop for the audience to shop is the Intel shop. That's where they try to get the picture of the combat zone. And I'll go see the boss there, whether it's a captain, a colonel major, whoever it is, and I'll say how good is the resolution on your on your, you know, battlefield right now? And then they'll say anything north of 60% I now know how to approach them, right way differently. Yeah. Because they're not they're not correct. And, you know, now I have to slow down back up. But if they say, you know, oh, my God, you know, is it is it better than 50%? They're like, Yeah, maybe. Okay. Okay. So you're out there. Yeah, okay, so that's good, though. I mean, that's that sets them they don't know enough. And they're curious about that now I can. Now I know directly how to go. Now I know I can go direct, I don't have to keep going. 10 gentle. The other example I thought of was this the other day, scientists took a picture of the surface of the sun for the first time ever. Yeah. And he took a camera and pointed it directly at the sun. But when you realize it took hundreds of years to develop this technology, and you're not doing it directly, you're going through a medium that allows you to see this incredible thing. And now you have all the questions like there it is, why is it like this? And it's so that's, that's how I think I like to approach people as you know, don't come straight for the thing I want, because it turned out maybe you can't even deliver that, but the thing you can deliver is the thing I actually need, huh?

Unknown Speaker  6:45  
That's right. Yeah, hundred percent. Totally.

Joe Mussleman  6:48  
Yeah, so it's been, it's been fun the last couple of months and since we last talked, there's been tons of personal and professional kind of milestones hit so I'm excited to share And he will tell us what the venture fund is. Yeah, sure. So maybe the quick 80,000 foot overview of the origin story and where it came from and how it was developed because it is absolutely linked to honor.org and the work that I did with veterans, from the Special Operations community, and it's, it's actually inextricably linked. So I think that's important to know. So just a flashback to 2012 2013. I interviewed hundreds of Navy SEALs and special operators all over the country. And I kept asking them 250 to be exact, and I asked them all the same 33 questions. And these were all folks that have already transitioned out of their service and, and I kept hearing the same thing over and over and over again, when they were transitioning into their new role. They You know, this is fresh two to three years out. So that's listening. Two to three years out from service, you're especially doing 10 1520 years, especially the 20 plus years. Folks, that is still a very raw time, two to three years out of service. And I kept hearing the same thing. And it was only until I revisited my notes that I start to notice a golden thread that was connecting all these stories, and it came down to one philosophy, but three things I kept hearing. Tell me about your transition, what's going on. And, you know, man, I just want to be part of a great team. Hmm, the next thing was, I want to work for a great leader, that one that knows how to lead and one that knows how to follow. And then lastly, I just want to help create a culture. I want to be a part of a great culture. Yeah. Over and over again, every interview that I went back and read the team, the leadership and the culture was mentioned every single time. Yeah, so it just by coincidence that I go back and revisit these things as I was thinking about my own transition. Post the honor foundation. You know, I've been Helping others transition but I've never once thought of my own transition and what the hell I was gonna do. I said pickle. Yeah,

thought of literally helped thousands of operators Just think about it walk through ideas like the classic hashtag What's next? Like I will walk them through that in a seamless way. And when I went back to visit those notes, I said, My gosh, you know, TLC. Interesting. Yeah. Teams leadership and culture. So I threw that up on a whiteboard. I'll never forget it was up there. And I just it said, teams leadership and culture. That's all it was. I knew where it stemmed from, but I just wanted to think about that for a second. Then I was I had been inspired by some great venture capitalists, literally some of the greatest investors in the world, have been donors to our cause. And I was mentored by them. I admired the way they approach the business. And then I started to notice and go back and listen to their talks that they were giving at TechCrunch at at TED campuses all over the world, at the World Economic Forum at Ideas Festival, at you named the major conference and all of these investors had been speaking there. And it was the most amazing thing Guess what? One philosophy kept being brought up and what three things kept being revisited teams, leadership and culture. It's gonna guess micromanagement. Yeah, no, I tell you about it. No that but see that's also interesting like those folks, they truly don't believe in that the best ones. Don't believe in that. These are all Forbes Midas touch top investors on planet Earth. Yeah. And it's not an accident like becoming a millionaire. These days. Like you can kind of you can invent like a pet rock or something. And sure you're a millionaire like that. And I'm not saying it's easy. I'm not downplaying the hustle that goes in to even productizing a rock like not saying that but to become a multi billionaire. Yeah, there's some eloquent sophistication and design behind that. Yeah. But then I started to notice, okay, I interviewed all these operators, they kept telling me the same thing that they hoped they would work for, which was teams leadership and culture. Now I'm looking at all of these VCs top VCs in the world. And they keep talking about what makes a great startup, right teams leadership and culture. Then I noticed that the majority of operators, the only consistent thing we had with [email protected], was about a third of our graduates went into starting up technology companies. Hmm. And I mean, it makes sense. Yeah, gritty garage. 10 people trying to change the world. Let's everything is new every day. That's frenetic. It's chaotic, just like you know, an operator's career. Yeah. So they thrive in those environments. So then I thought, Okay, so I've got this subset of talent that keeps looking for the same thing. I have this subset And of venture capitalists that keeps saying the same thing. But what about the entrepreneurs? And and what when I say what about the entrepreneurs? Like when I sit down with a founder? What are they thinking about? What aren't they thinking about? And most importantly, let's see if I can use Pete's method. Yeah. And this is all I did last year, all 2019 was was interviewing 50 startup founders between the A and B round of funding. And then 50 VCs B to fund between the A and B round funding. Yeah, I asked them I said, 30, the same process for creating thf Yeah, right. It wasn't broke. Because it's a design thinking process. Sure. The first step in design thinking is to empathize with the community. You mean to serve? Right, right. So boom, step one, I want to go talk to founders found 50 founders but and talk to every single one of them asked the same subset of questions, VCs found the best VCs interviewed all 50 of them, ask them the same subset of questions. And guess what? One of the main questions for the entrepreneurs was What do you wish your VC would stop doing? and start doing more of? Yeah, that was one of the questions. And immediately, it was like, I, they would look around the room and, you know, like, kind of look around and make sure that somehow the VC wasn't listening. Right. And at the same time, their their response was, was almost unanimous in the thread that I found, which was, I am 22 Mm hmm. I have never built a team in my life, right. I'm 22 I have never led anything. I just left Stanford, alright, you know, quit in some cases to build this great big next, this next big great thing, right? I don't know how to lead and they would like lean in and the body language would change because they were like embarrassed, a little bit more vulnerable, that they don't know how to build a team, right? And I'm being thrown all this talent. And by the way, some of these people are like twice my age and they have 10 times more my experience. How am I supposed to lead them? Yeah, I don't know how to do that. Yeah. And culture. Everyone keeps telling me that culture eats strategy for breakfast. Yeah. What the app does that mean? What does that mean? Like, really? What does that mean? Yeah. How do we quantify that? Yeah. And I kept hearing variations of the same things. I wish that my VC, like, it's almost like the founder is posturing up to their board. They don't want to ask them questions all the time. And they're posturing down into an organization. Yeah. And that leaves them very lonely in the middle. And I thought, okay, my God, I'm feeling I get you, I got you. I feel what you're putting out. Now. Let me turn to the VC community. Okay. Like the same thing was, What do you wish you were entrepreneurs would start doing right, and stop doing stop doing and start doing more of like a same question but reverse optic, and they said something like, you know, I just wish I could get them to be better leaders. I want them to be great leaders for the organization. And there was the same thing like his team, his or her team, they need to bring in better people, right? And then the culture, like all the culture is horrible that we don't know, you know how we're going to be able to work with them because the culture is kind of taking a random turn. So there's this huge disconnect. Huge, yeah. And there was an inspiration from one of our co investors. His name is Joe Lonsdale. He's the founder of palantir. He's the founder of at a bar and now he founded formation aid. One of his first funds now he founded ABC and they are a co investor with fathom venture capital, my fund, and Joe wrote an article in 2014 2015. And I'll never forget the title, huh. It was called there's a deficit of leadership in Silicon Valley. And Joe, remarkable, brilliant. By any human standard of brilliance, I look up to him. He's a mentor of mine, a friend and when I read that article, I reached out and I wanted him to speak to the operations community immediately. I was like this, they need to hear this because this is a community of leaders who need help, right, translating that, what is my value here? And how does it translate here? And Joe got it. He nailed it in the article. He's a, he thinks very philosophically about things him and I talk about stoic philosophy often. And this is something that community is very good at doing. So now I have this optic, which is the startup founder is actually craving for more support on the soft skills. Yeah. Like how do you form a team and and what does that mean from the environment standpoint? Look, touch taste, smell feel like what does a great team feel like? Yeah, I have no scar tissue to pull from to understand that leadership. I'm 2526. I just left here. I quit Intel. I left Apple I started this thing. I don't know. I don't know what great leaders a lot of times they start businesses and and they found organizations because like, no one was leaves a job they leave their boss. Yeah. Period. Yeah. So they're leaving leadership that they didn't agree with. But how do i do the opposite of that? And how do I implement it? And a culture like everyone thinks culture is like a petri dish that no one can figure out what it is, but when in fact, it can be quantified. So I would say that these things eventually led me to break down all of the data that I had from both sides of the field. Okay. I just listened to 50 entrepreneurs. I just listened to 50 the top VCs on planet Earth. Yeah, total net worth among these VCs was over 50 billion. Okay, yeah. So we're talking that isn't that is not a pool of wealth to scoff at? Yeah. Right. And there's a reason why the money followed their thinking. And it's because they actually valued all the things that we're talking about the team's leadership and culture, and they knew how to intuitively invest in that. Hmm. If you meet with the best investor one I'll never forget told me that, you know, there's still no quantifiable way to that, that tells me that this is a great deal and a great company, I think to myself, and this is a quote that gives me chills every time I say it.

When I look at the entrepreneur, and I think to myself that if they can pull this off, that would be magic. Yeah, literally magic. And if I get that feeling, I want to know more. I want to dig in. I'll do the due diligence. But like, if I don't get that feeling from just the market and the impact and what this person plans to do in the world, if I don't get that feeling, it's a pass for me. Yeah. And that's why I love venture. It's it's very much a performance art.

Pete Turner  18:44  
So it starts with an effect. I mean, that's what he wants. He wants create that effect in me. That's magic.

Joe Mussleman  18:50  
That's right. 100%. And when I when I think about when he said that I'll just never forget when he said that, because it gave me goosebumps, that this this top piece Seeing the world is talking about something. It's magical. And it's he talked about an effect, he talked about a feeling. And then the diligence will happen, right? I'll give it to the quants and the analysts and they'll look at the deal. But first, the magic has to be there. Yeah. And to me that I was raised in a Fantasia household where all we did was watch Disney and laugh and play and imagine. Well, it wasn't it was all based on, on how things made us think and feel, and our thoughts guided our feelings and our feelings kind of guided our thought process and how we wanted to approach people. And I'm an optimist. The alternative is not for me, but I am. And they all share that exact same attitude of the world and vision of the world. And to me, that is where I want to live with our portfolio of companies with our partners. I want to work with people that think act feel and communicate very similarly. And have that that viewpoint on the world that yes, we need balance in our teams. But that the way to look at that The world to me is is no other is no other way. And I want to be around entrepreneurs that are doing the same thing. Let's talk about culture because

Pete Turner  20:07  
yes, oftentimes, we'll hear people talking about EQ and emotional intelligence. You're absolutely have to have it. But you never hear like someone say, what about CQ? cultural acuity? Yeah. and building a distant petri dish. Yeah, petri dish, you leave alone passively, and it does something. Or doesn't? Yes. You know, that's

Joe Mussleman  20:26  
a great analogy. So you just took the Petri analogy dish and made it even better. Yeah. Because we're speaking the same language, man. That's right. If you leave it, something happens. Yeah. If you mess with it, something happens. Yeah. Either way. something's gonna happen. Yeah. So for me, I'd rather be a part of shaping the culture and, and so I'm excited to share something with you. So all right. So taking all the data and conversations and everything from the 50 entrepreneurs taking all the data and the conversations from the venture capital community. It really comes down to forces which create a culture.

Pete Turner  21:01  
Oh, that's here, this five for say, Hell, I want to record this, okay? This is good.

Joe Mussleman  21:07  
This is really important. And yeah, okay, I've taken the time back up and start leading to the five things that political. Sure. So there are after all of the interviews and research of the 50 entrepreneurs and the 50 leading venture capitalists in the world, culture creation comes down to five what I call the five guiding forces of a business.

And everyone's gonna hear this and think like, okay, we know all this, but but not necessarily. It's the it's the small tweaks, and then how I will explain it that will make a lot of sense, vision, mission, core values, guiding principles and an ethos, create a culture, okay, and what I realized is there's two problem sets that have to be solved in order to get great TLC teams leadership and culture. So the first problem set is if the individual founder does not have a clear his his or her own five guiding forces clear within themselves. Like for me my personal personally, not my company. My vision is very simple. And you have to start off a vision statement with I envision a world where I Joe muscleman envision a world where people feel psychologically safe and compensated, going to a job that they love. Okay, that is the world that I hope to see. We'll never get there. Yeah, that's the point. It's something over there that we're no matter what I do when I put my feet on the ground in the morning, I want to be working towards that vision. How do I get to that vision, it's through my mission, my mission in this world is to light fire. So others may see I used to have can but then I realized, I cannot make people see anything they have to want to see it. So so others may see, to light fire so others may see that feeds into my vision of creating a world that I envision where people feel Psychologically safe and compensated going to a job that they love. That's the mission statement that gets me to my vision. I have to have a set of actions, a set of verbs values, right? That's what values are their verbs. core values, leading to a mission statement that achieved the vision, my core values for a couple, for example, be you, Socrates Know thyself, that's the hardest thing for people to do is to know thyself. Next one, create experiences when people interact with me. I want to create an experience for them. No matter what it is, it doesn't matter whether I barely know you kind of know. You just met you in the store. My wife who's sitting over there, she jokes like okay, no, lollygagging right, because she knows I'm going to talk to everyone in like Walgreens. Yeah, because I'm constantly looking to just talk to people I love people. Another value is practicing artistry, right? And notice these are all verbs create experiences, right you, right? You have to have verbs to be values now created Practice artistry is a sliding scale. We wake up some days, man today I just felt in the zone, right? And then there's other days I was like, I was so lazy today like I didn't do anything productivity at a three out of 10. I didn't practice artistry today. That's okay. joke is tomorrow. Let's do it again. Right? So there's and I have eight core values, right? Right now, the core values are verbs, they are verbs, which will guide my behavior into my mission. My mission is to light fire so others may see all my eight core values are verbs that guide me into my mission that guide me into achieving the vision that I hope to see in the world. guiding principles are the watts the things that I do on a daily basis, to help me make decisions in the moment. So for instance, a guiding principle of mine is no relationship can change without contact. Hmm, none. So if I'm thinking to myself, why hasn't this person gotten back to me? Yes, hold on. Let's review. How much contact Have I made? Yeah, have I only sent an email? Well, no wonder why that's like one out of 10 ways to make contact? Right? have I written a note? Have I called them? Have I been to their house? Have I sent a meaningful gift for them to think that even talking to me is worth it? Right? So like when we think of, and by the way, I have dozens and dozens of guiding principles, and those guiding principles, they inform the what I do right now, today, right now, in this moment, I'm going to make a decision based off of my what I should do, yeah. And I'm going to feed those into a set of guiding values, if I mean, excuse me a values that will basically inform the actions that I take into my mission that will bring the vision I hope to see into the world, right. The last one is in ethos, how many times have you gone to an About Us page of a company? And yeah, like you just start to fall asleep. It's like, it always begins. It always begins with like, in 1912, something happened and then something else happened in 1920. And then we we built this thing in 1945. And now we're known in 1999. And now it's 2020. And look at our growth and all bla bla bla bla bla like like if you look at the the the warrior ethos of Sparta Hmm. If you look at the great Greeks and Romans, they all had ethos, they all all great societies had an ethos on what it meant to be, what it meant to be a part of that culture, right? And all of these things, they have to work in this kind of recycle, recycling cyclical way, where you're constantly going through your day, what I call alignment, up, down and all around, meaning when I wake up in the morning, I'm working towards my vision, My mission is going to is going to be this my core values. Today I'm going to guide my actions, my guiding principles are going to help me make decisions. And ethos is basically made up of my subconscious items and words that I hope to bring about that I hope to bring about in the world. Now, if you could picture an iceberg, I've drawn this out for the fund and if you can picture an eye iceberg the vision is the flagpole on top. Mm hmm. The whole world sees the vision, right? Then you have the mission, which is the next layer down right above the water. This is what the world sees the vision statement, the mission statement right? Now, the funny thing is the more founders that I met with, their visions thing was great. Their mission statement was beautiful. The moment I went beneath the surface, and I started talking to their management team, I started talking to their employees down to the janitor that clean the wastebasket at night and asked them So hey, simple question. Right, I would ask the following questions. Hey, tell me about the teams here. Tell me about

Pete Turner  27:38  
the leadership. Hey, this is Pete Turner from lions rock productions. We create podcasts around here and if you your brand or your company want to figure out how to do a podcast just talk to me. I'll give you the advice on the right gear, the best plan and show you how to take a podcast that makes sense for you. That's sustainable. That's scalable and fun. Hit me up at Pete at break it down show calm Help, I want to hear about it.

Joe Mussleman  28:01  
Tell me about the leadership. Tell me about the culture. Then it opened a big can of worms.

Pete Turner  28:06  
Well, okay, so I have bought many of these cans of worms and opened them for the military because they don't even know they have the can. That's right. Yeah. And that's right. It's the same thing. We have theory strategy, and they're all subordinate, right? They go on down to operational level, tactical level, and then boots on the ground. But there's a level below that that's ground truth. So okay, and let me see if I can explain this and positive, you'll get it just for the audience. So when you put boots on the ground, it doesn't mean that they're good at their job. You take someone who's an artillery men, and an admin clerk, and you're like, you're now going to go engage Afghan police and teach them how to be good at being police, which is literally a thing. Yeah, that's right. You know, and so these are all conversation. This is conversationally driven businesses, you know, this enterprise of advising. Okay, great. Well, who's taught you how to have a conversation in a way that advise someone well And how to use culture to your advantage and how to blend your culture with their who's taught you how to do that well nobody but I have gotten a you know a go at all tables and see when I was firing my long gun you know? So like yeah we can load in 30 seconds and all these you know we could our trigonometry is all great we work the computer Great, okay, but now go sit in front of your partner who is cross language, cross cultural, cross everything cross purposes. Sure. And and pull that out. And that's that lower part of the of the iceberg and that that's what matters if you can't find a mini strategic when on the ground where I go, and I look those boots on the ground. And it's not that it's not a lack of intention. Yeah, it's not a lack of capacity. They have the capacity to do this. It's not institutionally been created within them. Right. So all of these things are part of that that can of worms that are all under the iceberg because you cannot when you cannot make that flag. You can say the flags red my mic. I don't even see a flag. Yeah. By the way, by the way, I'm colorblind, you know, being empowered to see something, the person who you empower to see that may see, they may see something that you don't agree with. But it's their thing. That's right. It must be there. Right? It must be it must be there. So that whole the whole idea of the of that work at the lower levels if you can't, repeatedly advanced the strategic goal, and that may look and the ground level and you know, this, especially combat zones, it's a, it's forward and back, forward and back mistake, mistake, mistake, success, success, mistake, success, success, success, mistake, mistake, big mistake. And it's all born and these mistakes that you slowly go, I don't know anything. And I heard the best line the other day from Colonel john Mackay. We are talking about partnering. I'm going to do a whole series of shows for the S fabs the security forces advisory brigades. Oh wow. And they're trying to learn how to do all these things. They actually should listen to the show. And he said and this guy's not all of it. All. I can only imagine all of it. He said first and foremost, you must be humble.

Joe Mussleman  31:03  
Oh, no question. So no question. One thing about fathom ventures is we talk about, we talk about something often that whenever we talk about capital, we call it servant capital. Hmm. Like every dollar that we give out to entrepreneurs, they need to know that there's an element of service behind that. There's a purity to VC. And that's what I want our fund to reinvigorate throughout Silicon Valley, which is the venture space has changed significantly in the last 20 years. Even it's actually grown 60,000% from when it was launched in 1980. Yeah, 90 just from $1 perspective and growth. There was $700 million in venture capital in 1980 1990. And then it grew 60,000% like there's billions and billions and billions and billions of now dollars inside of venture capital. Yeah. And with that growth, imagine if you took a you know, As Special Operations unit, and over 20 years it grew 60,000%. Boy, do you think that the teams would be different, the leadership would be different, and the culture would be different. Like it, you would lose something. Yeah. And that's what I feel that through this rapid growth in scale and entre and the expectation of entrepreneurs to raise more money faster, quicker, deploy things bigger, better out into the world, there, there's a real detriment to the founder, there's a real detriment to the, to the to the VC from an investor standpoint, which is why VC is moving later. And later and later stage. It's harder for people to get into early stage companies now. So it's really changed. And so we just want to take a step back and say to our co investors, who are some of the biggest and best funds in the world and say, we would like to, to work with your top companies and we want to focus on serving capital. We want to focus on helping them build great teams. We want to sharpen their leadership. skill sets, and we want to help them build a culture from the earliest days possible. Back to the 50 entrepreneurs that I interviewed one thing they would always say when I talked about these, this these five forces, yeah, unanimous response, right? I don't know when I'm gonna do that I have time for that. Right? I don't have time, man, we've got this coming up. And that coming up in a product launch. We have a lot of people that I don't have time for that. And I have niches identified. But my immediate response is, if you don't have time for it now, do it right. When are you ever gonna have time for it later, right? And then I show them the quantifiable response of when you don't build a good management team from the earliest days. Here's the money cost, right? Suddenly half a million dollars to let go of two people within six months. Right? Like you're wasting your money. You're wasting venture capital money if like, we have to take the time to understand what types of teams they don't even have definitions for TLC, right? Meaning like, hey, well, how do you define the teams here? Oh yeah. How do you define your particular leadership style? Oh, like, hey, how would you define the culture here? Your organization? A like boy, right? So if they're not clear about where they're going, how is the organization also going to be clear to follow them? Yeah. And that is why the background of, of military and special operations and, and working with that community, they put their feet on the ground every morning, they knew exactly what the vision the mission, their core values are. No, they, in some cases, they are stated, but a lot of it is subconsciously known. Yeah, throughout the community, like you have to when you sign and also another reason why I wanted to go into venture capital and work specifically with entrepreneurs, is I'm not comparing the two communities. I hope everyone who's listening understands that I'm not comparing signing on the dotted line, to be a veteran to signing on the dotted line to be an entrepreneur. So I want to make that distinction very clear. Okay. Obviously when you sign the dotted line, you are giving up your life, quite literally to The needs of that organization, right and you're willing to self sacrifice you as a human being in your life to a greater cause that being the greatest country in the world, the United States of America, when you sign on the dotted line, as an entrepreneur, if you're a true entrepreneur, you are symbolically doing something similarly. Right? I'm signing that align, to launch this great big thing that hopefully changes the world. And I'm giving up everything, I'm giving up potential for relationships, I'm giving up potential to be closer with my spouse, with my family, with my kids, I'm giving up everything, I'd be on a constant frequent state of deploying, and I don't care because this thing must exist.

Pete Turner  35:36  
That's why I want to work with entrepreneurs. I want to jump in here and talk about that. Because when you are talking about Silicon Valley, in this case, and you want to start a company you got you got one big factor to come over. You're some 22 year old kid from Stanford, you've never known true adversity, and you're going to be perceived as a douchebag. You know, because you have all this opportunity, and there's gonna be people that resent you just for who you were trying to be. And you're not even that thing, yet. You're 22 years old, an enormous burden have to come over because that's the infrastructure of their mind. If you don't take time to understand the infrastructure of their mind, you can't go and buy furniture.

Joe Mussleman  36:10  
That's right. So I want to touch on that for one second, because you just brought up a great point. So thinking of, and I'm going to be playful with what you just said, because something happened to me recently that, you know, I connected with someone in a great way. adversity, right? I think that some entrepreneurs who are young, were tested in so many different ways. And I know this isn't what you meant, but like they've experienced adversity that I've never experienced, right. So like, for instance, I connected with this individual. I was at Sundance Film Festival for an event that we hosted there, and I start talking to this entrepreneur. I said, I stumped him. He said, like, hey, let's talk about stuff that matters. I said, you came to the right dude. Like, let's, let's go, let's talk about stuff that matters. And I said, Okay. opening question. I kid you not. I was like, Alright, so tell me emotionally shaping story that has either emotionally shaped you negatively or positively to life between the ages of zero and 10. And he was like, What? Like, okay. And he dove right in, right? Yeah. Turns out his mother was his mother worship Islam. He was a Muslim. His father was Jewish. Yeah, they met married had their son who I was speaking to. They divorced for what might seem to be obvious reasons. Early in his life before the age of 10. And then about 10 years later, he came out as gay. Wow. Yeah. That's adversity. Absolutely. And then he started a company and we're sitting there talking about the things that matter, right the things that and had a dialogue and we were completely opposite spectrums of he did not. He now is of course, he called himself a militant agnostic or a militant atheist. And I told him, I'm a I'm a super proud Jesus loving Christian. Yeah. And we hugged it out and laughed and had the greatest time and said Joe, only if, you know all Christians were like you, I might I might change to atheist. Yeah, you know, going from militant to JPS Hey, that's a step forward man step like you think, you know, you think Jesus isn't gonna accept anybody into their life? Of course they are. Yes, he is. Yeah. But we laughed and we had a great time and we're meeting again in a couple weeks like I want to work with him because of the adversity, right that he experiences so unlike other people's adversity, and it's such a relative term adversity, but I know this, that when you go to sign a line to be united states veteran, or serve in the armed services, and you sign the dotted line, to be a true entrepreneur, not those folks that are like watcher, foreigners like that. Oh, I'm going to post about starting a business. I'm going to post about being on No, I'm talking about until someone relied on you for their livelihood. Yeah, you are not an entrepreneur. Yeah. I there's a lot of entrepreneurial people. Yeah, but until a family is relying on you to provide for them, you are not an entrepreneur. That's just my own personal it's a good measure view on that measure of being an entrepreneur. And

Pete Turner  39:09  
that measure should be hard. It's a rigorous one because it's a rigorous field. And the other thing I was gonna say about that whole spirit is if you're not in that point, if you're I mean, obviously that dude you were talking to has courage. He's been through adversity, unbelievable. Yeah. And so he's getting past the perception of him being some entitled, you know, well, money, bad VC back thing. And he's becoming a real person, which is

Joe Mussleman  39:34  
totally and he seemed, he was vulnerable with the conversation and authentic and like, all that does from it. You know, I still feel like I have impostor syndrome, like calling myself a VC. Yeah. But like, because it's so early on, but but I could say that from a VC perspective, I want to be a part of that. Yeah. I want to be with what you're doing in that. And then it was like, Oh, you're and by the way, he has like, you know, 2000 employees all I mean, physically is booming, but there's not there's no surprise there. Yeah, right be and I didn't even know what business it was. Yeah, I just was talking to the person. Yeah. And then I said, oh, by the way, what do you do? Yeah. Right. Like we're attracted to people, a fact, people that are exactly affecting us. Yeah. All every day now. And then I was just amazed if not to not to mention that the business he's doing is of course very human centered. Right. And he's changing lives. And I'm not surprised because that's who he is. Yeah. This is a great opportunity in governments. They're totally total. Absolutely, absolutely. One thing about that, that's a great segue into to the cap off and tie bow on the five forces. He was aligned as an individual. He knew the vision of the world, whether he wrote it down on paper, he knew it. He knew his mission. He knew core values. He knew guiding principles. He had an ethos that he was walking around on the inside with, right. So he first was aligned. Yeah. Then he created a company. Yeah. Therefore, the company when he created it, it was also aligned. Now we can work on getting those things down on paper. So for all the veterans that are listening, and for all the people in the world that are just walking around, we are all a bundle of stories that equal these five guiding forces, yes, until we actually sit down. And I know this because I've asked audiences this before, and I've asked people I've worked with before that less than 1% of people are walking around every day they've ever taken. I use the analogy of six weeks to do a deep dive of self authoring into themselves. Like how many times have individual sat down, it's been six weeks trying to define who they are, and understand themselves at a very deep level, less than 1% from my calculations so far. So like if veterans are looking to move into their next great adventure in life, if you understand your five guiding forces, finding the company, or the next great big thing is going to be so simple, because it's like one of those old school projectors with the transparent like things like you lay your guiding principles and values down, then you lay down all of these different opportunities from companies. And if they don't align with who you are love it, you will not be happy at that organization, I will guarantee you that.

Pete Turner  42:12  
It's and as a leader, you have to develop that congruence for the people you have to like, that's how he's created this culture is to is to pull them through this, this die. That's right, and get them to be in shape. And if they don't fit, you say, it doesn't work here, you know, let's get you somewhere where it might work. And do that in a way that's that's not it's redemptive, redemptive, instead of objective. Because it's very easy to say you don't fit by the way Yeah, here's the thing that drives me crazy Joe about businesses is like all about family. We're all a team here until we don't like you then we hold a secret from you. And choppy right there. Right? And you know, like you're going home that day. So everybody fears that everybody sees it. They see like, Oh my god, that guy's got the cardboard box in his hand. He's walking through my next Yeah. Oh, I don't want to screw anything. And they work from a position of fear to hold on to their job and your competence. Right? That's right. And it's so expensive. That's

Joe Mussleman  43:06  
so expensive, so expensive. I wanted

Pete Turner  43:08  
to add, I think about the entrepreneurial spirit too, because when you're out there trying to do this, if you want to be an entrepreneur, Sly Stone, the, like, the icon that was copied by icons by I, like, he's so, uh, he is an iconoclast, he makes other iconic musicians. That's how big he is. And he said, if my musics not good enough, I don't deserve to eat. Yeah, you're competing with that. Yeah, it's right at the very at the very best, the best entrepreneurs are like, I will be damned if I'm gonna be damned by this. That's right. And they will work past you. So if you are and you don't have to be that way, you can go a different route. But that is part of your mindset is how do I outwork every problem in front of me, so that there's no way like, I don't have to solve this problem today, but I did get after it and I put a dent in it. Yeah. The other thing I wanted to say too, is when people pitch things that affect over effect, I learned this from my friend Hillier who's a writer in Hollywood when I pitch a project to people that pay for movies? I don't say, There you are. Zanzibar. He says, I'm a black gay kid that grew up in East. Palo Alto. Yep, the most dangerous city in the world when I grew up, and, and he tells this story about him. So they're leaning forward going, who is this guy out? You know? Yep. And that goes to the whole thing on, you know, how you align yourself. So I want to bring this last little point in here, then I'm gonna shut up. Let me roll. Oh, no, that's fine. But there's a I think it's, of course, it's got a ridiculous title. It's the cross collaboration, cultural matrix, or cross cultural collaboration matrix. And you would, in theory, stack them like your slides on your overhead projector and you would look for the collaborative behavior. So as a leader, you're looking for basically four values, and they might change depending on situation. There's four values, there's obviously collaboration, which is the upper quadrant that we would expect that to be, but there's also passive aggressive corruption and incompetence. And when you receive these things as the leader as the person who's trying to initiate the change, or whatever it is, right? You have to say, this problem here. And it's usually tied to and these are tools. These aren't these are lenses. These aren't answers. It's usually tied to you don't have an idea of Well, first off your goals and your decision making, which was what you just illustrated, yes. But also that person's goals and decision making, you know, and so when you understand where they're trying to go and how they get there, boy, now you can say, Okay, this is you want to, yes, this is your eight hit the gate. I don't mind that you're going to be here. I want to get the best view when you're here. Is that fair? Yes, of course. It's fair. Okay. Let's work within that paradigm, which, by the way, what's after the gate, right? And then you ask him, like, Oh, this is your passion? Well, then let's work on these things and improve that condition of that employee. Because otherwise, you know, you're just so they're not stealing money. You're letting them underperform? Yeah, by not being the leader you need to be and if you took time to do that, with a given percentage of your people you would start to tamp down that fear in your organization.

Joe Mussleman  46:03  
Yeah, that's right. And And speaking of two, so two things. You know, you mentioned, you know, something that struck something to me but behind us is a big mural of, of Martin Luther King, and modern I know that

Pete Turner  46:17  
Yeah, I knew you were gonna say that. ESP right there totally No

Joe Mussleman  46:20  
way. I didn't have to look. There's a big mural and it's and the reason why that's there is because talk about alignment. He did not start off his speech. And, you know, in the mall, in 1960s 1960s, with withI have a 99 point plan. He said, I have a dream. And then he expounded on that dream for America, and people were willing to follow him. And the plan activated itself because he was aligned from a vision, mission, core values, guiding principles and an ethos perspective and the world was ready to get behind him. When I talk about, you know, entrepreneurship as entrepreneurship is a performance art, to me, I grew up loving the arts, I grew up playing classical violin, I grew up watching symphonies play, you know, from the tightest nosebleed seats possible, and being inspired through music. And when I think about entrepreneurship, and the founder and the management team as being the conductor of this beautiful orchestra, yeah, everyone has to be playing the same on the same sheet of music. If the wind is off if the bowing is off, if you're playing a flat when it's you sharp, nothing sounds right. And so this founder is this constant conductor of this beautiful thing. And the reason why I love calling entrepreneurship, performance art is because if the perfect because performance, and the art varies, which is why we get different results, just like in performance art, yeah, just like in the art. So entrepreneurship, to me is an art form. And when we think about bringing entrepreneurs back to some of the basic have, again the five forces? How well do you know and preach this to the world? Because guess who's gonna run your company? People are going to run your company. Yeah. And if you aren't talking to the world in an external way that represents the true you, you're going to recruit the wrong people into your organization. So when you tell me Mr. or Mrs. entrepreneur that you don't have time to sit down and make these five forces, you're going to attract the wrong people. Yeah, you're going to have a horrible retention you people are going to be your attrition will be horrible. And then you'll begin to grow a reputation of a CEO who can't keep the right people and culture. Yeah. Do you have time for it now? Yeah, right. And and we've even seen statistically that when you change the language of a job description, and make things about culture and make things about community and offer things like working remotely with a team elsewhere, like finding giving them more power back to the employee We noticed that there's a 50% spike in applicants, wow, people are searching differently for jobs these days. Yeah, they are. They want to be a part of something that is aligned there where I can feel it inside of an interview that when I hear about the vision of this company, I heard the exact same words being used from the founder and CEO to the hiring manager I talked with three weeks ago. Yeah, they're all they're all operating and being conducted off the same sheet of music.

Pete Turner  49:28  
Yeah, for a little while, I was venturing into the veteran hiring space. And I was trying to teach companies how to do it. And just like initially, we really were desperate to do this. Okay, that's great. You've said those words. Does your computer highlight any veteran does every single veteran who applies? Do they get a response and give a veteran sitting on the other internet? So I'm not saying they have to see and read every resume. But every person needs to have an outbound robotic response like, hey, you're a veteran. We respond to all of you. Send us back a message to sergeant Bob, right start and Bob's going to talk to you. And if they don't respond, then good. They've self selected out. Yeah. But you have, like what the one person I talked to, but they're like, that's expensive. That's a whole new person. I'm like, if you're serious about hiring veterans, you have to communicate with them. I got a letter, a rejection letter back for like a veteran liaison type position at Pacific Gas and Electric, the electric company Millett, California, and I said, I meet the failed to meet the standard for for the position. And I'm like, you know what you just said to me, you just call me a shitbag. Yeah, they don't know that because they don't have the military culture there to understand those words. And by the way, not a conversation. They just read a piece of paper that they probably didn't read. I probably just got the standard rejection, that stuff makes people want to jump off the bridges. That's right. So if you're gonna hire quality people, it's the same thing across the board. You don't just have a robot. Pick your things for you. Yes, sort a little bit. But it has to be a human connection to truly get

Joe Mussleman  51:00  
Good. And I've noticed that the most the companies that are paying attention to a Human Centered Design onboarding process are winning. Yeah, they're just winning. They're worth billions of dollars. The founders are being recognized all over the world. And they look at the world like the world is crazy, because all they're doing is caring about people. Yeah. And one question that I love asking CEOs before we wrap up, but one question I love asking CEOs is Who do you work for?

Pete Turner  51:31  
Yeah, yes.

Joe Mussleman  51:33  
And when I asked that question, I'm I mean, I'm giving it away. But when I asked the question, it's interesting, because immediately, I'd say more than 70% of the responses are, oh, the customer. Mm hmm. 100% like we work. We work tirelessly, tirelessly for our customer.

Pete Turner  51:50  
Yeah. And I was like, okay, but but who's working for your customer? Yeah. And then they'll come around and be like, Oh, I see what you did there. Then they'll say oh, well, the The people that work for the company, I said, well, then who do you work for? And he's like, I work for the people of this company. Yes, that's right. You don't work for your board. Yeah, you don't work for your customer. No, you work for your people and your people. If you are a good, great leader, they will then in turn, take care of the customer take care of the board, because the board cares about returns and share and stakeholders and, and all of those things. But like, if you take care of the people, yeah, everything else could take care of. My uncle was a great man. His name was grant when and when I was getting my master's degree in organizational management, the main thing he taught me and the most important thing I learned the whole whole master's degree. So pay attention if you're in a master's program should have one good thing. He when he ran a hospital, and he said, The thing I want you to learn is this take any organizational chart and one idiot? Yeah, and if the person at the top and now at the bottom is uncomfortable, they're wrong person, on person, because you have to be willing to say, and then that puts the board below you. That's right. And your job is to take all that stuff in and say this is a CEO problem. Now I'm going to go to the people that provision the CEO Like you make them division down below you, and you're like, I need these resources to get my job done. Because my good people are telling me that this is what they need. And if you don't handle it that way, you can do it other ways, of course. But that is a way that's much more people centric. And the other thing I wanted to add in to is, we're talking terms of stakeholders, we often talk in a very dumb way, like, who's a stakeholder? Well, just stakeholder because he's that we need HR here. Yeah, always think like, okay, so school shootings, who's a stakeholder, the parents, if you're going to do a school shooting training, you should as the chief of police, you should as the principal, you should, as the fire chief, invite one or two or six parents to come along and observe training, because guess who's the biggest stakeholder in this tent? You know, like, it's those kids. And you have to have the parents and if you don't communicate that with the parents, then there is no exercise. Yeah, you develop some operational capacity. But you've missed the forest for the trees. Yeah,

Joe Mussleman  53:52  
that's right. That's right. So it's been a crazy journey last year learning all of this and I'm proud To say that will one year to the day I left honor.org on February 12, of 2019. And on February 12 of 2020, we will be closing first closing our fund deploying capital and getting into the weeds on amazing companies.

Pete Turner  54:18  
Yeah, yeah. Incredible. Wow. So what's next? And like, I mean, obviously, you guys are going up and growing and getting bigger. What's out there?

Joe Mussleman  54:25  
Yeah. So for me, the big, big part of all of this TLC talk and the big part of all these five guiding forces is, is I'm gathering a coaching contra made up of some of the greatest leaders the world has ever seen. And these are coming from the Special Operations community. These are coming from professional athletic backgrounds and professional coaching. We, you know, in the group that I've pulled together to begin walking through how we're not just the economics of being a part of a venture fund, but I have to make sure that the qualifying question is answered correctly. The first qualifying question that I asked all these people is, what do you know about venture capital? And there's only one answer that I will take, which is nothing. Nothing. I don't need them to know about venture capital. Yeah. I, because it's a jaded experience. It's going I'm not knocking MBAs, but like, yeah, the best way to learn how to build a business is to build a business. And the best way to learn how to build great teams, how to be a great leader, and how to be a great steward of a culture. Yeah, he's to go do all that. Some of these people have been doing this for decades. I want them to do that. Yeah, I don't want them to be a VC. Right. I want them to be a part of a VC fund that focuses on TLC. Yeah. And that's it. So I'm building this coaching contra that we're calling a venture coaching practice, because it's very much like medicine, right? Like you still go get a surgery. The doctor that you go and see he's he or she's practicing medicine. Yeah, right. They haven't figured it out yet. There's like practicing. Yeah, right. Because you don't know everything there is to know about that. Coaching is the same way. It's a practice. Yeah. Right. It's it's we don't know everything about coaching. It's a, it's a very qualitative service. We just know that when coaches get involved, business goes through the roof. Yeah. So and I have all the statistics from the startup Human Genome Project where they infuse these different types of coaches into startups early on 70% more growth, they raise seven times more capital faster, sooner and more. And the entrepreneurs businesses last 10 times longer. If there is a coaching element in the early stages of a startup. Yeah, that's all I want to do is I want to bring together great a great pool of talent at the executive level, and I want to bring together a great talent, a coaching practice made up of the greatest leaders our generation has ever seen. And then I think that the results after fun one, and then fun, too, they'll speak for themselves on the growth of our company.

Pete Turner  56:51  
That's fantastic. Hey, man, thanks for sharing all that stuff today.

Joe Mussleman  56:53  
Yeah. Thank you. Thank you.