From Building Products that Create Billions in Revenue to Running a Selffunded Venture Firm - Hunter Walk, Homebrew

Fabian Tausch:
[0:00] Hunter, welcome to the Unicorn Bakery.

Hunter Walk:
[0:02] Thanks so much for having me.

Fabian Tausch:
[0:04] I would love to understand at first, there's so much we need and should talk about, but you've been a builder for a very long time. Google, lots of responsibility for products that are now reaching billions of people, generating lots of revenues. And at some point you decided, hey, I'm turning my back on being a builder.

Hunter Walk:
[0:31] What.

Fabian Tausch:
[0:31] Changed what inflection point was there for this in quotation marks but maybe not even in quotation marks identity change yeah absolutely

Hunter Walk:
[0:41] That's a great question and it's funny because when you say identity change i'm gonna hit i think this year middle of this year it'll be about as many years doing homebrew and you know sort of venture capital as i spent as a product manager but i still very much consider my identity to be a product manager even though that's not the way most people think of me now it's sort of the you know maybe it's the formative years of tech so i guess i'd say leaving that behind and moving into what we're doing now was actually two decisions not one and i think they were the first was independent of what i did next was i kind of done with being part of org charts you know and i think about that differently from being done with building i was reaching a point in my career when i was running product at youtube where you know that you talked about, you know, product management is two words, right? And it turns out that I really loved the first word and didn't love the second word as much. I loved being hands-on with, you know, with the team, with, with users and figuring out how and what to build. I liked the management part less and less, at least as Google and YouTube got bigger and bigger. And so after about a decade at Google, I was, you know, thinking about leaving and I had this question, you know, am I done, right? Like, that's a pretty fundamental question. Not done with working, but like, done with the idea of managing people and being managed by someone else? And that was the question I was wrestling with. And I was going to.

Hunter Walk:
[2:01] Leave at the beginning of 2013, regardless, and take 2013 and maybe just angel invest. I've been doing some of that, continuing to build some side projects with friends and, you know, blog and, you know, go to conferences, whatever, you know, stay part of the conversation, but like not jump right into the next thing. And that I figured would give me enough time to figure out whether I was truly, you know, done operating, you know, or whether I was just overreacting to, you know, a decade at a very large, fast-growing company where I needed to take a step back, exhale before I jumped back in.

Hunter Walk:
[2:36] I didn't have that year, right? So 2013, I didn't get my year of exploration because what happened then, and the second decision, was my friend and now sort of co-founder, Satya Patel, left Twitter where he'd been running product as well. Now, the connection between myself and Satya was we sat about five feet apart from one another for the better part of four years during the early to mid-2000s when we were both working on AdSense at Google. When he left there to go back to venture before joining Twitter, we always knew we wanted to work together again. And we needed a blank sheet of paper moment. I think anybody, I know a lot of founders listen to this. There's the difference between friendships and co-founders where one of you decided to do something and then convinced the other to do it with you versus, hey, we just know we want to work together. Let's take a blank sheet of paper and figure it out. And frankly, that was the second decision. What we ended up writing on that blank sheet of paper turned into homebrew. But neither one of us was intending to build a venture firm together or even as individuals thinking about doing venture next. It was very much sort of, hey, if we don't take advantage of this opportunity to work together, who knows when it'll happen again so you know let's prioritize that and and homebrew was born from that it's sort of the end of 2012 beginning of 2013, super.

Fabian Tausch:
[3:56] Interesting when people ask me and this podcast is not about myself but when are you building your own venture are you planning on doing something and I'm like on the one hand right now I don't have the topic and the the problem that I want to tackle and on the other hand I might just jump right into it if I had the right people around me that I actually really really want to build with and then I'll find something but for now I'm very good with what i'm where i'm at and so therefore i know or i'm looking forward to the feeling of like hey i would love to build something with this specific person especially because i'm building alone at the moment when we talk about the podcast and everything around it but from a co-founder perspective there is none but it's it's interesting i can i can understand that

Hunter Walk:
[4:42] Feeling yeah i mean there's obviously a whole story we can talk about as to like why homebrew and how did you come to that and how's it changed i'm sure we'll get more into that but it was really as simple as the two of us wanted to work together again and so we started talking about you know one do we really want to do that right like hey i'm still i still want to work hard you want to work hard you know sort of a bunch of like values you know conversations and and then how would we want to spend our time together and so on so forth and that led us to venture rather than the idea of like oh we should start a venture capital firm well okay well you know like what would that firm do like what stage do you want to invest it it was very much we backed into it in a way that i think was very pure and has always informed, hopefully, I think is tangible to the entrepreneurs we back because we know who we are and we know what we stand for and we know what we do and we know what we don't want to do. But it's also informed the, you know, sort of changes in strategic decisions we've made along the way to the firm itself. You know, venture capital loves to sort of, you know, do a lot of content marketing, talk about how wonderful it is to, you know, like, I always think venture capitalists talking about the size of their funds is like bragging about your fitness by how many calories you consume. Like it's not, it's, you know, it's the output not the input and i don't put venture or specifically us you know on a pedestal i think you know we exist to serve entrepreneurs and you know that's the way that we've always sort of you know thought and felt about it but yeah but i've been doing it doing it doing it for a while now.

Fabian Tausch:
[5:59] One important thing when we talk about bigger decisions in life is like how did you come to them you said you like product more than the management part and it became a bit more management and or maybe not even just a bit more management but what yeah what were the parts that informed the decision besides like because for many people it's like yeah it's a bit too much management but it's not that bad so why would i leave yet so making bigger decisions and and such step changes is more than just like yeah i just a little bit of this i don't like that i've

Hunter Walk:
[6:40] Been very fortunate you know to not actually make that many career decisions in my life you know i worked at i came out to the bay area for grad school in 1998 i finished that up in 2000 i joined a startup called linden lab that built a virtual world called second life that's still around i was there for its first three years. And then I joined Google for about 10 years before starting homebrew. So I really haven't, you know, I've worked on a few products at a few companies. And part of that has been, I think, sort of making good, good choices, like knowing what is what I'm looking for and what's going to make me happy. And part of that has been an interest and willingness to not just bail when things get hard or when you had a, you know, had a bad month, because I think part of product management and part of what matters to me is sort of not just the start, but the end, like you're there for a phase of something if you inherited a product or you're you know whether it's a zero to one phase the one to two phase the whatever you're there for a, the chance and the ability to take something make it better and then hand it off to the next person.

Hunter Walk:
[7:36] So the the challenge if you've made a bunch of you know if you've made a bad decision you know if you're at a company that you know isn't run the way you hoped it would be or doesn't succeed or the person you're working for you know doesn't give you know doesn't care about you then sometimes those are easy you need to leave and go to somewhere that you know is better than that but if you're in a good situation it's sometimes like the hardest thing as you point out is leaving because especially at these large tech companies, you're probably pretty well paid, right? So you're, you know, likely not sort of unhappy financially.

Hunter Walk:
[8:08] You, you know, you know how to get work done and the people around you are generally competent. And so, you know, there's always progress. There's always progress. So if your identity becomes tied to, you know, being a Googler in my case or things like that. And so anytime you sort of have to give that up, change that, you know, to step and do something else, you know, it can be emotionally transitional. But I also think all those things are traps, right? If you sort of judge by the, well, I'm only going to go somewhere that I can make more money, work, you know, work with people I know, doing something I know how to do already. And there's a brand that's, you know, well known to my family and friends, like, you'll just keep shuttling between, you know, what, like, meta, you know, Google, and, you know, open AI now, I guess, or something, right? And like, there's certainly people who do that. You look at their careers and they sort of do, you know, anywhere from short to medium term stints at companies that have already built themselves, already scaled, and they have a very good life. But I knew that what I wanted to do was to always be at places where I could not just ride the curve.

Hunter Walk:
[9:15] Potentially inflected, right? How can you make a difference on what's being built? How can you, what would, what's being done differently because you're there versus would be done anyway, and you're just there to help out. And so for me, that was always about phases of companies.

Hunter Walk:
[9:29] Can I be there early enough to make an impact? But, you know, I was never a founder. I guess I founded Homebrew, but I was never the founder of like an operating company because I didn't think it turns out that I was, I didn't want to be a CEO. I didn't want to be the, you know, zero that started zero i wanted to start at maybe you know 0.25 in the case of second life or you start at one hey you know zero to one was the original youtube team and then i came on to help from sort of the one to ten and so i guess to sort of try to sum it up i think you know one people should avoid the trap of what i'm doing is good enough they should not worry about having they should shift their focus on the idea of what they want to optimize for in order to you know sort of break the frame of things are good enough. Well, not if you're trying to optimize or something else, you know, things are good enough. If you're trying to make money and trying to, you know, know which office you go to every day, things are not good enough. If you're trying to build something that doesn't exist. If you want to work in a different industry, if you want to optimize or something else in your life, well, then the, you know, your current situation isn't the status quo. It's something to, you know, start to leave behind. And I also think you also should never avoid things you're afraid of or that make you uncomfortable obviously when i say that i mean uncomfortable in the sense of nervous about your ability to perform fear or failure that type of stuff not compromise your values or think something might be you know wrong or a little bit off.

Hunter Walk:
[10:53] And that i think if you do that at the very least you'll you'll make a lot of good decisions and some of those decisions will be good outcomes right but i think technology and silicon valley culture is about the repeated game of good decisions and then you know the power law of good outcomes, right? Not everything you do will succeed to the same scale, but if you continue to make good decisions, you'll have some successes that so outstrip the others that they start to open other doors or enable, you know, other things in your life. And that's what I would urge people, whether they're, you know, just starting out their career, midway through their career, or, you know, sort of taking a few last swings and want to make sure they do some things that they hadn't tried before. You know, that's my perspective, at least.

Fabian Tausch:
[11:33] So, as I'm sure there are people listening right now who are in a situation where they're like, yeah, I could imagine, for example, doing a career change, or what I can imagine even more are listening to finally make the jump and say, hey, I want to build something and now is the time to do so. What would be your words and and advice for potential founders who are thinking should i do it shouldn't i yeah

Hunter Walk:
[12:03] So i have you know i have my own biases right like and it's wonderful you know what's the old there's like the old you know parable of a bunch of blind men each feeling different parts of the elephant and depending upon which part you're feeling you think it's a different animal if you're feeling the tail you think if it's a rat if you you know you feel the the trunk you think it's you know what do you think it's a giraffe whatever it is it's something like that. I'm messing it up, but you get the general idea. Tech is so big now, and there's so many different types of companies being founded, so many different types of founders that my answer is just the part of the elephant I touch, right? It's not, I can't get my arms around the whole elephant. And so there's so many different reasons to start a company. There's so many different examples of people who've done things and been successful. I'll give you my bias. I think that you should start something, if one or more of a handful of conditions are true. One there is somebody you really want to work with who you just think is an amazing partner an amazing co-founder and you know it's the right time for the two of you or three of you to try something and that you know time for some reason is perishable that person you know will otherwise go take a different job or you know the the moment of where your skills are really complimentary you know might change over time or things like that so you know it's person who you're going to do this with. Now, again, there's plenty of amazing solo founders. We've backed some amazing solo founders, so it's not a requirement, but I think it's certainly a catalyst.

Hunter Walk:
[13:27] There's an idea that you were a problem that you're just, you can't stop thinking about.

Hunter Walk:
[13:36] You want to see solved and you don't think other people would solve it the same way you would. So it's not even just sort of, there's a business opportunity or there's a sprint, you know, to a consensus future that you think you can win that sprint. I believe you have to have like a real interest to the problem, the issue you're solving, at least one of you, not the whole founding team and not the whole team, but like one of the founders needs to really care about the problem in a way that I almost think gives them an advantage in terms of they have earned insights, they understand the problem more than just surface level depth, and they're willing to commit 10 years of their life to it. I think that's important from a leadership standpoint. I think it's important from a strategy standpoint. I also think it helps from sort of a durability standpoint. Startups are hard. They have their ups and downs. I think you need something more than a net present value calculation to keep you doing it.

Hunter Walk:
[14:24] And then the the third would be you think that the sum total of what you've accomplished so far in your life or the ask or the resources you have available to you and sometimes that resource is just time you know you're young it's pre-family you can really throw yourself at it but you have some competitive advantage that gives you the right to win now each of those has you know sort of, you know opposite and equal you know sort of stories you can tell right solo founders who can put a great team around them folks who of course they care about what they're building but they care much more about the strategy operations the team building they'll they're not necessarily mission-driven founders in the sense of they're picking a problem that they really care about but they're picking you know an opportunity that they believe is interesting and love the act of company building amazing founders that way and then you know the third in terms of the the advantage like The advantage is the speed with which they build, the network with which they can pull from.

Hunter Walk:
[15:16] It's not necessarily that they have studied machine learning for 10 years when all of a sudden there's a breakthrough in machine learning technology. So like I said, it's just the part of the elephant. But for me, it's about that. It's about the people you want to work with, the problem you want to work on, and what gives you the advantage or right to win. And if all those things are clicking, you've got to go do it. There's you can't convince yourself that well if i spend just three more years at this big company i'll have more savings that will make it easier or i'll have more credibility when i go to fundraise or you know i'll know more people to hire like all those things are true but you know you can't sometimes you sometimes they can be true but still lead you down the wrong path which is you know waiting too long and then you find out that you sort of never never did it i had a friend who has since started a company that i backed as an angel so i'm incredibly proud of him but i remember when he worked for me back at youtube he told me he wanted to be an entrepreneur at some point and that his this was you know his hero was i think maybe at the time was elon musk and you know this is a decade or so ago and and and but he was going to spend you know another three years five years whatever at google before he started his company because he thought like that would give him the stability learning so and so forth and i was like mike hey total respect if you want to do that but i will point out like a little bit of inconsistency here i don't think that's what your hero slash role model would do right like you you just told me like this is your true north you know person and.

Hunter Walk:
[16:42] It doesn't seem to be the type of dude who would say, well, let me spend another three to five years at a safer place, you know, doing something I already know how to do before I, you know, before I decide to jump into that other thing that is scary and interesting. So I'm like, maybe you should, you know, for at least today, be a little bit more like a lot. That meant something very differently, you know, 10 to 15 years ago. But, you know, so that's my advice. You know, everybody sort of has their journey. And at some point, if you're going to start something like you got to take that leap and you'll never be, you know, you'll never be a hundred percent ready. And if you think you're 100% ready, you know, either you don't know what you're getting into fully because or you are supremely confident. Nobody I've backed, I would say, is like, you know, feels that always 100% ready, but they do it. You took the leap in 2013.

Fabian Tausch:
[17:27] So now it's like 12 years ago. So what would you say is the hardest part about building a venture firm? And we're talking about the specifics about Homebrew and why it's like not the typical venture firm anymore. But what is the hardest part about establishing a venture firm?

Hunter Walk:
[17:44] Yeah, you know, it's funny. I got the Homebrew logo tattooed on my shoulder shortly after we found it because I wanted to remember, you know, I said before about, you know, I believe in this sort of framework of separating the quality of decision from the quality of outcome and being focused on making good decisions. And I wanted to remind myself whether it was something that lasted, you know, unfortunately, you know just maybe a few months or less of the rest of my life and thankfully it seems like it's going to last the rest of my life the the firm the tattoo was going to last the rest of my life regardless i had no choice on that but i wanted to capture the start and so.

Hunter Walk:
[18:19] You know, when Satya and I were talking about homebrew and what we wanted to be and sort of how we would decide whether it was, you know, at any given point kind of worth doing, you know, after having made the original decision, we sort of came to this decision that, well, there's some people who are proud of their work in this industry, but are not good at their job in the sense of they actually are not good investors. They don't make money, you know, for themselves or their, well, maybe they make money for themselves. They're collecting fees, but they don't make money for their LPs if they're using other people's money.

Hunter Walk:
[18:51] And we said, well, I, you know, if we are that, then we won't necessarily have the right to continue. Like if we're just doing great work for the founders we've backed, but, you know, by and large, we're not able to produce economic returns. We won't have the right to do this, you know, for the next few decades, at least, you know, in terms of other people wanting to sort of fund us to do so. And then on the other hand if we are economically successful but not proud of the work we do for founders so let's say we're just you know good enough guys to get lucky on a few things or catch the crumbs off of you know the big firms deals or things like that if we're economically sustainable but not proud of the work we're doing then we wouldn't want to continue this right like there's no reason to in our mind to you know sort of get paid for something we're not proud of and so let's hold ourselves to account you know at the intersection of that venn diagram for homebrew to exist long-term, we have to be both economically successful and sustainable and proud of the work we do. And that was sort of like our guiding principle, right? Like from there, you know, we were able to make a whole bunch of other decisions about what stage do you want to invest in? You know, what types of founders do you want to be the preferred choice for? You know, it can't be all things for all people, different questions about growth and so on and so forth.

Hunter Walk:
[20:02] So that was the hardest question on our end. I think the hardest question that we had to figure out in terms of then taking that product to market was, do founders want and need our product skew, right? Like if you think of yourself as a product, I come with, you know, a check. I come with, you know, some help. There's more, you know, in 2013, there were fewer choices, but still plenty in 2023, 2024, 2025, you know, what does that number grow in, you know, 10 X or more choices, you know, for founders. And so I think the reality is that any investor needs to ask themselves is, for enough founders, am I one of their top three choices? And, you know, and if so, you know, how many of those, you know, founders can I meet, find, invest in? And, you know, what size firm, what strategy does that lead to? As opposed to like raising to a sum of money and then trying to commit that as opposed to just like picking a point in the market that you want to participate in, but not really asking yourself, well, how am I competitive enough to beat the other people who are investing at that area? I think a lot of VCs stay in business without being excellent. And I think the founders benefit most when the VCs who want to stay in business also want to be excellent. What would you say if I'm a founder and evaluating an investor?

Fabian Tausch:
[21:27] How do I find out if the VC has the tendency to be excellent and wants to be it? What will be your advice?

Hunter Walk:
[21:38] Yeah. And the reality is like, I don't, you know, before I started doing this professionally, I probably thought that, you know, the VC quality curve was like two humps, you know, like a big hump in terms of really, really bad people who just, you know, mess up your company and are horrible folks. And at the other end, like an equally big hump of people who are just kingmakers. And if they get on your board or your cap table, like they can help, you know, help you succeed to the extent that, you know, you're going to be the next unicorn or whatever. And when I got into the industry, not surprising, I realized that the distribution curve was like a little bit more of a normal curve. Most folks are just like smart, well-intended people trying to do their job and they are going to be, you know, neutral to slightly positive for you. But at the end of the day, you as the founder have like a much greater degree of agency and control over whether you actually succeed or not, then your investors can help you or harm you. And then there are a few, there's 5% on one end who are sort of, I'd say, people that we don't want to be in business with, but that's not necessarily even because they're sort of bad people. It's just sometimes their incentives, the situation they're in at their firm, whatever insecurities they have, I think make them sort of like less predictable.

Hunter Walk:
[22:48] Less long-term focus, less helpful for entrepreneurs. And we try to avoid those folks and steer them the other way. And then there's, you know, 5% at the end of like highly self-aware, really good at what they do. And part of those, part of the special nature, I think of those 5% is they also know when they're at their best, what situations they'd like to invest in. They're very good at picking the spots and the entrepreneurs that they do think they can be valuable rather than believing that, you know, they can be equally good consumer and enterprise investors, equally good seed and growth investors. So, you know, they have tailored themselves to, you know, who and where they work with. And so to your question as a founder, well, if I'm trying to, you know, best case scenario, find, attract, work with one of those folks who's going to be the sort of 5% best fit for my company, what can I do? I think you always talk to other founders, right? The founders who have worked with that investor before, both companies that were successful and companies that maybe were not as successful, are going to give you the best sense of how that person works.

Hunter Walk:
[23:53] Help how that person behaved in situations that were tougher, you know, for them as a, as an investor. And ultimately, you know, did that relationship transcend, transcend the company? Did the founder feel like that person was investing in the company or were they investing in them as a founder, you know, and where did that support come from? And then to the extent that, you know, those responses match kind of the similar state, similar stage of your company. And like, you know, great, that person is probably going to be, you know, so long as their head is still in the game and they're still doing it full-time and you know haven't lost their fire their edge whatever that person is probably a great fit for you but you know you don't always have a chance to pick from that five percent at least not every round and so i'd say what you're really doing is you're just trying to use your your you're treating your cap table like your old chart you're building a team of people who fill different roles and needs and overall are going to be you know useful to you in some way but you're not you know your company is not made and not broken you know often by the nature of the investor on the cap table it's you know made and broken by you know the the founders and the team you build and you know the market you're working in from.

Fabian Tausch:
[25:01] Your own experience what were like how easy or how hard was it to focus on the long-term building of hey we want to be in the top three rather than in an economy where everything went louder and louder and the volume is turned up every day by some other player

Hunter Walk:
[25:23] Also staying.

Fabian Tausch:
[25:25] In your own lane and saying hey we don't believe that this is the best approach we're staying in our lane we're focused we're building homebrew for mid-term and long-term success without and maybe sacrificing in quotation marks the short term a little because we're not trying to be the loudest and the best and the proudest and everything.

Hunter Walk:
[25:47] Look, I'll be honest with you. It got, like, it got hard because, Um, so from 2012, 2013 until 2022, we raised three funds, homebrew one, homebrew two, homebrew three, from a small group of outside investors, mostly university college endowments.

Hunter Walk:
[26:04] Charitable endowments, you know, some of the larger fund of funds, people we really enjoyed being in business with. And so we always loved our LPs. It was never about, you know, sort of any changes we made to our fund structure weren't about fundraising. They were about fund deploying. Like what happens once you get that money? In fund one i think we hit the timing really nicely it was you know seed was still sort of this weird space that you had some dedicated firms doing and you had the larger firms dipping in and out of but there was more supply of great founders looking for seed capital than there was there should be demand from found from great seed founders and there necessarily was like supply of capital and that changed dramatically over the next decade and by the time we were investing out of our third fund, we felt, you know, went from sort of, let's call it wind at our back to no wind to headwinds. So as a firm, even though we had reached the point where we had, you know, maybe even a better reputation than when we started out because more people knew us and we had more logos of great companies we'd invested in and, you know, so on and so forth, we were actually feeling the challenges increase to remaining a top three choice for somebody. And we had to ask ourselves the question well you know what do we want to do about that do we want to focus thematically take some of the areas that we know we've done the best work in fintech.

Hunter Walk:
[27:28] Applied you know ai machine learning computer vision horizontal vertical sass and basically say you know for all intents and purposes we're now a vert you know we're now a vertical fund these are the verticals we look in sort of pull back a little bit off the generalist do we want to and do we need to increase in size? All of a sudden, most of our peers, forget even the multi-billion dollar funds, even our peer seed funds had double, tripled, quadrupled in size since when we started, where we had grown much more modestly. So do we now need to go from being a 90, $95 million fund to a $200 million fund with all the sort of team operational overhead.

Hunter Walk:
[28:05] That required to support that, as well as the different math in terms of what success looks like and starting to get into the same narrative of, well, unless it's a $10 billion outcome, it really doesn't move the needle for us, that type of stuff, which I think, you know, ultimately creates distance between you and the entrepreneur, especially during the early days when everybody's trying to sort of do the best work to figure out what this company is versus, you know, just pump it full of helium and get it to its next funding group.

Hunter Walk:
[28:31] And as you pointed out, like, I forget whether I use the word noise or use the word the noise, like the content marketing organs of our industry, you know, went on full blast. So everybody loved being, you know, a pundit, a, you know, an event host, a podcast host, a, you know, a blogger, a, you know, talking head, so on and so forth. And you know they were all saying versions of the same thing more and less but it became in a because everyone's firm was becoming more and more similar you know they sort of had to differentiate themselves with words versus actions which i don't think is helpful for entrepreneurs or i don't think it's helpful for our industry and you know to a certain extent we've always spoken our voice spoken our values but we didn't want to participate in any of that and so we decided that actually the best way to remain in the top three choice for the entrepreneurs we wanted to work with was not to change the way we worked, but it was to change our business model. To basically switch from being the type of investor who only leads, co-leads seed rounds to an investor that has a more flexible check size. Basically, you can think about it as we're now a puzzle piece that fits into many, many puzzles, as opposed to having one type of puzzle piece where we're looking for the puzzles where that piece fits. And we made that change. We talked more about that, you know, sort of in 2022. And I think it's been great. We found that the venture capital business model was getting in the way of the work we wanted to do versus, you know, sort of supporting it. And so we decided rather than change the work, we decided to change the business model.

Fabian Tausch:
[29:56] You definitely know how to tell a story because now everybody wants to know what changes you made. So what's the homebrew 2.0?

Hunter Walk:
[30:07] Yeah, absolutely. So it's funny enough. When Sachin and I started back in 2012, 2013, we had this idea and we had this idea. We said, homebrew is going to be five funds, 20 years, and then we're going to switch to a model where we are our own funders, which is to say, we're not going to stop. We're not going to work for 20 years and then stop in year 2021, something like year number 20, year number 21, something like that. We will eventually just use our own money, our own capital to fund homebrew.

Hunter Walk:
[30:36] We put that under you know maybe it's called you know put it under a box and say get that box out in 20 years well that was the box we ended up getting out in 2022 and opening up hopefully it wasn't you know pandora's box or something but we basically said hey look if we don't want to get much bigger as i just talked about you know not wanting to grow to be the 200 250 million dollar fund that a lot of our friends were raising let alone the multi-billion dollar funds, maybe we should get smaller and if we get smaller like why wouldn't we just use our own money.

Hunter Walk:
[31:05] I think VCs would tell you there's plenty of reasons not to use your own money. First, you don't get a salary. You don't get management fees for your own money. Nobody pays you to invest your own money. So at the very least, we were switching from a model that could have paid us millions of dollars a year if we just kept raising funds to putting our own capital at risk. That's an economically stupid decision for the majority of venture capitalists, right? And it is an economically negative one for us, but a risk that we were comfortable taking, a sacrifice we were comfortable taking. The second reason that a lot of people don't like doing that is they want to be able to you know go a hundred million dollars deep into a company you know by themselves before somebody else you know some of these people like to really be gunslingers like i want to if i believe in this nuclear fusion company i want to be able to write a hundred million dollar check into it you know obviously we can't write a hundred million dollar checks from our bank account but we do have access to and retain access to sort of our old investors. So there's situations where if we need to augment our own capital with, you know, sort of an SPV or something, we have access to that. So we felt like that was a risk taking. And then the third thing that's why some people don't do it is they really like building, they've either inherited, you know, a firm or they're building a firm that they like training the next generations of investors as employees. We felt like it was less interesting for us to train the next generations of investors and employees and more interesting to help the next generation of firms like Homebrew get off the ground.

Hunter Walk:
[32:32] So along the same time, we started a fund of funds called Screen Door, where we're actually helping to, and which now is a full-time FEMA 3, we're actually backing the next generation of VCs and trying to pay forward some of the wisdom. But that's fundamentally sort of the trade-offs and why most people don't go down the path that we did. It's economically more risky. It, you know, sort of forces you to really be clear about, you know, the amount of money you're putting into companies because it's not this sort of, you know, well of other people's money you can just pull from. And you, you know, sort of trade off maybe a little bit of the mentorship coaching aspect of it. We just found a different way to do it. We still invest in 10 to 12 companies a year. We kept our small team together. We still do seed. We're just mostly writing now a hundred thousand to $500,000 checks instead of, you know, one to $3 million checks, although we can go larger and or later. And it's been an absolute joy. I think the challenges besides the economic ones, you know, we are dependent and excited about outcomes rather than collecting management fees, is.

Hunter Walk:
[33:31] Can we still build and maintain these great relationships with founders when we're not their largest investor? You know, when you're somebody's largest investor, there's a structural reason for you all to talk, spend time together, so on and so forth. I feel it's like in some ways even more pure now in the sense of we have to earn their time and attention in order to be helpful, but it's different. It's a different muscle memory. It's more, I sort of think of it like being sort of being an angel investor who just has the sort of experience and gravitas and sort of full-time nature of a VC. And that's what homebrew is now. You'll like this. I'll put on my marketing hat. So it happens to be homebrew four is the name of the fund that we self-funded. And so the way I think of it is it's homebrew four ever, because it's an evergreen vehicle that we will be investing out of together for the rest of our lives.

Fabian Tausch:
[34:16] You're right. I love this. From an outside perspective, it looks like after pretty much a decade, you will find something that stands between you and the next level of self-fulfillment in after 10 years at google pretty much you didn't like the management aspect that much anymore you wanted to have a new role which was then homebrew becoming avc because on the of the partnership with satya and then after pretty much nine to ten years of homebrew you realized okay the typical vc model is not exactly what we want to do we love the work but not in the current style so we're improving that and ripping apart ripping apart the things that we don't like and leave them behind us and it it sounds like a journey towards more self-fulfillment once in a while i

Hunter Walk:
[35:13] Do think so I think it's very important to me, and I probably, this is more of a, something I've realized, you know, only in my later adulthood than my early adulthood, was that what is most sustainable for me, and when I do my best work, is when I can sit at the intersection of joy, happiness, you know, joy or happiness, and let's call it professional success. I used to think that somehow being happy or fulfilled or joyful would dull me, would actually work against professional success. I needed a certain degree of.

Hunter Walk:
[35:49] Sort of, you know, focus, commitment, you know, that translated also to sometimes even insecurity and desperation, you know, in order to do my best work. And I think for short bursts, that's true. But I do think long-term, you know, you ultimately need, you know, the metaphor of people say dirty fuel versus clean fuel. Like dirty fuel is like just having, you know, nothing but a chip on your shoulder. And clean fuel is being highly competitive, being somebody who understands the urgency of the moment, who works very hard, but who ultimately believes in what they're building in, believes in how they're doing it, and can take moments of joy along the way. And I think Satcho's taught me that. I think therapy has taught me that. And that's very important to us at Homebrew. In some ways, I think we made the decision, the decision we made made it much more, even though you change something and usually think changes bring risk. I think in this case, changes brought certainty. It's much more certain we're going to be doing this for the rest of our lives when we know that we can pop up, you know, every once in a while and re-examine from a first principle standpoint, like, you know, what would we change? What do we want to change? How do we want to do this differently?

Hunter Walk:
[36:57] And that, that is, you know, that's like, there's nothing better than that. Right. I definitely, I, you know, I, I say love in your heart, but a chip on your shoulder. I do think that if you only have a chip on your shoulder, you know, you're, you sort of end up becoming toxic. If you only have love in your heart, you're too soft, right? Like our industry requires motivation, requires a little bit of willingness to be uncomfortable, willingness to upset the status quo, you know, willingness to make some people mad at you, right? Like, but if it's, if you're, so if you're just one or just the other, so whether it's people I back, you know, people who, you know, I look to hire people who I want to work with, it tends to be some combination of like loving your heart, but a chip on your shoulder. And so for me, the love in my heart is I love working with Sacha. I love working with founders. The chip on my shoulder is I want those founders to win in the market. And I also think the venture industry is pretty mediocre. And so I want to see it continue to get better. And that combination sort of leads to homebrew. if.

Fabian Tausch:
[37:59] I'm starting out in venture what would you say are a few things that i could do that would set me apart

Hunter Walk:
[38:06] From the.

Fabian Tausch:
[38:08] Mediocre knowing that it's a long-term business and i can't be exceptional from day one

Hunter Walk:
[38:15] Yeah so i think there's like a foundation of just good hygiene you know you have to basically you know be a good you know try to be a good communicator try to be a good relationship builder try to be you know somebody who understands like the fundamental physics of the business, which is, you know, the economics sort of, you know, determine a lot of behaviors and the incentives determine a lot of behavior. So you need to understand all that because otherwise you won't be able to understand, anticipate, or, you know, sort of.

Hunter Walk:
[38:43] Work with people who are sort of guided by those sorts of principles. But then I think you have to pick out something that is, you know, pick a superpower. And you pick a superpower that's either, if you're working at somebody else's firm, you pick a superpower that's valuable to the partner you're working for. And if you're on your own, you pick a superpower that's valuable to founders in a repeatable motion. And hopefully you have the time, energy, and ability to have at least one of each of those. One that's sort of, you know, important to the team that you're a part of and one that's important repeatability to founders. Now you can imagine that those could be any sorts of things. What's important within the firm you're working on? You could be the best, you know, data analysis person. You could have the strongest network to a set of engineering schools that you think produce high quality founders and team members, but aren't as well covered as, you know, you know, Stanford and whatever. You could be the expert on an industry of emerging piece of technology that, you know, folks are trying to get their hands around and be sort of the person who sort of understands, explains, you know, to partners working on different industries, how that's going to change their industry.

Hunter Walk:
[39:45] You know, founder facing, all those things are still valuable. You could be a great recruiter. You could be somebody who has amazing sense of marketing, branding, and communications and build all the relationships with the press and the podcasters and so on and so forth and help those companies get coverage. So I don't think it's best athlete. I don't think it's being, you know, sort of B plus A minus in everything. I think it's having enough of the standard understanding of the business to be able to anticipate predict and influence how situations occur and then one or two things that are useful and repeatable and if you can do that for you know a handful of a few years you start to build the brand the reputation and the founder network that become sort of you know almost self-fulfilling for the next set of years and then you just have to make sure that when you're a decade in you haven't outgrown the skillset, the network.

Hunter Walk:
[40:33] And, you know, and can, and aren't becoming, you know, there's almost a success, you know, in this industry, I feel like you have to, there's a, a backward bending curve of success, where when you're too successful, you end up spending all your time with consensus thinkers, people who are also successful, who are also at the same stage of their career, you sort of age out of contrarianism, and you age out of a network. And I think the best investors who have stayed agile as they age either know how to hire for that sort of contrarian non-consensus beliefs and or sort of, break and rethink their thesis, you know, like you said, every fun cycle, every decade or so. I think like Fred Wilson at USV is an amazing example of that, where you not only has he, you know, sort of built a firm, but I think he himself, you know, has approached each phase of technology and innovation and venture with sort of, you know, some beliefs that are consistent and some beliefs that adapt to the time. And that's why he can be in, you know, sort of have been in both like Twitter and Coinbase, you know, type of stuff and not just have sort of still be living off of the things he invested in, you know, in the 2010s. He's a role model for me to that extent.

Fabian Tausch:
[41:44] I'm talking to Albert Wenger next week as the German connection also helps out doing that. So a bit of insights into USV next week then.

Hunter Walk:
[41:53] Yeah, they're definitely, you know, I always say there's, I don't have like, I don't have mentors. I don't have like weird parasocial relationships with like, I don't stand anybody, but I do have role models. And even those role models don't have to be perfect role models. They don't have to be people who I want to, or who I feel a match with in every part of my life and every part of their life. But I do think it's important to like be able to look towards people who you think, you know, make decisions or have conducted themselves in ways that are interesting. And so within venture capital, you know, I think like, you know, Fred and Andy are probably the two I know best over there. USV has always been that for us. You know, Brad Feld and some of the other folks at, you know, Foundry Group have always been interesting to us for that. There's been a few other people who we've always sought and I've always sought out the guidance from not because we want to follow their path or be the 2.0 version of them or be the junior version of them but because we find that the questions that they ask themselves as firm builders are very interesting and they help us ask the same questions of home brew and sometimes our answers are similar to theirs and sometimes our answers are different from them.

Hunter Walk:
[42:54] So that's, you know, I do think, you know, Homebrew, I mean, to sort of do a little mini history lesson, Homebrew is named after the Homebrew Computer Club, which was a group of, you know, PC enthusiasts, tech geeks, who in the late 70s, early 80s, used to like hang out in Palo Alto on Stanford's campus and just like build PCs, talk shop. It's where Steve Jobs and Steve Wozniak met. So if Homebrew Computer Club hadn't existed, Apple, you know, probably wouldn't exist, certainly not in the form it took, as well as many other people who started various hardware companies or other things that influence the technology industry. I was a history major in undergrad, and I've always thought that what's wonderful about our industry is that we're so focused on what's next, what's next, what's next. But I think it's important to remember that a lot of who we are comes, that we stand on the shoulders of those who came before us, to remember even though this is an industry that's always been about moving quickly and it's not just about money now, it's always been about money, but it is about the love of technology. And so we sort of like pay a little bit of a tribute you know to those roots with with our name even though you know we as much as anybody are looking forward not backwards.

Fabian Tausch:
[43:58] My last question might sound a bit cheeky but oh

Hunter Walk:
[44:03] I'm excited now let me have it.

Fabian Tausch:
[44:05] When when we look at or when you look at the people who are on the top or in the top level of investors founders that didn't have the typical rise and fall because of becoming weird or crazy or anything what would you say are the characteristics of the people who stayed on top of their game for decades not only like three four five six seven eight years but really decades yeah

Hunter Walk:
[44:41] That's such an interesting question. We could, I mean, you could probably, you could, you could spend, you know, podcasts just about that. So I don't want to, you know, sometimes you never really know people. You only know some persona of them. And I don't want to put people, you know, on a therapy couch and analyze them. I guess what I'd say that I've observed of the people who I believe fit that definition and who I really admire, maybe people like Mitch Kapoor, who started Lotus, more recently, people like Jeff Lawson, who started a bunch of companies, including Twilio. And I really admire people who, you know, Jeff took Twilio public. I really might I really admire founders who take their companies public and remain as public company CEOs for a while.

Hunter Walk:
[45:15] Jeff should still be there. I think he only left because of some board and investor activism, but I have tremendous respect for him. And I think that company is an incredible company. I think that they care and love about something other than just the typical scorecard, the typical KPIs of the business world. They know that like revenue growth you know magazine covers like all these things you know are sort of either direct you know leading or lagging indicators of success but they don't turn them into the their own definitions of success they are they think about impact they think about their teams they think about generosity they think about you know a legacy, and for me it's kind of that looking out and seeing the the world beyond your company and knowing that first and foremost you have to run a great business but that ultimately that business needs to stand for something and that you as an individual stand for something i don't think it's you know this question now about well you know is that politics or social issues or so on so forth like companies don't have to stand for all those things i'm not a believer that it's incumbent upon every company to have a voice on every issue but i do think you know as a human being you get to decide how you want to use your power and the folks who i think i admire most in our industry who have achieved levels of economic success of the respect of the peers notoriety are somehow also.

Hunter Walk:
[46:41] You know, paying that forward in ways that, you know, increase the span of their influence rather than, you know, behaving in a way that I'd say is more, you know, about scarcity and pulling power towards them. I don't know, maybe you could go, maybe they all have, you know, some similar, you know, sort of experience that led them to that, or maybe they had just, you know, good mentors, good role models themselves. But for me, that's one of the things that attracts me to people that they use their success, their power, their influence to expand and empower others versus sort of, you know, maintain and increase, you know, their own, their own power.

Hunter Walk:
[47:17] We're all so lucky, so fortunate. I mean, I started in tech, I was born, you know, you know, Malcolm Gladwell talks about sort of the 10,000 hours, you know, how do you become an expert? But like, what people also forget is that it has to be the 10,000 hours during the right period of time, right? So the Beatles became the Beatles, not just because they had 10,000 hours, but because it was during the dawn of the, you know, electric guitar and, you know, rock and roll like bill gates became bill gates not just because he started programming early and at 10 000 hours but it was because it was at the dawn of the pc i felt like i'm so lucky i had my 10 000 hours you know the beginning of the home pc and the consumer internet and like got to see that industry turn from underdogs to now i don't think anybody would argue that like the technology industry is the most powerful industry in the world and you know what's the line from spider-man with great power comes great responsibility you know that would be my hope for all the people who's listening to you who have started companies or who want to start companies that even though you might feel like an underdog we're all trying just to make sure our company survives another day, that like collectively we do have great power and so thus we also have great responsibility and like homebrew is named you know after people 50 years ago who you know in many ways you know started what we are all benefiting from today like we should be doing things that for you know one five 50 years from now create you know a world where the next generation can build what they want to build i.

Fabian Tausch:
[48:38] Think these are the perfect words to end the episode i will definitely link to your blog your linkedin and homebrew in the show notes feel free everyone to to check it out there are amazing pieces on the blog for example that i really enjoyed reading and thought okay hey, you can just read them instead of talking about them right now. Hunter, it's been such a pleasure and I really enjoy your perspective. Thanks for taking the time. It's been wonderful.

Hunter Walk:
[49:08] Yeah, I appreciate it. It's been great meeting you. These questions always make me think a little bit. They challenge, you know, sort of what do I actually believe versus what do I just say? And so I'll be thinking about this as well.

Fabian Tausch:
[49:18] Thank you.