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It's, I think, also important to draw a line and pull back, because life's too short and these companies are running so fast.
Byron Dieter has spent more than two decades investing in some of the world's most innovative companies, from Anthropic to Waymo, to Canva and beyond.
Don't find things that are doing okay and going to fix them so that you go from good to great.
Go find the teams in the business that's already great and make them excellent, or help them just stay excellent if they're already there, so that the slope of the line stays bigger.
This is Masters of Scale.
I'm your host, Jeff Berman.
This week on the show, Byron Dieter.
After founding and exiting a pioneering company in the early days of cloud software, Byron moved on to become an iconic investor.
He spent 20 years at Bessemer Venture Partners with an incredible portfolio that includes 26 companies, each worth more than a billion dollars.
We talked about his advice for both founders and investors in this moment of AI transformation, why CEOs need to think more like athletes and much, much more.
Byron, welcome to Masters of Scale.
Great to be here.
I'm thrilled to have you.
You are an investor who started as an operator so I'd like to start with your operating days.
How did you become a founder?
I fumbled my way into it.
I've always wanted to be an entrepreneur, starting from invention idea books in my elementary school days to ideating in my McKinsey days with colleagues trying to think of startup ideas.
When I got my first pass at venture, I did a lot of brainstorming time on the side and found my two co-founders in that journey.
Diving into the early world of cloud computing over the winter break of 1999 to 2000, walked in in early January and quit my first venture job to dive in
I'm not sure that everyone knows there was cloud computing in the late 1990s, early 2000s.
What was the world like back then?
So Salesforce and NetSuite had been founded within a few months of that.
It was highly controversial because download speed, browser capability, et cetera were still real bottlenecks.
But my CTO, ultimately co-founder, convinced me that there was this other way to do things.
But it was a big bet.
And I'll tell you nine and a half out of 10 venture capital meetings when I went pitching, 13 threw me out essentially after the first few pages.
Why is that?
They refused to accept that the cloud business model deserved to exist.
This idea of forward, you know, cost and backloading revenue made no sense to most folks.
And it was highly controversial for many years.
Where did your conviction come from in the face of all those no's? customer experience first.
And we were convinced that maintaining all these back versions and multiple ports to different software stacks and things was a waste of innovation and drove to a lot of shelf wear and misuse.
And so We did believe that the answer was there, that fundamentally it was better for customers and that the business model would follow.
But, I mean, we went through layoffs.
We went through the dot-com collapse.
We had tough financing rounds.
It was a tough journey.
The company was Trigo.
Trigo Technologies, yes.
And what was the inflection point for Trigo?
So, some of those early enterprise customers who would go on stage and speak about it.
I'll remember Staples, Ann Marie Keene, a lot of credit, our early sponsor there.
This is going back over a decade and a half.
But she said this is real.
Like, I'll go talk about it.
I'll tell others this is a better way.
And I'll share it.
The first real customers who were hard on us, they were leaders.
And once we got through their qualifications, they would go tell others that it worked.
That for us was really the inflection point to transition.
It's pretty unusual for a customer to call and say I really want to get on stage and give you a testimonial.
How did that come to happen?
So one of the things I carry through now as an investor, trying to coach our companies, is it's somewhat counterintuitive, but you actually want to seek out the hardest, smartest customers and have them beat the crap out of you, because others will follow.
Their peers in the industry know how good they are and learn from them.
So take on the hard first and work with them as design partners go through it.
Feedback is a gift.
And when you don't get hard feedback is when you actually need to work.
It was all about we need you to make a great product.
And the expectation is then that you will share it.
This is non-proprietary.
It's important but not proprietary.
And go talk about it.
And so setting those rules and engaging them up front.
And one of the things that you know.
We ask our sales execs now across our portfolio if you can't get a reference out of that customer.
You know what are the issues.
And among the early contract terms, that's something front and center, because we do believe that it's one of the lowest cost customer acquisition methods when employed correctly.
Did that change things for investors with you?
It did, although often the macro will trump the micro.
And so we executed well, but the market went through turmoil.
And so we had, you know, one of the biggest market pullbacks of our lifetime, going into that, which created some real headwinds.
And fortunately, having been in venture before, I knew enough to raise early and have buffer.
So we never had a trend, true extinction level event.
But we had to do some layoffs because we weren't going to have cheap access to capital.
We had to pull back by some time.
We went through gyrations.
We went through customer churn at various points because of their bankruptcies and chaos.
And so I think entrepreneurs need to expect to go through several cycles in your journey.
And you need to reserve enough flexibility, capital et cetera, so that the macro can't sink or ship.
Just to complete the Trigo journey, ultimately sold the company.
How big was the company from a revenue and people perspective at the time you sold it?
Yeah, we were up to about $50 million in revenue.
Importantly, another inflection point we brought on Tom Riley as CEO and I stayed on the board and ran business development partnerships and all of that.
But another inflection point, he's excellent and a lifelong friend from that.
And why did you bring him in?
I was 26 and we were building an enterprise business and wanted some more executive air cover.
And I disclosed that up front to our investors that at some point we'd want to bring in a CEO.
It was my first time in an operating role.
And interestingly, I think it was the right decision for us, but I also think it's the wrong decision for the majority of our founders.
And I actually look to investment founders who are more interested in going longer into the journey.
And that's because I think that the founder product insight is irreplaceable.
And so much of these businesses today are product led that we want to back founders who are unique and differentiated there.
And we want them bought in for the journey.
And tapping out and hiring a replacement is hard.
It's destabilizing and introduces risk.
If they have someone identified, we're going to do it together.
Then that's okay early on, but we want to do it jointly.
Or if it's the only option.
And you know, as we talk about more current days, we've had a lot of CEOs tap out over the last few years, because it's been really hard to be a CEO right now.
And that's okay.
Like we'll go on it together, but we don't want to usually start with that, with plan A.
So it's more to use the overused example, Mark finding his Cheryl that you're talking about when you're talking about scaling up the organization and yeah,
Absolutely.
I think that's where you unlock the superpowers.
Design the founder role that is their best and highest use.
As in board meeting yesterday, we're talking about this exact thing.
As a founding CEO, you've got the luxury of designing your exec team.
Do it however you want.
What things do you enjoy doing?
What are you best at?
What's going to give you energy and what's going to give you most impact?
And then we'll hire everyone around you.
And again there are some cases where the founder just says hey, I want to run product and I don't like this business stuff at all.
Let's go get someone.
But I'd much rather do that up front or really have some people identified than get into something.
And then a year later, the founder is just like, I'm out.
And then you're taking a bunch of risk and you lose that founder magic.
It still takes a lot of good ego right to acknowledge where you're not strong to bring in people who are incredibly capable of things you are not.
Whether you are replacing yourself as CEO or building out your leadership team, what's the signal that you're looking for from founders when you're considering investing as to whether they have that trait?
Yeah, two things that in some ways may be at odds, but it's intense conviction and coachability.
And the way that they're at odds is you want someone who, when they will listen, gather all the facts, take input from their team, including us, but we're just one voice on a service provider, ultimately and then make decisive action, but also be willing to revisit it and carry it on.
And so one of the signals that I think turns us off is when tension builds, people turn inward and they try to, they force themselves to come up with the answers and they shut off communication, they shut off input, etc.
I think the best leaders are the ones who are brilliant, who are convicted, and yet they're reaching outbound when intensity mounts and they need more input and they seek it out and then they make a more informed decision.
And I think that's the mark of a mature, confident leader who's going to work through problems and wrong answers to get to the best answers.
Why did you decide to sell the company?
IBM was our biggest single partner.
They were the right distribution platform.
And back then, hundreds of millions of dollars was real money.
It was the biggest enterprise software outcome of the vintage at the time.
We need to remember how much things have changed.
But they paid forward value, and our team felt it was the right fit.
And so we were profitable, we were global, we were starting to think about an IPO.
Ironically, my first IPO as an investor Cornerstone On Demand was actually around the same scale and they traded up to billions.
I've thought back about the playbook and the decision many times, but never regret a good outcome in the sense of not just financially but fit and team.
Half that team still exists over there.
I mean our type A executives all left pretty quickly, but the team, the product, it's still in use years later and that's pretty cool.
How long did you stay at IBM?
One year and one day.
Not that anyone's keeping track.
I always like to over-deliver.
I said, what's the bare minimum where you will feel good about this?
And they said, one year.
And I said, okay.
And I left the day, you know, I told them, I will commit on my year.
I stayed one extra day very purposefully and then jumped out.
What was that one year like for you?
Tough.
IBM is a great big company and a great big company.
And there were meeting after meeting after meeting that's overlapped.
I could have been meetings all day.
And interestingly, I could have ignored all the meetings and no one would have noticed because they would have assumed I was in another meeting.
And that was just so painful for me.
As a type A person who's aggressive, who wants to get there and do it.
The idea of resting and vesting for me was just mind-numbing.
My senior execs felt the same way.
And so I loved IBM.
I wanted them to be happy.
I wanted this to carry through.
But I needed out.
Okay, so one year, one day hits.
You walk out the door of IBM.
What do you go do next?
I went straight to Bessemer.
So I'd worked in venture before, not with Bessemer, but with another great firm, TA Associates, back when they still did venture.
And we were fortunate to have a number of A-tier firms around our cap table, with Trigo raised some great folks.
Bessemer was our anchor investor but, more importantly, the firm that I felt best about their product, their service, their delivery.
And I was fortunate to have a number of offers to go join various venture firms and hands down.
Bessemer was my top.
You didn't want to go operate again.
You didn't want to go build something all over again.
I didn't at that point.
One of the things that was intoxicating to me about venture was the potential to be involved early stage and seed things and incubate things.
And yet satisfy my ADD and doing a bunch of things.
I'll confess that I've done much less of the incubation and creation that I thought I would, because I've been so excited by other people's ideas and other teams.
And so I've only done a little bit of that in my Bessemer time.
And the vast majority of what I do is find great teams that are already executing better than I could have.
Whatever would found,
And, and yeah. begging my way in to work with them.
What were some of the big early lessons when you went back to venture, when you went to Bessemer?
Don't try to be the operator.
And that manifests itself in a few ways, but one of them from the investing side is don't find things that are doing okay and going to fix them so that you go from good to great.
Go find the teams in the business that's already great and make them excellent, or help them just stay excellent if they're already there, so that the slope of the line stays bigger.
And that carries through to board interactions.
Like, Hippocratic Oath of Venture, do no harm.
Like, stay the hell out of the way when things are working and send them customers, send them candidates.
But, like...
Get out of the road if they're executing well and going.
Don't try to give product input, you know, out of cycle or sitting in a board meeting.
Like, you know, there's a process and a way to do it.
But back great teams and let them run and then just resource them.
Yeah, there's like a double-edged sword to having venture investors who've been operators, right?
How are you framing the value that you bring with that background as an operator and now the years as an investor?
Yeah, so I think it's a balance, which is I mean we have a large global firm, 20 billion capital aid offices around the world.
You know over 100 people in our platform team to support our companies.
So we want to help.
We want to engage.
But the mentality and the approach is very different.
You know, Bessemer is a low bravado firm.
We're not putting our firm first.
We're not out there, you know, pushing things.
It's all, what do you want?
And so my interactions with my CEOs, which are almost daily with almost every one of them.
But it's sending quick texts, it's sending emails, it's forward things around.
It's after hours calls and obviously structured board meetings and things.
But much more of it is the quick little hits.
You know, hey saw this great candidate you know think they're interesting for your VP of X role.
Or just met with this interesting partner.
Is it worth your time?
And if it's a trusted relationship, eight out of 10 of those is like is essentially no, which is eight, you know.
Thanks, not interesting, or hey, could you buy some time or run interference or whatever.
And then two of those like, oh yeah, I want that immediately, send it over, make it happen.
But that's, if it's high frequency, low risk and very trusted, then it's just, it's high velocity.
And my CEOs will say, yeah, Without a doubt, I'm on the phone within 90 minutes when needed.
I've been woken up countless times with, you know, chaos moments and crises, and I love it.
There are a few things I want to tease out of this.
One, critically, it's double opt-in. which I'm so grateful to hear.
It's like, you're not just saying like, hey, I'm connecting with so-and-so.
You're asking like, even if you might be pushing hard, like I think this one's really high value, this job candidate, this prospective client, whatever it might be,
I don't think enough people fully appreciate the value of the double opt-in.
Well, and that leads directly into the second tease out, which is time is our most valuable asset.
And not everything has to be a 30 minute phone call.
But that quick hit of like, hey, just flagging this for you could be of interest.
Let me know whatever.
I mean, that is invaluable to an operator where every minute really counts in their day.
I have a different modality of communication for most of my CEOs.
I literally have WhatsApp, Slack, Signal, text, email, FaceTime, by preference.
I'm not gonna name it, but I could tell you which CEO I communicate with in which way.
I have blocks of time for fixed things board meetings, new company discussions, conversations like this but half my time is interrupt driven.
And I'd say evenings and weekends are, are almost always interrupt driven.
And so I don't do a lot of long form things.
I don't sit down and read a book.
I don't sit down and do like long duration things.
Most of my interactions are, are prioritized kind of tier one and working through that.
And for me, it's very much the back and forth.
I'm constantly seeking out experts on every topic and having the discussions going back and forth and then all attempt to synthesize that and then go back to the CEO or the team member.
And go through and like.
By the way, we are totally transparent with our diligence issues and concerns.
And we don't dance like we'll literally share it after the investment.
Like, here's the readout.
Here's what we heard.
Here's, you know, here are the really red flags.
I was on Capitol Hill early in my career and one of my mentors said to me before I started there most Fridays your boss will go back to his state and a lot of your colleagues will take a three-hour lunch.
And I'm just letting you know that, by virtue of where you work, you can call almost anyone in the country and they'll want to talk to you.
And the number one thing most people want to talk about more than anything else is themselves.
And they will think you are really smart if all you do is ask them questions.
Hallelujah to that.
And so I love that you're in this position where you can call people who are true subject matter experts and give them the privilege of making you smarter, and on something that may well make you and your LPs a ton of money.
And they feel great about being able to do that.
And especially in these deep science fields where nuclear physicists and theorists have wanted to commercialize this technology for decades and are looking for avenues to do that.
And so they want to talk.
And, by the way, like there's also ways for them to hopefully make a lot of money in the process by, like we'll bring people on, as you know, paid advisors in times.
And certainly our consultants were paid.
But yeah, Most scientists, most computer scientists, enter this because of love of tech and love of what could be.
And more than anything, they want to see success and they want to see it happen.
And we're aligned there.
Yeah, and I think we underestimate how much people want to help, And especially when they've spent years acquiring subject matter knowledge and they can now deploy it to someone who genuinely cares about what they're doing.
And yes, if I can make money doing it, all the better.
But sometimes asking is all you have to do to get what you need.
Very right.
And I think that's great advice to the listeners that, you know, to reach out.
Yeah.
Still ahead, Byron Dieter on his anti-portfolio and what he learns from the ones that got away.
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What were some of the most important lessons from your early days at Bessemer?
The big swings, like the crimes of omission, are the ones that hurt more.
So it's so easy to talk yourself out of investments.
And unfortunately, just by its nature, we say no 99.9% of the time anyway.
But there are so many ways things can fail.
And especially the most bold entrepreneurs and the most bold visions, have a lot of ways to fail spectacularly.
And...
I keep pushing myself to think about the what can be, what can go right, what can really work with this.
And, quite sincerely, the things that I regret the most are the ones that I pulled back on, because I could see the big vision and just saw all the probabilities of the what can go wrong and just couldn't quite get there.
And I regret those the most.
And how is that informed, how you're investing in this era.
To start with the reverse and to think back on how could the world change to accept this and what's possible in a multi-horizon way?
Great businesses often start with a line of sight to cash flow positive and controlling our own destiny.
I think that's important, but the multi-horizon view is critical.
And so if you look at a business like Shopify That may partner Jeremy Levine-funded or Procore or ServiceTitan or some of these vertical SaaS businesses.
You could look at ServiceTitan and say, it's software for plumbers.
How big can that be, et cetera?
If you step back and say, it's actually multivertical.
It's actually, you know, payments relevant.
It's actually a great AI use case.
You know, they're at 10 billion already and sky's the limit in terms of where that can go.
And then, by the way, often the tiebreaker comes down to just bluntly what teams you want to work with and where can you change the world.
We have.
Our growth fund is called Century Fund because it's anchored on this idea of what are going to be the iconic companies of the next century.
Like when the books are written, our kids talk about it.
Who are the companies that dented the space-time continuum?
And there's a lot of ways to make money in venture.
It's a great asset class.
It's a great time.
So when i can only do two deals a year yeah, the tiebreaker comes down to the, the biggest swings and the teams i really want to work with for a decade plus.
We just ran the math.
Our average hold period's like 14 years longer, even than i thought.
These are long journeys if you're doing really big things and so like the qualitative does matter too.
Do you all have conviction that there are going to be great companies built now that will last a century?
Or are you more looking on a 10 to 20 year horizon for where that value will be created and you don't worry about it beyond that?
We don't think tech's going away.
We don't think software is disappearing despite the current narrative.
When you look at, you know, a rocket lab in space on our frontier tech side, or you look at Anthropic and the foundation models, or you look at A number of our vertical SaaS companies or infrastructure.
You know MaintainX or ClickHouse or some of these.
We absolutely believe these can all be 100 billion plus businesses and that they are the new foundation for the new economy.
One of the things that you all are known for is the anti-portfolio.
Could you share a little bit about what it is and how it came to be?
Yes, so on our website, in addition to the portfolio, which we're very proud of.
Which every venture firm has.
Yes, but I think the portfolio needs to look good to be able to do this.
But we have a page, which I'd encourage you all to go to, which is the anti-portfolio.
And it's all about those crimes of omission that I alluded to before. it's the missed deals.
It's not the companies we invest in that fail.
We have a lot of those.
We don't want to single out entrepreneurs in that.
And like, we want to continue to fail in that way because that means you're taking big risks.
But these are the ones that ended up being great companies that we had a front row seat and an opportunity to invest in and blew it.
And, and those are the ones that are most important to learn from.
And so the You know, for me it's companies like Tesla early on, and Atlassian on the software side, and you know on and on like this, where massive respect for the entrepreneur, belief in the vision and just couldn't quite get there.
And we need to keep asking ourselves in those ways what did we miss and what can we learn, so we don't make that mistake twice in a row.
Because that hurts.
And then part of the reason to keep it out there, not only to remind ourselves, but also...
For those 99.9% of entrepreneurs that we say no to, it's like, we're still rooting for you.
Like we're fans of tech.
We love innovation.
We love that you're doing this.
And like if you can't make it onto our portfolio page, which we certainly hope you do, we actually hope you make it onto the anti-portfolio and we learn from that.
So that next time, on your next company hopefully, if you're nice enough to give us another shot or for the next entrepreneur like you, we say yes that time.
I'd love to spend a minute on Anthropic.
Could you tell the story of how you all made the decision to invest there?
Yes.
So we were very close to cloud wave.
One saw the hyperscaler market play out, which really wasn't a venture capital game.
Obviously, the winners, Amazon, Microsoft, Google.
There could have been a case that one of the independent challengers emerged there, but there was no one that's willing to fund the capital for those on the private markets.
And we all missed it.
We didn't want to miss that again.
Our belief is that the foundation models are going to be the new hyperscalers.
And we don't do competitive investments, so we could only make one bet.
And so we were very much looking for who do we think was going to pull ahead several years out.
But the better and anthropic was that they would be one of those companies and that they had the chance to compete at the one slot, which we very much still think they do.
And credit to co-investors there Matt Murphy at Menlo and Ravi at Lightspeed and some folks that were coming into the same round.
And we're great collaborators and thought partners.
And there's less of that venture these days.
But we would not have gotten there without the ability to actually lock arms with a syndicate there and have real discussions.
And I'm thrilled we did.
I'm very appreciative of Dario and Daniela and that team for being so bold and to go all in and do it the right way with ethical AI and have the enterprise vision.
That was very non-obvious at the time and very contrary.
What gave you conviction that Anthropic could get to that number one slot?
This was a little bit the tortoise and the hare, but very much their bet early on the enterprise side.
Like Claude is their consumer front end.
It would have been great if that also won and it may still, but fundamentally the better model approach And the business mindset that they were bringing to this and the API approach and the focus early on verticals like software, as well as the team's mindset and value system that was a magnet for AI talent.
And right now, that is the fuel, that is the lifeblood of these businesses.
And it was true then, it's still true today.
If you look at the heat maps and you look at the talent maps, Dario is a magnet for the world's best and the world's best wanna work with him and do great things and the combination of a world-class product, the right strategy, but just the talent coming into that center of gravity, wanting to have the impact there, plotted the line that we said.
You know the slope is steeper.
Give it time and this will pass.
The hyperscalers will need to work with them, which has played out, and that was also non-obvious at the time.
And the unit economics it was a gross margin negative.
You know, totally unproven business at the time.
If you believe that they're driving value, all the numbers will take care of themselves.
Like, don't get caught up in the details, which is terrifying given the size of the investment.
It was one of our largest checks and now is our largest check ever.
But you had to look over multi-years in a horizon of what could be, and that was incredibly exciting.
How did their commitment to ethical AI inform the investment decision?
It was a big part of it because, as you think about first the people element, the talent attraction we spoke about before, but also the geopolitical and the uncertainties around AI and the impact,
And I'm going to answer it first, just from the business side, which is, you want to know that your customers are going to go on a journey with you, that enterprise are going to trust you.
And so there's an ROI to it.
But also say just back to the qualitative and the life's too short and the human side of it.
Like we just, we want to work with great people and we want to do great things.
And so you know our dinner with Dario closing the deal.
Like he previewed, a lot of the healthcare stuff that they're just now releasing.
And that was so cool to think about.
And you read his.
You know machines 11 grace that came out after that, but he'd also he previewed with us.
And the impact on humanity for this will save lives.
This will change outcomes when you apply AI technology to healthcare or education or some of these fields.
And they're deeply, authentically committed to that.
They're giving away the vast majority of their economics.
They've said that. like they're doing it the right way in some ways.
Like I think of Melanie and Cliff at Canva who set some of these principles.
And so do you know, they're going to do great things.
They're going to make this world a ton of money, but they're going to make this world better.
And I think that's that's a cocktail for success.
We have a executive health, wellness, and mindfulness program that we've launched at Bessemer.
The STRIVE acronym refers to categories so sleep, training regimen, et cetera around taking principles of peak performance for athletes and applying them to our CEOs.
And when you think about it, these athletes are tens of millions or hundreds of millions of dollars of value, impacting billions of dollars.
So are our CEOs.
And yet our CEOs often treat their bodies like crap.
They don't sleep well.
They don't eat.
They're underperforming.
And statistically it's often the same as driving drunk or running a company drunk when you're sleep deprived and underperforming.
And we have now great science.
We have great resources.
We have great tools to monitor and track and supplements and all sorts of things.
That hasn't been in many ways socially accepted in entrepreneurial circles.
And in fact, it's been the opposite.
This bravado around, oh, I barely slept last night and I'm working so hard and whatever.
And so part of this was bringing to a safe space the experts.
And so we mixed it.
We have a lot of pro athletes and Hall of Famers who also work with us and invest with us.
And so we brought the communities together and did an event at the Niners Stadium with our CEOs and a number of NFL players and said let's talk about this and like, let's go through it.
And it was so empowering to have you know Eric Armstead, who won the Walter Payton Man of the Year Award, this huge human talk about his psychologist and stay in a safe space like I need this.
When I was in a slump and like to be able to talk through the mental thing, like if Eric Armstead, a physically you know unbeatable human, needs this then, like you, tech CEO, could really benefit from it.
And sleep is one of the most powerful levers.
We focused on that as one of the first things, like just doing some of the fundamentals around.
If you can't sleep longer, at least sleep better.
So how can you get, you know, using cold, using light, using caffeine, using stimulants.
Like there's all these things that are now best practices that you can do.
And so you see our CEOs, we gave them all whoops and you'll see aura rings or eight sleeps and all these things now that are part of it.
And and I have gotten more positive feedback from this than any of the single programs we've launched
B Joel, our CEO of Guild Health, will say like she'd never run more than three miles and she wanted to work on sleep.
And so it was awesome.
And she shared this on LinkedIn.
So I'm not breaching any trust or confidentiality, but she participated in the 10K and she is.
She has this whole sleep program.
And so and I've got notes from her team saying thank you.
Be just so much better to work with and such a better CEO because, like she's happy, she's got energy, she's engaged.
And like these are 10-year journeys and I sincerely like every CEO I work with and like I want them to be better parents and better like friends, in addition to be selfishly being great CEOs.
Like this is part of it.
And so it's on our website.
We've got a lot of the materials there.
For our CEOs, we do deeper stuff and events and things like that.
But for the public we put it out there and we've just pulled together the best practices in each of those categories.
And then the last one I'd highlight the emotional health.
The mental health part is a really big part of this right now.
A year and a half ago.
I had three CEOs in the same year tap out, including one that had to go away and needed real time.
Just the stress on our operators right now is unprecedented.
And they need help.
They need outlets.
It needs to be safe.
It needs to be open.
And so just trying to surround them with resources to get ahead of it and to treat the mental health part as you would other executive skills, is essential.
I mean, it also just strikes me that one, right thing to do by people you care about.
Two, right thing to do by your LPs and the teams you've invested in.
It's a better business.
And three, it's got to be a competitive advantage that this is something that I'm sure the founders are talking about among themselves and saying when Bessemer invests, they really get behind you beyond as a business.
They get behind you personally.
I hope that's true.
And I think that is starting to come true.
It's interesting.
This one, we actually, we didn't start from the ROI side.
We started from the like. the pull of what our founders are wanting.
But I think you're right.
And I do believe there's a real ROI.
If you make them better with shareholders, it'll carry through.
And I do hope that part of just the partnership.
That would be great if it also has marketing benefit.
We haven't done a lot externally about it.
We hope that people find the content, but we don't want anyone to think that there is like that we're trying to market them.
And that's why I was confident with the example I gave with Bejel.
I know she's posted on LinkedIn, so I feel comfortable sharing that.
But this gets pretty personal.
And And.
These relationships with our CEOs are really personal, if it's trusted, if you're in the right spot.
And we want them on that vision piece to be comfortable sharing what their goals are.
And we have an outside coach with Exos, one of our partners who does a lot of stuff with the NFL, and others who they share the goal with them.
So they don't need to share it with us.
You've got an independent outside expert but a lot of them do choose to share it with us and a WhatsApp group with folks where they go through.
So I think part of them being their best and helping them be their best is just making these available.
And I do hope other venture firms will follow.
This isn't something that we want to be proprietary.
We make the content available and hope other firms follow, because it hasn't been thought of as a role of support.
When I was a CEO, Bessemer did everything they could.
But when I finished up my company, I had 13 cavities.
I went in five years after running this thing and I brushed my teeth every day, but I lived on power bars.
Never occurred to me.
You know, these things are like sugar just sitting on your teeth.
So I'd have five power bars in the day because I had no time to eat and I was sleeping like crap and no one knew any better.
And so we just beat ourselves up in the service of this great, you know, tech economy.
And so I'm trying to help our entrepreneurs have it better.
We spoke earlier about the dot-com bust and what happens when winter really comes.
As we sit here in the first quarter of 2026, what are you telling your portfolio companies about how to prepare, how to manage their capital, how to manage their teams for what may be a sustained bust ahead, as we've been in a boom cycle for a minute here.
Yeah, we are in the most volatile time but for COVID, you know, of the last two decades.
And the uncertainty is through the roof.
And as bullish as you are on your company and the prospects, you just can't run out of money full stop.
And so whether that means raising earlier, being a little more thoughtful on capital, et cetera, you've got to be balanced.
Now.
Our entrepreneurs have huge ambitions and are going to need a ton of capital, in many cases, for their vision.
And so that generally means raise earlier and just have buffer to weather some short-term chaos.
Part of why we've scaled up as a firm though, is also to be able to insulate a bit through the rounds.
And of course, like we need to be economically rational.
If valuations go down, like there may be a down round or maybe something, but generally we reserve in a way like where we can be the you know, a provider of capital and But we never want to do that.
Like our goal isn't to jam you or do a down round.
We would much rather we get ahead of it.
We raise, we've got the balance sheet to go for this.
But I also think, because these are smaller companies that can do more with less, these outcomes are playing out much faster.
There will be higher skew. but great things will be created in shorter windows with more leverage.
And then you'll know it.
And the downstream capital will be cheaper set up the other way, at higher valuations and more readily available.
And and we are seeing that separation where gen one cloud is, Companies who are not adopting are getting pounded and that capital is leaving that category and going over to the AI natives, who the bet is they're going to be the disruptors.
Yeah.
We talked about how there are 10-person companies that will reach billion-dollar valuation.
Roy Bahat from Bloomberg is the first person who I heard talk about a one-person billion-dollar company.
If I tell you that Bloomberg is reporting that there's a one person billion dollar company and I ask you what is the over under on the date that that report happens?
What's what's the prediction?
Well, I'm going to cheat because in some ways it happened last year when, when some of these founders went and said hey, I'm going to start a new foundation model and could raise it north of a billion.
So I think there's a difference of financing value for an individual versus what I think you're implying is a business that, on its merits, is worth that with a one-person team.
Very soon would be my answer.
And in my mind I'm thinking a year and I'm holding off, whether that means 13 months, whether it's a calendar year or through the end of January.
But I think it's that soon.
Why don't we call it one year and one day?
Because you have really good history with one year and one day.
And then I can take the under.
That's right.
Perfect.
Thank you so much for being with us.
A true pleasure.
Thanks again to Byron Dieter for joining us.
He shared so many invaluable insights, and I think the one that will stick with me most is his anti-portfolio.
It's an important reminder that we can learn essential lessons from the actions we don't take, if we're thoughtful enough to notice and honest enough to own it.
I'm Jeff Berman.
Thank you for listening.
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