The Venture Capital Playbook: From MySpace CEO to Venture Brilliance

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Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller, and today I'm my dear friend Mike Jones. 

Mike is the general partner of Science Inc, a two $50 million venture fund and studio focused on building the next generation of companies, shaping the future. He's achieved $1.3 billion in exits, including Dollar Shave Club, Liquid Death, PlayVS, Pray.com, Final Boss Sour and more. Prior to Science Inc, he served as the youngest SVP at AOL, then went on to serve as the CEO of Myspace, overseeing global strategy. Mike's collective angel investments have sold for a combined value of over $6 billion so what does this mean? Well, it means that Mike understands how to find close and exit winning startups for eye popping returns.

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[THE GUEST]: Mike Jones is the general partner of Science Inc.

[THE HOST]: Ryan is an Angel investor in technology and energy.

Transcript

Ryan Miller  

My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

Why won't venture capitalists invest in me, does that sound like you? Well, my next guest is the former CEO of Myspace, before he took the venture capital industry by storm. Listen as we discuss what investing in Liquid Death, Dollar Shave Club and more has done for him, and how you too can copy those principles he's about to teach in this episode. All this and more coming right now. Let's get into it. 

Ryan Miller  

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller, and today I'm my dear friend Mike Jones. Mike is the general partner of Science Inc, a two $50 million venture fund and studio focused on building the next generation of companies, shaping the future. He's achieved $1.3 billion in exits, including Dollar Shave Club, Liquid Death, PlayVS, Pray.com, Final Boss Sour and more. Prior to Science Inc, he served as the youngest SVP at AOL, then went on to serve as the CEO of Myspace, overseeing global strategy. Mike's collective angel investments have sold for a combined value of over $6 billion so what does this mean? Well, it means that Mike understands how to find close and exit winning startups for eye popping returns. So Mike, welcome to the show man. 

Michael Jones  

Thanks for having me Ryan. 

Ryan Miller  

So good to have you, brother. So let's jump right into it, you've been wildly successful. I mean, I, my jaw dropped when I saw all of the, those placements that you've done, very impressive work, brother, and even before that, being the former CEO of Myspace, there's a lot that we can unpack here in such a short amount of time. So let's dive into it. You've done funds, you've run businesses, you've led leadership strategy, you've done it all. What would you say to people just starting out on how to win and get some early points on the board?

Michael Jones  

Specifically like venture capital investing or building companies where we focus more on the VC side of it? 

Ryan Miller  

Yeah, sure, sure. 

Michael Jones  

So, I mean, you know, I started, I started companies when I was in college, right and so I learned what it was to be an operator and have a payroll and build a staff and motivate people and fire people, and all the dynamics of building and scaling and eventually selling companies. And after my second sale, I had enough liquidity, and I happened to be in Los Angeles at the time, and I started meeting with startups, because people would come to me saying, hey, how do I build and sell my company, right? And I'd done it, so I began investing, right and it was early days Los Angeles. There were very few venture funds, but there were some really good deals. So I'd say the first step for me was putting my own money to work. Like, what is it to be an entrepreneur? How do I tell whether or not they're gonna be a phenomenal entrepreneur and drive good returns? Do I believe that they have a market strategy that's gonna get to scale? Can I buy equity at the right price? Can I work with them over time to kind of encourage my outcome, and then obviously, hopefully I kind of realize gain. So I think the first step is like deploying your own capital. It can be small dollars, it could be $5,000 into a deal, but you do need some liquidity, right? You need some capital and I think you got to put your own capital work. Because before you go and knock on other people's doors saying, hey, you know, I'm gonna invest your money and make returns. I think you gotta show that you can do it yourself. And it required you to put a load of risks. I think the first step is find a way to generate some savings. Find your way into the angel circles, you know, meet those early stage entrepreneurs. Determine where you want to focus and become a specialist, then to place them your own dollars.

Ryan Miller  

Brilliant. So, yeah, absolutely getting, getting that track record and as we jokingly say, a real thing is, when you put that in, that's results. And it really comes down to the three most valuable assets in your possession, I believe it's your reputation, your relationships and your results, if you get all those firing in order. And I'd love to hear your opinion on that, but that's, that's the results section, is to say, what have you personally done if you're coming to me, and I'm say some sovereign wealth fund or pension fund manager, you're asking me for $300 million I need to know, are you okay with this? Have you done it, or am I paying for your internship? They would prefer yeah, Option A over option B and so putting your own money on the line, absolutely brilliant. But how have you found reputation and possibly relationships to help you in building a venture fund, have you found that that helps? 

Michael Jones  

Yeah. I mean, it's a big deal, right? So if you think about the mindset of an early stage entrepreneur, they're taking incredible risk, they're very vulnerable. They're pitching you their business. They're telling you their dream. They hope it's going to work. They don't really know if it's going to work. They may be personally in debt. Maybe they put their own capital into it, but the end of the day, they're looking for guidance, they're looking for feedback, and they're preferably looking for capital, right? And so if your reputation is hey, my door is open, I will spend time with people, I will give them knowledge. I will give them some my learnings to hopefully help them on their journey and help them become more successful. Then that builds a strong reputation and what that means is, when they go and meet other entrepreneurs, they might say, oh, no, I met this guy, Mike. He gave me some great advice, maybe he did, or maybe he didn't invest my company, but it makes it so that my name becomes known, or, in my case, my firm's name becomes known, and therefore more and more entrepreneurs come to us. So I give away my time quite freely. That granted, I also learn from those entrepreneurs when someone says, hey, I'm doing something new in biotech, and I'm doing something new in legal, and I want you to hear about my AI legal approach. It's a two sided street right on one hand, I'm like, yeah, you know, I'd love for you to come. Yeah, and inform me of the magic strategy that you have from a legal perspective on how AI is going to transfer legal that's going to make me smarter. And I feel like an obligation, in return, I will guide you in regards to the knowledge I have on how you might raise money, whether we're investing in you or other people might invest in you. I might even make some connections for you, right? So the more I can do that, more I can give my time the way I also receive in that exchange. But then it builds up a strong reputation, and more and more entrepreneurs come across my desk, Zoom meetings, in person, meetings where I learn, they learn, and then we find that next great deal, and that builds a strong reputation.

Ryan Miller  

 I love that. Now that my friends is a master class from the master himself, I love it. So, you know, in venture capital, we hear a lot of stuff, and I'd love to hear your opinion on what kind of support can you advise as far as that, that investor, investee relationship, when you invest in a company, where, what types of things can founders ask, you can expect from a venture capitalist? Maybe walk us through a little bit of that first experience of how, when those two come together, value is created in what way?

Michael Jones  

Sure and so and one way thing, especially these different stages. So there's the beginning of you and I, Ryan and Mike, the Ryan Mike fund, and we're going to disrupt, we'll just pick on AI legal, because I think it's such beautiful low hanging fruit, were gonna go after AI legal. 

Ryan Miller  

Yeah, lords or nerds.

Michael Jones  

They should be, $2,400 an hour, like, let's, let's go and so let's give them an ask. Let's assume you and I look at the market and we identify four or five areas for the conference opportunity, five areas and part of that's looking at where venture funding is going. Has it already been funded? Are there a bunch of star bunch of startups here the sun that you and I have a cluster of strategy we're like, these are the areas we're focusing on. We're interested. We start meeting with the CEOs, right? They're pitching us their stories, guys, girls, they have these pitches decks, their financials you and I are going through, and we're hopefully giving them knowledge in exchange we're learning through the process of evaluating and then we pick one. This is our person. This is the person we're going to back. Maybe this is two, maybe two of them, right, we deploy some capital now. We're at the beginning of the stage of the relationship where we're an investor, right? There's a formal there's a formalness between us, and there's a little bit of a nuance, right? So on one hand, that CEO wants to appear like they've got all their shit together when they meet with us, right? There's no problems. Everything's great, it's amazing. So on one hand, we have to make them feel very secure. Hey, we're in this journey with you. Like we want to build this company, we're at the early stages, this is a startup. It's one or two, three people trying something. So we need to develop that trust and rapport, like they have the capital, but we want to help them become successful. There's always going to be distance, right, on the other hand, we might also freak out and oh my god, you're not doing what you said you did, you're overspending, we're upset. So I build a lot of trust in my CEOs, I really want to understand the way they think, and I will really go off topic with them. Tell me about how you believe success is created. Like tell me how you when we're trying to do something extraordinary in the world. Tell me how you think extraordinary things happen. Do extraordinary things happen to you? Why do they happen? What do you believe in that lets you believe in you could do something extraordinary. Let's do something that's out of the bounds, right? So we're building this rapport, and part of that is tactical knowledge. Hey, when you hire somebody, let's think this way. We're working on a budget. Let's think about capital this way, when we think about partnership something, but it's very tactical. Another hand, I would argue that in the spiritual component, let's let's think about how we think about success. Let's discuss how we think about belief. Let's discuss how we think about confidence. Let's start looking at both sides, and we're trying to build that up, the tactical component of the actual business along with the psychological component of the management, so they're really in a position to receive that success and kind of build that thing with them, we're doing that over time. As the company matures, the relationship becomes more formal, right? Suddenly it's a board meeting, some of those other board members, of those other investors, we might not have that same intimate early stage relationship we had when we started the company together, right? 

Michael Jones  

So I focus on the early stage of like, let's understand the strategy, tactics, the growth pass. Let's work on the psychology of the CEO, let's understand how they think things happen, let's get them in that right mindset. Let's not accept poor results. Let's find ways to kind of change the story line and for me, that's, that's a multi year process. I mean, I'm spending a lot of time with them. As the companies get more formal, I elevate to a board level, maybe now it's strategy. Maybe now it's M&A, it's fundraising, senior executive hires, legal structures, fine, we can go do that stuff too. And then the third stage is, obviously, how are we exiting this investment? Are we selling it to other insiders? Are we selling it to new investors? Are we taking it public? We're doing a transaction company, we gave you bankers, right? So for me to three stages, right? Identifying strategy, looking at the market, selecting investments, developing the CEO, developing business and then finding our way to kind of return the capital back to our investors. 

Ryan Miller  

That is a power question. Man, I absolutely love it. I think you said, how do our extraordinary things, how do they happen, or whatever that might be in butcher it. But does that really help you to open up and explore their mindset and how they view success and achievement, which you're obviously expecting at this point, is that one of the questions you would ask a founder of, how do you make extraordinary things? 

Michael Jones  

Yeah, I've, I'll tell you a story about this, because I find this really, really fascinating, right? So I believe in belief. So I believe in belief, and I believe that your belief will determine the outcome of your life, not your religion, not the physics that surround you, I think it's fundamentally on your belief, right? And it's really important to me to understand who I'm investing in what they believe. Because if they don't believe, if they believe, life's hard, and we all gravitate towards the great middle that's not going to be a person that's going to create an extraordinary result like I need people that believe that they can do extraordinary things, and they can do them fast. They can be capital efficient, and they become very wealthy in the process, right? I have to find people to have that belief, right? The other day, we have a really, really amazing company, I'm really excited about them as a very young CEO. And I said, hey, I want to meet you for coffee, let's book an hour. He was sick, he still comes. He's like, I'm sick, I'm still coming, I'm not going to stand you up. I'm like, wow, like, I understand it, I respect it, like, let's sit down and talk. The first thing I asked him is, what extraordinary things that happened to you in your life? Like, tell me extraordinary things. He starts with, when I was born, I was paralyzed, and I'm like, oh, this kid's gonna be awesome. And he tells me that his life journey of overcoming massive obstacles, honestly, through belief, and it happened to him over and over, a completely non traditional path, non traditional passion, educationally, an incredible number of successes and failures, right? But there's no way this kid was on a normal path, he's like, he is volatility incarnate, right? He's not volatile, but his outcomes in his life are extremely volatile, not normal, like, completely different. I love this kid, I literally fell in love with this coffee. I'm like, we're gonna do I'm like, when I when you're thinking, when you're saying the word 10s of millions, I want you to start saying hundreds of millions, I want you to start taking billions. Like now my goal is, oh, you believe extraordinary things can happen because they have happened to you so you believe it. Now I want to up the bar, I want to set your dream bigger. That's a value, let's, let's adjust your parameters, right? But it's hard to figure this out, Ryan, in the early stages of these entrepreneurs, is what is their belief structure? In fact, I've had people that we've invested in which, at the end of the day, I think they believe they probably are born to fail. They might not say it, and they self sabotage, but they're kind of like, well, you know, that's how it goes. Most starts fail, and you're like, yeah, sounds like you believe that your startup is going to fail then, right? And so it's really hard to figure this out, because at early stages, you're not backing data, you're not backing traction, you're not backing customer feedback, you're back in belief. And so you really got to get to the core of what motivates people, what they believe.

Ryan Miller  

Wow, belief is, is the power behind it. I never thought of it that way, and I absolutely love it. I'm sold. That's it. I'm in, I'm in. Yeah, no, understanding people's beliefs, that comes down to partners, entrepreneurs, anybody that you give money and really just zooming out, feel free to agree or disagree but I see the fund management space as really a function of trust. That's why I tell most people, your first vehicle probably shouldn't be a fund. You could they're quite expensive and infinitely more complex. But at the end of the day, I really think that understanding what you're getting yourself into, and if you're relatively unknown, we're speaking to emerging fund managers, in this case, we're relatively unknown, and you aspire to that, and you have solid belief that you're going to be a successful fund manager. That's obviously a form of entrepreneurship, really just making sure that you generate trust, and that was one of the first things that we talked about, is really just generating trust, and then you start a fund and move people who trust you through that fund structure. So funds work, but funds are just a natural evolution of the trust that you've built through your reputation, your relationships and your results and over time, funds make sense. If you don't have that in place, you can still start, and that's what, Mike, that's what you're talking about. You're like, you got to start, you got to do a deal, here's five grand. You got to start and get a track record, and then eventually you can turn into an asset manager. That's the way, I believe.

Michael Jones  

Yeah, the fund is just the technical vessel that holds the capital right. Like, the magic component of this is that a the fund manager or the investor has a unique perspective on the world, right? And they have this unique perspective. B, they have the ability to reach young and emerging talent that's basically aligning with that perspective, that wants to disrupt this world you believe in, right? And C, to your point, they build trust with those founders that allow them onto the cap table in some form, advisory positions, small investments, large investments, large investments, syndicated investments, right, but it's got to start with the perspective. You got to be, as an investor, be like, the world's broken because of X, and a series of companies or founders are going to solve X, and then you've got to say, I'm gonna go find this series of founders. Maybe it's a network you're connected to, maybe it's from your university. Maybe it's a research lab you're connected to, maybe it's an industry you've worked in, right? But you have to say, something's fundamentally broken, I have access to the people trying to fix it. I know, the third question is just the economics. How am I getting involved in this, how am I going to profit off this? How am I going to support this effort? I can support it with time, I can support it with capital.

Ryan Miller  

Wow. Absolutely brilliant. And, you know, getting getting upside, obviously, that that keeps us here. I had an old friend who's a Partner at accounting firm, and he always would say, revenue hides all sins. And I don't know if that's that is not advice for those who are listening, but yeah, but it's not wrong either, but I'm not advising you on that. So upside, it does matter, but so does downside, or at least the belief of downside, will say some of it's real, some of it's true, some of it feels true. But either way, with all of your experience, man, and this goes far beyond investment funds, what are some cautionary tales as far as downside risk for emerging fund managers or anyone in this space? What would you say are some areas to look out for from your background?

Michael Jones  

Let's see. I mean, when you're investing into venture you're investing into the most volatile asset class really out there, right? You're investing in a liquid private companies that have very undetermined outcomes that are typically losing capital, that you're taking a minority position in, and you're having immense trust into the management and the potential, you know, future exit of these businesses. So there's, you know, the first perspective an investor is make sure all your capital is not in venture, right, like have traditional market assets. Maybe you have some credit equity, maybe it's real estate, you could buy some bonds for protection. You know, you have a, have a nice diversified portfolio of which a component is venture fine. Ironically, a lot of venture capitalists like myself, the majority of our wealth is tied up in venture capital. So like we typically, are over levered on on risk, but that's fine, we live, we live in trade and risk. Fine. 

Michael Jones  

In the venture space, if you are a fund, right, and you have deployed a ton of capital, you know what is very true today is the timeline between deploying dollars from a fund into a company to the time of exit is extremely long, right? You hear these stories in the late 90s where people would be saying how they're still doing capital calls into a fund within a single year, but they were also receiving exits at the same time. Because the cycle of basically deploying capital and returning capital back is really, really short. It's very long now, right? Which means that, like, you know, one thing to note that you will generally find is returning dollars back is really, really important, it is your primary job, right? Returning dollars back quicker is the best, is the best thing you can do as venture capitalists, even, I would argue, if you're taking some upside off the tables. And I remember, you know, on fund one, we received a large investment from a corporate and I remember the after the investment came into the first board meeting, and this might have been a month after receiving money, you know, the board member sat down and said, so how soon you getting my money back? And I like, what do you mean? We just received a running he's like, your job is to give me that base money back as fast as humanly possible. And, and I was like, oh, okay, you know, I thought my job was to deploy, you know, just give it back to me as fast as possible, I'll take the upside later. Oh, he was very forthright about it. Now, most investors do think that way. They just don't want to necessarily say, because they don't want to, like, take away your spirit as growing capital. So, you know, one thing you think about downside is, first is, if you have a big winner, like, don't feel any shame of early selling your position, so you return dollars back to your investors earlier. Maybe don't sell it all, maybe sell a portion, but that way your investors see those dollars come back quick, and then they're much more motivated to move on to fund two. You know, a steady fund that's returning two, 3x fund, you know, over multiple funds with really good cash management is often preferred than some fund that could be a 10x fund but has really long gaps between its distributions and a lot of LPs have told me this. They're like, we want you to pitch us that you're a five to 10x fund, but we wouldn't be terribly upset if you were sub five, but with regular capital distribution. So managing regular capital distribution is a big deal, the way you can do is do secondaries, and today, there happens to be a pretty healthy secondary market when you do have high profile companies and you can decide to sell those positions right. 

Michael Jones  

The second piece is there's a lot you can do in venture around tax management that very few investors do, the QSPS exemption is a really, really special one. It can benefit investors really heavily. So like, you want to become aware of the tax impact to your LPs and make sure that you guys are optimized to tax. It is important for them. It's needs important for you, right? The third piece is, you know, venture is a concentrated game, and that if you and I go out and we build a basket of 30-40 companies, chances of all 30 being successful is basically zero. They will be 1, 2, 3, 4, that will hopefully be epic, and we want to own a lot of them. So in downside protection, you know, I think you do not spread your capital equally in a portfolio distribution, you basically plant a bunch of seeds, and then, in my strategy, you lever up really heavily on your winners and make sure you have large concentrated positions. It is a concentrated position gain. You don't want to be right and wrong at the same time. You don't want to be right and you're saying, I did 30 companies, and three of them became billion dollar assets, but they'd be wrong because the capital strategy and allocation you did didn't provide strong returns off of the three. Right, you're gonna be right and wrong at the same time in venture and so you can pick the winners, but not own enough. So again, downside protection, make sure that you reserve that capital effectively to really follow one of those core winners, so you drive strong returns.

Ryan Miller  

Brilliant and founder quality. We've really talked a lot about that. I know, just me being a finance math nerd, naturally, we can go to the numbers, but you bring a very good perspective, and I can see why you're in the Elite League of venture but how do you vet founders? So this is a non financial, maybe slightly subjective approach to Making Billions in venture capital. What do you, what have you found to be helpful or not helpful, because this is a real downside risk with a lot of question marks. You know you want to move capital, but you don't want to take five years to get to know the guy. You got to move this thing forward and so there is some potential downside risk. What have you found as far as vetting founders to be helpful?

Michael Jones  

Sure? Well, I mean, I can tell you big red flags for us, right? So in venture, our best founders are on a mission, this is their mission in life and they have no second to plan. They have no backup plan, there's no plan B. This is the plan, right? So they're not saying, I'm running three or four things, one of them will work, will you invest in one of them? They're not doing that, right? They have no backup they're, you know, they're typically not from wealthy families. They typically need this to work, they want this to work. Their dreams, their future dreams for their own life, are kind of tied into this outcome. So they're on a mission, right? They also typically would do this instead, even if you didn't give them capital, they're like, look, I'm going to do this no matter what is your heart, this is my mission in life. I have to solve this problem, I need to build this product. And so they're doing it for more than a return, and at the end of the day, that just makes them more compelling and more convicted to the story, right? The third piece is they typically have really good people that surround them, like they need a co-founder and we often like this pairing of the visionary strategy, CEO plus the Chief Operating Officer, the Chief Financial Officer, so you can have Vision Plus structure. And when you pair those things together, you end up really good outcomes. So I would argue single founders a big red flag for me, when they're like, I can't find a partner, I don't think I need one, I got it, I will just hire some people. I'm like, you know, year five, year six is gonna feel really lonely for you, and you may not make it through that time period. So they might feel that today, but right now, it was the journey they're on is a very, very lonely and difficult journey. They're gonna want to quit a lot if they don't have somebody by their side, they're gonna have a really hard time getting through it. 

Michael Jones  

I would also say, like, no assholes, right? Like, you got to be that point where you're like, look, you know, I often think to my, you know, one of our companies sold, and the founder made a tremendous amount of money. And I remember people saying, couldn't happen to a nicer person. Just couldn't happen to a nicer person, so happy for them. They were generally and I've definitely had founders where somebody, somebody made a bunch of money, people like, such an asshole, I can't first I made that money, I fucking hate the world because this academic and so I think, you know, I want people where, like, not only their community supports and their community wants them to be successful. And that also allows them to hire great people because this is a great person. I'm motivated and inspired by this person. I want to show myself with this person, even if they're difficult to work with a managerial perspective, they have a beautiful vision, and they kind of spread that vision people. They collect great talent, I mean, you're in a business of talent, right? You have to these are not solo journeys, right? You need 5, 10, 15, 20, 500, 1000 people, potentially on some of these journeys. So you really want to get to a point where you have great founders that can attract great talent, which means they kind of have to be good people, and they have to broadcast a beautiful vision. So those are some things that we think about. But you're right you're evaluating founders at the earliest stages, I want them on a suicide run. You know, single outcome like this. It's this or die like this is what we have to do. We're on a mission for it. They're a great person, they attract great people around them. They're surrounded by really strong co founders to help them through the mission. They're not greedy over their equity, to help them, happy, to compensate people the right way. Put together a team and see that this is a big team journey. This is 7-10, years to big outcomes, right? Like you have to be signed up for something big. They got to really believe in it.

Ryan Miller  

I love that. And do you find that you also hold that with yourself, of surrounding yourself with good people, making sure the good vibe. I mean, I feel like I can confidently answer this already, but I would assume that not only a founder, but a funder like yourself would also drink that Kool Aid, so to speak, and say, you know, it's not only is it important for a founder that I invest in, it's important for me. I'm also a founder, I run a fund. 

Michael Jones  

I mean, it's definitely important for me. You're right, yeah. I mean, for me, it is really important. I think you find in venture there's a lot of lone wolves, right, that have very unique, disruptive views on the world, and they may even have disruptive personality. So do you get a little bit more variability in there? You know, at the end of the day VC firm can operate with one person that can operate with 50 people, you know, at the end of the day, if that person can attract good talent for all those good reasons, you don't necessarily have to be a teamwork oriented. It's a different team setup, it's a different team instructor, and obviously a very different relationship with LPS than basically a company with investors. So it's a little bit different but for me, personally, everything I just said holds true, right? Like, I want to give my my time freely, I want to be very generous with people. I want to attract it around me, if it becomes successful, want people to celebrate it. I want to share that success with people around me. Very, very similar.

Ryan Miller  

As the saying goes like a moth to a flame, not a moth to a sledgehammer. So that's a good lesson from Mike to the rest of us, is to say, be that flame that lights up the room, that attracts people in you've got that good energy, but that's that's not a tactic, that's just how you live your life and and if this is helpful, I reach a point in my career where things start to really go well, and it's amazing how many friends you have when things start going well. And so I reached a point in my career where I was, I was just, I was I felt like, like, swinging a dull ax, you know what I mean? You're like, I just, I don't know what's going on, I'm just not quite cutting through like I used to. And so I, like any recovering CFO that I am, there's medication, it's a real illness. But in all seriousness, one of the things I did is I need to do an audit and I believe in energy and belief in all of that as well, and in pondering that, for those of you who can hear my voice, if this is helpful, the three areas that I put an energy audit. I called it umpires, vampires and empires, and so umpires are those people and habits that keep you on the straight and narrow. And that's not just business, maybe you think about doing something that could obliterate your family, and you know, it could be anything, and you need those people around. That includes lawyers, doctors, habits, everybody that keeps you on the straight path. Then there's energy vampires, I don't have to go into that, we've most by this point if you're listening to the show, you've probably experienced one or two of them. And but those can also be bad habits, anything that drains the energy and the joy and the light. And then empires be around people that are quite similar, not exclusively, we're not talking echo chambers, but people that you don't have to explain yourself, those are nice and as you, as you improve your position in life, sometimes you get into that lone wolf status, and so really just managing that energy, not only seeing how others that you invest into it, but also managing your own energy and calling an audit to say, are there habits or things or thoughts that are draining me down? Am I doing it to myself? Are there people around me that maybe I need to create a little distance? Do I have enough people that are rooting for me who are not empire builders, but they're umpires? They're just like, I just want to see you win, because I like to see good people, and I think you're a good person, whatever that is, make sure that you're managing your energy and you're also investing in people that bring that energy, like the do it or die, right? This is, this is, as you said, a suicide run, and really finding, investing and surrounding yourself with people that build your energy, you build theirs and once you have it, I'm sure, Mike, you've had it. I know I certainly have it's like you feel like there's nothing going to stop you, and you got a team that energized. Would you agree?

Michael Jones  

Oh, no, I like that. It brings up, like, a few things for me. One is, I always like to statement that you're, you're the average of your friends, right? So if you surround yourself with degenerates, you lower yourself to their status.

Ryan Miller  

Ya, been there high school days. 

Michael Jones  

So I think, exactly, I think that is absolutely true. If you're surrounding yourself with people trying to do exceptional things, and they're going to hold you accountable to hold you accountable to exceptional things. I also say something that wasn't obvious to me, though, was I often surrounded myself with great CEOs that were building great things, or, in my case, now, you know, venture investors that are doing great deals. Sometimes I find that I think that there are my supportive group, but when I leave, I might leave their presence, I feel like I've been with energy vampires, you know, like, so like, I realized I walked in the room feeling like I was, like, so proud of my work and really comfortable with my portfolio, and I walked out of the room feeling like I missed every great deal and complete FOMO and, oh, my Lord, how am I so unsuccessful compared to this room of people? And so sometimes I found that the people that I thought I should be hanging out with were actually not lifting me up, they were making me feel very drained. And part of me, you know, likes to not surround myself with my peers because, you know, you know, if I'm building three or four new companies with great CEOs, you know, I'm falling a little dizzy as I'm growing, I'm growing, and I feel like they're great, but in the moment I'm with other builders, sometimes I'm like, oh, my God, their ideas so much better focus. You know, it distracts me, you know, very similar to social, right? Where you're like, oh, I think my life so great and then something your Instagram, you're like, is my life great at all, my life looks terrible. This is, you know, and so that comparison mentality, I don't know how you frame it. It's like, maybe they were empire builders, but really they're energy vampires, or, I don't know, you know, like, but there's some, there's some disconnect in there that, for me, said, helped by true. 

Ryan Miller  

Yeah, I love that. Yeah, I know Instagram, it can make anyone feel horrible for only having two Lamborghinis instead of three. It's a tough life on Instagram, but those who are on it, Chip stays stay strong, yeah, your third Lambo, I guess so. 

Michael Jones  

That's right.

Ryan Miller  

But you know, and I think what you talk about, this does not get talked about enough, Mike and thank you for being vulnerable and keeping it real when I started. You know, I went to school route, and they pump you full of formulas and spreadsheets and calculus and statistics and all kinds of goodies, and they're and they're cool. But what, what doesn't get emphasized enough is the soft skills, is the self awareness that does need to exist in perhaps those well intended professors just hope that that you figure that out and some of us do, some of us don't. But I think it, and especially in this place of exploring your downside risk, is not only investing in those people who have those soft skills, that self awareness, to bring the right energy, not only to you as the investor, but to the rest of their company, but you're doing that as well. And could you imagine having a company and port cos and CEOs around you where we're all focused on not being vampires, maybe some of us are umpires for others, some of us are empire builders for others. But either way, we're not just focused on the numbers, and obviously we are, but we're also focused. We're checking in with ourselves and those around us to be like, how you doing, man, your performance matters. I want to see you win as much as you want to see me win. I've been on those teams, what a wonderful time. So I absolutely love that we could talk about that and have a whole show on that, but we got other stuff to counter. So I'm dying to know, let's shift gears, I'm dying to know, talking about the market. I'm just curious. I mean, we all, we all pay attention to market, different corners of it, but as far as what's going on today, what are you guys seeing? What excites you, what terrifies you, what's the current state of things you're seeing out there as a venture fund?

Michael Jones  

We've always seen a ton of volume, right? So we always reading pitches, I would say, I don't get as many token lunch pitches as I got maybe a few years ago, with all the with the kind of, all the changing nature.

Ryan Miller  

Web three.

Michael Jones  

Web three world, I think there were kind of three points in my life where, like, my lens changed. Like, the first was, I was working at my University of Oregon Computing Center selling Apple computers to kids, and I remember when the web came out, and we, like, installed mosaic, and we're playing with this web, and I remember my eyes being like, oh my god, the world's just changed, you know? The second was, I remember when I was spending time with all the crypto people, and I bought my first Bitcoin on Mt. Gox and I was like, oh my god, the world's changed again, right? And the third piece is AI, you know, we're 100 like, everything felt boring until, you know, today, right? So now it's like, it's funny, I, I a few weeks ago, I was thinking about the impact of AI legal, as I mentioned a few times earlier. And, and I came up with this concept. I won't go through the concept, but I contacted kind of a partner of mine in India that runs a big dev firm that we have an investment with and I said, hey, I've got this idea. And they they send me this link back in probably a week that was using AI to explore this idea legally. And I said, oh, where'd you, where'd you find this service? They're like, oh no, that's yours, we built that for you. I'm like, but it's only been, like, a week, and I didn't even send you a spec. They're like, yeah, they're like, AI. So I'm like, wait, I have basically a near consumer ready piece and software and a week and a few $1,000 of dev time that does exactly what I'm talking about, because it's parked on top of an AI engine. They're like, exactly, what do ,you know, what do you want to do next? No, I mean, for me, it sets my mind on fire, right? I look everywhere now and I'm like, how can I bring AI to change this industry, change this change the status quo. So today, that's now, I would say, very similar in crypto. It's funny, like when the token economic came out, and everyone could rip their own token. You know, I got a lot of really, I got mostly terrible pitches, terrible ideas, like unbelievably terrible ideas. I'm sitting there thinking about title companies and escrow accounts, and people are pitching me NFTs for, you know, whatever, fractional ownership of a Lamborghini or something and I'm just like, I don't, you know. So it felt to me like the consumer into or the entrepreneurship intuition over the technology wasn't matched with the industry size that could be disrupted with traditional technology, right? And I think that's the true with AI right now, like, I'm seeing these bespoke, little, clever things to AI, but I'm thinking through bigger things. Like, well, gosh, AI can be applied to this thing and this is a multi trillion dollar mass, massive company idea. So I want to see more of those pitches, I'm not seeing as much as I'd like. And typically, what that means is I start building this stuff myself, and then I find founders and like, hey, you're doing this. But like, look at my strategy, 30% off what you're doing, and I've already built it. Are you interested? And they're like, oh my God, I want to build, I want to run. I'm like, great, let's fund you to do that. Let's go. So for right now, that's kind of where my mind is at. Is, yes, I see a ton of CPG stuff because the nature of Liquid Death, Urban Remedy, Dollar Shave Club, we get a bunch of CPG and I love CBG, I love functional ingredients. I'm excited about the protein revolution happening where we're investing and we're going to get great returns off some of those deals. But there's stuff over here that I'm playing with where I'm like, oh, this is really cheap. It's potentially really fast, It goes after a major industry. I actually want more of these pitches, like, I'm happy to look at your next generation beverage and how you're going to disrupt Red Bull and like, the next Candy Company, great. My team's excellent, I'm excellent that we can spot winners, right but I really want to see this. I want to see simple use AI tools going after multi billion dollar legacy businesses.

Ryan Miller  

Let's say, in the short run for for 12, say for 2025, versus 2026, and beyond, does that change or is it one straight line, you see one thing that's going to rule at all? Or how are you guys perceiving kind of the mid to short term? 

Michael Jones  

Um, I give it like a two year window, I would say, from a market perspective, we think public markets open up. We think consumer IPOs are there. I think that will get rewarded with the good transactions. I think the interest rates will fall, because I think they're going to force the interest rate to fall. I think there will be some major spending, you know, spending savings from the government. I'm not sure that the what, you know, wasteland is left over certain departments inside the US government, but I think that will probably save a bunch of money. I think there'll be good economics on the end of it, there may be some human costs, there might be some human capital costs, right? And we're paying some human capital cost out. But what that sets me up for is lower interest rates, good growth environment, positive environment for M&A. We're seeing M&A Start now and then positive margin for IPOs. That all makes it really, really happy for me, right? I think the second piece, though, is that startups utilizing AI could have the fastest revenue growth that we've ever seen, super fast deployed code, concept to prototype to consumer ready version, within weeks to months. Super low cost to launch businesses and it's all gonna be about creativity, like, where are you pointing those weapons and what are you spending your time on? And then I think they go after legacy businesses and I think legacy businesses have to acquire them. So I think there'll be a purchasing spree, maybe that purchasing spree is three or four years out, maybe one or two years of really good building a three or four year three or 4 M&A but I think it has to come because I see it already. It's like, I can see you, and I could probably go quickly through a list of 25 industries that, like core components, are gonna be destroyed through AI, right, that's gonna be amazing. The only question is, which 18 to 24 year old engineering team is going to rip that industry open and have the intelligence to position it against that kind of legacy competitor? So I think it's exciting time to be in venture, I want to make a ton of small bets, and then on the winners, I want to dump as much capital as they need to get to scale. I want to sell those companies, I think it's going to be big.

Ryan Miller  

Brilliant. And so now with let's look way down the road future forecasting, look into our proverbial crystal ball and in all serious people hire us to somewhat try to look around corners and really pay attention to this and see where the smart money is going. Where, what sector you don't say what company, we won't steal too much secret sauce here. But what sectors are you finding that's going to be looking very promising as far as AI or anywhere really, in the long run.

Michael Jones  

I think legal and medical are going to be unbelievable, huge amounts of complicated data and rule sets ingested into a giant centralized brain where you can ask questions insurance, finance, banking, for sure, incredible. I think entertainment, content creation, books, writing scripts, like 100% like, I think it just makes better content and look, it's more interesting. I think there's a layer of software that we built that sits on top of everything. Like one thing I think a lot about is how, when, right now, you and I build a website, we build an app, we build one for everybody, we build one version of the website, and every single you person uses a website. I recently built out a tool where you connect up your Google account and we create an automated profile view that can be passed on to the website, so the website itself can be customized to you. That can be customized to you, which means that we're building single use software, that software destroys itself after you use it. So when you go to the website, the website creates itself for you, and when you leave the website, the website no longer exists, right? So that concept where basically it's a one time new software exchange off of an AI engine that's auto profiling you based on whatever data you want to give it, you know, permissions to read. You know, that's a different way of thinking software. You know, don't have to AB test a single funnel that basically is look working for the majority of users. We can create a system now that's bespoke for every single person. Like, think yourself how weird it is today and age that you go to, like the Lululemon website, and you have to select men's you're telling me, with the amount of data they have, the amount of IP addresses squash around the email address, your cookies, they don't know you're a guy. Like, how is that, how is that even possible, you know what I mean. So it just, it's going to change the way. So, yes, there's big industries, there's legal, there's medical, there's pharma, there's drug interactions, prescriptions, medicine, finance, content, yes, but then there's also just the way we're going to interact with software. Well, how does the AB testing? What about user interfaces? Can they change per person? You know, can we just think of a different way of building software and lay that on top everything, so there are lots of areas to play right now.

Ryan Miller  

Wow, brilliant. All I want to know is, man, how hard can it be to build a funnel? Can I just get an AI to do all the copy and the funnel and, and that's what you're saying, is you're like, it's not a funnel. It's, well, it's a funnel per person, and tailored to preferences and things you like.

Michael Jones  

Your funnel. 

Ryan Miller  

Yeah, so admittedly, it's going to show me a lot of theme park roller coaster videos. That's, that's my guilty YouTube thing.

Michael Jones  

As it should. That sounds perfect.

Ryan Miller  

Yeah. And so it's, it's living on the edge, man. It gets pretty wild. So I absolutely love that, man. And so as we round third base, I'm just curious, with all of your experience, both in finance and corporate development and everything that you've done, wondering if you could leave behind, you know, one, two, maybe three, different competitive advantages that will give our listeners an unfair edge, what would you say?

Michael Jones  

The first is, I approach life that I can learn something from everybody, right and I'm just looking for secrets. So I want to find a secret from everybody, I want to learn what makes them special, what makes them tick, what specific knowledge they have that form them, what specific strategy they know that no one else knows, right? So I'm looking to learn. I'm curious, I want to meet people, and the best way to do that is to get out of my house, get out of my office, get out there in the world and just meet people and learn. Right, that's the first piece of it is like, just be curious. Don't be learning, assume you know nothing, right, just go out there to learn. Like, I don't want to be the smartest person in the room. I want to be surrounded by the smartest people in the room, right? Like, I don't know we do the smartest I just need to be the most curious. So that's a big piece to me. The second is, like, karma is real, friendliness carries so, like, you know, like, in my mind, like every single person you interact could be a great future employee, future investment, future partner, and I don't want to leave anyone dissatisfied. So it being in that open mindset of, like, meeting a ton of people and just making sure you're giving and giving and giving, I think that makes them a really good partnerships and builds, like, a beautiful long term, you know, beautiful long term, you know, beautiful long term strategy. It just lays really good groundwork, and those people be there to support you. So that's a big, big piece for me. The third is, like, I think you got to become specialists, you know. So, yeah, I'm interested in lots of things, but when I get into something, I want to go really, really deep. I want to know it extremely well. And I want to immediately go to the smartest people  and I want to hear from the smartest people. I don't want to hear from speculators, I want to hear from knowledge, knowledge receptacles. I want to know people that know knowledge, and I want them to provide that to me. So that's a big piece of it, too for me, is surround myself with experts on whatever, wherever I want to go, go to the top. You know, it's amazing how easy it is to get people to talk to you. So like, if you're like, I become a specialist there, don't hear anecdotal information from third party sources. Get to the core, go and learn it, become a specialist in it. And if it's big enough for you, you know, big enough for your market, big enough for investors, then go and deploy there like bring your conviction, build a thesis, go deep in your conviction, but become the expert in that specific piece by surrounding yourself with the smartest people.

Ryan Miller  

I'll paraphrase the late great Steve Jobs, but I believe he was, he was known for a lot of quotes and everything, but one of them is, this goes to your expert comment is, simplicity is the highest form of sophistication. This is how I know I'm talking to an expert is because they make complex things simple.

Michael Jones  

I totally agree. 

Ryan Miller  

And the opposite is true, by the way folks how you know you're not talking to an expert, no matter what words they're telling you, they take simple things and make them highly complex, and you come out of there drained, right? So back to what we're talking you see all, all of this is connected, and so you come out of their drained and be like, what, what I, I don't even know what to say, right? And so really, just making sure you're around people who are quite sophisticated and elegant in the way that they communicate and the way that they teach, the way that they build companies is they're saying, I can make it so good, I'll make this real simple for you. Let's get rid of all the noise, let's get right to the signal, and this is how you do it, so.

Michael Jones  

I love that and you're exactly right. I love, I love people that can take complex thought but into simple words. I respect so deeply, like, it's honestly one of my favorite things. 

Ryan Miller  

It's so good.

Michael Jones  

It's such a good symbol of intelligence.

Ryan Miller  

Yep, and so now, when you're around people, so now I guess we're just, we're totally judging people. No, I'm kidding, we're not judging people. But what we're saying is, there's just from our experience and yours is vast, is we say, look, we've been around a lot of people. Some we've led, some led us, some we've invested in some invested in us. But all things considered, we talk about what energy is like, or write a moth to a flame, not a moth to a sledgehammer. One of those attracts people, one of them repels them and then also these people who add to energy, they simplify complex things. They really are a specialist, and they're great to work with and I can't, I can't talk about that enough. So as we round third base, is there any final remarks, anything at all before we wrap things up? Ways people can get in touch with you, anything at all?

Michael Jones  

The one thing I would note is, like, if you decide that you're going to focus on becoming a venture capitalist, I really, really recommend you go to startups first. People come to me all the time, all the time. But like, I want to start a city, I want to start a bunch of companies, or I want to invest a bunch of companies. I'm like, how many companies I'm like, how many companies have you started, how many companies have worked at? None right out of college? And like, you know, because there's a certain, there's not a certain, there's a very specific amount of stress that goes to when you build a business and you have staff, and the staff have employees, and you don't know about your funding and your fundraising, and you're worried about making payroll. There's a reality too, there's a grit to it. And I would argue that if you haven't gone through it, I think it's really hard to relate to the entrepreneur, like you can be really right about the theory, and you can be great about the market, but when it comes to sitting eye to eye with an entrepreneur and committing them to your money over someone else's, you know, there's a relatableness that I think needs to be there. And so it's different. If you're like, I'm going into late stage, fine. Late stage, you got a lot of data, you're looking at market comps, you're looking at valuation exercises, and figure out that's fine, different if you're gonna touch early stage series A series, seed series A startup investments go work at a startup, it doesn't have to succeed. It's almost better if it fails. Get as close to the board as you can give a close investor, spend time with management, understand what those stresses are to build a business. It makes you a really valuable asset to the startup founder, because then you can help them be on capital. You can really give them good advice, you can spend time with them. Spend time with them. And I get worried when I see people running out of college, starting venture funds, because they come from one of our connected family or whatever, and suddenly they're like, I'm deploying. If you haven't done it, you know, it's fine. You can ride my coattails, you can go after my deals and let me, let me lead. And you can come this whole course. I love it, but go with experience tactically running companies. You'll really understood better, or choose a different, you know, a different lifestyle cycle, you know, go, go to Series B, C, D, fine, like different, different analysis. So I think you got to get in it, you got to experience it, you know, before you can go and you can go and find it. 

Ryan Miller  

Wow, absolutely brilliant, spoken by the true Master specialist himself, man, I absolutely love it. So, just to summarize everything that Mike and I spoke about just be curious, meet people. Get out of your house, get out of your office. Really just be toe to toe, belly to belly, start building those relationships, and you're gonna learn a lot. The other one, karma is real, kindness carries. Just be a giver more than the taker, watch what generosity can do for your life, whether you're an investor or not, being a giver and showing generosity, not only does it help your career, but it makes you, makes people see the best possible light. Who doesn't want to work with a generous person, I don't know anybody. I love working with generous people. It makes me more generous and these are those empire builders, those umpires that just say, hey, we're not going to let you act like an idiot, you're going to do the right thing, whether I have to drag you over that or lot. But you're surrounded by the right people, and then finally, become a specialist to become successful, you do these things, and you too will be well in your way, in your pursuit of Making Billions.

Ryan Miller  

Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.