ProjectKazimierz presents Will Bunker, with Richard Lucas and Sam Cook. Will was the founder of One-and-Only.com (currently owned by Match.com). He is a successful entrepreneur and investor. Richard and Will chat about their philosophies around investing. They discuss the importance of surrounding yourself with people that can bring you new ideas and ventures. Finally, Sam and Will look into analyzing data and its use in predicting startup success.
Table of contents, resources and links:
Resources and links:
- Will Bunker LinkedIn
- Sillicon Valley Growth Syndicate
- Borrow my doggy website
- Innovation Nest
- Open Coffee Krakow
Table of contents:
Story of huge success
- 00:47 Sam’s intro
- 01:35 Richard introduces Will
- 03:09 Will’s story of huge success
- 03:54 Lessons from fails
- 05:20 I’m always trying to be transparent
What is the reason to raise money?
- 05:56 Startups in Krakow are very idealistic
- 06:54 To raise or not to raise money for startup?
- 08:13 We had no idea how to raise money
- 09:33 It’s not a success to get funding just necessary step
- 10:57 I studied flash code at lunch and in evening
- 12:46 Internet as a source of knowledge
- 13:21 Will’s investment philosophy
- 16:33 Investments in startups that have revenue
- 18:34 Selling the idea of a product before you produce it
- 19:39 Advice for companies
- 21:13 There are many ways to success in life
Cooperation with startup communities
- 22:08 Why are Sillicon Valley sucessful entrepreneurs interested in Krakow?
- 24:44 Focusing on sharing and collaboration
- 27:02 Advices for startup community
- 29:34 Trust is the key
- 30:21 “Borrow my doggy” experience
- 31:54 Piotr Wilam
- 33:52 Summary points
- 34:39 Outro
Hello again Project Kazimierz listener, my name is Sam Cook, the cofounder and co-host of Project Kazimierz here with my co-host as always, Richard Lucas. How you doing Richard?
Very well. Good afternoon everyone or whatever time of day it is wherever you’re listening.
And then we’re here with our guest today and I’m gonna do a very quick introduction today cause we might not have a lot of time for the interview, but here with Will Bunker whose email tagline says: my life as a startup, learn, do and build startup order family number 1: Silicon Valley, number 2: or sorry, Silicon… number 2 and then number 3: our community. And I love that tagline, I’m gonna let Richard do a quick introduction of Will and then we’re gonna go straight into it here.
Okay. Well, this is actually the first time I’ve ever had a conversation with Will. So my prior contact with him resulted from the fact that I listened to the Andrew Warner’s Mixergy podcast series, I subscribe to that. And I heard him being interviewed a few weeks ago and just reached out because I really like the content, what he had to say. I also found that one of the portfolio companies his fund is invested in was a little similar to something that I thought of many years ago but I always think that action speaks louder than words so I just, and well actually when I haven’t invested in that business whereas I only thought about it. So I sent Will an email, I said he’d be up to do an interview and he replied: yes, he would and that’s why we’re here now.
Will was the founder of I think the first really successful online dating company which was could One and Only which was later sold out to Match.com and was a phenomenally successful business before he sold it and I think I’ll let Will tell that story himself in a couple of sentences. But the other thing that’s very interesting to ask here is the fact that you’ve got your fund, this Silicon Valley Gross Syndicate which applies sort of organizational level principles that I think are rather similar to the ones that we share here in Krakow in Poland. So well, I don’t know whether I’ve done a fair job of introducing yourself and maybe now you can correct all the mistakes I’ve made.
Well, we, One and Only was the largest dating site of the ‘90s and then we sold to Ticket Master City Search who had also bought what was left of Match and we ended up with their brand name on our business in Dallas but it was a long and crazy ride. It was interesting, Match raised 10 million dollars but the VC lost confidence in them and pulled the plug and sold them off prematurely. And we only raised 90,000, sold it for like for 50 million so it’s crazy.
0:03:43 Richard: Totally crazy. And I hear success story so we’re very pro success here so, unlike some Europeans, I’m very pro success so congratulations for that..
Yeah. I understand the failure, fail con and that movement and stuff and well, I don’t think you should be castigating for failure, I don’t know that I saw, I prefer success over failure although I’ve had a lot of failure in my life as well.
That’s interesting, that’s not visible on your LinkedIn profile but certainly Sam and myself, I’ve had some businesses that have collapsed around me and although people say fail first, fail often, I strongly recommend people not failing if they can avoid it, it’s a very painful experience although it does teach you a lot of lessons, right?
“Fail fast, fail often” I strongly recommend people not fail if they can avoid it. It’s a painful experience, but it does teach you lessons.”
Yes. And the last one I had was a V chartered and it grew very rapidly to 200,000 users a day. We raised small realms of 500k and then Facebook changed a lot of their policies and ours died on the vine and it was extremely painful and probably took me about a year and a half or 2 years to get over that. It was truly tough cause I raised money for people that I really respected and then to turn around and tell them that you just lost their money, it’s horrible…
Certainly, certainly. This is also like the human side of it, right? These are the people you let go off and all the people you let down as a result, it feels quite bad, right?
Yah. And luckily, I mean, we knew that it was going down and so we were able to get all the employees off to new jobs before we closed the door so, in my workings, I try to be transparent with everyone that’s taking the risk with me and not hi, all this is going great up ‘til the day the phone quits ringing so we were able to transition all, everyone that needed a day job so that they didn’t have a disruption but it’s still extremely painful.
Well Richard, one of the things that I think that you’ve brought up here in terms of, we’ve talked a lot about failure and what it teaches and how to react to it but I think this is really interesting, maybe counter or corollary to that is the success episode. And I think that we’re gonna be talking mainly about investing today and Will, you run a very successful venture or angel venture fund that we’d like to go into. And I think one of the main things that startups in Krakow are very, they’re very idealistic right now cause we haven’t had a lot of huge part of our community and everyone thinks that raising money is like the be all and all versus not raising money as long as you can. And I think you brought one of the great points about that which is the responsibility and the burden that money puts on you.
Well, and it also creates, I mean, every time you raise a route, you basically raise how far you have to go in order for you to personally see success. And for instance, I ran to a gentleman at South by Southwest this year, he had sold us company for 75 million which is almost, well, yeah, almost double what I sold mine for. He ended up with 300k out of that and he had raised 25 million dollars and it took him too long to build a company and he saw basically no reward for it. I mean, 300k is a lot of money, I mean, it’s better than zero but it’s certainly a slim amount given the amount of value that he created.
Certainly. I bootstrap all my businesses, I know I have an outside investment and I have investing other people’s businesses and sometimes I’ve been lucky enough to see them succeed, other times I haven’t. But I think sometimes if people are young and they haven’t have that bootstrapping experience himself, it can teach them bad lessons like money is too easy to come, if you haven’t earned it, maybe you don’t treat the money with the same respect as you do when you’ve made it yourself. That certainly somehow I feel from time to time with some people.
Well for us, we raised 900k for One and Only and it was mainly because we had no idea how to raise money and we were in Dallas in ’95, it was an internet company and jading of all things, I mean, what I would tell people what I did for a living, they would physically back off from me, you can almost see the shock on their face and so it was just an impossibility to raise large sums of money where we are at or at least we didn’t know how to do it, we didn’t have the skills to do it. But what it did forge us to do was to become ruthlessly efficient with our business and because we did that, we overcame and outran all of our competitors. And these things go through so many cycles, it takes so long and a lot of times, you’ll read on the cover check crunch so and so got funded and we, back then, it was Red Herring and I forget one of the other big publication was but we felt very jealous like, oh man, that guy just raised a bunch of money, what’s wrong with us? Why is he so cool? And then I stay in the business long enough, you’d see the person was out of business 18 months later.
It was something that, I completely understand, sorry, I was just gonna cut in there and say that I often say because we do have this sort of startup community, the events and sometimes when I’m doing a workshop or a talk, I say it’s not the champagne time when you raise funding, the person who puts the money in one small bag when they put in but sometimes there is this sort of atmosphere, wow, we’ve got funded, we’ve made it. And of course there will be our company that will happily pump you up but it’s not a success to raise money is a necessary step for some businesses but it’s not success there, right?
No, all it is is you got to the next mountain that you have to climb and by the way, that mountain was bigger than where you were on cause you got to pay the money back. So, and there are some businesses where that is absolutely the correct strategy to do but if your probable exist is 5 – 20 million then it’s probably a really big mistake.
“All raising money does is get you to another mountain you have to climb and, by the way, that mountain is bigger than the one you were on.”
Yah, yah, certainly. And it also depends what you’re doing and I noticed that in your startup, you and your partner were doing the work yourself but if you don’t have a technical cofounder then you need some money to get the development work done but if it’s an internet based business, on the other hand, if you don’t have the skills in-house who can very helpful to manage that process of outsourcing I think.
Well, I physically talk myself program, I mean, neither of us knew how to do any of that, I just said, well, no one’s gonna give us the money unless we build a prototype and so I started, I basically took the programming books and I made stacks of flashcards and I had a full time job and I would study those flash cards at lunch and in the evenings until I taught myself enough to do it.
I think that tells a story about the level of motivation you need there, sometimes I think people don’t appreciate just how much effort and work you have to put into be successful in your case but it does tell a story, doesn’t it?
Well, and I figured worst case I’d have some amazing skills, I just went, there’s no downside to teaching myself. I think I could teach myself faster than I could beg money which is usually a true statement. I can’t tell you how many entrepreneurs I ran into that don’t have a technical cofounder that if they would just pick the book up, I mean, unless you’ve got a learning disability or you dislike it or, I mean, there are cases where it’s truly hard to learn that type of material but if you’re of average intelligence, there’s maybe 500 facts you would need to know to be able to build whatever it is you’re trying to build and if you learn 20 a day, like 40 days you know enough to do it.
It’s very interesting. Maybe as a thing you could do after this would be to send us your proposed reading list of the books that people, the reading list, maybe you’ve published it in a blog post or something but the books that you’d recommend someone who wanted to follow your advice should read cause we like sharing knowledge and I’ve heard people say similar things but as directly as that, I think it’s a useful lesson for some people listening. Cause most of this is much easier to acquire the knowledge now because of the internet, right?
No, you’ve got all these free educational routed. I think what most people lack is a way, a disciplined way to cram it in their brain and I found in college, flash cards would be the only way I could learn these difficult subjects. But if you break down like, take HTML, there’s maybe 100 facts you would need to know to be pretty good at HTML and it’s a lot but it’s not infinite.
No, I agree with that. And yes, so one of the things we wanted to discuss was your investment philosophy because it’s on your website, we’ll post a link to siliconvalleygrowth.com like you’ve got the investment, the asset class, the leading strategy and the Q&A with the investment committee but if there’s someone listening who, like, hasn’t heard of you, haven’t been on the website yet, what would you say is the most important thing about all the couple of features of your investment philosophy whereas maybe differentiates you from the many, many other investors who are out there in the Valley?
Well, I tried to, I mean, I feel like it is the stage that I’m investing. There’s 2 ways to rationalize doing what I did which is investing in early stage startups. One is to imagine that you somehow are the smartest person in the room who could take the future and I just need purposely, I know that that’s probably not true for me. And the other way is to go what does the math say about and what is the data say about early stage startups? And what the data says is that there’s a power of law of returns. And you look at every one of those breakout companies and there’s a long list of super intelligent, very savvy people who pass on and it wasn’t because they were dumb or the person didn’t explained it well, I think what the data says is you can’t tell. And so I look for people that can get things done that I wanna work with that if they were to succeed, I go, okay, 20 years from now, is this a way the world is gonna be? But if the answer to the question is yes, yes, there will be a database in this industry or yes, people will do things in more efficient way then I look at the team and go, okay, this is the group I love to work with then they have as good of chance as anyone else to accomplish it. And I place a bet but I don’t over, try not to overthink it and I also don’t take too big of a risk relative to the amount of money that I have to the best. Because 100k in Uber’s angel realm is worth over 400 million dollars and so what I love about this business is I only have to be rider every once in a while. Like I can be wrong, and it was that way with the startup, when you’re doing a startup, 90%, we found that over 80% of the features that we built reduced revenue and so you just didn’t know, like you really have to just try multiple things knowing that the odds were whatever you’re gonna do is actually gonna make it worse. But if you can’t try those things, you’d find that one breakthrough idea that made the whole company and I think investing is very similar to that.
“What does the math say and what does the data say about early stage startups? What the data says is there’s a power law of returns.”
Yeah. And there’s one thing that I already noticed was that you like investing in startups that already have revenue, right? Is that correct?
It is correct cause I view it as a proxy for a team that can get things done and it don’t even have to be a lot of revenue, it’s just how do they build a product that anyone on the planet finds any value in whatsoever.
Yes. Cause I’ve often said that I think that when people ask me what I think of the business idea, the startup idea, I say, ultimately, it doesn’t matter what I think, it matters what the customers think because ultimately, the only money that really matters is the money that’s comes in from clients or customers. So it seems to be like there is some kind of validation of the idea cause if they’ve got a customer, there must be a lot of, as you say, proof that they can get things done but as a proof that someone out there is ready to swap their real dollars or pounds or euros for whatever it is they’re doing and I think that kind of validation is incredibly powerful and that’s something that I’ve personally often looked at is, okay, if you don’t have a customer other than names and phone numbers of people who said they will be your customers once you get the thing built then it seems to me that’s a very, very significant and it’s a very good criteria for anyone when they’re looking at investing at anything I think.
So I just gave 100k check to a company that doesn’t have a product but they mainly called around to potential clients and sold 600,000 dollars’ worth of stuff last month before they built any. And I just went, holy shit, that’s the kind of person I wanna go in a business with.
Exactly, it proves that they can do stuff that isn’t, it press things about their personality and character, doesn’t it?
Yes. And because we’ve bootstrapped 2 businesses now, my friend and sister started theirs for 100k and just sold last December, I know anyone can do it.
Will, one of the things you’re just talking about it someone who has sold 600,000 dollars’ worth of a product that they haven’t yet created, this is a very interesting and controversial subject where in the online publishing business, you can sell a product or the idea of a product before you produce it especially if you’re gonna deliver it over a 9 week period. It’s a model we just did recently on a product that we launched and it wasn’t incredibly a successful launch but it was really interesting to see the way to test an idea is basically going out there and putting up a sales page and then in a software as a service business, one of the ways that I’ve heard some companies do it is they put up the marketing page and the sales page and then they go buy ads for it and then people buy it. They say, well, this is actually not yet ready, we’re gonna refund your money and let you know when the beta is ready and that’s I think a very interesting concept. What would you advise companies that are looking at cause I think the classic mistake people make is they fall in love with an idea, spend all this time and money building a product and then no one wants it.
My theory is that if you have to build a perfect product before anyone will buy it then that is probably not a very good startup idea because by definition, startups are fubar from day one and you need something that people wants so badly that they will put up with your crappy version of it. I mean, I can’t tell you how shitty our personal site looked when we launched it, it was designed by an accountant and we had a form that didn’t even connect to the database, it pulled up your email and had the mail to form, it pulled up your email client and you email it to us and then we will physically paste it and upload it to the website. And the shocking thing was that 1 in 20 people were so lonely that they filled it out wanting out product.
Yeah. And the point is I think you made the point in the Mixergy interview, basically people wanna hook up, that is a very fundamental with human thing and they wanted enough to put up with a crappy product.
And if we had to have a perfect product and that meant the desire, the needs for that service is not extremely high.
And do you think that may have been true once but it’s like the bar, and most of my businesses are business to business and if you’re selling to a corporation, people are very cautious when they’re spending their company’s money because they don’t want to be seen to be doing business to something that might be risky. So do you think that if you’re selling to other companies then, or maybe the threshold is reason now or do you think it’s just question of finding a problem that’s so painful that people will still put up with a thing that’s suboptimal when they kick off?
I look for problems that are that painful because, it’s not to say that the other ideas don’t work and so clearly, there’s many ways to succeed in life but if you can find a problem that’s that pain for your odds of succeeding I think go up dramatically.
Certainly makes sense. Now, one of the things that some people listening, this is Project Kazimierz which is a dynamic region, historic region of this startup community here in Southern Poland and for sure, some people may be thinking, maybe you were thinking why is a Silicon Valley successful entrepreneur is someone of interest to us? We’ve got an answer to that question because we wanna learn from what’s going on in other parts of the world and also the world is very connected. But I noticed one of your investments was in Sprig and the founder of Sprig is Gagan Biyani who doesn’t sound like a native American judging by his name. And I just wanted to ask how much you interact with non-Americans in your business and how much you’re open to working with people from other parts of the world and is there anything about the way things are in Silicon Valley that other places in some way want, not follow in Silicon Valley’s footsteps but takes some of the things that are good about Silicon Valley and replicate it locally? Are there any particular things you draw your attention to?
Well, I mean, I would say that I tend to attract outsiders as a rule. So there are many immigrants in my portfolio, half our companies are not in Silicon Valley. I am a firm believer that someone could have a good idea anywhere in the planet and that idea succeed and there are great ideas everywhere. The Valley makes it easy to do certain kinds of ideas because the capital is available here to follow through once you get traction and I think it takes a lot more effort and grit to succeed in a market where there’s not as much capital because you can’t make mistakes or takes longer but it doesn’t mean that it’s not possible. And each place may have advantages like Memphis, Tennessee is a place that I helped with a startup incubator and their advantage is that FedEx is located there so if you have a medical technology company and someone has an injury that needs that device, you can put it on a FedEx plane and get there within 12 hours.
And so there’s a cluster of companies that that’s their advantage and I think it’s just looking for what the advantages in your area or what people are interested in and then what you can then.
Okay, that’s nice. And I certainly agree that each, everywhere is different and there are advantages and disadvantages and you need to be aware of those. What about the sort of the attitude, I have to say that I think that a lot of places have become maybe it’s not universally pro entrepreneurship but there are a lot of places that one of like Silicon Valley and what are the things, and you say you tried outside as we suggest maybe you’re doing things a bit differently than some of your other contemporaries or other investors in the ecosystem so why do you attract outside and what is it about the way you do things, do you know? And maybe what are the things that are worth copying?
Well, I think a lot of the venture capitalist have gone to the Ivy League school system and they tend to look for people that match that pattern of success and I tend to think that to go to an Ivy League school, not that I have anything against it, it’s just I don’t look like that kind of person and I attract other people who don’t quite fit that mould and the good thing is most of them are super intelligent. Now in terms of like what I think the greatest advantages is the ease at which people share information and meet and help each other, I’ve never been in any place on the planet where you can walk up a complete stranger, talk about what you do and have people introduce you to extremely important and helpful people and almost, not everyone, I mean, there’s clearly some people kinda have an agenda but in general, there’s a very much a share and a pay it forward attitude that I think if I were to try and build up a startup community in other places, focusing on how to foster that sharing and collaboration I think would be the thing I would focus on.
Alright, certainly agree with that and there’s something…
Sorry, go ahead Sam.
So Will, one of the things that you’ve, I think you’ve brought up a couple of really interesting points that would be useful to our audience. One of the things you said is you’re a big believer that a good idea can flourish anywhere in the world but there are certain advantages to Silicon Valley. And one of the interesting things, I don’t know if you’ll ever have a chance to come over to Europe but if you do, please come visit us, is Krakow has this really strong idealization of anything Silicon Valley and I think it’s an interesting fascination that they have but also there’s probably a downside to that where you might pick up some bad habits i.e. taking money too soon or thinking that money is gonna solve all your problems like we’re talking about earlier. What would you, for an inspiring startup community in Europe that Richard and I both believe has a real shot of leading a European renaissance in tax startups, what advice would you give to young community that’s trying to develop something like Silicon Valley in Europe? Because Europe has not produced the big tech names and tech giants that are worldwide like the US and I think my opinion is they desperately need a hub that would be the center of something like that cause there are certain advantages there. So talk a little bit about what advice you’d give to a community that’s aspiring to build something like that?
I would look at the underlying institutions and what I mean by that, I read a biography of Benjamin Franklin and one of the things he was a genius at was he would see an institution in Europe like take for instance a fire department or a library or he brought over 6 or 7 institutions like that and set them up in America. And so if you look at it, there’s underlying mechanisms that create the flow of information like a strong set of technical meet ups that occur every month, co-working spaces where people can gather and share ideas and so there’s a set of practices that if instituted would increase the flow of information and the ability to collaborate with each other and I think that’s the sort of thing I would look at.
It’s quite interesting. We’re actually, I met Sam, we host an open coffee meeting that used to be in Google for entrepreneurs in Krakow and Sam came by and that’s how we met each other. And I absolutely agree, I also invested in a co-working space and certainly I think it’s very reassuring what you’re saying is what we’re doing. I also think that the point you made about the sort of pay it forward culture, the trusting-ness, the being ready to help people without necessarily immediately expecting to make a dollar out of it or a percentage is very important and we’re certainly keen on that type of thing and I think that’s true but that’s probably true for everywhere. I wanted to ask you about your investment in borrowmydoggy.com because that’s a UK based company that’s moving to the United States and I think, I’ll post the link to the website is, it’s a very, very charming website for people who like dogs. But how did they reach you and does that mean that anyone listening to this interview anywhere on the planet can approach you, do you invest that widely or is there a reason how they reach you in the United States?
So the way we met Borrow My Doggy was when we went to London to raise money. We dropped by C Camp and Carlos introduced us to them as a good company given by background and dating and matchmaking. I love Rickey, she’s awesome and then the other thing is that C Camp will bring over their top companies to the United States to build New York and then to San Francisco and it presents a way for people like me to meet them but we’re investing in as far away as Brazil and other places and now it’s mainly through introductions from our network but I’m open to meeting people. I’m looking at investing at one Polish company, Duck Now, and it’s through “William Piotr” who I met who promotes Polish companies and brings them my work.
Piotr Wilam maybe, Piotr Wilam?
Yah, okay. Yah, he’s a friend of mine. I was at his New Year’s Eve party, he’s a very, he founded the Polish equivalent of maybe Yahoo!, a company called onet.pl and he’s a leading figure in our community here. We’ve interviewed him for this podcast here but it hasn’t been published yet. So you’re looking at one of his companies, you’ve met the right people I think if you’re talking to Piotr and so that might be gonna happen, what was the name of the company again Will?
Duck, was it Duckie?
Ducky Deck? Ducky Deck? It was that like that for Ducky Deck is doing like games for kids, right?
Yes, this company allows people to collaborate around their website and put up comments so that makes it easier to, for the whole team to fix and work on a website at the same time.
Okay, now that might be something UX Pin, or something like that. He’s got, he will post the link that’s called Innovation Nest, that’s his seat fund and it’s probably one of the companies on his site. But anyway, so that’s very good news, interesting news for us because I didn’t realize that you’re looking at companies from this region and I think that, in terms of the process and the way it works, it’s all set out in your website so I guess it doesn’t make sense to go through it in great detail, we’ll wrap this Will. I asked you to send those, if you could send us a suggested reading list, I know you love to read and I know you said you read several books a week but your ideas if somebody wants to follow in your footsteps for the coding would be great. And perhaps I’ll leave it open, I’ll discuss with Sam whether we wanna come back and just let you get to your meeting now. Thanks very much for your time and I’ll drop you a note a few summary points.
Any suggestions you guys have for how to plug into the community there and be helpful, I mean, even if it’s connecting with local incubators and getting those Skype calls, I’m open to any of those. My goal is to keep widening out our reach and meeting great entrepreneurs or where would they happen to be.
Wonderful. Well, I’ll certainly, it’ll be pleasure to do that and I’ll certainly, let’s keep the lines of communication open. So why don’t you go off to your meeting now and maybe we will do a follow up maybe when we have a chance to think about some of the things you’ve said in this interview. So thanks very much for your time, have a great Friday and we’re in touch, right?
Sounds good, talk to you later.
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