1 June 2022 | Link to podcast episode.
Sajith: I have always found Mike Maples’s views interesting. He is a provocative thinker, and backed by a terrific track record. So that makes his views always worth a listen. As was this podcast episode. A few thoughts stood out to me – a) success in the first five years helps a lot in your career as VC. I cant but agree here and wrote about it in my essay on my five years in venture as well b) the allocation between upfront and reserves, and how that needs to be an intentional decision was fascinating c) the three groupings of their 30 or so mental models d) each investment decision is written out as a bet (an assumption etc.) and this is put into a time capsule at the time of the decision. They revisit later (at the time of the growth decision?) – did the assumptions or presumed outcomes work out?
Code: Hi, I’m Code Cubitt, founding partner of Mistral Venture Partners, and I’m excited to host a series on building an enduring investment firm. Let’s hear from my guest today. Mike, why don’t we just kick it off? So you’re a born technologist, I think that’s clear and I’m the same thing. You start out with an engineering degree. Actually, even before that, you were hacking in high school building stuff, infinitely curious. You got an engineering degree, you started at SGI (Silicon Graphics) and then Tivoli (part of IBM now), and then you started your own company. So maybe you can start with the, I’m working for a big company as an engineer, and then you said, oh, I’m going to do my own. What was that urge? And I’m curious about that thought process to take the leap.
Mike: I pretty much always knew I was going to start a company and I was just a little bit of a risk averse entrepreneur. And so I thought when I was coming out of college, I’ve got no business starting a big startup. And so I thought, well, I’ll just work at good companies and I’ll get progressively bigger jobs at progressively smaller companies until one day it’ll converge into me being a founder. And so that was kind of my model. I call it the risk averse entrepreneur, the other polar opposite extreme I call it the psycho entrepreneur, drop out of college and don’t get preoccupied with the fact that you don’t know much because you’re just doing this. And I don’t think there’s one answer better than the other, but I’d say Larry Ellison was a psycho entrepreneur. I would say that probably Bob Noyce was a risk averse entrepreneur really early.
Code: It’s just that burning need to build something. And I think naivety is actually an important ingredient in being successful. If you knew how hard it was, there’s probably no way you would do it.
Mike: Hugely important.
Code: So, yours was much more premeditated. So then walk me through the transition. So, successful technology career, did a startup, successful, but then you started a fund, so you kind of switched from being a player to being a coach. Walk me through that thought process.
Mike: I’ve been involved with two companies that had gone public in Austin, one as part of the startup team and one as part of the founding team. And I was a little bit tired because we’d helped start motive in, 1997 and now it was 2004. We’d just gone public and I needed some time off. I’m just a little bit tired. So I thought I was going to take some time off and then John Thornton at Austin Ventures said, Hey, have you ever thought about being at venture? And I was like, not really. I didn’t think I’d be good at it. I didn’t really understand what the job was in the first place. And as I was thinking about it, he said, Hey, why don’t we just look at some deals together, just humour me. But at that time, no desire to be in venture, no notion that it would ever be a career for me.
And then after I looked at some deals and spent some time with him, I have to confess, I got pretty darn interested. And so I was at a wedding and just by coincidence, Scott Sandell from NEA was there and he said, well, if you’re going to look at venture, you really owe it to yourself to check out what’s happening in California. And so I did, and I just got immediately hooked on California. And so I just ended up moving to California. My kids were still in grade school. I’d fly to California every Sunday night and stay till Thursday to come back until the kids got out of school. And then we all moved to Silicon Valley. But I just knew that what was at the time called Web 2.0 was starting to form and you could just tell that there was going to be a spectacular set of outcomes on the horizon. It was kind of time to get the party started again on the internet and ground zero for it was San Francisco. And so I was like, okay, I got to come back.
Code: You’ve talked a little bit about here and there around the premonition that it was much easier to start a business in ‘04 than it was previously. All of the pieces were in place, the cloud, the back office and stuff. Was that part of the original thesis for looking for companies?
Mike: Well, it’s funny because originally, I thought I would join a venture firm and I panic at how naive I was now, but I just went to Kleiner Perkins and Sequoia Capital and just said, Hey, I’d like to interview for partner job, Austin Ventures liked me to be a partner. How about here? And thinking back on how naive that was, I’m amazed they’d even talked to me and they weren’t saying no. They were just like, Hey, that’s not how it really works. Venture firms tend to bring people on board who they’ve worked with before and they know. And so I was like, okay, well I’ll just see what I can do. And I was spending time in Silicon Valley and as I was doing that what’s now called Lean Startups. You saw this emergence of companies where I used to say $500k is the new $5m. And so eventually I decided to start a fund that emphasized that point of view.
His first fund
Code: Your first fund was modest, $10m, if I’m not mistaken.
Mike: I think it was like $11m, but it was tiny.
Code: And was that premeditated to go and test a thesis or was it, this is as much as I need to do $250-500k bets?
Mike: So, fund one was defined as that, which I could raise in 30 days or less. And so my theory was that I didn’t have much of a track record as a VC, and so therefore anybody who was going to invest in me already knew they wanted to invest, but that the idea of trying to get new people to want to invest in me was misguided. So,, one day John Thornton says, Hey, we have a little bit of extra money in one of our funds. Would you like to take some money from us to try to start a venture firm? And I said, sure. He said, how much money would you like? And I said, what’s an amount of money where if I lost it all, we’d still have a good relationship? I’m not sure I know what I’m doing here and I’m not sure I’m going to like this job. I’m not sure I’m going to like you as LPs. I’m not sure you’re going to like me. And so he said $15 million.
So, I think that Josh Koppelman (of First Round) and I might’ve been the first two official rolling funds. So, the way we structured it was they would write me a $5 million check each year. I mean, we did capital calls, but so there’s a $5 million one year micro vintage fund, and I would just take a one-time management fee each year. And the reasoning was that I’m either going to establish that I can do this or I can’t. In which case they’re not going to want to pay me fees anymore. We will just declare it a failed experiment and hope that we make some money back. And then two years in, some of the more mainstream LPs came in, Phil Horsley and I had a good relationship and he decided that he wanted to get involved. And we didn’t end up doing the third tranche, if you will. Instead we just went straight to fund two and raised a proper sort of normal, fund.
Code: I love your sales pitch, by the way. I don’t know if I’m going to be good at this. I don’t even know if I’m going to like it, but if you want to give me some money, I’ll give it my best. That’s great.
Mike: I mean, I had the advantage of I’d made him money twice before.
Code: Right, right. No, that’s great. And so that’s a good transition to fund two, which is effectively is when you brought on your first partner. I’d love to hear that story. Was it premeditated? How did you, you know her and so on?
Getting Ann Miura-Ko aboard
Mike: Yeah, so I started to get this idea that it was interesting, these lean startups that were pitching me, I was getting a surprising number of founders who were women, African-American, Hispanic, not people that would normally fit the profile of what the high priest of Sandhill Road would’ve said.
And my conclusion was that when it costs less to get a startup off the ground, that innovation becomes more democratized. More people can raise their hand and say, I want to be an entrepreneur. And so I thought, well, if I believe that I’m precisely the wrong kind of exemplar of that, I don’t exactly check a lot of minority boxes. And so I was like, you know what this is like, it’s like if you’re a founder without a technical co-founder, it was like, I have an incomplete team. And so what I decided was that I needed to be gender averse from day one and it wasn’t like an affirmative action thing. It was like, okay, there’s a whole universe of women who will be awesome VCs someday. And so it would be silly to say that I can’t find one who’s great and so I kept looking.
And so I’d been looking for about two years, and one day I was at advisor in a class that Steve Blank was teaching, and Ann Miura-Ko was helping him teach his class. And she says to me halfway through it, you need to do a much better job. You’re not managing this team well, it’s a mess, it’s bickering all the time. And I was totally taken aback by it. And then I said, no, you’re wrong. This team’s going to get an A+. And she says, well, at <incomprehensible> course at speed, they’re not going to even finish the class. And then I’m thinking to myself, oh crap, I better get my act together here. But fortunately, the team did get an A+.
It’s kind of a good metaphor for how Ann and I work together in a lot of ways. And I remember thinking, she’s teaching this class on starting new ventures. She really likes seed investing, I could of see this working. And so I tried to convince her to drop out of her PhD, but she wouldn’t. So, I said, well, why don’t we be partners until you graduate? And before you know it, she was spending all of her time. We were spending all of her time together, and she was kind of not doing that much work on the PhD, but she eventually finished it. That’s how we started working together, and we just had a good chemistry right away. And so then we said, Hey, let’s formalize this, and we probably shouldn’t call it Maples investments anymore we should come up with a firm name. And we worked together, came up with the name Floodgate, and off it went.
Code: That’s amazing. And 15 years later, you’re still doing the same thing and very successfully.
Mike: Yeah, I mean, it’s worked out great.
Equity split amongst fund partners
Code: And so let’s talk about structure for a second. And by the way, feel free to answer based on other firms that you know as well, because looking for broad experience here. So, if it doesn’t apply to Floodgate, then feel free to reach around. But I’m curious, do you start the firm 50-50? How do you think about equity and sharing and economics within a firm that either you’ve seen not work or does work? Do you have a sense of philosophy there?
Mike: Yeah, I don’t think there’s one canonical answer. In general, though, I think that there should be a trend over time to the key partners having equal economics. In the early days would it have been fair for Ann and I to have equal economics? I’m not really sure. Right? I mean, I raised the fund, I put the thing in business.
But what we did, the agreement we came to, and I don’t know why more firms don’t do this? I said, Hey, why don’t we just agree that if this works out fund by fund, this is how we’ll get to equal someday and there won’t be any surprise. And if we raise a bigger fund, let’s do it in relative terms, like relative management fee, relative carry. If we bring on a new partner, then that’s still a robust, durable model. So, we do that with everybody who gets part of the carry, we try to say, look, here’s what we see as your path to becoming a someday equal carry GP. And on one level it’s sort of like that’s good because they have clear expectations. But on the other hand, if you get to a point where you don’t think that they should be one of the equal GPs, you have a decision to make. And so the reason I like it to trend to equal over time is it kind of forces you to be objective and honest about who’s contributing, who’s not contributing.
Code: When you talk about contributing, is that returns on deals? Is it pure ROI or is it fundraising or is it working with portfolio companies? Everybody has different skill sets. How do you measure an attribute?
Mike: And it could be a lot of things, right? But in the end, you’re making kind a simple decision. I’m giving up the only thing that zero sum is a hundred percent, which is the amount of carry that’s available. So, am I going to be better off for giving this carry to that person is the economically rational way to do it? I don’t think we’re quite that coin-operated. I don’t think we’re quite that bloodless about it, but that’s the high integrity way to think about it in terms of the economics.
One of the secrets to success in VC is getting lucky in the first five years
Mike: The other thing I think I should mention is that when we decide to make somebody a partner, we have a strong belief that one of the secrets to VC is to get lucky in the first five years. And a lot of my friends who are on the Midas list, they get a little bit offended when I suggest this because they’re saying, what are you saying?
I got lucky in my first five years. And I’m like, yeah, pretty much. I’ve seen very few examples of somebody who was long-term successful who didn’t have a big win in their first five years. And so that would cause you to say, if we’re going to make somebody a partner here, we ought to be prepared to make an over our skis bet and commitment to helping that person get a big win in their first five years, which I’m not sure all firms do it that way. Some firms, people want to hog the credit for the hot deals and stuff, and there’s competition for attribution and stuff like that. But if you’re trying to build a firm, I really think you should start with the premise that everybody in the firm should be a super-performer and everybody needs to get lucky in the first five years. And if they don’t, it starts to kind of go against them in terms of their ability to contribute at the level they’re going to need to contribute.
Code: Yeah, that’s a good point. I mean that I think speaks a little bit more to the team ethos. We’re all here together for Floodgate as opposed to everyone eats what they kill much more competitive dynamic.
Mike: Yeah, absolutely.
Code: And you’ve gone on, so I’m take a slight detour. You’ve raised six or seven funds now?
Code: Six funds, and you added more partners in later years, right? Yes. So, Iris and then Arjun, same dynamic, but what’s even before that, your fund sizes have stayed relatively the same and you are dedicated to seed, which is an anomaly. And clearly, you know what your knitting is and you like it. By the way, I share this exact same ethos. Do you get pressure from LPs to raise bigger AUM? Obviously, fundraising is shorter if you have results, but I’m curious how you push back on that pressure to grow and expand and more fees and etc.
Mike: I think that we tend to bring folks on board who just have that value system. We want to have the best product in seed, we like seed. And maybe we could have made more money in absolute dollar terms if we’d raise bigger funds with more AUM and more management fees and stuff. But we just place a big priority on liking our business, liking each other and feeling good about our product. I’ve got enough beans to count, and so I’m not trying to optimize for that. I’m trying to optimize for the impact we can have and the enjoyment and relationships with the founders that we work with.
Code: I love that the North Star is the entrepreneur; that’s deep seated. And so what does the future hold? Where do you go from here? You’re on fund six, then there’s a 7, 8, 9. Actually even before that, I’m curious in terms of attribution. In some firms there is call it a rockstar picker, they get lucky two or three times. And in other firms or in other partners are really good at support roles or governance or this or that. Do you divide responsibility that way or is every partner managing their own deal?
How Floodgate thinks about first cheques vs follow-ons
Mike: Yeah, we have a little bit of an interesting model in that regard. So, you have upfront investments, we call them startup cheques, and then you have follow-on investments. We came to the conclusion that most venture firms do a terrible job of follow on investing, that they keep too many failing companies alive too long. They keep the plate spinning.
We looked at our funds, so funds one and fund two are both, I think 7x now, but our follow-on dollar investing was worse than random. So, you think about if we had good follow-on investing, those funds would’ve been amazing funds. So, we started to say, okay, what if we had one partner who only did follow on investing, that’s it? So, Iris does follow-on investing and she has a cheque book. And we say, let’s say we underwrite a fund and we want it to be five x. Well, Iris has a cheque book for follow-up investing and she needs to 5x that cheque book, just like the startup check writers need to 5x their cheque books. And so what is the right allocation? 70 – 30, 50 – 50, whatever. Theoretically, it should be the allocation that results in follow-on cheques having the same return as first checks.
Because to an LP, a dollar is a dollar, right? All the dollars count. And so if we discover that Iris is operating at high skill but still not getting the same return as the first cheque riders, then we’ll reduce our allocation reserves and increase our allocation first checks and vice versa. But we believe that actually, this is core to good governance. Looking at follow-on dollars as something that you can use to prop up an earlier cheque that you wrote is not a great idea when you really think about it. And so that’s one thing that’s kind of different. And then each startup cheque writer or myself, Ann, and Arjun, each of us has a cheque book as well. So, we’re 70% upfront, 30% reserves. Iris’s cheque book is 30% of the fund, and each of us is a third of 70% ish. And each of us is accountable for making that cheque book achieve the multiple. And it’s not like you do this or you’re fired, but it’s like people need to know the score. We need to have a firm that’s got clarity.
Code: Yeah. Has that ratio shifted over time?
Mike: Yes, because fund one was 70-30, and fund two was 50-50 because the conventional wisdom and all the advice we were getting was you want more reserves. And then we looked at it and had fund two in 70-30 rather than 50- 50, it would’ve achieved another two x multiple. And we would imagine you’re not making any decisions differently. You’re not picking different companies, you’re not adding any different value to the companies. You’re not making any different decisions about what follow-on cheques to write. And what I learned from that is that David Swensen at Yale used to say, the most important decision you make is your allocation decision, how much in equities, how much in bonds, how much in private equity, etc. When you think about it upfront versus reserves is your allocation model at venture. And what people don’t understand is that that single decision you make is very profound. It’s one of the most important decisions you can make as it relates to the returns you’ll get.
Code: That makes a lot of sense.
Mike: And I could go on in a lot of depth as to why most seed funds have way too high of a reserve.
Looking at investments as bets
Code: Yeah, I’d love to go on there too. I think that’d be personally valuable. But what I’d like to get to is the process of that. Do you write the same size cheque for every deal for every partner? So, in other words, do you and Arjun always write $2 million at the seed stage, or do you throttle that with either conviction or capital needs?
Mike: Yeah, I’d say we throttle it. So, there’s a couple things. When you do seed investing, you’re making very risky bets. I read a book by Annie Duke called Thinking in Bets a few years ago and actually became friends with her in the process of reading her book and then having her on our podcast and stuff. So, when we do an investment memo, it’s not a memo. A lot of investment memos are like, here’s my thesis. This company is going to do X, Y, and Z that’s why it’s a good investment. We don’t do that. We write a summary of bets. And so why do we do that? Well, you’re trying over time to create mental models associated with seed investing because a startup isn’t a company. So, Buffet and Munger’s mental models don’t work for seed investing. And so what you’re trying to do is you’re trying to frame each decision that you make as a bet, and you’re trying to understand under what circumstances would we say the bet’s going well versus not well. It’s really easy in seed investing to misremember how it happened. It’s easy to remember that you knew something you didn’t really know.
So, we like to say we want to always go back in time. So, we put these bets in what we call a time capsule, and we go back to the time capsule and we say, okay, did the bet play out in such a way that we anticipated it was one of the potential outcomes? Or did a whole new set of outcomes play out that we didn’t even think about? And the goal is just learn from that, right? It’s not to beat each other up or whatever, but we don’t be like Annie Duke talks about the problem of resulting, which is what’s the best decision you made last year? Oh, I bought Bitcoin. Well, that’s the thing that worked out for you best. What was the best decision you made? And you can only evaluate whether buying Bitcoin was a good decision, if I can see your homework assignment that you did when you decided to make that investment.
Code: A priori.
Mike: And so we try to separate the decision from the outcome, and we try to, here’s the other thing we’ve learned is that seed investing is more about what can go right rather than avoiding what goes wrong. And so when you make a seed investment, you’re kind of saying, look, there’s a two thirds chance this won’t be in the top third. So, in the circumstance where it is, what needs to go our way, that’s how you frame the bet. Just making a list of all the risks involved isn’t the way to frame the bet if you’re doing seed; maybe if you’re doing late stage. But if you’re doing seed, you’ll get overly focused on what could go wrong rather than being creative about applying your mental models to what could go right. And in seed, what matters is how unbounded is the upside in the case that you’re right, rather than how often do you win or lose.
Code: That’s really insightful. So, here’s the question, the $64,000 proverbial question, can you teach that model to the next generation? You have an apprenticeship model, you have associates, you’re bringing them up, I presume, is the intention that they would grow into partners as a partner track? And if so, is it the idea that your insight, your way of doing seed investing is a teachable thing, in which case it can transcend you and Ann and…
Mental models at Floodgate
Mike: Yeah. We talk about thunder lizards, right? That we invest in thunder lizards. And a few years into it, we worked on this project called Jurassic Studies, the fossil record of thunder lizards. We took the companies that we’d invested in that had worked out, and we took ones that we’d said no to, like Airbed and Breakfast, which became Airbnb, PagerDuty, Pinterest. Well, Pinterest we wanted to do later, but DoorDash and what we did is we said, okay, who made the intro? Where’s the pitch deck? What was the chatter between us? What was the pass email? And then what round got done? Who did it? And then what were all the subsequent rounds and how fast did the price escalate? And how much would we have made? And how much longer should we have invested pro-rata.
Code: Assuming you got in the first place.
Mike: Assuming we got in the first place. Now, what’s interesting about that is people are like, okay, well why do you do that? Well, the next part of it is what’s important? Why did we say no to Airbnb? And what question could we have asked? Had we asked that question the answer would’ve revealed that we should have done it. And in the case of Airbnb, it was we internalized that it was, we didn’t coax the earned secret out of Brian. So, an earned secret is something you figure out, and you did some work to kind of go down the rabbit hole. And so how was Airbnb started? It turns out that Brian Chesky was trying to buy tickets for a design conference that he couldn’t afford. And so he rented his apartment, an air mattress, and he was surprised that hundreds of people wanted to rent his apartment air mattress.
He’s like, that’s really counterintuitive. I wonder why that is. Well, all the hotels were booked. So, he’s like, huh, I wonder how often that happens. And by the way, what’s up with hotels anyway? Why do they even exist? How long have they existed? So, I realized that if he had told me that anecdote, I would’ve known to invest because it doesn’t matter my opinion of the product, it matters what customers think. So, I was like, okay, that’s going to be a mental model, the earned secret. And so we now have about 30 or so of these, and what we’ve done is we’ve grouped them in three main categories. One is founder and founder team models. So, an example would be the builder and the persuader, or it would be jazz band, non-marching band. It would be the courage to be disliked, there’s a bunch of these things.
But then we have insight models. And insight models are less about the product for what it is, but it’s about what is it that these people know about the future that’s not obvious? What’s the earned secret? What’s the why now? What inflexions are they following? How do they follow the path down, the idea maze? So, we have a bunch of those.
And then we have some about category design, which is we like to say, great startups force a choice and not a comparison. And so if everybody’s selling bananas, you don’t sell the 10 x better banana. You say, I am the world’s first apple, and you can’t reconcile me with banana. And so if you still want bananas, I’m not your company, but if you want apples, I’m the only person selling apples. So, category design is about that. It’s about framing a new category in the mind of people who are going to be the early believers rather than trying to be better in an existing category.
Code: Yeah. Have they improved your decision-making over time as reflected by IRR?
Mike: Dramatically. If you’re a firm like us in a world now where there’s 2000 firms, we have to find new ways to compete. What we did in 2006 was a novel idea. We just had to prove to the world that seed funds mattered. Nobody disputes that now.
So, now we have to avoid the comparison game. We have to do the same thing we advise our founders. And so one way you can win is you can just turn your experience into a learning curve advantage by getting very tight about the mental models and being very deliberate about what is the quality of the decisions that we made, and what can we learn from the mistakes and the wins, and how can we use these ideas to stress test future startup ideas? That’s one thing, the other thing that you can do then once you have them, is when you bring new folks on board, you can sort of indoctrinate them in that set of beliefs that we think is really important. I think fundamentally in any kind of investing, you have to have some belief system about what’s your edge or otherwise you’re just playing random dart throwing. And so you have to believe that there’s a reason you win. And for us, it’s the mental models and a few other things.
Future of Floodgate
Code: So, you’ve built that process and mental models, the postmortems, etc. You instilled that into the junior team coming up and share it amongst yourselves to get better consistently, is the idea then that you can then transcend the firm. So, this is kind of the money question you’re going to be around for a long time, but at some point the best before date expires, and Mike is on an island somewhere. Do you envision building Floodgate to transcend you? And is that part of the planning process for you?
Mike: Yes, but it’s interesting I don’t care about my legacy. So some people say, I want this thing to last forever because it’s got my hand prints on it and stuff like that. That’s not why I want it to persist. I want it to persist because I think that building a world-class high performance firm, that also embraces the new types of intellectual gender and ethnic diversity would matter.
Code: That’s a great answer.
Mike: If it persists, it will be because that matters to me and the rest of the team a lot, but it’s not going to be because I’m going to want to be remembered in a certain way.
Code: So, you’ve got a low ego coefficient. I think that’s clear from…
Mike: Well, I don’t know about that, but once you’re gone, you’re gone. Right? And so if we showed people that that was possible, I think that would be meaningful.
Code: Mike, any other last words of wisdom? We could go on all day, but…
Mike: Yeah, the other thing is I think that I’ve learned that there’s a way to think about the mix of partners. And I think about it from two directions. One is, I like this movie Oceans 11, where you’ve got the safe picker, you’ve got the explosive guy, you’ve got the guy that cuts the lights, you’ve got the guy that drives the SWAT truck, and then you’ve got George Clooney and they’re robbing the Bellagio safe and everybody has to do their specific job or it won’t work. And the way I internalize that in business and venture is that there’s a bunch of risks that could cause your firm to be unsuccessful. And so you want to have partners that help you take out risk that you wouldn’t naturally take out with the partnership you currently have, right? You want to just like the Ocean’s 11 team, you want to, upside comes from complimentary skills, but also risk mitigation comes from complimentary skills.
Other thing that I’ve learned is that you want some partners that care about emergent strategies and some that care about deliberate strategies. So, like Ann and I are more emergent strategy people like Ann and I sort of go under a bunch of trees and shake trees and hope something comes out of it that’s really good. But we tend to think that insights and great people can be understood across a lot of markets and stuff like that. And we tend to be kind of extroverted and that kind of thing. Arjun and Iris tend to be more deliberate. You always know what an Arjun Chopra deal is going to look like. He reminds me a little bit more of Roger Ehrenberg (ex IA Ventures) or folks like that. There’s no mystery about what kind of a deal they’re going to do. You see them coming a mile away, but there’s power in having a deliberate strategy because it’s consistent.
It involves having a level of discipline. I don’t think one’s better than the other, but I think if you have both strategies and partners under one roof and they like each other, respect each other, you buy yourself a lot of optionality as a firm. And you think about Kleiner Perkins, back in the days they had John Doerr and Vinod Khosla, and they also had Ted Schlein and Kevin Compton. A lot of these firms that have done really well, I’ve noticed that they have a mix of people who have the emergent strategy and the deliberate strategy, and they’re able to respect each other enough that they can make both of ’em work in the same place. And if you can get that right, I think that’s really good, which is why it’s so important that you trust each other to begin with, because you can’t make those differences work if you don’t have absolute faith in the people you’re working with.