Don't Be Evil - Dylan Hunzeker

foreign [Music] thank you foreign [Music] foreign [Music] I'm Dylan um I'm one of the people that's going to give the talk don't be evil today I'm currently an early stage investor through various funds and also personally and I'm also the CSO of a protocol topple okay hello my name is Miko I am also a early stage crypto VC and so our talk is about don't be evil but both of us are VCS so how's that gonna work so you know I feel like one of the things we would love to deconstruct is the question of are VCS evil and we're going to kind of get right into that so we're going to get right into that but uh you know uh I basically am with Gumi Gumi cryptos capital and we're an early stage Venture Capital firm so we're just out there looking to support the best entrepreneurs so that's us yep so the first thing that I wanted to bring to the fore is kind of the question of is Venture Capital as a profession evil and our Venture capitalists evil and I'm just posing this and it's just something I mull over all the time and we're gonna kind of chat that point yeah so I'm really eager to unpack the concept because I see on Twitter all the time I see on Twitter people are like VCS are evil right and I can tell you that my perspective on this is that VCS are not evil feces are predatory species are predatory they are not evil right so is a shark are sharks evil right because like VCS are sharks right like sharks are not evil sharks are hungry right so I think that's a distinction that I think is very important to make so when I say that sharks are hungry right the thing that's important is if Predators were evil then our best move as humans would be to wipe them out right because if we encountered a species on this planet that was truly evil then we should wipe out that species but I think Eagles deserve to live sharks deserve to live Bears wolves deserve to live right and so predators are not evil although they may be misunderstood so maybe we can get into that yeah so something that we've talked about a lot um is Hal behaves how how BCS actually behave and interact with their founders and I think the distinction between evil and predatory is is definitely that such that something that is predatory is still needed for the broader ecosystem so Innovation wouldn't occur if species weren't around and even though BC is a relatively new um construct like you know in 2015 24 of all jobs were created by venture-backed companies for example like there's just so much evidence that VC is really good for like our broader economy in the United States and globally but kind of wanted to bring bring it back in terms of things that VCS do that are actually severely helpful to the founder but also inherently predatory because they're dual sighted yeah so one of the things to know about VCS is how their brains work right and one of the great things about VCS is that their brains like the brains of most predators are actually pretty small right so like if you look at like Predators their brains are small and this is actually great I actually have a venture capital pitching methodology and the methodology is what I call the magic words so there are magic words that you can say to a VC and they're going to basically invest and I'm so confident in my methodology of the magic words that you can literally write the magic words on your hand and you could literally stand in front of a VC and read them visibly read them from your hand and they will still work right and yeah right and and why is that why does it work right it's so simple because the goal is essentially if you're pitching a VC you want to trigger something that I call the chase reflex and what happens is that a VC is basically either going to chase or they're going to sleep sleep right which is if you look at a lion a lion spends most of their time asleep and the reason Lions spend their time asleep is because it's calorically expensive to Chase so when they chase they're wanting to kill and eat right so the point is that the magic words are the bait that starts the chase it it's really a way of effectively like it's like bait so you dangle the bait and then the VC just kind of comes along right so it's and it's all done through pattern recognition which is you can show something it's a pattern it fits the pattern and then the VC starts to chase right their brains not very big their eyes point forward it's predators right so what are those words and what are some of the patterns so that's a great kind of segue yeah yeah so like you know I'm definitely producing content on the magic words and on the pitching methodology but really like one of the biggest things has to do with how do you talk about your opportunity right because pitching the actual pitching part every single minute you spend pitching you're in the weak position wow uh so every second that you spend pitching you're in the weak position and every second that you spend talking about the deal is the strong position but here's the sad thing about entrepreneurs entrepreneurs know their business right and so when they pitch their business they feel knowledgeable and Powerful but in fact every minute they spend pitching they get weaker and weaker and weaker because when you're pitching you're saying please understand me please invest in my business please please please please I am begging you right talking about your deal and the opportunity is you're powerful because you're like there's only one of me I'm non-fungible right my opportunity is unique and your money is fungible like there's just thousands of VCS there's too many VCS yep so you know nature will remove a lot of the VCS for you right but anyhow so in terms of your question about evil right what are some of the evil things that VCS do so I don't think surveying you and watching you all the time is evil right like I said predators are not evil they're just hungry right so they just watch so there's a lot of watching that goes on so for example as a VC one of the things I do is I try to help I try to help right so for example if you say oh I have a certain kind of customer right if I'm interested in your company I'm going to introduce you to five potential customers I'll just bring them to you it's like oh okay you want to talk to these customers but then those customers are actually doing diligence on you and let's say that you land zero of five customers what does that mean it means you're either your product isn't very good or it means your selling isn't very good so if I'm sending customers to you and nothing's happening then I got my diligence done is that helpful actually it is it is helpful like you got introductions to potential customers right is it predatory it kind of is because I'm using the customers to figure out if your product is good and if your sales are good right so that's kind of the way our brains work right but it's it's predatory but it's helpful and sometimes it's what's needed to actually make the actual economic truth of the product come alive and so I on that note I think one of the things that has happened in the last 12 months which is I'm very grateful for is that we've come away from a founder-led BC landscape and into a vc-led BC landscape for fundraising and so we're now able to actually get to the bottom of a lot of Truth so to speak that perhaps were obsticated based on the economic climate in 2021 and early 2022 so to me that's not evil or predatory that's just what's going to happen anyways and the VC can either speed it up or be passive and not and so the same thing happens naturally when the VC who's trying to hunt actually also hunts with other Hunters and those people gather together and try and figure out the truth about certain situations it's just another way to aggregate information and it can be seen as unethical but it's it's not it's usually how very large amounts of money get raised yeah I mean I think one of the things that's kind of crazy is uh like the way VC brains work right is that I actually try to make it a point to help people before I have any economic interest in helping people right so you could look at that you could be like wow that's very altruistic right that's a very benevolent human like at the core like I Aspire like most humans to be a benevolent human right so I want to help people and helping people actually makes me feel good right and one of the ways I help people is I help entrepreneurs figure out how to talk to VCS right because they don't know how to do that mostly right but the other side of the coin is is that there are certain ways to try to help where you can actually also be doing diligence like for example one kind of help can actually be critical feedback critical feedback so there's a couple reactions you can have the critical feedback right so for example let's say I tell an entrepreneur I don't think I don't believe what you're doing I don't think it's good what you're doing is bad right so the worst thing you could ever see is if the entrepreneur just says man you're right I give up I'm gonna do something else now and it's like okay wow no conviction right that's terrible right the other thing that's bad though is if they just get really angry and they don't listen right because if you have a legitimate critical feedback you want to Java back and forth and see that they're actually thinking about the space right so I guess what I'm trying to say is I'm trying to say that you know the complexity of the mind of the VC is that they may be helping you but helping you also May and also be a part of helping themselves it's very complicated so when when the founder and the VC make money it's value creative to both of them I I did want to comment on that I did want to comment on that which is there was a great exchange on Twitter and the classic Venture Capital is vinod khosla he basically this he was arguing with someone about VCS and he basically said so the the person was arguing that VCS is zero sum at zero sum right and it's win lose right but this is completely nonsense it's nonsense right like like here's the issue the issue is is when you talk about predators predators eat what do Predators eat they eat herbivores right and really the thing that's funny is herbivores eat plants right the only people that are actually producing energy in the ecosystem right are plants right so the you know so Builders right so for sure VCS don't build anything we don't build anything right so that's why we're predatory is we don't build things but do we need does the ecosystem benefit from the existence of predators I guarantee you it does right they're playing a role yeah and it's beneficial yeah and then it just becomes a question of what happens to the Predators when they aren't successful right like what happens when there are too many yeah yeah that's really what we're seeing right now yeah I love I love that Dylan has pulled this out right because the thing that's happened recently it related to the massive money printing right is that when you look at covid money printing what it's done is it's created like thousands and thousands of like PCS right and then just not as many Builders right so I think we're definitely headed for like VC mass extinction right because the ecosystem when you think about like an apex predator like think about like a bald eagle right so like how many how many mice do you need for there to be a bald eagle right it's it's the ratio is like natural right so the biosphere doesn't support as many VCS as we have so for sure we're going to have BC mass extinction coming up we're actually already seeing this at least in my opinion on the traditional side where a lot of LPS are saying for VCS that were started before 2017 and didn't return a majority of capital by 2018 or even by 2021 probably aren't going to see reups or those LPS and I can tell you for a fact that is happening so like there are really amazing funds that will probably never raise another fund so you know it's fascinating to see it happen in real time yeah awesome so I know we're kind of in the closing hours of this talk so what I wanted to do is give uh information about if you want to continue to follow us I'm definitely kind of in my ethos trying to be helpful to entrepreneurs so you can reach out to me my website is miko.com miko.com uh Twitter is Nico Java j-a-v-a so you can just follow me at either place uh Dylan where do we reaching my Twitter is uh crypto VC Dylan so yeah crypto VC Dylan uh and uh you know what we'll do is we're gonna dump off stage right so like we'll just be over there if you want to talk we'll probably like not try not to disturb the next speaker but uh thank you very much foreign [Music]