Quitting your way to startups

MO DHALIWAL

[00:00:00] Welcome to High Agency, where we ignite conversations that drive change and spark momentum towards transformative action and professional mastery.  No business is truly in operation just for survival.  Businesses at every stage of life have different objectives, but they're all some variation on growth.  Startups are establishing product-market fit, while Series A or B scale-ups exist to maximize their market share.  And mature enterprises may focus on revenues or profits, but every corporation ultimately exists to create and deliver value to its shareholders.  And there's entire educational disciplines and practice areas that are designed to give people the tools to start, manage, and grow their enterprises.  We see this in business programs at universities or executive education.  And here, we appreciate the art and science behind the governance of organizations and the responsibilities that flow from managing these massive amounts of resources and time, money, or people.  And today, we're diving into the world of new ventures and the intricate dance of growth and the challenges that they face.  So, we've got some intimate knowledge in this field as our agency, Skyrocket Digital.  With startups over a decade ago primarily.  And we all know the stats that approximately 90% of startups fail, 20% of them don't make it past their first year.  And by the fourth year, half of these ventures have likely ceased operations, primarily due to running out of cash or a lack of market need or being out-competed.  So today, I'm thrilled to have Diraj Goel, the CEO and founder of GetFresh Ventures, join us today.  Diraj brings a wealth of experience in accelerating startup growth and driving enterprises towards meaningful exits.  His unique perspective on growth by design and his extensive work with both startups and investors will provide valuable lessons on how to channel the insights and experience of solid advisors into sustained growth and success.  So we're going to explore the successes and failures that companies experience when identifying their own path towards viability and growth.  And, management consulting for that has long been a critical tool for businesses that were seeking to navigate these complexities of the modern market, streamlining operations, or implementing effective strategies.  Many enterprises achieve remarkable success with the guidance of consultants, and others face significant challenges and setbacks.  So we're going to talk about what the key factors are that contribute to these varying outcomes, offering insights into what makes a strategy successful, and the pitfalls to avoid along the way.  Welcome, Diraj.  Thank you.  So we're going to be talking about time, money, and people, right?  These are the components that come together for any venture.  I like to sometimes have jokingly say that every company is actually an energy company.  Because what are you trying to do?  You're trying to harness energy in the form of resources and people and convert it into a different form of energy.  Now, before we dive in, I just want to talk about YET Fresh Ventures, and you position your consultancy as a venture catalyst.  What is a venture catalyst?

DIRAJ GOEL

[00:03:34] Well, a couple of things.  One, I love the way you say my name, because it's how you pronounce it in Punjabi.  But I usually go by Diraj rather than [Diraj], because that's just how it's been pronounced since I was in grade eight when I first came here.  Okay.  And then the other piece is that we're not a management consultancy, even though some of the work that we do may look like it.  When I started to think about creating YET Fresh Ventures, what I saw in the market was there were a lot of founders that were struggling and failing in their daily efforts, as well as companies in its entirety failing, even with great innovation.  Because what they were, constantly missing was capital.  And the assumption always, and at least in the last decade, in talking with founders, is that they had to go out and build a pitch deck and focus on fundraising.  The missing piece always was, what about revenue?  What about creating a sustainable company?  What about doing that from day one?  And that's what I think most companies miss.  And we've seen that.  Happen especially in the last few years, with a bunch of startups landing in the graveyard.  What I saw as an opportunity was working with early stage founders and helping them actually engineer companies from the ground up to be sustainable.  Revenue generating, cash flow generating.  A management consultant will take your money and your retainer and help you solve one or two problems. Yeah.  They're compensated on their retainer, uh, accelerators, uh, are there to, uh, provide your curriculum and networks, which actually I think is one of the fundamental reasons why some founders get funding while others don't.  Um, but what was really missing was intimate support of the founder as an individual as well as the company's um operating um operating motion in terms of what they were there to do, who they were to serve, and how they were going to actually engineer something that was sustainable.  Um, that's what we do so the catalyst side, that's the catalyst side.  We're a venture partner if you if you want to use a standard language.  But the catalyzation happens in that we are not operating the company on behalf of the founder; we're not a startup studio; we're not running departments uh for these companies.  We're helping them build self-contained, self-sustained engines that operate on behalf of  The founder and we're not operating the company on behalf of the founder; we actually built our own setup team with um two leaders and um what I termed as um identity.

MO DHALIWAL

[00:06:37] It seems like you've got some really varied experiences, uh, but why you, like, what drove you to say, 'Okay, I want to do something about this myself'  and start GetFresh?

DIRAJ GOEL

[00:06:58] Well, I think I've had the journey of a lot of startup employees, but I've also had the benefit of starting companies when I was really young and starting companies with my dad because he was an entrepreneur and I saw what he struggled with, being a solopreneur and trying to raise a family and pay the bills.  For him, there was no funding; there was no options, but there was no massive exits.  He didn't know if he was building a valuable company.  He was just trying to run cash flow to pay the mortgage.  And when I grew up, and I started a couple of businesses, but what I found was that there was a lot that I didn't know about how to build a company.  You know, I just recently got diagnosed with ADHD and that's kind of explained a lot about my journey.  But when I was in university, I couldn't sit in one place.  I was constantly trying to engineer new things and do new things and learn new things.  And that's what I realized I needed real-life experience that was beyond my capacity to build.  That's when I went into startups.  You know, this is 98, 97, 98, 99.  And I started in my first startup.  It's called WebCT, my first tech startup, not the startups that I started.  And through that journey, and I've gone on into multinational, billion-dollar companies, scale-ups, and had several successes.  But in all those instances, there was no massive payout for me as an employee.  You know, a lot of my options are still paper.  So those companies, even though they got funding, they grew, they had revenue, they weren't enough that they could actually create value beyond their own earnings for the employees who put in all that time.  And I used to, you know, we are both from an ethnic background where, you know, working a 78 hour week is a pretty normal thing, right?  Like, yeah.  And what are those?  Yeah, you know, that's- People that you see on the weekends?  Yeah, yeah.  You know, it's part of our generational trauma, right?  Like, you know, you're a workaholic because that's what you've seen before.  Yeah.  It wasn't until I was 39 years old sitting at my desk at Hootsuite on a Friday evening at 9 p.m.  And my wife's six months pregnant at home.  And the reason I was 39, looking forward to my first child, was because I deferred having kids knowing that I was spending 78 hour weeks and I didn't want to have that same reality.  But what I also realized sitting there at 9 p.m.  that my reality hadn't changed and I had a baby on the way in three months.  After that Friday, I mean, you know, there's some- there's a little bit of a juicy story to that.  But basically, the short of it is: I took Monday off and I walked away on Tuesday, and I haven't had a paycheck since.  The first few years, I had to build a company from scratch.  I had to replace an executive salary from scratch.  I don't have a big bank account from any kind of generational wealth.  It's only what I earned and what I had earned and created myself.  So I had to work those same hours for the first couple of years of having my kids.

MO DHALIWAL

[00:10:41] So you left the corporate environment to go to an entrepreneurial eat what you kill journey.  As a means of having more flexibility?

DIRAJ GOEL

[00:10:52] Well, that was the intent.  Okay.  Because- That seems counterintuitive, doesn't it?  Well, I mean, it's the intent that you can own your time when you go into entrepreneurship.  But that rarely happens.  It wasn't until my second child was born that when I realized that I wasn't actually living into what I had set out to do, which was spend time with them.  I missed two years of my daughter's life.  Not to the extent that I would have if I had a 9-to-5, but it was still significant.  And there were a lot of sleepless nights and nights where you're completely in depression and worry about the future of your family.  But when my son came unannounced and we only found out when my wife was 19 weeks pregnant, that gave me the realization that I needed to engineer my life.  That was five years ago.  My son's five now.  My daughter's seven.  And now I work 30 to 35 hours.  I've engineered my life, engineered my existence so that I can spend time with them in the way that I want and not lose out.  And that time, that time is the, frankly, the only resource that's irreplaceable.

MO DHALIWAL

[00:12:25] So how do you bring that experience of thinking and some of that pain to the startups that you work with?

DIRAJ GOEL

[00:12:33] Well, you know, there's this assumption that most startups start by young people, right?  These crazy workaholics that, you know, it's innate in their flexibility and their availability of time.  But most startups, most founders are our parents.  They've got families.  They've got kids.  There are a lot of founders.  We have in our portfolio right now, most of our founders are 35 plus.  Some are, you know, 55 plus.

MO DHALIWAL

[00:13:07] I just read that statistic recently, actually, and I was quite jarred by it because I also was a believer of the cliche that all the startup founders are, you know, mid, maybe late 20s, lots of energy to burn, lots of time, lots of flexibility.  And apparently the average age of a startup founder in North America is 45.

DIRAJ GOEL

[00:13:24] Yeah.  So what is a 45-year-old supposed to do?  They're probably leaving their $95 job, much like I did.  They have to replace the salary.  They're running an enterprise that's constantly losing money.  They're probably going into their life savings to pay for it.  They're probably mortgaging their homes to pay for this business.  To them, creating a sustainable business is not about pleasing investors.  It's about putting food on the table and not forfeiting their family's future.  And for me, that I think is the real challenge that founders have in ensuring that they're not forfeiting their livelihoods in pursuit of trying to solve a real problem and not having the right support to support them on that journey.

MO DHALIWAL

[00:14:19] So how do you support them?  How do you help them solve that growth problem?  Because every entrepreneur, yes, they’re in business and working to put food on the table, but they’re not survivalists either.  I’m sure everybody’s assumption or the perspective they’re walking in with is that there’s going to be some amount of short-term pain, but that there will be a longer-term payback that would outstrip any other corporate role or anything else they might do in life.  So they’re trying to get through that chasm.  Right.  And get to the other side.  And that’s only going to happen through growth.  So what are the challenges that you see in helping them?  And what challenges do you see them facing when they’re trying to solve the growth issue?

DIRAJ GOEL

[00:15:02] Founders don’t intend to do the wrong thing.  They just don't know what's the right thing to do.  And hindsight is always 20/20.  You can look back and say, you know what?  I really screwed that up.  Instead of spending three months on that, that should have probably taken me three hours.  The path of least, least resistance is less complicated.  It's more straightforward.  It's easier to overcome as long as you know how things work.  That's what founders struggle with.  You know, I've worked with founders who are highly educated, MBAs and time working in companies, and they still struggle with know-how.  So is that a curse of knowledge?

MO DHALIWAL

[00:15:41] Like, do they know too much and then start cluttering the objectives with a bunch of side missions that might not be?

DIRAJ GOEL

[00:15:47] I mean, there's a tendency for us all to over-engineer everything because, I mean, think about the amount of effort parents put into creating the perfect nursery for their new child.  These companies are their babies, right?  So there's an expectation that these things have to be perfect.  This is a representation of me.  And then there's a focus on building these companies to sustain themselves beyond today and over-investing or pursuing paths that may go nowhere instead of really focusing on how to build a profitable company.  Where the prevailing mindset is that, okay, I need to build a pitch deck and go get investment to solve this problem.  Yeah, money's going to solve everything.  Money's going to solve everything.  And you know what?  My revenue doesn't need to be as high right now.  I need to focus more on, you know, sign-ups or user acquisition.  Or whatever signal that they believe they need versus making sure that you're cashflow positive.  When my dad was running a business, there was no option other than to be cashflow positive.  And the ironic thing is, you know, when I started at Hootsuite, that was a company that had raised more money than any other company in Vancouver at the time.  Yeah.  And it was purported as a business to be a billion-dollar company.  But by the economic math of that business, it wasn't worth more than, I would say it was worth less than $200 million.  Like if you use standard discounted cash flow models.  So why was it worth so much?  Is it because of the promise?  That company was losing money.  One of my first mandates as the head of operations in the company was to re-engineer the company so that it could get to cash flow neutral and then subsequently to cash flow positive.  And this is during the heyday of, you know, 2016.  Okay, now you've got this big company that has to do cash flow, has to get to cash flow neutral and positive.  Was it because the investors wanted it?  Was it because they saw the light and said, oh no, we've got to build a profitable company?  No, they did it because they were running out of money.  And they knew that if going to market to raise money at that point of their stage, they wouldn't, they wouldn't get a billion-dollar value.  Yeah, times have changed.  And that was in 2016, right?  The later stage you are, the more the reality slaps you in the face, right?  Unless you've got, you know, high flying visibility and you're Sam Altman in a smack dab in the middle of Silicon Valley and you've gone and you know everybody.  And you're the zero of whatever the current hurricane is.  Correct.  And you're, you're, you're going to be disenfranchised.  And, and, and that could even mean for a white male founder.  Now think about a female founder.  Think about an immigrant founder.  You're at a significant disadvantage.  And, and if you constantly believe that some investor is going to come and save your day, they may, but they're going to fuck you in the end.  They will fuck you in the end.  There's a river, there's vesting clauses, there's clawbacks, there's massive dilutions that are, that happen on, on when you don't hit your target.  All kinds of things that, yeah, that where a founder sometimes has to walk away with their business with nothing to show for it other than the paychecks that they earned out at their own company.

MO DHALIWAL

[00:19:41] Yeah.

DIRAJ GOEL

[00:19:42] We've heard of that happening.

MO DHALIWAL

[00:19:44] We've seen it happen.  Past managing director at Skyrocket, went through that with his own startup.  Yeah.  Built the company, got the company funded, took the company public, and then later on realized he didn't have a company.  Right.  So we've definitely seen, you know, the ugly side of it as well.  But getting back to actually Hootsuite, as an example, there was an interesting juxtaposition when you were talking, because you're talking about your dad, right?  Where it isn't even about being cashflow positive in business.  There's an entirely different thinking where it's like, unless you're cashflow positive, why are you in business?  Right.  That's that mindset.  And it's very different in tech spaces, obviously, because there's an idea that you can leverage yourself into growth and rapid growth takes that degree of leverage, right?  And so the situation at Hootsuite was a little bit different because you're saying there was a real cash flow crunch happening.  And that's what was now creating the focus on revenues and making sure that there was some cash flow neutrality and eventually cash flow positivity.  But in the startups that you work with now, you know, how do you actually balance the need for rapid growth with cash flow neutrality, right?  Because they are in a little bit of opposition.

DIRAJ GOEL

[00:20:52] It's not to say you don't get funding, right?  And that you're always focused on cash flow positive.  There's a difference between cash flow positive and positive unit economics.  The operating assumption when you raise money, at least in the decade before the pandemic, was that your focus was on cashflow positivity.  So, you would spend three dollars to get attention and users.  You would spend three dollars to get a dollar.  It doesn't matter.  You're first to market, you're doing a land grab, and that land will pay for itself later on.  Really, if you think of markets as two-dimensional real estate, every company is trying to get more real estate and ensure that people keep paying rent.  That's your subscription fee.  And they never move.  In fact, you just keep increasing the rent every month.  That's the point.  And that's where you get value.  In that situation, there was this assumption that, hey, if I just go out and get a whole bunch of land and I have people on it, I can charge them three dollars tomorrow, even though I'm making a dollar today, because I'm going to get them on board and then I'm going to lock them in.  Think of any company that you know, that's using Salesforce.  It's way more expensive in terms of an impact to the organizational execution and its ability to do what it needs to do, to rip Salesforce out than to just leave it in and deal with all of the pain points.  There's a lot of inertia there, for sure.

MO DHALIWAL

[00:22:35] So, how would you then work with your current cohort of companies, let's say?  We've seen that there's a number of startups you're currently working with.  What are you doing to help them get the right amount of the right kind of money?

DIRAJ GOEL

[00:22:51] Well, so, I mean, even before that, if you're building something, and I'm not talking about inventive stuff at the edge of, like, frontier tech, or, you know, that to me is the equivalent of drug development.  There's this assumption that you're going to put a whole bunch of money in it.  It's a long shot, and it may or may not pay out.  That's a pure risk, but the win is always massive.  If you're not going to be that company, and that's not the product you're building, you should really focus on getting customers who are willing to pay you for the value you're providing to solve some simple problem, right?  Yeah.  If you give away something for free that costs you $3, so you can get that user, and by that, user's economics, the only reason they can use you is because they can afford you at $0, then they were never a user in the first place.  They're an opportunistic user.  They're not a real user because they can't actually afford you based on the economics.  Okay, so when interest rates went up, a lot of companies saw a whole bunch of their clients leaving, right?  Because they probably couldn't afford them in the first place.  But there is a segment of customer that is willing to pay for it.  I call that the captivated audience.  And it's a simple equation for me.  They have a mission-critical problem, and you have a no-brainer solution, right?  That's the type of things where it drives acquisition velocity, not just in getting the customer, but getting them to pay for it and getting them to adopt it.  I really like that.

MO DHALIWAL

[00:24:36] So a mission-critical problem meets a no-brainer solution equals captivated audience.  Yeah.  That's pretty clear.

DIRAJ GOEL

[00:24:45] Yeah.  And look, any business, I don't care if you're selling rocks or you're selling AI, you can make $10 million off it, right?  Like there's YouTube stars that, I don't know what the hell they sell.  And maybe it's not even YouTube, like TikTok and so on.  And you see these young kids who drive urgency in whatever they're hawking and they can crank out a few million dollars.  So what is the piece that we're missing in the startup space of what they're trying to pursue?  And then there's the other side of the argument.  If you're really trying to solve a problem in the market, why don't you just go solve it?  That's the mission-critical problem.  In a downturn, when I was running operations, and I'd gone through the hype cycle, right?  Like with these companies where we've got money and then we got no money.  And every quarter would be a different feeling, right?  And I started to develop my operating budgets because when I ran operations, the massive spend was on technology, infrastructure.  It's all the business systems that support the humans in running the company.  I had a one-through-three list that I learned from an IT director back in, in 2000.  She was ex-military and she said, 'lifeboat one, two, three.'  I didn't understand what the fuck she was talking about.  But it's a term like, who's going to go on the lifeboat?  Who's the main being?  And who are we going to throw off the side of the ship?  Right?  And that's what we have to do on our budget.  Like, what are the things that we really need?  I used to call it the KTLO.  Keep the lights on.  What are the things that, let's see if we can make a case for it.  In terms of operating the business, and what are the things that we're not going to touch.  If you reflect it in Gartner's language of operating models, it's the systems of innovation that companies test out.  The systems of differentiation that make them unique and are able to allow them to compete in the market.  And then the systems of record, which is how they fundamentally run.  Right?  If you're selling systems of innovation, you'd be thrown out.  Yeah.  But if you're selling systems of record, they can't rip you out.  Right?  And the equivalent of systems of record for you in running your home is rent.  It's food.  It's not steaks, but it's not the fine steaks, but it's something that is going to provide you sustenance.  Those are the mission-critical problems that businesses always have.  And usually, it's tied to something to do with dollars: more revenue or more cash flow that these businesses need.  You can take that kind of mindset even to the B2C side in terms of consumer desires and wants.  A mom who's promised her kids Taylor Swift tickets and can't get them as a mission-critical problem.  Assuming she can afford them, she's going to pay a premium.  Right?  So there is always a segment of a market that has an urgent need to solve whatever you're solving.  It's harder to justify to someone that there's urgency around what you're selling if it's never urgent to them in the first place.

MO DHALIWAL

[00:28:26] Is that a tough conversation with some startup founders or does everybody generally get it that you're working with?

DIRAJ GOEL

[00:28:32] Um, it is sometimes tough. Right?  Because, you know, when founders inherently have to be visionary and optimistic and optimistic, highly optimistic, they want to solve the big problem.  Right?  And that's the vision.  Nothing wrong with that.  But your go-to-market is not your vision.  Your go-to-market earns you the right to pursue your vision, and your go-to-market can't be optimistic.  Your go-to-market has to be for real because you've got bills to pay.  And if you're not worried about paying your salary, there are other livelihoods at stake.  And we've seen with the massive thousands of layoffs that have happened that those livelihoods don't really matter to these companies.  Having been laid off myself after putting blood, sweat, and tears into companies, you're disposable.  Right?  So this is the big challenge that I think gets created with a mindset that funding is how I grow my company versus building sustainable high-growth companies that can actually serve the people they're meant to serve, which is the customers, the founders, the employees, and the community.  And when you start to provide real value, and you allow founders to actually own the conversation where they don't have to dilute a whole bunch, that's when true wealth transfer happens.  That's when the equity that the employees get in terms of options are really meaningful.  Now, there's always the Silicon Valley story and the pandemic didn't help.  There's a lot of folks that exited during the height of the pandemic that were engineers or the admin staff there.  And they walked away with millions.  Those are anomalies that have skewed the perspective of what it means to actually build a company.  But if you really think about building a company that's meaningful for yourself, it should be calculated against a need to drive generational wealth, not just for yourself, but the people that are helping you build that company.  And being on the other side of that, where you put in your blood, sweat, and tears, and I did for Devin, I did for Devin for decades.  And investors walk away, founders walk away, and employees are left holding the bag with options that never convert.

MO DHALIWAL

[00:31:08] So, of the companies that you're working with today, I mean, because what you're describing, it's a pretty, you know, I wouldn't want to say obvious, but I feel like it's a very foundational discipline, right?  Of focusing on very specific fundamentals that should be basic to business and then building on that.  But some of them are obviously in the market for investment, right?  Yeah, I mean, what would have been successful and why?

DIRAJ GOEL

[00:31:32] Never discount the human exuberance, right?  Like, fundraising is a lot easier when investors have very little to argue about that you're building a great business.  There's less you have to sell in terms of vision when it's a great business.  You know, in some cases, there's less you have to invest in.  However, during this upswing of low interest rates when cash was flowing, great businesses weren't getting funded.  It was the exuberant ones?  The exuberant ones.  You know, like Fast Checkout, for example.  They raised $120 million and only did $600,000 in revenue in its entire existence.  Think about that for a second, right?  Like, what were all those people doing?  Yeah.  And, you know, like Renault Run, which was another company in Vancouver.  I think the VC said it was the greatest embarrassment in VC history.  Really?  Yeah.  And, I mean, he was obviously overshooting.  I'm sure there's greater embarrassment.  This was the investing VC?  Yeah.  Because that company, you know, for example, raised $20 million in October, I think, of 2022.  And by March of 2023, it had gone bankrupt.  $20 million.  That's a quick burn.  That's a quick burn.  What were they spending money on?  What were they doing?  Now, imagine if those are the-I think advertising, because I saw a lot of retargeting.  Yeah.  Right.  So, who actually makes the money?  It's like Google, right?  Or Meta.  Big tech is big tech because all these startups are feeding them, right?  But there's better ways to get to your customer.  There's better ways to solve your customer's problem.  When startups in downturns are the ones that truly drive innovation, scarcity breeds innovation.  When you don't have much- Yeah.  When you've got to figure the fuck out.  Yeah.  When you're growing in a desert, you're going to be pretty resilient. Right? Yeah.  You know, you will science your way out of it.  You'll math your way out of it.  You'll figure out how to get out of it because you have to survive another day.  And that's what builds resilience in companies.  It's discipline as well that I think is significantly missing.  It's grit that's significantly missing in companies.  It's that ability to solve whatever problem that they face with a mindset that they're going to solve it in purpose and in pursuit of the problems they actually want to solve.

MO DHALIWAL

[00:34:24] What are the trends you're seeing right now?  Like, you know, aside from, like we talked a lot about the startup founder, the mentality, the culture that they operate in and what makes them successful.  But is there anything happening on sort of like an industry level or on an economic level trend-wise?

DIRAJ GOEL

[00:34:43] Oh, you know, it's changing.  It's changing a little bit because it goes in cycles, right?  Like, you know, after going through three downturns and this is my fourth, you see that same cycle.  I remember in 1998, I was in the airport on a business trip and I saw it was Fortune magazine and it said 'the new economy'.  It was the first time I heard the term 'the new economy'  and it was everywhere.  It was on CNN.  Everyone was talking about the new economy, the new economics, right?  What's the new economy?  What's the new economics?  Well, it doesn't, EBITDA and profit doesn't, don't matter anymore, right?  Amazon was high flying and losing money every day but the stock market was rewarding it consistently.  And then it was funny.  I feel like it was the same airport I was walking through and the same newsstand and it said, and it was either Forbes or Fortune and it said, 'Back to basics.'  We're in the era of back to basics.  Right?  Oh wait, your company actually has to have real traction or your company's economics actually have to be meaningful.  So the overt trend now from investors is that they want to see real numbers because everyone's fingers are squeezed up and they're worried.  So that's revenue on day one?  It's meaningful traction that's tied to revenue, which is also unit-economically positive.  The era of spending three to make a dollar is only really where I see happening in frontier tech, where there's long-tail or more deep-tech development.

MO DHALIWAL

[00:36:37] Those are the long shots we talked about.  Those are the long shots.  And in those instances, the investor knows what they're signing up for.  Yeah, right?  It's a moonshot.  Yeah.

DIRAJ GOEL

[00:36:45] But keep in mind with investors, most of them have never operated a company.  Most of them have looked at balance sheets and cash flow statements and projections, and maybe they have some operational exposure in working with the founders and such, but they've never lost a night of sleep because they couldn't pay the mortgage.  There isn't that visceral sense of pain.  So when investors pull back, it's usually because the family offices that invested in them are pulling back because those are the ones that were built on blood, sweat, and tears.  At least there's a lot of wealth that comes from families who've done that.  Every dollar that goes into a startup belongs to somebody and they’re putting it in; the higher net worth people are putting in half a percent, 1% of their portfolio.  They can lose it.  But even then they’re pulling back because when interest rates were low, a lot of that 1%, 2% was borrowed and now they have to start paying interest and they’re upside down.  So the investors as a whole are now being told, VCs and such, that they need to invest in profitable companies; they’re actually going to provide a return.  Now, keep in mind, this is short term.  It’s a cycle.  It’s a cycle.  I imagine within the next three to four years, we'll forget all about this and then start pumping stupid money into everything again because maybe interest rates will go down again.

MO DHALIWAL

[00:38:27] Can't wait.  Yeah.  So of the companies that you're working with and that you advise in your portfolio, just to get really real here, can you name some instances where you provided the advice and consultation and it went really well and maybe another scenario where it went really badly?

DIRAJ GOEL

[00:38:53] You know, the company I love in terms of a story is Mifo.  I mean, this is right smack dab.  In the whole venture space and the capital space, it's a platform for family offices to provide individuals.  And it doesn't even have to be high net worth, but as long as you have investable assets and you're managing those assets to give you agency in what your net worth actually looks like.  For myself, I'm fully diversified in a bunch of startups and such where there isn't a reporting structure.  There's a bunch of documents and so on that historically lived in a combination of spreadsheets and folders and so on with zero intelligence.  There's no way I can explain any of that to my wife before we go to bed, in between putting kids to bed and then taking care of the household.  Mifo allows you to put all of that information and uses AI, aggregates the information against those assets, and then starts to give you a visibility of what your assets look like, who's involved, what's the path to liquidity, all the things that matter that you can immediately transfer to someone else without them having to know anything.

MO DHALIWAL

[00:40:21] What set them apart for the success that you're describing or raising money?

DIRAJ GOEL

[00:40:30] The founder's resilience.  She grew up in a Punjabi family as well.  Simran Khan?  Yeah.  So female, person of color?  Person of color.  You know, went through a similar hard-knock life.  Her family is, I believe, well-to-do now.  But she had a lot of that same kind of trauma around worrying about where her life was going, investing her life into this company, struggling to get it off the ground, but what I found in working with her was a deep sense of camaraderie where we understood the problem and she was willing to work and explore and really pursue the mindset around building a valuable company.  Because she had come from a finance background, it was easy to have that conversation around the valuation of her company, what, what would drive that valuation, how would she take it, and also what the company was going to mean for her in terms of her personal wealth and doing the math early on. Okay.  Which then helped to drive a lot of the conversations around what we pursue, how much effort we put into things, and really helped to focus the execution around efforts that delivered an outcome.

MO DHALIWAL

[00:41:58] That sounds like a great client for you because what I'm hearing there is- And to be clear, they're not clients.

DIRAJ GOEL

[00:42:02] They're part, partners.  Partners, right?  Because none of my founders are clients.  I'm not running an agency.  These are not folks that I'm getting a retainer from.

MO DHALIWAL

[00:42:14] You're invested in their success.  Yeah.  Yeah, I get that.  But what you're describing in her as a founder is that there's a values alignment, there's an openness, and obviously really has the fundamentals down, right, coming from a finance background.  Now, you don't have to name names, but is there a scenario where you were in partnership with a founder or a startup and where things didn't go well and why?

DIRAJ GOEL

[00:42:41] Yes, and that usually happened because the founder continued to live in the vision rather than the reality.  They were always chasing the next big thing and never really getting down to work and executing.  So there was always some partner, some new opportunity, some new investor, some new way to craft a solution.  And I've seen this time and again, right?  I've had founders who are trying to build one platform, and then they see the hype cycle, and they're like, 'Oh, we're going to add crypto to our company, and then we're going to be a crypto company.'  It's like, 'Okay, but what has crypto got to do with your business?'  Oh, well, we'll just put everything on the blockchain.  So what is that going to do for your business?  Right?  So those founders, I think they struggle with really nailing down reality of what's actually possible.  What can you actually do in an eight-hour day?  What can you actually deliver and execute?  How fast will people actually move to do things?  And when I'm having a conversation with the founder and most of the conversation from the founder is with their heads in the clouds and I'm trying to bring them down to reality, it's a losing battle because the mindset of 'I'm going to build this next big thing'  and some investors are going to come and save the day, they focus so much on telling the story rather than trying to build a company.

MO DHALIWAL

[00:44:12] So focus, execution, and connection to reality, which you would think is pretty critical.  Okay, maybe in closing, what advice would I give a fresh new startup founder if somebody just walked in the door right now?

DIRAJ GOEL

[00:44:29] I have this conversation a lot.  I always ask the founder, who's the living, breathing human who's going to give you money today for what you're selling?  And you know what?  There will be people who give you money today, even if you don't have a product.  And I'm not talking about an investor, I'm talking about a customer.  Because they have a need so badly that it's not being served that they're willing to pay upfront.  Right?  We've seen this before.  And you know, it's opportunistic and it's more B2C, but Kickstarter is all about that, right?  Kickstart your customer base.  Go out there and get real humans that you can call by name, you can text them, you can talk to them before you start building.

MO DHALIWAL

[00:45:22] There’s a question that I normally ask at the outset and I’ve forgotten once again to ask it at the outset and I’m going to ask it now.  Okay.  So this podcast is called High Agency.  What does the term high agency mean to you?

DIRAJ GOEL

[00:45:35] Well, I dabbled in the cannabis world for a while, so they could mean a lot of things.  I’m actually not sure.

MO DHALIWAL

[00:45:45] What’s the high part of the agency?  So it’s actually a phrase, I forget who coined it, maybe I should pull it up sooner.  But essentially the idea is that there’s an notion of agency, right?  And agency is being able to make decisions for yourself that affect yourself, right?  High agency, okay.  And high agency refers to people that have a really high bias towards believing that they're in charge of their own destiny, right?  That they can affect and shape things around them, that they're not just at the effect of the world.

DIRAJ GOEL

[00:46:17] Well, I think that's a critical part of being a human, right?  It's realizing that you're the master of your domain.  Everything that happens to you is because you put yourself in that situation.  I mean, there are obviously definite situations where people aren't put in that situation.  They're unfortunately in that situation, like what's happening in Gaza.  But for the rest of the world, understanding that your destiny is based on your own destiny is based on your actions today.  And the things that you do and the things that you can control is what's going to get you to where you want to get to.  I think it has to be part of your critical thinking.  And this is also what founders struggle with, right?  Because I don't really have high agency because some investor is going to come and save me.  And I'm going to raise this money and somebody is going to come and solve it.  And they might believe it's agency because they raised the money.  But when founders start to understand how money works in venture and how it's deployed and where it comes from and how it's all adjudicated, they start to realize that they never had agency in that process.  Nobody's coming to save them.

MO DHALIWAL

[00:47:47] Awesome.  Well, thanks, Diraj.  Thank you.  Thank you for having me.  Well, hopefully we've given you a lot to think about.  That was High Agency.  Like and subscribe, and we will see you next time.

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