Angel Invest Boston

Through the Angel Invest Boston Podcast we seek to learn more about the creation of world-changing startups. Boston’s unique concentration of academic talent and entrepreneurial culture offer bountiful opportunities for conversations with people who have funded and built innovative companies. By recounting engaging stories, angels and founders convey lessons they have learned. These narratives illustrate the rewards of helping founders commercialize transformative technologies. We hope you too will find our dialogues entertaining and instructive. I’m Sal Daher, host of the Angel Invest Boston Podcast. After immigrating to Boston as a child and attending Belmont High School, I studied engineering at MIT and Stanford. Decades of work in international finance followed. During that time, I invested in a handful of ventures founded by friends and acquaintances. Now, I’m a member of Walnut Ventures and MIT Angels and spend most of my time as an angel investor taking stakes in about a dozen startups per year.
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Now displaying: 2017
Dec 20, 2017

A curious but orderly mind prepared to take advantage of serendipity has taken Adam de Sola Pool on a remarkable journey during his career.

His father, Ithiel de Sola Pool, the brilliant political scientist (look up Six Degrees of Separation or Convergence) took young Adam to many different countries. These travels sparked in Adam an interest in geography which led to a job on Wall Street. From Salomon Brothers he went to the EBRD to restructure companies emerging from communism. This grew into setting up Central Europe’s first cleantech fund which produced excellent results. Now Adam is an investor and advisor in the Boston area; much respected for his fresh approach to building young companies.

Topics covered in this charming interview include:

  • Adam de Sola Pool Bio
  • From Geography Major at University of Chicago to Wall Street
  • From Salomon Brothers to the EBRD
  • Adam Poole Has a Chance Encounter in the Bathroom & Gets a New Job
  • Overheated Factories in Poland
  • Adam Pool Discovers that Local Businesses Can Be Extremely Profitable
  • How Adam de Sola Pool Got into Angel Investing
  • Adam Pool Compares & Contrasts Angel Groups in Boston
  • Adam Pool Talks About Squadle, a Promising Startup Just Added to His Portfolio
  • Adam Pool Looks for a Defensible Market Position in the Startups in Which He Invests
  • Adam Pool’s Favorite Pivot
  • Adam Pool’s Approach to “Inoculating” Startups Against Risk
  • Adam Pool’s Poetic Statement of the Need for Founders to Give Way to Managers as the Company Grows
Dec 6, 2017

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If you want to get rich and to pass money to your kids, listen closely to Howard Stevenson. Here’s condensed wisdom from the heart of the investing world delivered with dry humor and charm. Professor Stevenson was a co-founder of storied Baupost Group and helped hire its legendary manager Seth Klarman. He began the study of entrepreneurship at Harvard Business School and eventually became HBS’ biggest fundraiser.

His book “Wealth & Families” gives invaluable advice on how to make money and keep enough of it to hand down to the generations. My personal favorite is illustrated by this quote from the interview:

“Whereas, some of my colleagues were going off consulting ... They were making a lot of money every day, and they go their XKE (Jaguar XKE, a coveted sports car of the era) quite quickly. I went off to places like Lima, Ohio, and I was paid $300 a day, but I got 1% of the company.”

Howard Stevenson was forgoing high current income, and consumption, for the ability to own promising assets that would build his wealth in the long term. This approach contributed to Professor Stevenson becoming rich enough to need a family office to manage his money.

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This dynamic conversation includes:

  • Howard Stevenson Bio
  • How Howard Stevenson Started His Career
  • Fear of the “Velvet Rut” Causes Howard Stevenson to Leave a Tenured Position at Harvard Business School
  • Howard Stevenson: “A lot of people are fairly miserable in their job, but they fear change more than they look for the optionality that comes in change.”
  • After a Sojourn in Entrepreneurship & Real Estate, Howard Stevenson Was Lured back to HBS
  • Sal Daher: “There are not a lot of people that would turn down tenured positions at The Harvard Business School…” Howard Stevenson replies: “That's sad. I'm a trustee at Olin College, and they have no tenure. It's amazing what that does, because people are there voluntarily.”
  • Howard Stevenson on Building Wealth: “I've always been experimental, because I don't believe I understand and can predict the future. By the way, when you look that the facts, very few people can.”
  • Howard Stevenson’s 400x Investment in a Company with a “Stupid Business Plan”
  • Howard Stevenson’s Four Criteria for Investing
  • Howard Stevenson’s Portfolio Returns; Warren Buffett-Like
  • Howard Stevenson on whether Entrepreneurship Can Be Taught
  • Howard Stevenson’s Definition of Entrepreneurship
  • The Best Due Diligence Is Time
  • How Baupost Got Started and How Investing Wizard Seth Klarman Was Hired
  • How Howard Stevenson Shops for Cars
  • Howard Stevenson’s Advice for How Young People Can Build Wealth
  • Mitt Romney & a Young Colleague on Spending
  • Why You Should Review this Podcast on iTunes – It Really Helps Us iTunes Podcast Page Where You May Review & Subscribe
  • "Most of the wealthy people I know, are better at making money than managing it."
  • Howard Stevenson’s Journey in Investing Began by Reading Graham, Dodd & Cottle in 1961
  • "I was smart that I recognized the quality of the people. But, whether it was coming out at 2X or 400X, wasn't in my control."
  • Talking to Your Kids About Money


Sal Daher: Welcome to Angel Invest Boston. Conversations with Boston's most interesting angel investors and founders. I'm Sal Daher, and my goal for this Podcast, is to learn more about building successful new companies. The best way I can think of doing this is by talking to people who have done it. People such as entrepreneur, angel investor, and scholar of entrepreneurship, Howard Stevenson.

Professor Stevenson, Howard, I'm elated for the opportunity to interview you on this the 29th episode of our podcast. Thanks for hosting us at your offices. In this recording session outside our usual studio. This is what's normally called a remote.

H. Stevenson: Well it's not so remote, it's right in Harvard Square.

Sal Daher: That's right. Not too far away.

Howard Stevenson Bio

Howard Stevenson founded the storied Baupost Group, and is the father of entrepreneurial management, at the Harvard Business School. Howard has served on many boards, and his advice is prized by so many wealthy people. He has written extensively on business and social ventures. He has been generous with his time and treasure, towards philanthropic causes in which he believes. It is said that he has raised more money for Harvard Business School than anyone else. There is now a chair professorship named after him at HBS, in recognition of his outsized achievements.

Starting out as a math major, Howard has had a methodical approach to wealth during his entire career. While he measured assiduously the growth of his net worth, he also paid close attention to choosing work that was satisfying to him, and valuable to others. Informed by fear of the “Velvet Rut” that can trap tenured academics. Howard found his own career trail in several industries. By taking astute long-term bets, he has become wealthy enough to need his own family office, though he does not like the term.

In preparing for this interview, I read his latest book, Wealth and Families: Lessons from My Life Journey. Written with his longtime collaborator Shirley Spence. The book is a remarkable document, in that it grew out of another book. A book that he had written for his family, titled: Howard's Journey: Lessons from the Game of Life. This other book was written to impart his hard-earned lessons to his family. The family book was shared with a few close friends, who urged creation of a public version, which became Wealth and Families. Which, is the book we'll refer to in this conversation.

In concluding my introduction, I'd like to read a beautiful blurb of the book by Howard's colleague, Kenneth A. Fruit of Harvard Business School. "It is hard to fathom, even once you've read it. The compactness of the wisdom and insight Howard Stevenson provides in this short book. His perspective is practical, yet enormously synthetic. Don't be confused by the direct "Oh shucks" tone. The simple folksy-sounding analysis of the complex problem of intergenerational wealth, belies Howard's incorporation, and absorption of much more of the magic of mathematically rigorous laws of compounding and diversification. Sprinkling in a foundational knowledge of the tax code and the law. It's that he has in his own mental frame incorporated a sense of people's humanity, their strengths and weaknesses, their goals and actual accomplishments. Based on successfully watching and doing for all these years. The wisest teachers have all along been life's best and most observant students. Howard and this integrative little book that you and your progeny should share, are just that."

That's really beautifully written.

H. Stevenson: Yes, and I didn't even pay him.

Sal Daher: I know. I know those things are tremendous.

How Howard Stevenson Started His Career

As a service to our younger listeners Howard, I'd like to ask a question about how my massively successful guests got started in their careers. Tell us about the choice that confronted you when you completed your undergraduate in mathematics at Stanford, and what you chose.

H. Stevenson: Well it was fairly easy. I discovered when I was at Stanford, there were people who were smarter than I am, love math more, and worked harder. I decided I didn't want to compete with them.

I had looked at both law school, and business school, and in my great wisdom I discovered law school was three years long. Business school was two, and I chose business school.

Sal Daher: A math major, you could count.

H. Stevenson: I could count. Even on one hand. And, then I discovered that in fact Harvard gave me a bigger scholarship than Stanford for my continuation. End of story on the career that got me into Harvard Business School. Staying on to teach was another decision, which I think is, I've always loved learning, and what better way to learn than to teach. So, I did that for a couple of years, and then played investment banker with a friend on doing deals for small companies. Then I came back to the business school to do ... Well I came back to tell them I wasn't coming back, and they said, "What are you going to do?" And, I said, "Well I'm going to be a VP of Finance of a real estate company."

That meant that they thought that I knew something about real estate. I'd never read a book on the subject. I never had done anything in the field, and they said, "Do you want to teach the course?" And thought, "What better way to learn?" So, I came back to the business school, started a real estate course, or took over one that was sort of moribund. And, did that for five years. I came up for tenure, and I got tenure, and the Dean told me to do something important. So, I left again.

Fear of the “Velvet Rut” Causes Howard Stevenson to Leave a Tenured Position at Harvard Business School

But, part of the motivation of leaving was that I saw a lot of people in this “Velvet-lined Rut’. That it's very easy when you're successful, to keep doing what you're already doing. But, in fact the only way you can get from doing the wrong thing to the right thing, is probably doing the right thing poorly. And, so you have to learn, and I watch people who run the top of little hill, who didn't want to go down in the valley to try something new.

Sal Daher: This is very interesting. Very, very interesting. I wanted to elucidate a little bit, what was meant by the Velvet Rut. You think that academics tend to perhaps specialize a great deal? Become the most knowledgeable in a field, but are afraid to venture out, where they're not as knowledgeable?

H. Stevenson: Or where there're people who won't think they're as knowledgeable. But, I don't think that's restricted to academics.

Sal Daher: Mm-hmm (affirmative)

Howard Stevenson: “A lot of people are fairly miserable in their job, but they fear change more than they look for the optionality that comes in change.”

H. Stevenson: A lot of people are fairly miserable in their job, but they fear change more than they look for the optionality that comes in change.

Sal Daher: Ah, yes. The optionality that comes in change.

H. Stevenson: And, we can never predict the results of change.

Sal Daher: No. No.

H. Stevenson: So, for me I said, "Look, I can always get a job." I think the dean, at that point was not interested in what I was doing, which was entrepreneurship and real estate. And I said, "Why do I want to work at some place where they don't value what I'm doing?"

Sal Daher: Mm-hmm (affirmative)

After a Sojourn in Entrepreneurship & Real Estate, Howard Stevenson Was Lured back to HBS

H. Stevenson: That led me to work with a private company. Became VP of Finance of a private company. Helped them raise money. Got some control systems in place. A whole bunch of things. So, I had a lot of learning, but after five years the learning went away and I ... The dean had heard that I was dissatisfied, and came and said, "You want to do something in entrepreneurship?" And this was a new dean, and he was a person I knew and trusted, and so I said, "Yes".

Sal Daher: It's a new direction and a new discipline that challenged you at the time. So, you felt that that did not have the risks of constraining you within this rut.

H. Stevenson: Absolutely not, and beyond that I knew that I could leave again.

Sal Daher: There are not a lot of people that would turn down tenured positions at The Harvard Business School. No, that is impressive.

Sal Daher: “There are not a lot of people that would turn down tenured positions at The Harvard Business School…” Howard Stevenson replies: “That's sad. I'm a trustee at Olin College, and they have no tenure. It's amazing what that does, because people are there voluntarily.”

H. Stevenson: That's sad. I'm a trustee at Olin College, and they have no tenure. It's amazing what that does, because people are there voluntarily.

Sal Daher: Yes, yes. That is a remarkable organization.

We're going to talk a little bit now about building wealth. What type of early stage investments have you made, and how have they turned out over time?

Howard Stevenson on Building Wealth: “I've always been experimental, because I don't believe I understand and can predict the future. By the way, when you look that the facts, very few people can.”

H. Stevenson: I've always been experimental, because I don't believe I understand and can predict the future. By the way, when you look that the facts, very few people can.

Sal Daher: That's right.

H. Stevenson: We've always tried to invest in places where, in the early stage, I prefer to invest when people have some revenue. Because, it points to the fact that there is somebody that's willing to have a cash-ectomy performed on their wallet.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: We like to be broadly diversified. I'm not trying to guess what's going to be in the next public market.

Sal Daher: You prefer companies that are post-revenue? That are ...

H. Stevenson: Post revenue.

Sal Daher: Earning, okay.

H. Stevenson: And ...

Sal Daher: In a growth stage?

H. Stevenson: In a growth stage, where they need the money to ... If it's in biotech, I prefer something where the scientific risk is out.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: But the market risk is still there. The best investment I ever made was in a company that had a really stupid business plan. But, the people were fantastic.

Sal Daher: Yes.

Howard Stevenson’s 400x Investment in a Company with a “Stupid Business Plan”

H. Stevenson: They were in an industry that I thought was very interesting. I thought that what they were doing in that industry made no sense. Over a couple of years, they morphed, and that's probably returned 400 to 1.

Sal Daher: Oh, the 400 to 1 return that everybody's looking for, to pay for the rest of the portfolio.

H. Stevenson: Yes. But ...

Sal Daher: Which company was that?

H. Stevenson: It's a company called Asurion.

Sal Daher: Asurion.

H. Stevenson: And, they are very quiet, I'm still invested.

Sal Daher: Yes.

H. Stevenson: They're doing very well. One of my friends, who's a noted venture capitalist, turned them down because the business plan was too stupid. That's been one of the worst decisions he ever made. Whereas, one of the other venture capitalists that put a little money in, it's the best decision he's made in his life.

Sal Daher: I know, those kinds of investments are few and far between, and when you turn one of those down, it's hard to live it down.

H. Stevenson: You have to live life forward, you can't live with regrets.

Sal Daher: True, true, true, but I think there is some room for learning.

Howard Stevenson’s Four Criteria for Investing

H. Stevenson: I think the thing that I've learned is. I have four criteria for investing in companies I know and love. Is the person honest? Because, if they're not honest they'll screw you some way.

Sal Daher: Oh yeah, that goes without saying.

H. Stevenson: Now how do you figure out if they're honest? Well, there're two ways: 1. You know them. Or, 2. One of my favorite questions is, "Tell me about the sharpest deal you ever did?"

And, it's amazing what people will tell you. One guy told me how he cheated the IRS. And you say, "Well if they can send you to jail, and I can't, and you're still willing to do it, I think I know something about your value system."

Sal Daher: That is remarkable, that is remarkable.

H. Stevenson: The second criteria, that I like to use in investing is: Are they nice? By that I mean, are they looking out for somebody other than themselves?

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: I've had experience in start-up or early stage investments, where the entrepreneur takes care of themselves really well, and the early stage investors not so much.

Sal Daher: Left hold the proverbial bag.

H. Stevenson: Well, or holding nothing.

We have one that just went public, and I think compared to my investments, I'll make 10 cents on the dollar, even though the company was successful. And, I went through three or four rounds, and I discovered what the person was.

But, trying to figure out are they nice, that means talking to people that know them. Looking at past decisions. I've had investors ... Or, I've had companies where we lost all the money, and they gave me stock in the next venture they did. Which is a good sign that they are nice people.

Sal Daher: Yeah, that is a nice sign, yeah.

H. Stevenson: The third element is: Are they curious?

Because if you believe that the future is impossible to predict, then anybody who thinks they know the future absolutely, is not looking around the corner. I go back to my example of the best one we ever did. They had a bad plan, but they were curious, and they said, "Where can we serve this group of customers, with a very profitable notion?" And, they found it.

Howard Stevenson’s Portfolio Returns; Warren Buffett-Like

And the last is: Are they smart? Because, this is a very complicated field. Now you ask how we've done. We've been doing it for about 25 years, since I sold down some of my position at Baupost, and left active management. I was the president for the first eight years. We probably return 17% or 18%. Probably 12% without the real big winner.

Sal Daher: Mm-hmm (affirmative). So, a little bit ahead of what Baupost has done in the same time?

H. Stevenson: Yes. I guess I look at it, and I say, when I've done the analysis ...

Sal Daher: Probably a lot higher beta.

H. Stevenson: Yeah. It's actually interesting, I've divided things into five categories. Stuff happened, I don't use the word stuff when I'm talking about this.

Sal Daher: Yes. I understand.

H. Stevenson: That was a ... The guy got a pancreatic cancer soon after we invested. The Tanzanian government it over, because it was too profitable, and they wanted their cousin to own it. And, you can go through some, but there weren't a lot of those.

There was the wrong on the bet category.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: It was a good bet, but it didn't work. And, I think in a lot of what we're doing, you've got to differentiate between, is it a good bet, and did it work?

Sal Daher: Yes.

H. Stevenson: Because, on a high variance bet, it's not going to work out all the time. But, one of the things we always try to do is say, "What are we betting on? What are the three or four conditions we're betting on?" And, then sometimes they're not going to work.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: Then there is, we made it safely through. Then there was a few good things happened. If you take the bottom three categories, I think we got about 7% out of that total pool because ...

Sal Daher: Wow! Well that's not bad, yeah.

H. Stevenson: When you're post revenue, in some ways you don't ... You're not going to lost everything.

Sal Daher: No, no.

H. Stevenson: But one of the interesting ...

Sal Daher: I've had at least one post revenue company that lost everything, because they were so highly leveraged. That's the thing, if they have revenue, there's a temptation to borrow.

H. Stevenson: Yeah, but I think that one of the things about it is, that if you're working with the right people, they are ready to say, "It's not working". Then they turn their task to getting something for the company. Instead of, as some people are, they'll just throw the dice, until they run out of money. Somebody who's nice and curious, is probably going to spend some time saying, "It really isn't working, is there some way we can salvage something for us, and the investors?"

Sal Daher: Yeah, that really is remarkable wisdom.

H. Stevenson: Then some good things happened. Largely that was when somebody else wanted it worse than we did.

Then there's the wows, and there are probably five wows. The one I told you about is by far the biggest one, but there were quite a few that returned 30 to 1.

Sal Daher: Wow.

H. Stevenson: And you say, "What field were you in?" They were all over the lot.

Sal Daher: Wow, so no specialization?

H. Stevenson: No specialization.

Sal Daher: Interesting. I was having a conversation with a young venture capitalist yesterday, who is a part of MIT angels. He says, "I'm very specialized in biotech. Everyone, of these deals I can see all the problems with them, and solve them and so on." And he said, "I don't understand how you can make money, without that level of specialization." The answer for me at least, is that I'm investing much earlier than he is. So, my judgment isn't really based on knowing exactly what the industry is, and so forth. It's much more based on character, and so forth. The sort of thing that you're talking about. That is what makes it possible for you to be investing. If, you're investing early enough. The remarkable thing is that you're investing in post revenue, and you're still making those judgment calls based on character, and making money. Which is tremendous.

H. Stevenson: I think that part of it is that nobody knows the future, no matter how many PhDs you have.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: In the biology field, I've had people present things to me. They say, "This is absolutely unique." And, I walk back to my office, and I get a business plan, that if I just crossed out the names, it would be the same.

Sal Daher: It would be the same, yes.

H. Stevenson: So, my belief that you have a unique upside. Just think, even Uber. How many examples are there of Uber?

Sal Daher: That's right. The ones that failed, there were many of them, and Lyft, which is still extant. But the reality is that, ideas are a dime a dozen, and execution is very, very hard.

H. Stevenson: One of my favorite stories about this is, in 1993 and the personal computer is coming out. We said, "There's got to be a role for this in home accounting."

Sal Daher: Ah.

H. Stevenson: We found a guy from Procter and Gamble, because we knew you'd need marketing.

Sal Daher: Mm-hmm (affirmative)

H. Stevenson: They'd written a software. It was good software. It worked fine on the apple. Unfortunately, not on the PC. And, it started literally within a week of Quicken.

Sal Daher: Ah!

H. Stevenson: So, you look and you say if I took two business plans, look at the resumes of the people, I couldn't tell the difference.

Sal Daher: No.

H. Stevenson: One is wallpaper, and the other is a fortune.

Sal Daher: Quicken, they managed to establish a process for developing a product. Which was really, tremendously impressive.

H. Stevenson: That, but I think they may have gotten into Staples slightly before we did.

Sal Daher: That's all part of the product development process.

H. Stevenson: Yep.

Sal Daher: The product is developed enough, that Staples can distribute it. As a matter of fact, I'm trying to think of who it is that I interviewed recently who has the founder of Quicken as his ...

H. Stevenson: Scott Cook?

Sal Daher: Scott Cook, yes is his idol.

H. Stevenson: Mm-hmm (affirmative)

Sal Daher: I think it came out in the podcast.

H. Stevenson: Yeah, a P&G guy. He's not a technology guru.

Sal Daher: Well, he's another P&G guy, because you guys were backing a P&G guy as well.

H. Stevenson: Yes.

Sal Daher: Well I'm in the process of writing ...

H. Stevenson: HBS guy too.

Sal Daher: HBS guy. Well I'm in the process of writing a check right now to P&G, J&J, HBS guy. So, I hope it's going to work out.

H. Stevenson: I can guarantee you won't know until it does.

Sal Daher: I know. That is absolutely true. That is absolutely true.

Howard Stevenson on whether Entrepreneurship Can Be Taught

You've done a lot of research, and given all your business experience. This is a tough question. Do you believe there are certain personality types that are more conducive to entrepreneurship, or can it just be taught to anyone? Bill Aulet, thinks it can be taught.

H. Stevenson: Can I answer no, to both questions?

Sal Daher: Absolutely.

H. Stevenson: Well, in the old days before I started to work in entrepreneurship, there were people who said, "Well, they've studied it carefully and you need ... Being a first born helps, because 44% of the entrepreneurs are first born." Failing to notice that 44% of the population is first born.

There were other deep studies of locusts of control, and other things. It turns out to be nonsense. I don't think that there's a personality type. Because, if you're going to run a cable television company, you could be the wallflower at the accounting convention.

Sal Daher: Right, right.

H. Stevenson: If you're going to run a promotion based ... Look at Steve Jobs’ personality. I mean ...

Sal Daher: Absolutely.

H. Stevenson: I can go through Ken Olsen.

Sal Daher: Mm-hmm (affirmative)

Howard Stevenson’s Definition of Entrepreneurship

H. Stevenson: You look at the great entrepreneurs, and if you can find a single personality type, I think you've got a flawed test. So, I would reject that. On the other hand, I don't think that you can teach entrepreneurship to anybody. What I always thought we're doing when we're trying to teach entrepreneurship. Is if you take the students who come to Harvard Business School, they're opportunity driven. And, as you may know, I tried to define entrepreneurship as the opportunity beyond the resources you currently control.

Sal Daher: Yes.

  1. Stevenson: Almost any kid, who walks into Harvard Business School, Sloan School. They didn't get there because they were shy, retiring ...

Sal Daher: No.

  1. Stevenson: Just hoping to make it to the first level of the company, and then they'll stop.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: What we tried to do is, to show them that somebody like them could accomplish it. So, you had the cases on women, you had cases on African Americans, you had cases on people who started late, people who started immediately. Although, I tried to discourage people from starting early. Because there's a lot of research that shows, you got to know something about your customer in your market place.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: You ought to be known. Because you're going to go out to raise resources, and the more that other people know you and trust you, the better off you are. But, I think what you have to do is have the self-knowledge to say ... Probably politically incorrect say, "I know there's a lot of money to be made in China, but it won't be made by people that look like me."

Sal Daher: Mm-hmm (affirmative)

No, really the problem of information, and the fact that it's broadly disseminated, and people who have local information have an advantage, over someone coming from the outside. That is broadly recognized. I see the point that you're making, that you think that what the academic experience can do, is inspire people with models.

  1. Stevenson: Mm-hmm (affirmative)

Sal Daher: That have, through cases and so forth. They can get people thinking, "I can do that." Which is a little bit of what I hope to do through this program, with angel investing. Is, to get people saying, "I don't have to be Mark Zuckerberg, to invest as an angel. I can be a guy who has built a business, who's got some experience and so forth. And, I can probably help some young person who's building a business."

  1. Stevenson: Well, what I said about ... There were two things that I was trying to do, accomplish. One was planting time bombs in people's mind, that exploded when they stepped on the opportunity.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: The second thing that I think you try and do, is keep them from doing really stupid things.

Sal Daher: Ah, okay.

  1. Stevenson: I have a sign in my office at home that says, "It's great to learn from other people's mistakes, and you've been a real blessing to me."

Sal Daher: Yeah. The ability to learn from other people's experience. It's a lot cheaper than learning from your own experience.

  1. Stevenson: That's what you try and do as a teacher is ... But, you also have to say there is no one right way. The business plan, no I've never had a business plan that worked out the way it was written.

Sal Daher: My first interview with Michael Mark, who's founded several companies as a technology founder. And, he said he had invested in more than 200 startups, and he could think of one business plan that went according to plan, Progress Software. All the other ones necessitated pivots.

  1. Stevenson: The first thing I would say is, the fact that writing a business plan can be helpful, because you have to express the bets that you're making. So, you actually know what you're shooting at.

Sal Daher: Absolutely.

  1. Stevenson: But, if you think that the business plan has foreseen all possible combinations ... Even just timing is at best, a random event in some ways.

Sal Daher: That's right.

In your book I think you quote Eisenhower saying, "Planning is everything. Plans are nothing."

  1. Stevenson: That was my doctoral dissertation. Had a lot to the defining strengths and weaknesses. Didn't matter what you wrote down at the end. It was, you were asking the question, "How do we compare to the other people trying to accomplish the same thing we are?"

Sal Daher: So, going through the process of planning, you develop understanding. Even though things don't work out as you expect, at least you know a little bit about the lay of the land. So that when things change, you can regroup and do an informed approach.

  1. Stevenson: I would also say that one of the things that I look for in a business plan, is have they looked honestly at the competition.

Sal Daher: Ah.

  1. Stevenson: I can't tell you how many business plans and software I've read that says, "We've done this for $300,000, and it would take everyone else 2 million."

Sal Daher: I've seen a lot of those, yeah.

  1. Stevenson: There's a lot of competition out there, and you need to have some humility on the part of the entrepreneur and the investor to say, "We're going to be out there in a tough market. How are we going to win? Where do we have a competitive advantage?"

Sal Daher: In those situations, one trick that I've learned from some of my colleagues in Walnut Ventures is, give them a little time. If they're at the beginning of the race, don't tell them that you're going to invest with them. Give them three months, and then see where they are, in those three months. See how much progress they've made during that time. They've told you everything about where they are now. If, in three months they're still telling you the same things, and they have competition, so that they're not very good at implementation. So, they're not going to get anywhere.

The Best Due Diligence Is Time

  1. Stevenson: We always say the best due diligence is time. In fact, I was talking to one of the famous venture capitalists, who was a former student, and a good friend. And I said, "Isn't due diligence highly overrated?" And he says, "Yeah, I need to make five calls." He said, "I just need to know, which five people I talk to." I think that's true in most of this area for us as investors is, do you know somebody that knows the field? Do you know somebody that knows the person? Do you know somebody that knows the state of the financial markets for that particular fashion element? There's a lot of stuff ...

Sal Daher: Absolutely.

  1. Stevenson: That, you don't need to talk to everybody in the world. And, getting a 2000-page report from Bain and Company, or McKinsey, is not going to help you understand where the world is going.

Sal Daher: No, no it's not. It's not.

How Baupost Got Started and How Investing Wizard Seth Klarman Was Hired

Howard, I'm very curious to hear the story of the founding of Baupost. Hiring of Seth Klarman. For those listeners who do not know of Seth Klarman, think Warren Buffett a quarter century younger.

  1. Stevenson: I'll start with a recent search that I was working on for a not for profit. The people said, "We need to hire somebody like, X." And I said, "No you're going to be hiring someone like X was 30 years ago."

Sal Daher: Yeah.

  1. Stevenson: That was true of Seth. Here you had an extremely bright young man, who loved two things.
  2. He liked stocks.
  3. He liked betting.

Baupost was founded because, Bill Poorvu had sold WCVB, or was selling CVB, and I had worked with him quite a bit. And, Jordan Baruch ...

Sal Daher: Bill Poorvu, fellow professor at the Harvard Business School.

  1. Stevenson: Yes.

Sal Daher: Who had been owner of the television station, WCVB channel 5, here in Boston.

  1. Stevenson: A part of it, yes.

Sal Daher: A part of it, yeah.

  1. Stevenson: And, Jordan Baruch was a professor at MIT.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Who, was one of the early ... I think he was employee number four, Bolt, Beranek & Newman.

Sal Daher: Okay, okay.

  1. Stevenson: And Isaac Auerbach was one of the early employees of UNIVAC.

Sal Daher: Okay.

  1. Stevenson: And, he was a good friend of Jordan's.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, as Bill was about to receive some money he said, "Help me how to figure out how we get the money managed." So, the first hire was an administrator. Deloitte's going to come in, you better make sure you can account for it.

Sal Daher: You can put it in somewhere.

  1. Stevenson: Well, make sure you can account for it first.

Sal Daher: At least cash the checks.

  1. Stevenson: Yes.

Sal Daher: Right.

  1. Stevenson: Then Seth was a student of Bill's, and he said, "This is an unusual guy. What are we going to do with him?" And I said, "Who knows?" We started out looking at, how do we select money managers?

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: This was 1982. After you talk to a number of money managers, you say, "We can do better than that."

Sal Daher: The industry was not highly developed at that time.

  1. Stevenson: The industry, it was ... White shoe, everybody was into recreational vehicles.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It was a screwy industry, and always has been.

Sal Daher: Right, right.

  1. Stevenson: We hired Seth. We looked at ...

Sal Daher: But what is it that you saw in Seth, that set him apart?

  1. Stevenson: The same things that I talked about earlier. He was honest. He'd worked for honest people.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I wouldn't hire somebody from, you can name the firm.

Sal Daher: Absolutely, yeah.

  1. Stevenson: He doesn't even need to work there, I don't want to work for me. He certainly understood the charitable notions that I think the other founders had. I think they were all deeply committed to other people, and that was attractive to him.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It wasn't, they were trying to make the most money, and so you saw the niceness come through there. Clearly curious, you don't work the pink sheets, if you're not curious.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Because, nobody else was covering them.

Sal Daher: No, no. Mm-hmm (affirmative)

  1. Stevenson: That was one of the things I liked about him is, he was willing to do original research. Rather than call up Goldman and say, "What's hot today?"

Sal Daher: Yeah.

  1. Stevenson: And their answer is, "Whatever I got a lot to sell off."

Sal Daher: Exactly, exactly.

  1. Stevenson: And, he's clearly smart. He's a Baker Scholar. So, we saw that and ...

Sal Daher: But the idea of patient investing, of buying things that are deeply underpriced, and holding them until they are, not fully valued, I know you always sold early. But, until other people begin to have an interest in them, that is something that's attracted me to him. Because, it's a lot similar to what my partner and I did in emerging markets. We were always early, buying stuff at incredibly cheap, and selling into the market as it began. People made a lot of money buying stuff off of us. And, the same thing with Seth Klarman. So, how did you detect that? That quality in him.

  1. Stevenson: I like to think I even taught him some of that. The expression we gave was, "Feed the birdies, when they're hungry."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: And, he transitioned into being the president after about six years. Because, people don't want to give a 26-year-old all of their money. And, we had all of the money, of all of the clients.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, there was concern. This is a different approach. I think one of the things that also Seth has been brilliant at, and I like to think I had something to do with it. Is, not ... Because we had all the money, you didn't get stuck on we're buying big cap stocks. It was ...

Sal Daher: Ah, okay.

  1. Stevenson: So, a lot of the success was, you moved from sector to sector. So, you bought real estate, when real estate was dead cheap. You bought busted bonds. I can go through the history and ...

Sal Daher: And, given the composition of the investors, the original investors. They were a small number of people, who had a long-term outlook. They had a much healthier attitude towards the market, than a lot of people have today. Because if you're a young, rising fund manager, you live or die by your last results. In your ...

  1. Stevenson: No. And, frankly as we're building the business, we turned down a lot of those people.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: We didn't think the acquisition of assets was important as the acquisition of good clients.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Also, we were interested in who the family was. Not, do they have a name.

Sal Daher: Right, right.

  1. Stevenson: But, how they dealt with each other.

Sal Daher: Right.

  1. Stevenson: Because, you were trying to create something, and I think Baupost still has that feeling that it's everybody's in it together. So, it was, everybody participated in the performance fee, down to the secretary. Everybody ate from the same pizza box.

Sal Daher: That is wonderful. That's something Warren Buffett complains says his secretary pays a higher tax rate than he does.

  1. Stevenson: Yes.

Sal Daher: In this case, even the secretary is paying a high tax rate.

  1. Stevenson: Yep.

Sal Daher: A low tax rate, I should say.

  1. Stevenson: Yes.

Sal Daher: Because, she is benefiting on the ... Or he, in the ...

  1. Stevenson: Right. That was certainly the case then, and they tried to spread through.

Sal Daher: That's really laudable. I have great admiration for the firm that you helped put together, and its outcome is really impressive.

  1. Stevenson: Well it's Baruch, Auerbach, Poorvu and Stevenson, is where the name came from.

Sal Daher: So it's Baruch.

  1. Stevenson: Baruch, Auerbach.

Sal Daher: Auerbach.

  1. Stevenson: A U B A

Sal Daher: B A

  1. Stevenson: A U

Sal Daher: A U

  1. Stevenson: P O and S T

Sal Daher: And, S T of Stevenson.

  1. Stevenson: Yes.

I think it happened with a piña colada somewhere on the Caribbean.

How Howard Stevenson Shops for Cars

Sal Daher: Howard, I find the way you shop for cars, particularly instructive. Please elaborate.

  1. Stevenson: I don't shop for cars. When my oldest child turned 16, I handed him a signed check and said, "Go buy me a car." And, people look at me like I'm crazy. But, in fact what I was trying to say to him is, "I trust you. I believe you'll do good research, and I respect your judgment." Because part of the process of educating kids is not saying, "I'm smarter, better, faster than you are." It's saying, "I am asking for your help in important things." I look at buying a car ... First, I hate dealing with car dealers, so I look at it as a pain. I was reasonably sure my sons, who love cars ...

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Would spend more time harassing car dealers. Which, made me feel like I was getting even with these guys. But, in fact they really do the research thing. So, they come back with a great knowledge of the packages that are available. What you want, what you don't want, and what was my risk? A couple thousand dollars, at worst?

Sal Daher: Yeah, you might overpay a little bit for a car, but your kid will learn.

  1. Stevenson: But, I don't think I ever overpaid. I am absolutely sure that they got better deals than I would. Because, I'd walk in and say, "Oh, I like that car. How much it cost?" Because, I want to get out as fast as I can.

Sal Daher: That's interesting, my father-in-law used to do that with his children. He used to give them, when they went to college, the money for the whole year. Give them one check and say, "Here, you've got to pay tuition, your cost of living, everything." Of course, he was overseas in Argentina, and they all came here, and it all worked out. But, sometimes it goes wrong. My dad had a cousin, who when he was away at a university, his family sent him money for the year, and he took the money, and he gambled.

  1. Stevenson: Yeah.

Sal Daher: So, he didn't have any money for tuition, or anything like that, and then he was afraid to go back home, when everybody else graduated, because he still hadn't studied.

  1. Stevenson: Well, but again a car is a different thing.

Sal Daher: Absolutely.

  1. Stevenson: I would know whether they bought the car or not.

Sal Daher: There are guardrails, yeah.

  1. Stevenson: And, they probably do have fraud and collusion among the dealers. There's lots of reasons why that's, trust but verify in some ways.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: But it leads to a lot of trust in the judgment. But, it's also a sign of respect for their work, and their ability to think, and their ability to plan. And, I think they figured out that they would get the used car. So, they bought cars they wanted on the next round.

Sal Daher: Yeah, so they're highly incented to do that. And, it's consonant also with your idea of having the children be brought in early on wealth, brought in early on responsibility for money, and so forth. Which unfortunately nowadays, children really don't have much of a sense of that, of responsibility with money, and so forth. They don't work, they don't make their own money. At least in my experience, children in America work a lot less, than they used to 20, 30 years ago.

  1. Stevenson: The rules are harder to comply with, if you're a company.

Sal Daher: Yes, absolutely.

  1. Stevenson: We have a friend who owns a car dealership and he got an OSHA citation because he had his 15-year-old son sweeping the floor. So, to me the question of how do you teach responsibility?

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: How do you teach trust?

Sal Daher: Yes.

  1. Stevenson: How do you live by example? Are the critical things in Wealth and Families.

Sal Daher: That is really beautifully said.

 Now what advice would you give a young person about building his or her own wealth?

Howard Stevenson’s Advice for How Young People Can Build Wealth

  1. Stevenson: I think the most important thing you can start at is, assets are more important than income. At least for me I can speak only in the things I tried to teach the kids. But, if you have a high income, you usually have high expenditures. Whereas, some of my colleagues were going off consulting their ... Consulting was a euphemism for teaching in outside courses at GE. They were making a lot of money every day, and they go their XKE (Jaguar XKE, a coveted sports car of the era) quite quickly. I went off to places like Lima, Ohio, and I was paid $300 a day, but I got 1% of the company.

Sal Daher: Ah.

  1. Stevenson: I always tried to look at the assets side, because I couldn't spend it.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Which meant, if I was right, I was saving it.

Sal Daher: So, you looked towards building assets?

  1. Stevenson: Yes.

Sal Daher: Instead of building income, necessarily?

  1. Stevenson: Yes.

Sal Daher: And in time these assets will generate income, but you weren't looking about income today.

  1. Stevenson: I wasn't looking for income today, and I was always trying to say, "How do I use my current income to pay the taxes?" So, I could compound after tax, rather than pre-tax.

Sal Daher: Yes. And, another thing that is mentioned in your book. You emphasize very clearly that a house, is not an asset.

  1. Stevenson: No, and a mortgage is ... I think of a mortgage as a funny beast.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Because when I didn't have any money, as I said, "I was a scholarship student."

Sal Daher: Right.

  1. Stevenson: Then a mortgage was a functional equivalent of rent.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I still have mortgages, even though I don't need one. But I think of it as the cheapest way to lever my investment portfolio.

Sal Daher: Well yes, if you have been reliably producing 16%, 17% returns every year, it makes sense to borrow at 3% or 4%. That is remarkable. So, I really like that advice. Concentrate on building assets, and think about high income leads to high expenditures. That reminds me of a story of Mitt Romney.

  1. Stevenson: Mm-hmm (affirmative)

Mitt Romney & a Young Colleague on Spending

Sal Daher: This is after he had had his initial success. He was with Bain Capital already. A young associate got his first bonus check and he went out and he bought a fancy sports car, and he gave Mitt a ride. Mitt was famous for beat up station wagons. Are you familiar with this story?

  1. Stevenson: No, no. I know Mitt well, he was a student of mine. Same class as George Bush, by the way.

Sal Daher: I'm not going to ask, who got the higher grade.

  1. Stevenson: You don't need to.

Sal Daher: I know, no. But, anyway ... So, the young partner said ... Is driving Mitt around, and Mitt was very impressed, he says "Geez, I wish I could afford a car like this." And the young associate said, "Well, Mitt you're worth hundreds of millions of dollars. You can afford this." And the kid didn't get the sense that Mitt didn't think he could afford the fancy sports car. This young kid with his first bonus check goes out and blows it on a fancy car.

  1. Stevenson: Well, I think the other thing Mitt would probably say if you got him under sodium pentothal. He doesn't drink so ...

Sal Daher: Yeah, I know. That's the darned thing with Mormons, you can't get them drunk.

  1. Stevenson: I was raised in Holladay Utah, so I understand it.

But I think it's also what behavior you're modeling for your kids.

Sal Daher: Right.

  1. Stevenson: Because, as my grandmother would say, "Your actions speak so loudly, I cannot hear a word you say."

Sal Daher: That is very wise, very wise.

Why You Should Review this Podcast on iTunes – It Really Helps Us iTunes Page for the Podcast Where You Can Review and Subscribe

Coming up next, we will be shifting to managing your wealth. A matter about which Professor Stevenson has deep experience. However, before we do that, I'd like to take the opportunity to thank listener, SewNow, who left this review on iTunes. "Definitely worth a listen. The series is full of very useful information. It is clear to me that Sal has put a lot of effort into it." SewNow, you have done your part to support the podcast. We bring stellar guests like Professor Howard Stevenson. We come to you free, with no schlocky ads, and professional sound, and you can help by following the example of SewNow, and leaving a review on iTunes. The listenership is growing with every episode, breaking records. It's something like 10% or 15% every month, that they're growing now. That growth combined with more reviews, will eventually cause the iTunes algorithm to start featuring the show. Thus, your review is critical to us. Thanks

"Most of the wealthy people I know, are better at making money than managing it."

Howard, in your book Wealth and Families you state, "Most of the wealthy people I know, are better at making money than managing it." Please take this opportunity to elaborate on taking on the responsibility of managing your wealth.

  1. Stevenson: Well I believe firmly that, you're accountable for your own actions. And, not everybody takes that to the management of their wealth. They think they can outsource it, and the results are often what you'd expect. But, I think it's also, you have to know your own objectives. Why am I interested in wealth? Is there an amount beyond that, it's for charity, or for my kids? I think that thinking through clearly, what your objectives are, and when I use the word your, I mean your spouse, and you probably. Because, if you start early enough, the kids don't have major voice.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: But it's also a subject that's quite un-discussable. I don't know how wealthy many of my friends are, because we never discuss the subject.

Sal Daher: Right.

  1. Stevenson: It seems to me that at least within the family, you've got to say, "Here's where we are. Here's where we're going. Here's how we're going to get there."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: That involves a lot of decisions that are complicated. That's before you get to what you do with it, when you have it.

Sal Daher: Right, right.

Howard Stevenson’s Journey in Investing Began by Reading Graham, Dodd & Cottle in 1961

  1. Stevenson: I guess for me, the question is ... Most people would rather talk to their kids about sex than money. So, you don't learn it at home, in most cases. So, you have to in fact reach out to say, "what do I need to know, to be successful?" So, I started by reading Graham, Dodd, and Cottle in 1961.

Sal Daher: Not a bad start.

  1. Stevenson: It's probably as good a start as you can have if you want to be a value investor.

Sal Daher: Absolutely, absolutely, yeah.

  1. Stevenson: That probably is one of the things that made Seth appeal to me. But, all along I felt like, I had to take ownership of my own results. That didn't mean you didn't use brokers. That didn't mean you didn't hire a financial planner occasionally, but you had to take responsibility for your own results.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: But that's humbling.

Sal Daher: It is, it is.

  1. Stevenson: Because, you'll never know all you need to know.

Sal Daher: And, taxing because you will inevitably have reverses.

  1. Stevenson: Yes.

Sal Daher: And people have the attitude that if they ever lose any money, they've failed. But the goal is not to never lose money. The goal is to grow over time.

  1. Stevenson: Well, and anytime you lose money ...

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It helps to say, "Why?"

Sal Daher: Right.

  1. Stevenson: And you go back to my five categories. Stuff happened, there's nothing you can do.

Sal Daher: Right.

  1. Stevenson: I was wrong on the bet. I knew the bet, but something happened that was different than I was betting on.

Sal Daher: Right.

  1. Stevenson: Also, the humility on the other side to say, "I wasn't a genius because I invested in X."

Sal Daher: Mm-hmm (affirmative)

"I was smart that I recognized the quality of the people. But, whether it was coming out at 2X or 400X, wasn't in my control."

  1. Stevenson: "I was smart that I recognized the quality of the people. But, whether it was coming out at 2X or 400X, wasn't in my control."

Sal Daher: Right, right.

  1. Stevenson: Whereas, I can assure you, if you listen to many of the professional investors they will say, "I knew it all along."

Sal Daher: Right.

  1. Stevenson: And, in fact many of the 100% losses I had were done when I was investing side by side with professional venture capitalists.

Sal Daher: Right.

  1. Stevenson: Because, their motive is to shoot for the moon.

Sal Daher: Right, right. That is pretty deep. Very good.

I guess we talked about this a little bit, but could you go a little bit more into hiring the professional help you need, beyond the financial planner and CPA. When someone starts to accumulate significant wealth. Give us some hints. This is well explained in your book, but maybe give some teasers, that will lead people to look in your book for a really well-developed approach to it.

  1. Stevenson: Again, like most things, I'm somewhat humble about giving the absolute rules. But, there are people you know and trust. The first thing is, I don't require a lot of due diligence if Bill Poorvu calls and says, "I want to do this."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: You say, "How much can I come in for?"

Sal Daher: Right, right, right.

  1. Stevenson: After working with him for 43 years, I have a great deal of faith in his judgment.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: And, they're not all going to win, but when you know and trust people you can get by with little due diligence, and you can ... Also, it's going to be low cost. I don't pay him a fee.

Sal Daher: Right, right. In contrast to the process that you went through when you're setting up your family foundation. The Stevenson Family ...

  1. Stevenson: Charitable Trust.

Sal Daher: Charitable ... No, no, not the trust but the one for managing the funds of the family and ...

  1. Stevenson: That we just did ourselves.

Sal Daher: Right, right, but you had quotes from ...

  1. Stevenson: We had quotes from ...

Sal Daher: From various people, and they were just absurdly high. So, you brought your son into it, and then you hire people to do particular chores, and so on and so forth. So, you don't have a lot of high overhead of a normal family office.

  1. Stevenson: Well you can see looking around, we don't have a lot of high overhead.

Sal Daher: No, no, there's not a lot of overhead.

  1. Stevenson: The mahogany furniture from IKEA is ... Shows through.

Sal Daher: It's extremely functional, very functional.

  1. Stevenson: But, then when you start to say, "The next level is things that come with recommendation." But, even with recommendation you have to actually go out and talk to people.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: It depends on who recommends them. Because, there are people that are chasing the last hot deal, and I don't want to be in with them. So, I have to know not only if it's recommended, but who's recommending it.

Sal Daher: Who's recommending, that's right.

  1. Stevenson: And, why it is.

 Then if you're trying to go out to the rest of the world, it requires a lot of due diligence. It's probably going to be expensive.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, for me, I've tried to stay in those first two rings, of people I know and trust, and people that come recommended by people that I know and believe in. There you're going to pay more fees, but that's okay.

Sal Daher: Still you're probably much more involved in the management of your wealth, than most people who are comparably wealthy. Perhaps also, because you know so much more. I think that, that is certainly a great lesson here.

  1. Stevenson: Think about how hard it is to earn a million dollars.

Sal Daher: Yes.

  1. Stevenson: I'm not saying how much I have, but if you have a hundred million dollars, it's easy to lose a million dollars.

Sal Daher: It is.

  1. Stevenson: Or, to make it.

Sal Daher: That's right.

  1. Stevenson: What I say is, "the first million dollars is really hard, and the second million is a matter of time."

Sal Daher: Exactly, exactly.

  1. Stevenson: So, having the long-term perspective, and I could go through some fancy math to show you that in fact, having long term perspective actually is highly beneficial. Because, most of the world is interested in the first two or three years of return. Warren Buffett is the classic example where I think, if you look at his results, it's largely because he bought long duration cash flows.

Sal Daher: Ah. He's not buying the first three years, he's buying 15, 20 years out.

  1. Stevenson: He's buying the 3 to 15 year.

Sal Daher: Right.

  1. Stevenson: And, he's not competing against the ...

Sal Daher: Which most people are not interested ... Oh no, that's ...

  1. Stevenson: That's too uncertain.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, he spends a lot of time looking at how stable it is. He talks about building moats.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: All those kinds of things, and I think that's a ...

Sal Daher: Right, right.

  1. Stevenson: I didn't learn it from Warren Buffett, but when I started to examine his way of dealing. I think that's what we've always tried to do is say, "Look, I can't outguess the professionals that have better information, quicker execution, all that in the first three years."

Sal Daher: Yes. Mm-hmm (affirmative)

  1. Stevenson: But if I can find things, that have long duration cash flows.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I'll probably do quite well over time, because even if you buy something at 10 times earnings, and it’s got 5% growth, you've got a 15% yield.

Sal Daher: Right, right. Now that is a ...

  1. Stevenson: It's a pretty simple ... You don't need the higher math to ...

Sal Daher: No, you don't.

  1. Stevenson: Make small amounts of growth, and good profitability ...

Sal Daher: And, consistent growth over time.

  1. Stevenson: Consistent ...

Sal Daher: Yes.

  1. Stevenson: It doesn't mean you don't have down years, because one of the things ... My experience is like in one of my other wow investments, was yeah ... But, they were willing to make the investments when it mattered.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So many of the people would have done really well. See, the first thing we do is serve our customers. The second thing we do is we do it at a profit.

Sal Daher: Ha.

  1. Stevenson: But the first question is doing, are we serving our customers well?

Sal Daher: Mm-hmm (affirmative) because ...

  1. Stevenson: That goes back to what we talking about in terms of criteria.

Sal Daher: Because serving your customer well is what assures continued growth, continued profitability over the long term, and not just the short bursts in the first few years.

  1. Stevenson: The profit is absolutely critical, because whether you're not for profit, or for profit, if you don't have profit, you're out of business.

Sal Daher: Something's got to float the boat.

  1. Stevenson: Yes.

Talking to Your Kids About Money

Sal Daher: Yeah. I really like your approach to letting kids know about family wealth and bringing them up early, and so forth. As a matter of fact, I love that little exchange at the HBS that I attended. A gentleman of advanced years, after you explained that you have to let your children know early on said, during the question and answer session, "So how do you think I should tell my children?" And you looked at him and said, "Looking at you, I think it's a little too late."

  1. Stevenson: Well, I do get myself into trouble.

Sal Daher: I know, it's just ...

  1. Stevenson: It seems to me, that many people underestimate, particularly in this internet age, how much the kids know. They know how much your house is worth.

Sal Daher: Right.

  1. Stevenson: They can go on Zillow.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Or their friends will.

Sal Daher: Yes.

  1. Stevenson: They can find salaries. They can find the size of your private foundation, if you have one. There's no limit to the data they can have. And, by the way, there's no limit to the data they can make up, or their friends can make up too.

Sal Daher: The imagination.

  1. Stevenson: Imagination.

Sal Daher: Gallops way ahead of reality, yes.

  1. Stevenson: they can look at the prices of your cars. But it seems to me, if you start talking to your kids at 10, 12 about, "Well aren't we fortunate. We've been very lucky. We have to work hard at making sure that it's there, and we're working with honest ..." You start talking about what the criteria are to work with people. You start denigrating the get rich quick schemes.

Sal Daher: Yes, yes.

  1. Stevenson: you start to in fact have them start thinking about, their own financial planning. You also have to help them understand that if you want to be an investment banker, you'll have one life. And, if you want to be a social worker, you'll have another life.

Sal Daher: Yes, yes.

  1. Stevenson: You're not telling them that one is good and the other is bad, because at least to me, I never wanted the kids to think that having money was the measure of success. Having money is a measure of the options you have for the future. But, if you want to do something that doesn't make you money, you're going to use up some of your capital, and that's fine with me. I'm not going to measure my life on whether you've made money.

Sal Daher: So, your job is to explain the consequences of the choices they are making. So, that they make decisions in a way that makes sense. And, they can make the tradeoffs. There's nothing in life that's not a tradeoff.

  1. Stevenson: Yeah, well my sons said that I raised him by the case method. I said, "What do you mean?" He said, "if you really like something, you'd say if you'd thought it through, go do it."

Sal Daher: Right.

  1. Stevenson: If you've really hated something you'd say, "Have you thought it thorough carefully, because here are some things that you might want to think about."

Sal Daher: It's a case study method.

Now please explain your thinking behind tracking of your family's total wealth, rather than your own net worth. I found that quite valuable.

  1. Stevenson: Part of it is, when you start to think about giving away money. You probably start thinking when the kids are young with some charity. As the kids get older, when do I transfer wealth to them? As you have more money, you start to say, "Okay, my assistant needs help with the mortgage." Or something.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: Now if you only track only your net worth, you feel poorer every time you do that.

Sal Daher: Yes, right, right.

  1. Stevenson: If you start to say, "Okay, I want to include the wealth of transfer to other people." And, even the taxes you can say, "I'll feel very good, even though my net worth, as reported on gap basis, may be 15% of the money I've made." But, I'm measuring my contribution to the economic wellbeing of people I care about, except for my Uncle Sam.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, I try to minimize that.

Sal Daher: Yes. You care about your whole family, except your Uncle Sam.

  1. Stevenson: As I say, "I like my kids, or I love my kids. I can stand my grandkids. I hate my uncle."

Sal Daher: Oh! Listeners, I forgot to tell you. Howard's book has cartoons. Here's one. Dogbert is sitting behind a desk talking to Pointy Hair Boss under the caption, "Dogbert Financial Advisor"

Dogbert: You should invest all your money in diseased livestock.

Dogbert continues: It would be unwise to invest in just one sick cow, but if you aggregate a bunch of them together, the risk goes away.

Dogbert concludes: It's math.

 Pointy Hair Boss replies: Suddenly I feel all savvy.

 Kindly distinguish between a herd of diseased cows and real diversification.

  1. Stevenson: I think that one has to ask the question, "What are the drivers?" And obviously diseased cows are diseased mortgage backed securities, have a single driver.

Sal Daher: Right.

  1. Stevenson: In spite of the fact that somebody from your alma mater might say these are diversified portfolios, because they are uncorrelated having real estate in Miami, Las Vegas.

Sal Daher: Yes, yes.

  1. Stevenson: Phoenix.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: And Boston.

Sal Daher: Right, right, right.

All under written very poorly to a certain sector of the economy. Likely to lose their job and certainly ...

  1. Stevenson: All at once.

Sal Daher: All at once.

  1. Stevenson: In our investing, as I said earlier, as somebody said, "What are your guidelines?" And the answer is, "We have no guidelines."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: You look at some things and you say, "I think this is a fairly stable way of investing. I don't like to put into funds that lock me up for 10 years. Not because I need the liquidity, but because I want to be able to change my mind."

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: I just looked at a fund today that had a 20-year time frame.

Sal Daher: Oh, wow.

  1. Stevenson: Now that's fine for me.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: If I control when to sell.

Sal Daher: Right.

  1. Stevenson: It's less fine for me, if they control when to sell.

Sal Daher: Yes.

  1. Stevenson: I won't get into some statistics I've done on the leverage buyout groups. But, I think I could prove to you that their average holding period is under three years.

Sal Daher: Oh, yeah.

  1. Stevenson: In spite of the fact that they try to tell you they've done a great job with managing, but lever it up.

Sal Daher: Yeah ...

  1. Stevenson: Take a bit out, and get out of there. So true diversification to me is, look for the underlying drivers. And, if they look the same ...

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: That's not diversification. Let's take the example that everybody thinks Spider is diversified.

Sal Daher: Right.

  1. Stevenson: Let's see, what percentage of the Spider is high technology unicorns? It's like 25%?

Sal Daher: That's right.

  1. Stevenson: The top 10 stocks?

Sal Daher: Yeah, yeah. They're swinging the index now.

  1. Stevenson: Yeah. And, is that diversification, just because you have 500 stocks, if it's all dependent on this one group of ...

Sal Daher: At one point, I remember Apple was 3% of the market cap…

  1. Stevenson: Well it ...

Sal Daher: Of the S&P.

  1. Stevenson: In 2001, I think ... I'm getting old and senile, but as I believe, technology represented well over 50% of the S&P in 2001.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, anybody who thought they were diversified, was smoking stuff that smelled funny.

Sal Daher: So, that sets up our last question here.

In your HBS talk, you mentioned starting your professional career when blue chip stocks like, Nabisco sold at four times earnings. Today, cyclically adjusted price earning rations of the S&P 500, is closing in on 30. How does one manage one's money when all investments, not just the S&P 500, but all investments are priced to perfection?

  1. Stevenson: I think it was Bernard Baruch who most of your young listeners, won't know who he was.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: He was one of the great investors of the '30s and '40s.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: He said, "Sometimes the best investment is going to the beach." As you might know from Baupost's history.

Sal Daher: Yes.

  1. Stevenson: Many times, we have 45% cash.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: 30% cash. In our case, now we do things that structure deals. I'm not expecting to shoot the moon. We've structured some preferred stocks like Warren Buffett does. He just did a deal with an 8% preferred.

Sal Daher: Right.

  1. Stevenson: And a big chunk of equity in the company.

Sal Daher: Mm-hmm (affirmative)

  1. Stevenson: So, trying to figure out how preferences, and structure protect you is probably the thing you have to do right now.

Sal Daher: Right.

  1. Stevenson: That's very different from when stocks were selling at four times earnings you say, but I started investing for other people in probably '62. Then stocks yielded more than bonds, because bonds were more secure. Now, stocks yield more than bonds, because bonds yield nothing.

Sal Daher: Yeah, exactly.

  1. Stevenson: By the way, anybody that says bonds are secure now, doesn't understand, A: What's underlying a lot of those. And, B: That interest rate changes can have a devastating effect of a bond price.

Sal Daher: Everything has duration, not just bond, but stock.

  1. Stevenson: To me the answer to your question which is not a good answer is, you got to look to structure.

Sal Daher: Okay, so cash and structure.

  1. Stevenson: Mm-hmm (affirmative)

Sal Daher: Howard Stevenson you've been most gracious to have us to your office, and to answer our questions. I'm sure our audience will find your deeply considered advice as valuable as I do.

  1. Stevenson: Well thank you for the opportunity. I tried to give you answers, and sometimes I believed them.

Sal Daher: It's been great fun, it's been great fun.

I thank our listeners for tuning in, and remind them to please go to iTunes, and leave a review. Listeners with critiques, or suggestions, are welcome to write me at I should also mention that we also hold in person events. If, you want to be made aware of those events, please go to Angel Invest Boston, and press the Sign Up button.

 This is Angel Invest Boston. Conversation with Boston's most interesting angel investors and founders.

I'm Sal Daher.

I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our Graphic design is by Catherine Woodman-Maynard. Our host is coached by Grace Daher.



Nov 29, 2017

At the TEDMED Conference in Palm Springs, CA I had the chance to interview people from interesting startups. These brief interviews will appear in the coming months interspersed with our regular episodes.

Chee-Yeun Chung, a neuroscientist from Korea, was captivated by the idea that cures for neurodegenerative diseases, such as Alzheimer’s, Parkinson’s and ALS, could be found by doing experiments on yeast cells. Conventional approaches to neurodegenerative diseases had proved problematic. However, an MIT professor, the late Dr. Susan Lindquist, saw a remarkable connection between yeast cells and the human neuron that could offer a solution. This evolutionary conservation, the scientific name for the unlikely connection, might lead to a platform for finding human cures. The promise of quickly evaluating compounds on simple yeast cells opened up the possibility of testing large numbers of potential treatments. Such massive experimentation could not be done with the much more complex human neuron. Chee was thus inspired to become a scientific co-founder of Yumanity Therapeutics, the corporate embodiment of Dr. Lindquist’s passionate vision.

With $47 million is Series A money, Yumanity has developed ultra-high throughput methods for testing the ability of large numbers of compounds to improve the functioning of yeast cells purposely afflicted with a certain defect. The defect, protein misfolding, is implicated as a cause of neurodegenerative diseases. Compounds found promising in treating yeast cells are then evaluated in human neurons in which protein misfolding is present. Yumanity has also developed methods to figure out the mechanism of action of these compounds based on yeast genetics and protein network analyses.

The result has been the discovery of promising compounds that might become cures. Yumanity believes that its progress over the past two years will justify a Series B raise.  The new money is expected to take the existing compounds to clinical trials.

For more details see annotated transcript at: [link to episode page to be added here]

Topics covered include:

  • Chee-Yeun Chung Bio
  • Yeast Cells as a Model for Human Neurons – The Simplest Cells Used to Model the Most Complex
  • Induce Protein Misfolding in Yeast – Test for Compounds that Alleviate Symptoms – Find Candidates to Treat Protein Misfolding in Human Neurons – Protein Misfolding Cause of Alzheimer’s Etc.
  • Take Skin Cells from a Parkinson’s Patients, turn them into Stem Cells, Make the Stem Cells into Human Neurons with Misfolded Proteins – Neurons Then Used to Validate “Treatments” Found in Yeast Tests
  • “There [were] a lot of evolutionary conservation between yeast and human neurons. And the compound worked in yeast and also worked in human neurons. So, this to us presented an amazing opportunity where we can create a drug discovery platform using yeast and human patient derived neurons.”
  • New Approaches Sorely Needed, Previous Approaches by Pharma to Find Treatments for Neurodegenerative Diseases Failed
  • Tony Coles, Yumanity CEO Raised $47 Million Series A to Maximize Freedom of Action & Long-term Support – Sanofi & Biogen Participating
  • Two Years into Series A – Promising Results Justify Series B Raise
  • The Biggest Obstacle Has Been the Chemistry – How to Make the Compounds Soluble, Stable Etc. without Compromising Efficacy
  • What Led Chee to Give Up a Safe Position in a Leading Lab to Risk Being is a Startup
  • Yumanity Hopes to Be in Clinical Trials Within 2 Years – Promising Compounds Have Already Been Identified
  • Working in Yumanity Chee Has Gained a Greater Appreciation of Focus and Team Work
  • Flexibility and Intense Communication Within the Team Have Proved Essential to Success
  • Sought Advice from Others Experienced with Startup Culture – Listened to Advice
  • Chee on Her Late Mentor Dr. Susan Lindquist
  • The Late Susan Lindquist found Her Work on the Evolutionary Conservation between Yeast and Human Neurons No Accepted by the Scientific Community, Yet She Persevered
  • Due to the Grit of Susan Lindquist, the Yeast-to-Human Neuron Platform for Drug Discovery Is Becoming a Reality
Nov 22, 2017

Ty Danco is an outlier in a population of outliers. His interests are varied and pursued passionately. He’s founded two fintech companies, he’s invested in a gazillion startups and he’s been a hugely generous advisor to companies, in fact the chief advisor at Techstars. Oh, I forgot to mention he’s an Olympian and also deeply involved with crypto-currencies. In this really meaty interview, Ty and I covered a wide range of topics. He explained his ideas in his affably quirky way. This was a super fun conversation.


"Danco, why are you here? You're a marketing guy." And I said that I was here to see Lever Brothers and he goes, "You idiot, you signed up for Lehman Brothers."

“So, I took a leave of absence from school, and Wharton let me make up my remaining credits over the summer, and so I tried doing all three things at the same time. It was a success on paper, I did make the 84 [Olympic] team, I did complete the MBA, I did work at Lehman Brothers, but in truth I was overwhelmed, I did everything badly.

I ended up breaking my heel and didn't compete in Sarajevo. I learned nothing in my last classes at school and I was just lost and floundering my first year on Wall Street. So, there's a pretty obvious lesson there about the need to focus and my inability to multi-task. That's maybe why they say focus on one metric that matters, don't try to do five balls in the air at once.”

Topics covered include:

  • Ty Danco’s Bio
  • How Ty Danco Stated His Career – Lehman Brothers vs. Lever Brothers – Olympic Team
  • "Danco, why are you here? You're a marketing guy." And I said that I was here to see Lever Brothers and he goes, "You idiot, you signed up for Lehman Brothers."
  • Ty Danco Doing Too Much
  • Ty Danco and the Importance of Focus
  • Ty Danco on the Cover of Sports Illustrated
  • Ty Danco Moves from New York City to Burlington, Vermont
  • Ty Danco Discovers that, Thanks to Michael Bloomberg, It Was Possible to Do Investing in Vermont
  • Ty Danco Founds His First Startup - eSecLending
  • Ty Danco Recalls Wall Street Misogyny of the Past – Women Found a Haven in Hugely Complex CMO Deals
  • Ty Danco’s Company is Hit by the Crash of 2008
  • Sal Daher Asks for you to Review the Podcast on iTunes – It Really Helps!
  • Why Ty Danco’s Second Startup Failed
  • Ty Danco’s Angel Investments
  • Ty Danco Thinks Crypto-currencies Are Worthy Alternative Investments
  • Ty Danco Believes One Can Eliminate Many Losers - But at a Cost
  • Ty Danco’s Philosophy of Angel Investing
  • Why Mass Medical Angels Is the Only Angel Group Ty Danco Attends
  • Why Ty Danco Does Not Invest Based on Cold Calls
  • Ty Danco Reveals the Secret of Getting into Techstars
  • Ty Danco Likes VCs Involved in Every Deal, Why?
  • “Virtually all of my deals, 99% of the deals come not from me directly stumbling over something, but from a lead from my network.”
  • Boston Angel Pantheon: Michael Mark, Joe Caruso and Jean Hammond
  • What Are ICOs and Why should VCs be Scared of Them?
  • Some of Ty Danco’s Favorite Startups
  • Ty Danco’s Categorization of Mentoring Styles
  • What Sets Accelerators Apart in Ty Danco’s Estimation
  • Ty Danco Takes a Page from Manu Kumar in Starting His Next Venture

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Nov 8, 2017

While in prep school Matt Singer performed at a religious ceremony and became fascinated with the impact his music had on the congregants. This fascination led Matt Singer to major in music at Yale, where he graduated Summa Cum Laude, and to think of how to make a life in music. Matt hit the streets soon after graduating to start his music business. For ten years he built Dawn Treader Production with marquee names such as Paul McCartney, James Earl Jones and the New York Philharmonic. Relying on the emotional connection possible on TV, he sold the CDs he produced by the tens of thousands on QVC. In 2007 he joined co-founder Amanda Eilian, in starting a company that is now changing the way large enterprises communicate with their customers and employees via video. Videolicious makes it easy for employees to produce polished videos personalized to particular clients that make emotional connections. The platform is now used by 4,000,000 users in 100 countries, it’s even taught at 90 schools of journalism. Backed by Amazon and VC money, this startup is poised for continued growth.

This is the story of someone who followed what seems to be an impractical passion but managed to create something that is useful to large numbers of paying customers. Listen to this candid and introspective conversation with a young man who thinks deeply but acts practically. In particular, I liked what he had to say about how founders can prepare their psyche for the arduous journey of building their startup: “It turns out that anything that you accomplish in life actually brings a crush of responsibility, so you really just have to enjoy the journey because there is no magic carpet ride of happiness that comes with any accomplishment.”


Here are the topics covered and some quotes:

  • Matt Singer Bio
  • Matt Singer Actively Looks for a Way to Turn His Passion for Music into a Living, and Succeeds
  • The Story of The Talk Market Which Became Videolicious
  • How Matt Connected with his Great Co-founder, Amanda Eilian
  • What Videolicious Does Today
  • Sal Daher Reads a Review from Listener ChangDS and Ask Listeners to Leave a Review on iTunes
  • The Pivot that Turned The Talk Market into Videolicious
  • The Vision Stayed the Same, the Implementation Changed
  • Great Point about Finding Your Focus
  • “From the perspective of entrepreneurs, I think it's just good to note that you can have a vision but there are a lot of choices along the way in terms of who should you really sell to.”
  • Videolicious is Taught at 90 Schools of Journalism – It’s Becoming Ingrained
  • Instead of a Sales Binder Videolicious Allows You to Send Your Customer a Compelling Personalized Video
  • “Video is becoming the standard way that people create content.”
  • Videolicious’ Board Has Been Very Supportive – They’ve Been Amenable to Reasoned Arguments
  • “Yeah, you've heard that theme of focus, focus, focus, but exactly what that means is not always super clear.”
  • "Wow. What do I need not only just to get in the door, but also to keep them forever?"
  • How Matt Singer Got Amazon as an Early Investor in His Company
  • How Videolicious’ VC Backers Help with More than Money
  • The Interesting Route Videolicious Took to VC Funding
  • The Path Ahead for Videolicious – Making Video Creation Ever Easier & More Effective
  • Matt Singer’s Three Bits of Advice for New Founders
  • “Definitely finding a great co-founder is important… someone that you can really work with… work through thick and thin, because there's going to be ups and downs constantly and so it's great to have someone that can support you and you can support them.”
  • “…thinking through the entire lifecycle of your customer from the acquisition to renewal.”
  • Having a Long-term View Is Crucial in Selling to Enterprise Customers
  • Because Everybody Works from Home, Videolicious Looks for Self-starters
  • ” I do find that being able to tell the story and the vision is a good way to attract talent.”
  • Other Startups That Matt Singer Admires – Companies That Make Using their Product Super Easy
  • What Matt Singer Has in Common with C.S. Lewis
  • “…most technology is pretty disruptive for your average employee. It's different than what they're used to doing. That's what you have to contend with as a startup, you assume that's a big jump, even if your product in the isolation is easy.”
  • Matt Singer’s Parting Thoughts – A Truly Valuable Observation
  • “It turns out that anything that you accomplish in life actually brings a crush of responsibility, so you really just have to enjoy the journey because there is no magic carpet ride of happiness that comes with any accomplishment.”
Oct 25, 2017

Bettina Hein is the founder of Pixability, one of the fastest-growing companies in Massachusetts. She was also co-founder of SVOX, a profitable Swiss startup sold to Nuance Communications for $125MM. This record may make her success seem easier to achieve than it was. Bettina Hein overcame numerous obstacles to justify the sobriquet “Fearless Founder”. Learn from her as I did. She is an exemplar of resilience, grace under fire and plain common sense. She also has much to teach us about how a startup might best raise money. Whenever I ask angel investors about a remarkable pivot by a founder, there’s a good chance Bettina’s name will come up. Don’t miss this charming and instructive conversation with a star founder.

Here are topics and quotes from the interview:

  • Bettina Hein Bio
  • How Bettina Hein Found Her Entrepreneurial Path in Life
  • Bettina Hein Used to Write Computer Programs in Fourth Grade but Did Not Learn to Code in College; Why?
  • Professors Discouraged Bettina Hein from Pursuing a Career in the Sciences
  • “If I had to go back, I would probably get an undergraduate degree in either electrical engineering or computer science.”
  • “I think I wanted to be an entrepreneur very early on. There's just that example that was set in my family. There's no one in my family that has had a nine to five job ever, except my brother…”
  • Bettina Hein Founds an Entrepreneurship Initiative for Students at her University Called Start, that Leads her to Brains-to-Venture, Which Connects Her with Her co-founders in SVOX
  • SVOX Has a $125 MM Exit to Nuance Communications
  • Bettina Hein Starts Pixability – Looked for Co-founders But Could Not Find Any Willing Takers – How She made Being a Solo Founder Work
  • Pixability’s Storied Pivots
  • “We help large brands and their agencies place their video advertising and optimize it on YouTube, and we've expanded to Facebook, Instagram, and Twitter.”
  • How Pixability’s Platform Impacts the Viewing Public
  • “Consumers like it better, and brands get more out of it.”
  • Sal Daher Reads an iTunes Review from HealthTech617 – Asks You to Leave a Review on iTunes
  • Bettina Hein’s Advice on Fundraising for a Startup
  • Bettina Hein on How Things Change Once a Startup Gets Venture Funding
  • Bettina Hein Thinks Founders Are Scared of Having a Board So They Miss out on a Lot
  • “Many beginning entrepreneurs are scared of having a board. They fear the meddling in their business. They fear that people will force decisions on them, on the board. I have not seen that ever happen.”
  • “For me, often times the exercise of preparing for a board meeting is almost more important than the board meeting itself because it allows me to really think through the narrative of the company.”
  • Bettina Hein’s Way of Balancing Work & Family
  • Bettina Hein on Fundraising While Pregnant
  • Bettina Hein on Marketing Technology’s Crowded Landscape
Oct 11, 2017

Quotes from the podcast:

“Every startup investment is folly, but not every folly should be a startup investment…”

"How can I eliminate the real follies?"

“Banks are dominated by all these rules, and they're extremely risk averse. It's sort of like belt and suspenders, and yet, periodically, their pants fall down.”

“Someone who's selling is steeling herself for failure in every phone call…”

Sal Daher got a person who knows him really well, his brother in law Martin Aboitiz, to interview him in this 25th episode of the Angel Invest Boston podcast. The result is a wide-ranging and light-hearted conversation that tells a lot about how Sal sees the world of startups.

BTW, during the podcast Sal refers to the physicist Stephen Hawking as Christopher Hawking. This lapse was occasioned by Sal having spent time with Christopher Lydon (Christopher Lydon's Website) just days prior to recording. Sal's sure neither gentleman takes umbrage from the confusion.

The list of topics includes:

  • Sal Daher Bio
  • Switch from Engineering to International Finance
  • How Sal Started Investing
  • How Being a Banker and an Engineer Helped Develop Sal’s Investing Philosophy
  • ”When I look at markets, I understand that markets are not knowable, and so I don't look to guess where markets are going. I don't look to think that I know more than anybody else, or that I know more than the market.”
  • “Banks are dominated by all these rules, and they're extremely risk averse. It's sort of like belt and suspenders, and yet, periodically, their pants fall down.”
  • “I've developed kind of an approach of skepticism, you know Popperian skepticism of how much I can know.”
  • Sal Has Andrew Carnegie as a Model – Keep a Lot of Cash to be Able to Buy Bargains
  • “I can tell you right now, anything we're buying, we're buying it very expensively.”
  • Sal Thanks Listener GranTia for Leaving a Review
  • How Sal Decides on Which Startup to Invest
  • “Every startup investment is folly, but not every folly should be a startup investment…”
  • "How can I eliminate the real follies?"
  • “What I have to do is I have to play a defensive game, I have to avoid investing in losers.”
  • “Martin, I discovered a really amazing thing, being really smart and really knowledgeable has zero correlation with the ability to sell, zero, okay?”
  • “Someone who's selling is steeling herself for failure in every phone call…”
  • Regrets?
  • Anti-portfolio
  • Sal’s Favorite Pivots – Pixability & SQZ Biotech – Personal Pivots
  • “I'm a big fan of pivots, because a pivot is an expression of belief in the ability of human beings to fall down and get up again.”
  • Networking in Boston vs. the Bay Area
  • “There's no other place like it [Boston], and there's an unbelievable variety of things that go on. It is a little bit insular, it is hard to network here, but I can tell you that the angel investing environment, there's no angel investing environment that's as collaborative as the one here.”
  • “Now, venture capitalists aren't interested in follies, they're interested in sure bets.”
  • “How many companies can an angel investor successfully track and manage in his portfolio?”
  • People from Whom Sal Learns the Most
Sep 27, 2017

Epilogue to the Interview:

Martin Aboitiz asked me to add this to the notes:

"...I do have a regret though, that I did not mention four names during the interview:

Juan Manuel Garcia Carral, my CTO in Intermedia who suggested Healthcare as an industry worthy of application and data integration,
Dr. Richard Low of PraxisEMR, who first gave me a picture of the lack of data integration in Healthcare Juan Manuel's suggestion, and
my two other founders in Healthjump, Mark Ribeiro (our original CFO) and Shanti Aboitiz who was our Patient Advocate, both have moved on, but were pivotal in getting Healthjump started.
Sal's Notes:

In 2013, (I said 2003 in the podcast by mistake) my brother in law Martin Aboitiz sat in my dining room and sketched out this business he planned to start. I thought “majnun” which is Arabic for crazy! How would this guy who had built software companies in Argentina found a startup to help Americans have better access to their healthcare data? But I underestimated his resourcefulness and titanic tenacity. Four years later, Healthjump is at cashflow break even and has 7.5 million patients in its data warehouse. I’m glad because I have some real money riding on Martin’s company.

Listen to this lighthearted but informative interview. It was inspired, in part, by an excellent meal shared by the interlocutors the night before which included an outstanding paella (see photo) and some delightful wines. We talked healthcare, pivots, angel investing homeruns and flops and many other matters.

Topics covered include:

  • Martin Aboitiz Bio
  • Martin Aboitiz Gets Started in His Career
  • Lessons from Working in a World Bank-funded Project in the Philippines
  • Lessons from Doing Business in Argentina
  • How Did Martin Discover He Wanted to Be an Entrepreneur?
  • Martin Aboitiz’s Advice about Dealing with Failure – Really Good Stuff!
  • Martin Aboitiz’ First Startup – Intermedia
  • Martin Aboitiz Sets Up an Informal Incubator for Argentine Startups
  • Martin Aboitiz Founds Healthjump in 2013 to Make Medical Records More Accessible to the Patient
  • Problem: Healthcare Data is Sitting in Silos and People Don’t Have Access
  • Healthjump’s Pivot
  • Saber & Amadeus as Analogues
  • “Now in healthcare it's different because what we're seeing right now is the equivalent of the Hyatt across the street buying the bed and breakfast. That did not happen in travel but it's happening in healthcare.”
  • Lack of Healthcare Record Interoperability Is Pushing Consolidation to an Absurd Extreme
  • Healthjump is Helping Make Electronic Health Records (EHR) Software More Interoperable
  • Seven and a Half Million Patient Records Now Reside in Healthjump’s Data Warehouse
  • As More Practices Use Healthjump to Understand Their Data the Number of Patients Who Can Use Healthjump to Access their Records Grows – Network Effect
  • Healthjump is at Cashflow Breakeven
  • Martin Aboitiz Starts Angel Investing – Three Homeruns in a Row – Thought Angel Investing Was Easy
  • Martin’s Favorite Pivot Story - Twitter
  • Argentina as a Place to Build a Startup – OLX & Mercado Libre
Sep 13, 2017

Super angel Michael Mark and marketing wiz Kathryn Roy take questions on the topic of angel investing. This was recorded before a live audience at gorgeous Babson College, a university dedicated to teaching entrepreneurship. Sal, as usual, finds it hard to keep his opinions to himself!

Topics covered include:

  • Recorded on the Beautiful Campus of Babson College, Thanks to Margaret Jones & Nina Block
  • Michael Mark Mini Bio
  • Kathryn Roy Mini Bio
  • Michael Mark on What Angel Investing Is Not – Not the Best Way to Make a Lot of Money
  • Kathryn’s Thoughts on Making Money in Angel Investing
  • Question from Mark T.: What’s the Minimum Number of Startup Investments to Get a Good ROI?
  • Audience Question: What Are the Three or Four Things You Look for In a Startup?
  • Startup Founder Davey Bakhshi Asks a Question - Fundraising Pointers
  • Davey Bakhshi: Do you Invest in Founders from Other Countries?
  • Have a Real Sales Funnel for your Fundraising – Willy Loman Beats Einstein
  • Monthly Communication with Your Investors and Constituents
  • Lisa’s Question: What Would You Do Differently Today as a Founder Given the Changes?
  • Go to an Incubator
  • What Has Not Changed in Fundraising
  • Question from Listener Martin Aboitiz: What Startups Do You Regret Not Investing In?
  • “Another Train Leaving Every 15 Minutes.” – Michael Mark
  • Question from Kit, a Freshman at Babson: Can You Build Business without Raising Money?
  • Audience Question from Alan, an MBA Student at Babson: Notes vs. Priced Rounds?
  • Audience Question from Marcos, an MBA Student at Babson: How Long Does It Take to Build Trust?

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Aug 30, 2017

Ed Roberts started the scholarly study of startups. Learn from this brilliant academic pioneer and seasoned investor in and HubSpot about the keys to success in founding a tech company. Along the way you will be entertained and charmed by his most engaging narrative style.

He grew up in working-class Chelsea, Massachusetts. At Chelsea High, he received preparation that would allow him to explore the academic delights offered by MIT’s curriculum.

Four MIT degrees later he was on the faculty at MIT’s Sloan School of Management studying the impact of NASA’s research on the economy. From there it was a short hop to founding the study of tech startups. He also co-founded successful companies, including Meditech. His course on entrepreneurship incubated Beijing's and Boston's HubSpot. Ed Roberts was an early investor in both.

The oft-cited result that companies founded by MIT alums generate revenues equivalent to the 10th largest economy in the world is one of the products of his scholarship. He also delves into his work on the optimal composition of founding teams. Among the many topics covered in this bravura interview are:

  • Ed Roberts Bio
  • High School in Working-class Town of Chelsea Thoroughly Prepared Ed Roberts for Success at MIT
  • Sound Preparation from Chelsea High Allowed Ed Roberts to Explore the MIT Curriculum
  • Ed Roberts Meets Jay Forrester, Co-inventor of the Core Memory and Founder of System Dynamics
  • Research into Entrepreneurship Springs from NASA Project to Measure Impact of Its Technology
  • Ed Roberts Starts His First Company, Pugh-Roberts Associates
  • MIT Faculty Form Consulting Firms, MIT Grads Form Product Companies
  • Ed Roberts Founds Meditech
  • Engineers Debate the Need for a Marketing Person on the Meditech Team – Hired the Only Marketing Person They Knew
  • Sal Daher’s Pitch for Listeners to Give Back by Reviewing the Podcast on iTunes and Telling Others About It
  • The Most Significant Results from Ed Roberts’ Research
  • It’s Important Not to Keep Your Idea Secret but to Talk to Many People About It
  • Eric von Hippel & User Innovation
  • Ideas Are Overvalued – Person Who Has It Gets Too Much Credit – Pivots Are the Norm – Nobody Remembers All the Pivots – Example: Founders of HubSpot
  • Ed Roberts Invests in Founders, Not Ideas
  • Charles Zhang & the Founding of – Ed Roberts Was Surprised Charles Zhang Wanted to Return to China – Amazing Story!
  • “I’ve always focused on ground zero companies. I do not regard a ground zero company as a frightening and risky thing. I regard it as the place to be because that’s where the fun is, that’s where you can have impact and, to me, if you’ve passed my test, that you’re passionate, you’re dedicated, you’re trying to do something that seems worthwhile, you’re smart, you’re open. I’m going to be able to relate to you. Then, I don’t see it as a risky thing”.
  • Data on PhDs as Founders?
  • Why Are MIT Students & Alums So Likely to Invest in Startups?
  • 30% of MIT Alumni Go to Work for a Startup – Of Those 25% Go on to Found Their Own Company – Those Companies Outperform the Market
  • Second Companies Outperform First Companies; Third Outperform Second – Studies of Universities as Sources of Innovation – Chuck Easley Did Similar Study at Stanford





Aug 16, 2017

The collaboration of Ham Lord and Christopher Mirabile, two of Boston’s most consequential super angels, is widely admired. Its most visible fruit is the success of Launchpad Venture Group, which they manage together. In this revealing interview, they let us in on how this winning collaboration came to be and what keeps it productive as it approaches the end of its first decade.

Christopher Mirabile and Ham Lord are already familiar to our listeners.  Each has been interviewed individually on earlier episodes of the Angel Invest Boston Podcast. In the current episode, the two different personalities interact and give us a glimpse into what drives their working relationship.

Topics covered include:

  • Christopher & Ham’s Remarkable Collaboration
  • How They Connected
  • Division of Labor
  • Lucky to Have Jody Collier as Operations Manager
  • Complementary Skills & Creative Tension
  • What They Enjoy in Working Together
  • What Motivates Christopher and Ham
  • How Christopher & Ham Differ in their Investing
  • Gene Gregerson, an Engineer’s Engineer & Mobius Imaging – Astonishing Feat of Entrepreneurship
  • Blind Spots: How Having a Partner Helps Avoid Them
  • Integrity in the Founding Team is Essential – Due Diligence Screens Out Frauds
  • Geographic Focus Makes It Possible to Add Value
  • Dos & Don’ts for a Winning Collaboration
  • How Ham and Christopher Work Things Out When Problems Arise
  • Co-CEOs Raise a Red Flag but Can Work
  • Trends Christopher & Ham See
  • A Business Semyon Dukach Would Like!

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Aug 16, 2017

The collaboration of Ham Lord and Christopher Mirabile, two of Boston’s most consequential super angels, is widely admired. Its most visible fruit is the success of Launchpad Venture Group, which they manage together. In this revealing interview, they let us in on how this winning collaboration came to be and what keeps it productive as it approaches the end of its first decade.

Christopher Mirabile and Ham Lord are already familiar to our listeners.  Each has been interviewed individually on earlier episodes of the Angel Invest Boston Podcast. In the current episode, the two different personalities interact and give us a glimpse into what drives their working relationship.

Topics covered include:

  • Christopher & Ham’s Remarkable Collaboration
  • How They Connected
  • Division of Labor
  • Lucky to Have Jody Collier as Operations Manager
  • Complementary Skills & Creative Tension
  • What They Enjoy in Working Together
  • What Motivates Christopher and Ham
  • How Christopher & Ham Differ in their Investing
  • Gene Gregerson, an Engineer’s Engineer & Mobius Imaging – Astonishing Feat of Entrepreneurship
  • Blind Spots: How Having a Partner Helps Avoid Them
  • Integrity in the Founding Team is Essential – Due Diligence Screens Out Frauds
  • Geographic Focus Makes It Possible to Add Value
  • Dos & Don’ts for a Winning Collaboration
  • How Ham and Christopher Work Things Out When Problems Arise
  • Co-CEOs Raise a Red Flag but Can Work
  • Trends Christopher & Ham See
  • A Business Semyon Dukach Would Like!

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Aug 2, 2017

Writing software never seemed like work to young Ham Lord. In high school and then in college, coding is what got him rolling with his other courses; he loved it. This passion, and the happy coincidence of being at the right place (Brown University) at the right time (early 1980s) led to a brilliantly productive career in computing and entrepreneurship.

Ham’s early work in computer graphics would eventually lead to innovation in applying 3D imaging to the creation of new molecules. Later he helped build software with applications in medicine, oil & gas exploration and engineering analysis. He even did work that presaged today’s drone technology.

After 16 years as a software engineer and entrepreneur, Ham cashed in his chips and began a hugely consequential career as one of Boston’s super angel investors. He was the engine behind the relaunch of Launchpad, one of the country’s most respected angel groups. In a frank and accessible interview, Ham discusses the workings of this group, talks about companies that excite him and addresses current trends in the ambit of angel investing.

Topics covered include:

  • Ham Lord Bio
  • Ham Lord Discovers His Love of Computer Programming
  • How Ham Lord Connected with His First Job After Brown
  • Building a New Display for the F-14 Navy Jet
  • Why Ham Lord Founded His First Startup
  • AVS Rises from the Ashes of Stellar
  • Ham Lord’s Transition from Software Development to Marketing
  • After 16 Years Building Startups Ham Lord Takes a Sabbatical Year & Starts Investing
  • Ham Lord Discovers Angel Investing
  • Ham Lord Relaunches Launchpad
  • Ham Lord & Christopher Mirabile Get Together
  • What Does Ham Lord Look for in a Startup?
  • The Ones That Got Away
  • Ham Lord’s Favorite Pivot Story
  • Ham Lord & Cambridge Trust
  • Ham Lord Talks About Launchpads’ Early-stage Track, the Catalyst Program
  • Two Companies in the Machine Learning Space – &
  • & Seraf Compass
  • Trends: Professionalization of Angel Investing & the Angel Capital Association

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Jul 19, 2017

The family of Wan Li Zhu did not see a future in China. His parents, persecuted by the one-party state, came to America when Wan Li was ten years old. China’s great loss became America’s brilliant gain.

Wan Li benefited from high-quality public education at Bronx High School of Science and went on to a perfect grade-point average at MIT. He studied under renowned quant wiz Andrew Lo and was poised for a career on Wall Street but was lured away by the prospect of hands-on responsibility for product features at Microsoft.

After a prodigiously successful stint, during which he was involved in building and marketing Dynamics CRM, MS’ fastest-growing product, he went to Harvard Business School. From HBS he was recruited by early-stage VC firm Fairhaven Capital.

The firm, known for its expertise in web security and digital advertising, now sees promise in various applications of artificial intelligence starting with self-driving technology. Wan Li is deeply engaged in bringing on the next generation of winning investments at Fairhaven Capital. Despite a busy professional life, Wan Li Zhu has found time to advise startups and to co-found MIT Angels in Boston. I learned a ton from my conversation with this wise, yet unassuming VC.

Here is a list of some of the topics broached:

  • Wan Li Zhu Bio
  • From Persecution in Communist China to Bronx High School of Science
  • Studied with MIT Professor Andrew Lo – Used Natural Language Processing to Assess Market Sentiment
  • Why Wan Li Zhu Went to Microsoft – Three Years at MS – Shipped Three Versions of the Product
  • Wan Li Zhu Connects with Fairhaven Capital through HBS Resume Book
  • Fairhaven Capital Is Thesis-driven – Attentive to Market Trends that Could Create Large Opportunities
  • How the Fairhaven Capital Portfolio Is Doing
  • What Wan Li Zhu Looks for in a Startup Investment
  • Experienced Founders Can Actually Time Markets
  • TVision Came Via MIT Angels – Measuring Engagement of TV Viewers
  • AirFox – Enabling Wireless Carriers to Offer More Affordable Data Plans
  • MIT Angels Company PathAI’s Deep Learning System Is Better at Detecting Tumor Cells than Human Pathologists
  • Latch – Enterprise-grade Keyless Access System for Apartment Buildings
  • The Investment Wan Li Zhu Regrets Not Making
  • Wise VC Wan Li Zhu Continues to Be Very Bullish on AI
Jul 5, 2017

Two brilliant scholarship kids became friends at Georgia Tech and went on to found a company that could change the world. This is the story of Matthew Stellmaker and Keith Hearon and of the good chemistry manifested in their friendship and in the creation of new polymers friendly to people and nature.

The idea came to Matthew when he was working at a large company that produces 50,000 tons of citrus waste per year. His friend Keith thought that he could do something interesting with the citrus rinds so Matthew got the company to fund the research into creating a use for this natural material.

These two young founders display remarkable self-knowledge and reveal discoveries in the art of founding companies that could help other founders, technical or not. It’s a valuable conversation that includes the following topics:

  • Keith Hearon Bio
  • Matthew Stellmaker Bio
  • Keith Hearon Views Himself as an Entrepreneur Who Uses Science to Commercialize Valuable Products – Inspired by Ken Gall, Founder & Inventor
  • How Keith & Mathew Became Friends
  • How to Find a Job in Architecture in a Down Market
  • Challenge of Langer Lab Further Energized Keith Hearon
  • How Poly6 Got Started
  • How Poly6 Zeroed in on its First Use Case
  • How Poly6 Zeroed in on its First Use Case
  • How Being Co-founders Changed Their Friendship
  • Should You Found a Company with Your Friend?
  • The Risks of Moonlighting
  • The Care & Feeding of Advisors – Busy People Generous with Their Time
  • Other Startups Matthew & Keith Admire

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Jun 21, 2017

Tivan Amour is reinventing how urban bikes are designed and sold. This is a tall order. The competition is ferocious. Wise counsel is justifiably skeptical of the possibility of success in this endeavor. Yet, Tivan is gaining traction with his approach. He may be defying the odds.

This young repeat founder bristles with energy but is also capable of contemplation. He is a growth hacker familiar with the Socratic Dialogue. He is hugely ambitious yet generous with the less fortunate.  It was great fun interviewing him and he taught me a bunch of things. Among these were the real value of Techstars to founders and some pointers on growing a customer base.

Here is a list of the topics covered:

  • Tivan Amour Bio
  • What Effect Did Working for AT&T While Still in College Have in Tivan’s Life?
  • Tivan as a Product Manager at Abercrombie & Fitch
  • Tivan Starts His First Company
  • Tivan Decides Boston Is Just Right for Him
  • What Tivan Learned from Volunteering at BUILD
  • How Tivan Structures His Day
  • Tivan’s First Company Pivots
  • Genesis of Fortified Bike – New Way to Market to Bike Shops – Cutting Out Distributors
  • Fortified Bike Goes into Techstars
  • The Real Value of Techstars to the Founder
  • Changing Co-founders
  • com Has Won Plaudits from Experts for Its Efficacy – Tivan’s Advice on Building a Website
Jun 7, 2017

Armon Sharei wants to train our immune system to fight cancer. We hear a lot of claims like this, however when a mega-pharmaceutical company like Roche inks a $500 million deal to work on it, we pay attention. At age 29, Armon convinced not only Roche but gimlet-eyed VCs to back him. How did he do this? How did he go from a boy living in Iran to being one of the stars of MIT’s storied Langer Lab?

Part of Armon’s secret is the ability to explain thickly complex ideas in accessible language that does not over simplify. He is that rarest of creatures, a scientist of the first rank that speaks lucidly and acts practically. I am grateful that Armon took time out from curing cancer to share his experiences with us in this inspiring interview.

If you are a scientist thinking of founding a company or an investor thinking of investing in a biotech startup you could learn a lot by listening to this interview with Armon Sharei (as well as the interview with biotech founder & investor Patrick Rivelli Patrick Rivelli Interview). Among the topics covered are:

  • Armon Sharei Bio
  • Childhood Spent in Iran & Dubai, Finished High School in Marin County
  • Why Armon Sharei Wanted to Be a Scientist
  • Why Leave Edenic Bay Area for Purgatorial Boston?
  • SQZ Technology Comes from Failed Attempt to Shoot Genetic Materials into Cells
  • How the Idea of Starting a Company Came About
  • “I think one of the main examples, which is kind of the subject we've been pursuing most deeply at the company in two different projects, is the idea of telling the immune system what to target in the context of cancer”.
  • SQZ Technology Excels at Getting Protein Fragments into Cells – Very Promising Method of Training Our Immune System to Fight Cancer
  • Sal Asks Listeners to Subscribe & Review on iTunes – Podcast Has Great Guests & Sound
  • Biotech Fundraising Is Hard – Armon Sharei’s Advice on Fundraising
  • Armon Sharei Finds a Lead Investor for His Angel Round
  • SQZ Biotech’s Pivot from Selling their Tech as a Tool to Looking for Therapies
  • “…over 70 or 80% of scientists want to put stuff into cells for some reason. I think aside from looking under a microscope there's nothing that they want to do more”.
  • Therapy Research Is Risky, But Tool Business Was Harder Than It Looked, Besides Armon Really Wanted to Do Science
  • The Board Was Essential in the Pivot from Being a Tool Company to Becoming a Therapy Company
  • How Does a 29 Year-old Negotiate a $500 Million Deal with a Major Corporation?
  • Hiring the Right People Is the Most Important Thing a Founder Does, Look for Cultural Fit
May 24, 2017

Still in his forties, David Chang seems to have a lifetime of achievement behind him. Six startup exits, stints with TripAdvisor, PayPal and Goldman Sachs as well as close connections in the world of VCs give David a most informed perspective on startups. In this candid and instructive interview, David highlights the dos and don’ts of tech startups in clear and engaging prose. He provides a wealth of suggestions on how to approach markets and technologies.

He immigrated to America from Taiwan as a child and grew up on Long Island. David Chang distinguished himself in computer science as an undergrad at Cornell. Later on he attended Harvard Business School after seven years on Wall Street.

Topics covered in this interview include:

  • David Chang Bio
  • Came to US from Taiwan with His Family at Age 3 – Grew Up on Long Island
  • Job Market Tight in 1992 – 38 Rejection Letters – 2 Job Offers – Wall Street vs. Silicon Valley
  • Applied to Harvard Business School Thrice - Third Time Lucky – Stays in Boston Working at a Small Startup
  • Dumb Luck Had Brought Him to a Phenomenal Company - edocs
  • Co-founds Mobicious – Just in Time for Financial Crisis
  • Quits Fulltime Stable Job – Decides to Start Company – Daughter Is Born – All in One Weekend!
  • Mobicious Sells for Pennies on the Dollar – Thought Would Never Work in Tech Again – Lands in Where, a Company into Location Awareness – David Beisel of NextView Ventures
  • Decision to Sell Where to PayPal
  • Genesis of Where Angel Fund
  • David Chang’s Biggest Failure as a Startup Operator – Lacked Focus on First Startup – Guardrail to Guardrail
  • The Role of Thrift in Startups
  • How David Chang Came to Make His First Angel Investment
  • Great Startups David Chang Passed On
  • Why Is David Chang Not a Full-time VC?
  • David Chang’s Advice to Startups Raising Money
  • Be Clear About What’s Your Basecamp and What’s Your Summit
  • What David Chang Looks for In a Founding Team
  • David Chang’s Favorite Pivot – TripAdvisor Stumbles upon the Idea of Doing Reviews
  • Startups David Chang Is Excited About
  • Nightmare Mistakes Founders Make
  • How Do Founders Decide to Raise Another Round or Shut Down? The Value of Knowing Your Place in the Market You Serve
May 10, 2017

It is rare that we hear reports from the frontiers of technology expressed so lucidly and accessibly by a real insider. This gem of an interview rewards the listener with Jay  Batson’s sensible and eloquently expressed explanations of the pitfalls of building products and companies. Jay recounts how angel investing taught him things he wishes he had known as a founder. He closes with wise words to recent college grads thinking of founding a startup.

Jay Batson started out as a land man helping oil and gas explorers secure drilling rights. Computerizing part of his work led to his first startup. This made him realize that he loved technology. He would eventually embody this passion for tech in the founding of two venture-backed companies which brought significant innovation by way of the open source movement.

Here are some of the topics included in this podcast:

  • Jay Batson Bio
  • Born to a Family of Entrepreneurs – Land Man Studying Law at Night – Tech Founder
  • Jay Batson Exits first Startup – Learns UNIX & C - Heads to Job with BBN in Boston – Massively Parallel Computing
  • Jay Batson Goes from Engineering to Product Management
  • At Forrester Research, Jay Batson Foresaw some of the Internet’s Potential
  • Desktop Internet Phone – Pingtel – SIP – Bits of Code We still Use Today
  • The Story of Acquia
  • Open Source Primer
  • Jay Batson Gets into Angel Investing
  • What Jay Batson Looks for In a Startup
  • What Jay Batson Has Learned from Being an Angel Investor
  • Technique Jay Batson Uses in Mentoring Startups
  • What Do Startups Most Frequently Not Do Well?
  • Jay Batson Relates the Story of Pingtel’s Pivot
  • Jay Batson’s Eloquent Statement of the Value of a Working Board of Directors
  • Jay Batson’s Advice to Recent College Grads Thinking of Founding a Company
Apr 26, 2017

Growing up in Northern Italy, Arrigo Bodda dreamed of becoming an architect. He chose instead to study law, a handy pre-requisite for a career in human resources in a country where staffing involves a lot of legal work. His corporate career neatly coincided with the emergence of the European Union, a phenomenon that deeply influenced his work and life. After much success in the executive suites of global enterprises, Arrigo now has the opportunity to pursue his passion for design and architecture as an angel investor with Walnut Venture Associates and as an entrepreneur.

In this lighthearted interview, Arrigo shares some of the valuable wisdom gained in navigating large multinational enterprises across cultures and across disciplines. He offers valuable suggestions for founders of startups seeking to do business with multinational companies. He also provides an appealing model of finding the right balance between following your passions and making concessions to reality.

Topics discussed in this podcast include:

  • Arrigo Bodda Bio
  • Living & Working in Europe vs. in the United States
  • The Secrets of Successful Cross-cultural Relations in the Workplace
  • How Arrigo Bodda found His Career Path – Deep Wisdom on Career Development from an HR Specialist
  • “The suggestion that I have for everyone that is listening now, and that they are thinking where I should make my first move, my recommendation is make your first move in a place where the people around you are better than you.”
  • European Union 2.0
  • Tips for Startups Navigating Huge Multinationals
  • The Value of an MBA from IMD
  • Starting a Company in Thailand
  • What Kind of Companies Arrigo Bodda Likes to Invest In
  • What Does Arrigo Bodda Look for in a Founding Team?
  • Don’t Invest in Startups Alone – Join a Group, It will Save you Money & Be More Fun than Investing Alone



Apr 12, 2017

Christopher Mirabile is an angel with a plan. This super angel wants to make angel investing more professional and methodical. He comes to this aspiration by way of being a consultant, a corporate lawyer and a CFO of a successful tech company. He is co-managing director of Launchpad Venture Group and sits on numerous boards. He has co-founded Seraf, a platform for tracking angel investments and helping angels become better informed. He is an engaging and thought-provoking interlocutor. Do not miss this energetic interview which includes the following topics:

  • Christopher Mirabile Bio
  • From English Major to Junior Management Consultant and, Eventually, a Corporate Lawyer
  • Law Firm to Tech Company, First as Chief Counsel, Ultimately as CFO Taking the Company Public
  • Turbulent IPO Leads to Decision to Become an Investor Rather Than an Operator
  • What Christopher Mirabile Looks for in a Startup
  • Christopher Mirabile’s Favorite Pivots: Pixability, Powerhouse Dynamics and Vela Systems
  • Christopher Mirabile’s Informative Columns and Posts
  • Boston Has the Best Ecosystem for Angel Investing: “I've seen a lot of angel investing, and, as far as I'm concerned, there's no city in the world I would rather invest in than Boston”.
  • The Angel Treaty – Angel Syndication – Collaborative Culture of Angel Investing
  • Christopher Mirabile on the Value of a Board to an Early-Stage Company
  • “I'm to the point now where if I run into a team that I otherwise like and I get any sense of hesitancy about building a board, that's a huge red flag for me”.

Episode Transcript with Subject Headings Available at:

Link to Angel Invest Boston Podcast Episode Pages


Mar 29, 2017

Peter Fasse has patents in his blood. He comes from a family of patent attorneys. He is a highly respected partner at Fish & Richardson, the storied Boston-based (now global) firm that represented Alexander Graham Bell, Thomas Edison and the Wright Brothers. Peter’s work continues that tradition by representing some of the leading technological innovators of today. Peter also invests as an angel in technology companies. In this practical and accessible conversation he revealed valuable insights and resources for founders and investors in technology companies. He also relayed some interesting and instructive stories of intellectual property success and calamity.

Among the topics covered were:

  • Peter Fasse Bio
  • Young Cornell Grad in Textiles & Fabrics Becomes Patent Office Examiner
  • Peter Fasse’s Practice
  • In What Areas Is it Important to Have Patents and Why?
  • Software Patents, Why Have Them and Why Not?
  • Supreme Court Taking Harsh Views on Patents
  • Patent Attorney Horror Stories – Theft, Suicide, Rogue Wave, Bear Mauling & Hasty Firing
  • How Institutions Can Claim Intellectual Property of Employees
  • Freedom to Operate – Should Be a Big Concern for Tech Startup Founders & Investors
  • “There's a common misconception that if you have a patent on something, that it allows you to practice and commercialize that invention, but that's not true.”
  • Different Levels of Freedom to Operate Analysis
  • Two Extreme Freedom to Operate Cases & Outcomes
  • Strong IP Position a Vital Ingredient in Sale of Tech Startups
  • Mass Tech Transfer Center (MTTC) Is a Great Resource for Technology Startups
  • Transcytos & SQZ Biotech
  • Most Patents Are Not Commercially Viable, But Fish & Richardson Has a Special Package for Highly Promising Startups – Fish Steps
  • Unsolicited Client Testimonial for Peter Fasse!
  • Why Investing Through a Vehicle Rather than Directly Can Make Sense
  • Trade Secrets – Formula for Coca Cola
  • Trademarks – Frequently Overlooked
  • Trouble with Chinese Partners – Capital Controls & Theft of Intellectual Property


Mar 13, 2017

Gong Ke came to America at age 13 with little English. Yet, barely a decade later she had graduated in computer science from MIT and was working at one of America’s iconic startups. Later she started her own consumer company which achieved impressive growth. While doing all this she also married and had three children. Google and Harvard Business School followed. She now works full time at Trip Advisor while sharing her business building experience with others at Mass Challenge, the Wily Network and Tech Stars. This remarkably dynamic young woman narrated compelling stories to illustrate her hard-won lessons. She provided three sterling bits of advice to founders, delved into what makes immigrants so successful as entrepreneurs and presented an excellent example of strategic thought in her career planning.

Among the topics covered were:

  • Gong Ke Gouldstone Bio
  • Gong Ke Gouldstone at Akamai – 9/11 Happens – Danny Lewin Tragedy Inspires a Lot of People
  • Hard to Raise Money for Tech Startup due to NASDAQ Crash – Decides to Do Bubble Tea Startup
  • MIT Grad Selling Tea; Parents Are Horrified!
  • Learned a Lot Working Behind the Counter – Degrees Don’t Matter – Listening to the Customer Is What Matters
  • Gong Ke Gouldstone’s Startup Was Profitable on Day 1
  • Amy Chua, alias Tiger Mom, “Triple Package”
  • Gong Ke Gouldstone’s Advice to Founders – (1) Know Why You Are Doing It & (2) Don’t Be Afraid to Talk to Everyone About It
  • Motivation for Being a Founder – “Unleash Your Inner Company” by John Chisholm – Best Treatment of the Subject
  • Gong Ke Gouldstone Goes to Google to Learn What It’s Like to Work for a Big Company
  • Gong Ke Quits Google to Go to Harvard Business School
  • Gong Ke Goes to Her Current Position at Trip Advisor – The Other Side of the Table from Google
  • Is an MBA Necessary for Entrepreneurship?
  • Wily Network
  • Boston vs. Bay Area as a Place to Start a Company
  • Gong Ke Gouldstone’s Favorite Founders
Mar 1, 2017

Whenever I speak with Kathryn Roy I learn something. I learned a lot when I spent an hour talking to this remarkably incisive thinker. Kathryn has advised some of the most dynamic technology companies of our time including Lotus, Kronos, Phase Forward, IBM, Computer Associates, Avid and Constant Contact. The qualities that make her ideas prized in so many executive suites were in full display during this delightful interview.

Here are some quotes from our conversation.

  • “The hardest thing about marketing and messaging is figuring out what you're not going to say.”
  • Speaking about what she calls The Curse of Knowledge she says: “When you're steeped in a technical domain, you start talking to other people as if they have the exact same context in their heads.”
  • Speaking about what companies should put on their websites she says: “What's really important is to let the visitor see, at a glance, what could you do for me? What problem could you solve, and do you solve it for other companies like me?”
  • “I always tell the companies I work with: never brag about yourself. You can get a customer quote, and they can talk about you, but when you brag about yourself, it is totally discounted by prospects.”
  • “I think that's a challenge I see in a lot of companies, because you get marketing people and they want to work on fun things. They want to work on beautiful graphics. They want to have great events. The real benefit or the most important thing that you can do is understand the customer's needs, no matter how boring they are.”


Here are the topics covered during our interview:


  • Kathryn Roy Bio
  • From Math Major to Harvard MBA
  • Early Incarnation of Artificial Intelligence – Kathryn Roy’s First Experience in a Startup – Product in Search of Market – Classic Problem Described by Geoffrey Moore
  • Kathryn Roy Goes to a Dungeons & Dragons Company Next – Finds Her True Calling – Marketing & Behavioral Economics
  • Not Being Cut Out for Coding Did Not Discourage Kathryn Roy – She Knew Where She Could Better Use Her Acute Powers of Reasoning
  • Kathryn Roy Finds That There Is a Market for Her Kind of Thinking
  • Peace Corps & BBN Planet by Accident
  • By Teaching I Learn – Docendo Discimus – Kathryn Roy Decides to Learn More About Marketing by Teaching Marketing But Ends Up at BBN Planet Instead
  • Phase Forward – More Open Communication with Clients Bought Time to Succeed
  • One of Kathryn Roy’s Marketing Tricks: Give Away Something of Value to Customers Which Is Relatively Easy for You to Create – It Gets You Mindshare – Two Excellent Examples Given
  • Marketing People Want to Work on Fun Stuff – Graphics, Events, etc. – Should Focus Instead on Boring Things that Address Customer Needs
  • Kathryn Roy Finds a Natural Fit between Her Approach to Marketing & Consulting
  • Angel Invest Boston Brings You Outstanding Guests like Kathryn Roy, with Professional Sound Quality, at No Cost to You and with No Commercials – Give Back by Reviewing Us in iTunes & Spreading the Word
  • Kathryn Roy’s Three Bits of Advice for Founders
  • One – Make Sure You Have Critical Skill Within the Founding Team – Hard to Get Otherwise
  • Two – Narrow Your Focus to a Group of Buyers That Have Common Needs & Consider Each Other References
  • Three – Don’t Be Seduced by Fads
  • Founders Frequently Get Into Trouble by Not Recognizing the Differences between B2B and B2C Marketing – Taglines: Less Is More
  • “The hardest thing about marketing and messaging is figuring out what you're not going to say.”
  • How Kathryn Roy Became an Angel Investor
  • What Does Kathryn Roy Look for in a Founding Team?
  • Kathryn Roy’s Advice to Founders Hiring Marketing Teams
  • The Curse of Knowledge
  • Investors, Beware of Giving Advice in Areas beyond Your Expertise
  • Messaging Mistakes
  • If You Are a Company Under $100 Million in Value You Can’t Afford to Have People Remember More Than One Name for You
  • Kathryn Roy Talks about Pixability’s Pivots
  • Poly6 Narrow Its Focus
  • 3D Data
Feb 15, 2017

As an undergrad at Harvard, Ed Belove hung out with people at the campus radio station that liked to play with computers. This eventually led to a brilliant career that included building software products with the visionary Mitch Kapor at Lotus Development.

Ed co-founded a company that greatly expanded the Apple II’s ability to communicate. The company would eventually pivot to supplying the hardware for early Internet services such as CompuServe and AOL.

This successful trajectory allowed Ed to dedicate his time to building early-stage companies and doing philanthropic work. As a much sought-after angel investor, Ed puts his capital and energy to work on behalf of promising startups. If you are building a software startup, you would be well served to listen to the thoughts Ed expresses in this podcast.

During our conversation Ed Belove made mention of a document written by Alex Schiff, co-founder of Fetchnotes, a company he and I were very interested in. The link to the document can be found here: Link to Lessons Learned from Doing Fetchnotes

Here are some of the topics covered in our conversation:

  • Ed Belove Bio
  • Data General in the Early 1970’s Was a Hotbed of Entrepreneurship – Many Startups Came Out of Data General
  • Software As It Was Before It Ate the World
  • Data General Gave Away Software to Sell Hardware
  • Space War Video Game on PDP-10 Computers
  • “Soul of a New Machine” by Tracy Kidder
  • Now There Is a Huge Number of Software Building Blocks That Anybody Can Put Together – This Did Not Exist in the 1970s
  • Telex and TWX Emulation for the Apple II – Got Around Apple II’s Inability to Multitask
  • Ed Belove Went to Work Lotus Development – Mitch Kapor Was a Real Visionary
  • Ed Belove Runs into People Who Are Still Using Lotus Agenda
  • WorkFlowy!
  • Ed Belove, Lessons from Fetchnotes – Alex Horak & Alex Schiff
  • “Ease of use can't be overestimated”
  • Interchange Online – Put the First Major Paper Online, The Washington Post – Ziff Davis
  • AT&T Still Had a Monopoly Mindset despite Deregulation & Divestiture – No Hurry to Make Decisions in Fast-moving Market
  • “The Innovator’s Dilemma” by Clayton Christensen
  • “The Road Ahead” by Bill Gates, Nathan Myhrvold and Peter Rinearson
  • How Ed Belove Got into Angel Investing
  • Do Help Get the Word out About Angel Invest Boston by Leaving a Review on iTunes
  • What Ed Belove Looks for in a Startup
  • Knowing What You Don’t Know
  • CEOs Need to Have People to Talk to In & Out of the Startup – There Are Now Many More Resources than in the Past
  • CEO, Don’t “Manage” Your Board, Work with Your Board
  • CEO, Founder, Know Thyself
  • Shares, Notes and SAFEs, Oh My!
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