In today’s episode, we talked with Vadim Slavin, Portfolio Advisor at Hatchet Ventures about creating and cultivating relationships with investors and how they think about investing in startups.
In today’s episode, we talked with Vadim Slavin, Portfolio Advisor at Hatchet Ventures about creating and cultivating relationships with investors and how they think about investing in startups.
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Hatchet Ventures website: https://www.hatchetventures.com
Hatchet Ventures LinkedIn: https://www.linkedin.com/company/hatchet-ventures/
Chet Lovegren’s LinkedIn: https://www.linkedin.com/in/chetlovegren/
Connect with Vadim Slavin on LinkedIn: https://www.linkedin.com/in/vadimslavin/
Listen on Spotify: https://tinyurl.com/36ub3fpy
Listen on Apple Podcasts: https://tinyurl.com/ystuxubt
Listen on Google Podcasts:
1, 2, 3, 4. Are you a founder, co-founder, aspiring entrepreneur, or just someone who loves to hear about how companies are built? Then join us as we talk with founders and CEOs who have been there and done that. Welcome to the Founders Formula Podcast. Sponsored by Hatchet Ventures and now your host, Chet Lovegren
[00:00:32] Chet: All right. Hello. Welcome one and welcome all to another installment of the Founders Formula podcast, the show that is designed to bring you the latest and greatest insights from founders and CEOs worldwide who have been there and done that, as always, brought to you by our partners in crime, our sponsors of the.
Hatchet Ventures, I'm thrilled for today's guest because he is a three-time founder, strategic advisor, and investor, as well as a hatchet portfolio advisor, working closely with our Hatchet members and those in our portfolio. He's currently also a managing partner at Monthly Ventures and Advisor of Venture Capital and a founder, himself.
Of an accelerator called Startup Monthly. Please welcome to the show, Vadim Slavin, Vadim, what's going on?
[00:01:16] Vadim: Hey, thanks for having me, Chet. It's, uh, it's a pleasure to talk to you. Yeah, I've been, uh, I've been listening to a lot of your podcasts out there, some interesting people. Uh, and so I've, I'm, I'm pretty, uh, stoked to, uh, to be invited, uh, to speak on your podcast this time.
[00:01:31] Chet: Yeah, we're gr we're really excited to have you. Um, you've got a really extensive background, not only before becoming a founder, but also after becoming a founder. And you do a lot of stuff and you come from a really interesting background as well. You come from software development and engineering and you've made your way to become a founder and you've done it three times over and now you're advising and investing and strategizing with other founders and helping them build their companies and scale to become a profitable business.
But before we get into the. All the stuff that we don't see. Right. We only see the Vadim now. Let's talk about the Vadim before the Vadim on paper, all the journey to get here. Tell us a little bit about your background and how you got to the point of deciding, Hey, I want to be a founder. I wanna work in this space in spinning up your first venture.
[00:02:16] Vadim: Sure, sure. Um, I'll start at the very beginning, but only because I think it will be helpful for some of the aspiring entrepreneurs out there to see how you could get started with basically any kind of background. Uh, you don't have to be, you don't have to have gone to business school to, to start a company.
Um, you don't have to be a successful previous founder to start a company. Um, so I started off with actually, um, in college I was interested in, uh, physics. Um, that was my kind of first degree, uh, my bachelor's degree. But, uh, computers was, was a, a thing back then. Al already, uh, this was late nineties and so, um, I also did computer science.
Uh, but initially, like, believe it or not, I started off with, um, uh, learning about astrophysics. I thought I would become an astrophysicist. It was a movie out there. Uh, Contact if you. Came out in 1997 and I was blown away, and that's what I wanted to do for about two years of my life. In fact, I have a book in there somewhere, uh, signed by, by the lady that was, uh, that was the prototype for, uh, Judy Foster.
Um, Uh, character. Anyway, so I digress. But, uh, uh, no matter your background, um, if you're really determined to, to start a company, to jump into the entrepreneurship world, you absolutely can. Um, so after I graduated, I went into, uh, research. Um, I, um, I wanted to be in space. With my engineering physics, computer science background, still wanted to be in space, maybe not listen to, uh, to aliens, but, uh, at least, you know, work, work with space.
Um, so I was in research for about seven years, um, managing a lab, uh, for a military contractor that was working with space technologies. Uh, but um, after college when I was, uh, what was I, I was thinking about where to. eventually. I always thought that I would end up somewhere in Silicon Valley, so when I was looking for a full-time job just to get, um, you know, just to get some work experience.
Uh, but primarily I have to admit, it was about, um, finding a good, secure financial base before I could jump off and do something on my own. Um, so I chose Silicon Valley to, um, to come to. And, um, at some point, you know, my, my job kind of got maybe interesting, maybe hectic, maybe I got a little bit, uh, um, kind of burned out.
But eventually, um, I was thinking, all right. When am I gonna jump in ? And so, like many of of the folks I think in, uh, in this audience, I was thinking, all right, what do I, what do I do? How do I get started? Right? I'm here in Silicon Valley, right? I, I lived at the time, I think Mountain View, which was a, a short stop from Palo Alto.
Like, what do I do? Uh, back in the day, I have to say, there weren't a lot of, um, a lot of communities out there. Um, people have heard about startup. Uh, if anybody remembers what, uh, what that was, it was basically a, a hackathon that was, uh, two days long. And, uh, you can come in, meet people and, and hack. Um, the point was not, as I realize now, the point was not to create a product.
I mean, if that, if that happens, great, but the point was to get people mingling. to get people to meet each other. And two, just, you know, get involved and, and then see what sticks. Um, and for those sponsoring Startup Weekend, um, hackathons, it was an amazing opportunity to see talent, uh, to meet, uh, future founders early on.
But, uh, as good as that program was, they weren't that many programs like it. So the opportunities to get involved were, were kind of scarce. Um, I think, uh, meetup platform, if you remember, that platform was, uh, was just coming up. And so I just looked at, um, a meetup that was happening around like entrepreneurship or something like that.
And second or third meetup that I went to, I met my future co-founders. So my, my, my advice is get out there, uh, covid is over. Face-to-face events are happen. Find, find opportunities to just get to know people. Um, in fact, today there's a lot more tools out there. There's a lot more opportunities. There's a, there's a company out there that is offering, um, a way to connect with other people, uh, just, just for lunch.
It could be over Zoom. Um, there is a portfolio company for Hatch Ventures Cabela, that is actually a community for, for founders. Another great opportunity. I just joined myself today. Um, there's a few folks. Are asking questions that I've dealt with before, I'm happy to help. Um, so yeah, get involved is the point.
Um, so what did I do with that first, uh, meetup? Um, I did meet my co-founders. They were thinking of starting up. Kind of a program for entrepreneurs after Startup weekend. Um, they wanted to call it, uh, startup Month. So that was, uh, uh, that r l was taken, domain was taken, so it became Startup Monthly. Um, I joined in to run, um, to run operations.
I remember I was, uh, delivering, um, um, 17 pizzas for the first. Couldn't get rid of that smell for, for months. Uh, but eventually , eventually I, um, I was like, you know what guys? Like, I want to help you run that program. Like, I have ideas. So I, I got more involved and eventually I, I became a co-founder of Startup Monthly.
I created the, the curriculum for, uh, entrepreneurship, um, education for, for this. what we called Idea Accelerator before we became Startup Accelerator, and we helped the founders, um, meet each other, um, prototype their ideas, uh, learn how to do it quickly. and um, I'd like to think that we saved, uh, many people a lot of time because, uh, in about a month they were able to, um, quickly find out whether they want to continue pursuing the idea that they've been harboring.
Um, one of the early things that, um, I was uh, I was telling those folks was like, don't be afraid to share your idea. Cause a lot of first time founders are like, oh my God, that's my idea. Like, I'm not gonna tell anybody cuz it's so amazing. Well, uh, it's all about execution. It's not about idea itself. And, uh, if you're ready, um, if you are ready to tell people about your idea, that means that you're ready to get started and then, and find a co-founder.
Um, so the startup Accelerator, uh, took off. Um, we actually took that curriculum, traveled to different parts of the world, uh, bringing, um, that kind of the spirit of Silicon Valley, bringing the mentors from, uh, from here, advisors. And, uh, we help different entrepreneurs out there to kind of, um, accelerate their thinking around, uh, startup ecosystems.
Um, so, you know, Silicon Valley, everybody's kind of talking about it. Um, at, at the very least, there's a meetup you can go to, at least you go, could go to, uh, in other parts of the world. It wasn't. That wasn't the case. And so eventually we met, um, we met investors that were really interested in kind of piggybacking on this community that we were building.
And, uh, we raised the fund and we became, um, uh, investors. So about, uh, three or four years after the startup Accelerator took off, um, we raised. A small fund, uh, called Monthly Ventures. Uh, we started investing in some of those companies that we were seeing, uh, during our startup Accelerator days. And um, um, because it was an evergreen fund, we deployed most of our funds and we were thinking, okay, let's do something else.
Let's do another startup As we're waiting for, um, our. Youngling to grow up. Uh, we started another company, uh, called Vimo. It was a platform for concierge services. Um, did some things right, did some things wrong, um, failed. It's absolutely fine. The experience that we gained was, uh, was absolutely precious.
And, uh, about five years ago, I. I was thinking, all right, what do I do next, uh, after that startup and, um, I went to work for one of my mentors. Um, it's a, uh, digital identity company, so I'm leading product there. Um, and, uh, there's an exciting opportunity that I am absolutely okay not being a founder of just because I wanna be part of that story, um, at the moment.
So, uh, but that doesn't mean that I'm staying away from entrepreneurship. I kind of live vicariously through the startups that I help. Um, and I recently joined, um, hatchet Ventures to help some startups. Uh, there's two very cool, interesting startups that I'm helping with, and I almost feel like. You know, living day-to-day life of those, uh, founders, we, we, we stay in touch very, very closely.
Um, so exciting time to, to get involved. Um, one word, uh, of, I don't wanna say wisdom, I don't wanna presume that I'm a wise person, but, uh, one thing I wanna tell folks is that, uh, you know, people are talking about recession. Oh, this is not the good opportunity right now. There's not a good climate. No. There, there's, you know, the best time to.
get started on your own. Idea on your startup is yesterday and the second best time is today. Uh, so, um, opportunities are everywhere. It's just about how much you want to, um, commit. Um, maybe the climate is not as conducive to starting something new, but it doesn't mean that you can't. Um, venture capitalists.
There's still money out there. There's still, uh, folks eager to get involved. Uh, there's plenty of opportunity. This slowdown in the, um, in our ecosystem creates opportunities. Um, it just means that there's a lot more folks, um, sitting and thinking about stuff rather than doing, um, which means that more folks are ready to get involved.
Um, so really exciting to be part of the whole ecosystem. Even in the, in these trying times.
[00:12:19] Chet: I love that Vadim, that was, that was very insightful and I love that you kind of walked through the entire history books there and brought us to today. Um, if, if I'm not mistaken, so, so two things I kind of wanna, for lack of a better term, piggyback on is, number one, your, your advice or you would say your encouragement as well to people that are interested in pursuing a venture even.
Tough times. Mm-hmm. Right. That's a, it's a varying terms, maybe, maybe more in technology than anywhere else, but, um, I believe it was Slack and of course Microsoft were both founded in recessions. Right. The oil embargo. In 1975, Microsoft and then right after the housing market crashed. Mm-hmm. Slack. Mm-hmm.
Mm-hmm. And, and those are just a few. I think Airbnb was another one. Um, I remember my dad was telling me about the, the Roomba people, iRobot, like they were another one. So there, if you look through history, you just Google search like companies that were started during recession. There's. Pretty, pretty good chunk of companies that are very successful that were started during recession.
Now there is of course, also companies that were started that, that weren't successful, but I think you hit on something important there as well as someone who is looking to become a founder, if I'm not mistaken, you said before you were a co-founder. Of Startup Monthly, you were getting pizzas and bringing them to their events for them, right?
Mm-hmm. , and that's you. You talked about Kabila and we just had James Oliver on on the podcast recently. Okay. And that was one of the things that he said in his episode, which you can go back and listen to connecting the dots, was if the first time you're talking or chatting with an investor, you're asking them for money, you're gonna lose.
And he has this whole thing about getting involved with investors and helping people at their events and growing your network. Mm-hmm. . Mm-hmm. . And that spoke so true to me because, As someone who's in the very early stages of what I'm doing and I have a services based business, majority of the business that I win is through connection.
I don't cold call. I'm very rarely cold outreaching to people. I definitely don't cold call. It's not like my glory days as a salesperson when I was selling software making a hundred dollars a day. But the majority of the business I win is through, Hey, let me go create content for you and your business for 30 days for free, and tell me what you think.
Hey, you know, it's really, this is great. We did great results. It's really not in our budget, but I know someone who has a content creation budget. Let me connect you. . Mm-hmm. , right? Mm-hmm. . And that's because I offered to do work for free for that person and just helped them out because I wanted to see them grow.
And at the end of the day, if I'm surrounding myself with people that I can, , they may not be able to pay it back directly right now, but in one form or fashion, I've seen a lot of that retribution, which is really cool. So I, I love that you brought that up because you're like, Hey, I had the smell in my car.
I was delivering 60 pieces to every event. But those, you know, that that effort, that hustle and my abilities as a potential founder in my work ethic were noticed and then I was able to jump, jump in that venture for sure. I would love to talk about. , uh, Veritamo. Mm-hmm. , and kind of your, your founder experience there and being someone who is an engineer.
I think if you wouldn't mind talking a little bit about how you think about standing up product and creating product as a founder, especially from like building the MVP to finding those beta customers and getting feedback. Like would you share a little bit of. that you, you would give away here?
[00:15:29] Vadim: Yes. Yes.
And a few, uh, few mistakes that I think we made, uh, which is what I think is the most valuable thing you can ask of founders. Like, not how did you become successful, but cuz everybody talks about that, like mm-hmm. , how did you fail and what did you learn from that? So I don't repeat your mistakes. Um, so as I mentioned, we were, um, we, we almost deployed our monthly ventures fund and we were thinking, okay, let's do a startup.
And that is a. The worst possible thing. It's putting the, the, the cart be before the horse. So we were looking for, um, what it is that we wanted to sink our kind of teeth into. Um, it should always start with a problem, which is kind of where we went next. We were like, okay, let's look for a problem out there.
The best kind of problem that you can solve is the problem that you know the most about coming into starting a company, right? Like you've been, um, you've been working for a big company and you're like, oh, if only there was this. Wouldn't that be amazing? And then you find other people that are like, yes, if only there was this, I would buy this.
And that's how a, a good company is starting. We were looking for a problem. We were researching different, um, uh, different things. We were doing our customer development. We did everything by the book. We were researching, uh, what are the pain points and different industries were. Um, there were a few technologies coming up at the time that we were thinking wouldn't be cool to do X or Y.
Um, But at the end of the day, we eventually settled on a problem that we wanted to solve. And that problem was the inefficiency in the, um, in the business of concierge services, service industry, hospitality industry. Um, the problem that we identified, having talked to, um, a number of people in the, in the industry.
I remember in San Francisco we were going through, um, basically around Union Square. We were. From door to door to door of all of these luxury boutiques, asking them, so what, what problems do you have? And we identified a problem where, um, they really didn't understand who their clients were, people walking through the door.
Um, and, um, they, they would really appreciate some help with that. We over-engineered the solution for sure. I, I realize that now. Um, but, um, eventually we've, um, , we put an MVP together. Uh, we threw it out there. We, we found out why it didn't work, and we pivoted and we did that often. And I think that we should have done it even more often.
So my advice is, uh, number one, start with a problem. Problem that you feel like with your bones every day. Something that you know so much about that you can project. Um, number one, authenticity and number two, authority. to any investor or any potential co-founder that you wouldn't want to, um, have join you.
Um, and number two, get the product out as fast as possible. Test it out. Um, you don't even have to build anything to test it out. And there are some techniques that we're going over with even Kabila, some, some techniques like to try out, like what is the most important feature? Like what should we build?
There are ways to test those things out. So get it out fast. Learn and shorten that loop, that learning loop as much as possible so that, uh, when you're ready to come to, to investors, before you even talk to metric about metrics, before you talk about unit economics, the first money that you expect to receive from an investor, you need to show authority over your subject matter.
And you need to show that you have, um, some call it skin in the game, but um, you can also call it, um, you know, your investment into your idea. Like how passionate are you? Um, are you going to, uh, are you gonna try those trial loops many times, even if you fail five times?
Or are you gonna be like, you know what, yeah, yeah, I guess it didn't work. Lemme try something else. So those are the, um, I think most important things when you come to investors, um, for, for seed rounds, but I digress that that's maybe for later in our conversation. Um, so, yeah, go ahead.
[00:19:46] Chet: Well, I wanted to ask you, you said something interesting.
You said at first we might have over-engineered the solution. Mm-hmm. , can you dive into that a little bit more? Uh, on what you mean by that? Like, did you try to make it perfect instead of just getting of course out there and getting feedback? I'm an engineer. , of course. Yeah. There you go.
[00:20:02] Vadim: Cause it was like, otherwise it's too embarrassing.
Um, I built products for, uh, for a big company and people judged you on that. And that's one of the things that I needed to unlearn very early on. Like it doesn't have to be perfect. Um, I forgot who is, who said this? Uh, was it Eric Crease? Or, or maybe Steve Blank. That, you know, if you're, if you're not embarrassed about your M V P, you've released too late
And, and I knew that. I knew that in, um, in, in theory, but. Um, I had to, I had to experience it for myself to really learn that, that lesson. Um, so I think we didn't, um, that loop was not short enough. Uh, we spent maybe months before we released something to, uh, to try it out only to see that, um, yeah, in theory, like all the value props that our potential customers were telling us, uh, were valuable to them.
Yet those, we checked off those marks, but, , the users didn't like it. The, the people didn't like it. The people didn't care. Like would they ever change their behavior to, to accommodate our customers? Um, and so we could have learned that a lot faster.
[00:21:16] Chet: Sorry for the pause there. I'm taking some notes. Cause I think that's valuable. As I've talked with a lot of people who will show me constant iterations of their product, but they don't have it available for use, uh mm-hmm. and I'm like, just put it out there and let some people try it. Um, you said another interesting thing that I want to dive into that I think will segue nice into, um, into investing and, and I want, I want to ask you these questions.
interacting with investors and raising capital, not only as someone who's done it and advises people on how to do it, but someone who invests as well. Mm-hmm. as an investor yourself, so you said demonstrating authority of subject matter. Yep. , what does that, what does that metric look like? Is that having a beautiful product?
Is that having a high NPS on the product that you have with your MVP? Is that a revenue number?
How do you that?
[00:22:00] Vadim: It's understanding a problem. That's what I mean. It's understanding a problem. Um, you know, if, um, like we, we invested in a company, um, that was trying to, um, automate. Um, um, automate, uh, the mortgage industry, right?
This was before better.com, before those days, right? And those folks were, uh, agents themselves. Like they were, they were helping people get mortgages now, like there's an inefficiency here. They, uh, they came into our office and they walked us, uh, through the whole process and they really impressed us with understanding the problem, right?
And then the next thing that they had to do was to say, This is the problem and many people experience it, and we were sold. We were like, absolutely. Let's talk about whether you are the right team to solve that problem. Right. So that would be maybe as a, as an investor, like an angel investor or investor in seed rounds.
Uh, that would be also, um, kind of the third qualifier for a young startup that comes to you, right? So do they understand? Do they know the problem? Do they have authority over that, that subject matter, right? Um, do they have enough skin in the game? Have they really committed themselves? And how have they demonstrated that commitment to their startup?
And, um, and the third thing, which is kind of related to that second one is whether they are the right team to execute. What have they done before? Right? A lot of people say, oh, second time co-founder, second time founder, obviously gets money much faster. Successful founder, that is because they've demonstrated they can execute.
Uh, but if you're a first time founder, that doesn't mean that you are a, um, that you're not gonna get that money. I mean, everybody gets, second time a successful co-founder got their money somewhere, right? So you can still demonstrate this to, uh, to an investor that you can execute. There are things that they have done, uh, before that, um, there things that they have excelled their career at a big company was another thing that we looked at.
Um, we were like, well, they're, they're serious. They're, they're quitting their full-time job and they wanna do this full-time and they need our support with this. So we wanted to. Um, and, uh, those are the kind of conversations that investors are, are, are having, uh, or at least should be having. There's no metrics, there's no unit economics.
There's nothing that you can quantify at that stage. Somebody comes to you with a, with an MVP maybe. Um, Maybe even with an idea to what you were saying earlier, Chet, you know, just introduce yourself, get that relationship going. Um, one of the things we learned with our startup accelerator was that investors in later stages were very eager to see what people wanted to work on.
They wanted to be involved, they wanted to help, they wanted provide a, uh, uh, advice. Um, even for those that are doing this for the first time. Why? Because they wanted to see who else is, uh, is working on interesting problems. They wanted to see, um, maybe there is a person out there that, um, that will be successful in the future.
How can you see that? Early? We had a guy in our accelerator that came to us with, um, with what we saw, what was, with what we thought was a really silly idea at the time. If you guys remember, Farmville was a game on Facebook. So he wanted to do Farmville, uh, for, for real. So you, you, you turn on a camera and you pay somebody to, uh, to create a garden for you.
Um, but, uh, we really liked him. Uh, he was in our accelerator with this idea. He found out very quickly that he should be working on something else. And, uh, later on he started a big company that I'm sure you guys have heard of. So, I'm not gonna name any names, but, uh, the point is to identify that talent early on and for that talent to be identified early on.
So start getting engaged. Ask for advice. Don't ask for money. Somebody told me before, And I like that cuz um, investors are like, oh, cold calling for, for money. Well, of course I'm an investor. I, except I, I expect that there's so many of these emails that I get, but asking for an advice. Okay, I'll listen.
[00:26:26] Chet: What's up? Founders Formula listeners. This episode was so incredible and so packed full of insights that we actually ended up recording nearly an hour's worth of content. That said, it's too much to pack into one episode, so check back on Thursday, two days from now at 6:00 AM Eastern for part two of our conversation with Vadim thanks and we'll see you then!