James Currier
Appearances
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
There was a moment we were running out of money again, and we were 60 days away. So the first time we literally got the money on a Friday, we would have missed payroll for the final seven people on Monday. So we were 48 hours away from running out of money. And then we were 60 days away later and we saw another website that was non-competitive with us doing something.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And we just copied their feature onto our website. And we made $88,000 in one month, which doubled the revenue of the business. And we got profitable and we never looked back. And then we were profitable every month for 36 months. And we got up to about 32, 40 million in there. And then monster.com offered to buy us out and we sold to them.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
For 110 million. It was 90, but with the earn out, it ended up being 110 because we did really well after the acquisition. And it was five years to the week since we started the company. So we went through the downturn, came out the upturn, and then we sold at that time. And so here's a story about network effects. So we get to Monster, horribly run company.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Management doesn't know what they're doing. There's bureaucracy. They have 600 people building the monster.com website, which we could do with three or four people. Like it was, and I was like, why are they worth 7 billion buying me for a hundred when our team is better, our products are better, et cetera.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And I was like, oh, they got a network effect back in 1997, 98, where the employers and the employees are all coming to their marketplace. And so nobody can really leave. And so nobody can really compete with them. And that's why they're worth $7 billion is they had this network effect. And that's 2004 is when I fell in love with network effects.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And I really started to understand, ah, if I'm going to do anything going forward, I got to have a network effect because I do not want to be in the fresh produce business.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Right. NFX is the name of our venture firm. It stands for network effects.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Because I never did it for the money. And this is the big reason why 90% of the exits in technology come out of the Bay Area. is because the culture here doesn't care about the money. The culture here cares about ego, cares about impact, cares about changing the world, cares about basically being a graffiti artist. Like you go out with a graffiti and you paint your tag.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And then as you go by on the subway, you see your tag on that wall. We're graffiti artists out here. And so once you do one graffiti art, you want to do more graffiti art.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So that mindset means that once you get money, what do you do with it? You use it to build more things.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So what we did was we decided that at Tickle, we had built a testing business and a matchmaking business and a social networking business and an ad tech business. We had seven different P&Ls inside of Tickle as we were doing consumer stuff. So we were like, let's just build that endemically into it. Let's create an incubator. Let's get 30, 40, 50 people in here.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We'll work on three or four products at the same time. Most of them won't work. That's okay. We'll just iterate. We will iterate faster and cheaper than anybody else towards successes. And when something takes on, we'll jump on it. And so if you look at venture-backed companies at that time doing other consumer things, we were able to build things 10 times faster and 10 times cheaper.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We actually measured it. Like how much venture capital did those six companies take? How much did we spend? So they would spend 6 million each. We'd spend 600K, one 10th. And they would take four years to go through it. We would take four months. It was literally a one to 10 ratio in terms of figuring stuff out inside the incubator. The problem was,
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Once you get a hit and something's working, the only person capable of running that business is you because you're the one who came up with it. You can't install a CEO or co-do it with someone, which is why incubator models don't work. There's a soul. Now, it can work a little bit with spreadsheet businesses like HIMSS and Rocket Internet, I think has Alonda.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
But in general, these incubators do not work unless they're spreadsheet businesses where anybody can run it. Somebody from BCG can just buy traffic, sell traffic, that sort of thing. But if the business has any amount of soul in it, incubators don't work. And so we tried it for three years. And during that time, we built 24 different products.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We ended up venture backing three businesses, but I ended up being CEO of each one in turn. So it wasn't really an incubator. It was just a way of finding the next business that I was going to run. And so that's what we did next. And the first business that came out of that was a gaming company called Wonderhill, which it started as something different. And then it pivoted into gaming.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And then we merged that with Kabam, another gaming company. And then we took the growth analytics engine from that and spun it into a company called Iron Pearl. And then PayPal bought that. And then we started an enterprise HR software company for benefits called GIF.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Thank you for having me.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And this was the biggest mistake of my career because I was really good at consumer stuff and I wanted to sort of cure American healthcare with basically bringing Facebook platform, but making it for health and then letting all the apps sit on top of it. That was the idea. It's still a good idea and still hasn't been done.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Because healthcare does not want to be cured. The American healthcare system is so frozen. So broken. It's so locked in bad behavior. Everyone in the system is behaving badly. The doctors are behaving badly. They don't really care about patient health. They care about revenue. The patients are behaving badly.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
They just over-consume healthcare all the time, particularly as we age in the United States, like entertainment. The insurance companies, they just increase their prices all the time. They're just rapacious. They're not actually trying to lower costs or improve. They say they are, but they're not. They don't behave that way. The pharma companies are just
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
The people at the pharma companies work from 10 a.m. to 2 p.m. They just use their IP and just milk money out of the system. They're unbelievably profitable. Nobody is behaving well, and it's hard to get anybody to try to behave well. And the only way you can help is make someone more money, not save costs, not improve care. The only thing that the system responds to is making more money.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And we were trying to improve care and reduce costs, and the system does not want that.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
In the end, I did hire a person who knew the health care sector because it took me about seven or eight years to understand a bunch about the health care sector. It is very deep. It is very complicated. There's a whole set of new terminology you got to work on. And so I just didn't know what I was doing. I came in naive. And the healthcare system just spits up naive people like me.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And I had already had three successes, but I was not naive about how you finance things or how you hire people or how you build good product. But I was naive about how the healthcare system worked. And we weren't getting bashed around. We were just getting ignored. Nobody cared. So for the first three years, we were just ignored. It was very hard to fundraise and it was very hard to get pilots.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So we grounded out, we grounded out and we actually built the product. And then suddenly one person liked it and then three and then 10. And we were then on the stage and we were the hot thing. for about six to eight months. And I was like, my God, we waited them out. It took three and a half years, but we are the hot thing. Everyone's talking about this new hub strategy.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Every self-insured employer needs to bring on one of these big pieces of software that we've built to manage all of their employees' healthcare. And this is awesome. And then in the end, what happened was we had nine salespeople and we had all this pipeline.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And the consultants who consult to the self-insured employers in the United States, there's three of them, Towers Watson, Aon Hewitt, and Mercer. One of them had even invested $4.5 million in us. One of the people in their organization told other software companies, this is what's selling. This is what everyone wants. You should sell this. Here's GIF's deck.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
In a way, I didn't decide. When I was six, I started selling worms. And then I was selling seeds. And then I was selling shellfish. And then I started a t-shirt company. And I started a boxer short company. I started 18 companies before I was 18. It was a way of making money. My dad was an entrepreneur. My mom was a music teacher. We lived out in New Hampshire.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Because if you have the same product GIF does, then I can make money by running RFPs against all four of you. But if Jif is the only source of this, then I don't make any money because they just buy you.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And so for those people in those organizations to make their living, they needed to create competition and create fear and uncertainty and doubt in their customer's mind so that they would continue to need the consultant. And if the hub strategy had gotten implemented, no one would have needed Towers Watson because all the data would have been right there.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
They could have added something or removed an app at a click of a button, no contracts needed. It would all just been electronic. All the data would have been there. We would have desiloed the information. Everyone would know what are working. And so to protect their business, they ultimately ensured that the hub strategy has not been implemented.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And the four companies that then raised between $150 and $300 million each to compete with us and then started giving out the same deck, none of those have done very well because the system itself is resisting improving. It resists change because it reduces costs. It improves quality of care and nobody wants that.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Yeah.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
It was traumatic. And I had put in millions of dollars myself to get GIF going. That's how we survived the first three years. And so when we sold for 144, I barely got back what I'd put in. And I'd spent months not sleeping over GIF as well. So a lot of heartbreak, no reward, a lot of risk, and no impact on the American health care system either. So a lose, lose, lose.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So this was all taking place around 2016, 17. We had decided in 2010 that we were going to do a network effect venture firm. And the model for that was an accelerator. The more companies you have in the class, the more alumni you have, the more leads you have, the more your brand gets out there, people are loyal to it, blah, blah. Venture firms don't have network effects, but accelerators do.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
If I wanted money, I needed to start businesses. And so... I did that. And then when I was in college, I started the loft agency and I took a year off and started a company and then went back and finished up at Princeton and whatnot. So I was really an entrepreneur from the time I was born. I grew up in a place where you had to be an entrepreneur sort of in rural New Hampshire.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So we started as an accelerator in 2015 and did it for two and a half years. And in 2017, we decided that we weren't going to continue with that model, but we were just going to become a venture firm. We invest an average of $3 million for an average of 18% of a company. We're very hands-on. We try to help them if they want.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
If they want to leave us alone, then we're also completely leaving you alone. But we have been in your shoes multiple times. And so that's what we're doing with NSX. And we've made over 200 investments now and going very well. One of the biggest seed funds in the world. I think us in first round are probably the biggest and it's going very well. But it's the sense of the PTSD of being a player.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
It's much better being a coach when you're my age and you have all this PTSD. You've got to move from being a player to being, I'm like Steve Kerr. I want to be like Steve Kerr, who played for the Bulls and won championships, but now he's winning championships, coaching the Golden State Bulls.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I was living in Switzerland for a year and a half, having an adventure with my kids and my wife. And I was looking for companies in Switzerland to coach, and I couldn't find any. And so I decided to go to Israel looking for some, because we knew that Israel was just this awesome place to find startups. And I emailed four people and I said, who should I meet with when I go to Israel?
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And all four said, listed Gigi LevyWise on their lists. I emailed Gigi and the guy's got three kids and he's the biggest investor. He's like, I can meet with you at 9 p.m. on a Wednesday night. I have an hour long slot. I was like, that would be fantastic. I'll take it. So I meet him on a Wednesday night at 9 p.m. and we're still sitting there talking at three in the morning.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We were up there for six hours. And we talked about Ender's Game and about Star Wars and about all the things you're not supposed to talk about, like religion and politics and money and all the things that, you know, no one you're not allowed to talk about. And he and I just talked about all those things. We had the best time.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Some have the walls, but not Guy, with me at least. And so we just got to be good friends. And then he and my co-founder for all of my companies, a guy named Stan Chudnovsky, who's here in the Bay Area, he had also met Gigi like a year earlier at some event in England or something. And so when Gigi came to the Bay Area to have dinner with us, he's like, hey, I want to dinner with you guys.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Stan and I had been looking for a third person to start this NFX thing with. And Gigi came to dinner and he said, and I don't know, Stan and I had talked to, I don't know, 60 people and said no to everybody. We just couldn't find the right vibe. We couldn't find the right soul, the right spirit.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
He said, well, if you guys are still going to do this NFX thing, I would do it with you. And so Stan and I just glanced at each other like, let's do it. And we thought we would love to have a foot in Israel, but it was mostly about spirit and soul. It was about karma.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And so it was chosen for me. What was sad was that at Princeton, they didn't have anyone to slap me in the face and say, dude, you're an entrepreneur. Get out to California, get out to San Francisco where the entrepreneurs are. Took me 10 years from graduating from college to actually getting out here and realizing, ah, these are my people. This is where I was supposed to be the whole time.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
14.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Okay.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And then we started up in June of 2015.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We had a bunch of capital ourselves, right? Because we'd all built and sold businesses successfully.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
A lot of businesses. So we had plenty of capital ourselves to use. And, you know, it's better to use your own and screw yourself than to screw somebody else while you're learning. And then we had a bunch of venture firms who wanted our deal flow. And so they put in a little bit of money into our fund as well. Greylock, CRV, Shasta, and Mayfield. Great funds, great guys.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And they had known us for years and invested in our companies and been successful and whatnot. and supported us in this. But again, it was the vibe. It's like, do you trust the person? Do you love the person? Do you believe in the person? And we just got that community together and then we got going.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And then when we went out to raise a bigger venture fund of the first fund was 150 million, Pete Flint had joined us and Pete had built and sold Trulia for three and a half billion. And so between the three of us, we had built and sold 10 companies worth over 10 billion. And that's twice as much as Horowitz and Andreessen when they started that fund. So the fundraising wasn't too difficult.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
It's the daily constant battle between negativity and positivity. So I originally never wanted to be a venture capitalist because I'd worked at Battery Ventures. And Battery is a negative investing firm, which is why I think their returns are the highest and most consistent of almost any venture firm in the world. They will only invest when they can't not invest.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
They will only invest when they've gone down all the risks and checked them all off. And there's no reason not to exist. Oh, fuck. We have to, excuse my language. Oh, crap. We have to invest. We don't have any excuses not to. And that's just a very negative process. And it makes you very negative as a person. And that's not a great way to live.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
On the opposite end of the spectrum, you have firms like Benchmark, where they're constantly thinking, how big could this be? How could this be massive? How could we look at our optimism and see what's going here? And I hadn't realized that there was that type of more optimistic investing. And that's why I never wanted to be a VC.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
But now we are bringing that sort of optimistic, almost naive approach to the investing, which doesn't work very well at Series B, but it kind of has to work at Pre-Seed and Seed where we operate because there's not much to go on.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And you have to think about what can go right. Because in the end, what matters to the venture capital fund is And what matters to your life and your ability to paint graffiti on the wall is the big outcomes. Like I will be associated with my Poshmark investment and with my DoorDash investment and my Lyft investment because those got big.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And I just hadn't known. And so right after school, I went into the normal path. I applied for an associate position at GTE, which was now part of Verizon. It was a 180,000 person company with a big headquarters in Stanford, Connecticut. And I traveled up there with my little coat and tie on the train and got a job and They gave me six different jobs over three years.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
You won't associate with my rap leaf investment, even though I made 35 times on that. Or maybe you'll associate with my Goodreads investment or not really with my Flickr investment because they weren't massive. And so in the end, this is a power law business, as everybody says, but you have to understand you're really looking for the big outcomes. So at seed, you have to just be optimistic.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And you have to be realistic. You have to have looked at hundreds of thousands of plans. You have to have invested in hundreds of companies and failed with most of them. You have to have a few successes where you see the patterns of success. And then you try to throw that all in and not get too negative all day long and not too cynical and keep swinging. and just keep swinging.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Our first fund at 37 investments, second fund at 55, third fund at about 80. So we're taking a lot of swings per fund, looking for the three or four that are going to be worth $2, $4, $5 billion. And that's where we make our returns. That's where we have the most fun in terms of returns. But in the end, that's how you balance that negativity and positivity.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
No, we were just talking about this last week. It's one of the more difficult judgments to make about a founder. Are they smart? Are they fast? These are easier things to figure out in interviews. Are they ambitious? And we have a list of 48 attributes we're looking for.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And most of them are easy to, not easy, but you can figure it out in three or four or five meetings and looking at their track record and seeing how they respond to emails and seeing how the people around them behave and et cetera. There's lots of tip-offs.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
But this issue about will they sell out when someone offers them $80 million for their company, which matters not to our venture fund, even at $400 million, it's really not that interesting. If you exit for $400 million, it's fine for our venture fund, but it's not going to really move the needle. You've got to get to $2 billion for it to move. It's a crazy business model.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I mean, the venture capital model is kind of crazy. That's why I say most businesses shouldn't raise venture capital, because most businesses don't have a shot to be a $2 billion to $4 billion to $10 billion company. But this is one of the hardest things to suss out. And what I will tell you is that one of the big things you can suss out is geography.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So if someone is in San Francisco and they get offered $400 million, the guy they were sitting next to at the soccer game sold his company for $2 billion or just raised at $4 billion. For $400 seems like a loss. If that person is in Toronto, they're going to be the king of Toronto. for the next 20 years.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And so someone's willingness to keep going and their craziness to keep going is influenced by how crazy the people around them are. And Europeans are really reasonable people. And most people are really reasonable.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
It's the crazy ones that are kind of out here, which is why most of the big exits are in the Bay Area and increasingly why they're in Israel, because there's enough crazy people in Israel that are now there. So the people who are
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
trying to decide if they're crazy or not can be influenced toward the crazy end of the spectrum, which is what we as venture capitalists want, and which I think is the most fun in the end.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
If you have a question, you shouldn't be.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So I learned all about the corporation and all the people. And then I was just like, this is not for me. And a friend of mine had reminded me that my dream had been to go to Asia and So, yeah, he called me up one day. He had just gotten back. And I was like, I went to my boss. I'm like, I got to go to Asia. So I sailed. I took a sailboat and I sailed to Tahiti.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
If there's a question, if you're worried about it or wondering about it, you know, just live your life. Just take your job. Enjoy your days. Like most entrepreneurs are not going to affect the world. And if you're working in a big company, you will not affect the world. That's fine. Most of us won't affect the world. There's just a few people who will.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So just enjoy your personality, enjoy your family and enjoy your community. And don't stress about it. Look, what happened was in 1994, before we had the browser, entrepreneurship was not high status. The people who would come into Battery and pitch us, they had maxed out 16 credit cards, they had a mortgage, and they were already doing 3 million of revenue.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And they were hoping for 2 million of investment for us, and we could buy like 30% of the company. They had dandruff on their jacket, they had bad glasses, they had like a $90 suit on. These were autistic people mostly. These were people who couldn't work anywhere else. They were being driven into being entrepreneurs. They were very awkward, most of them.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
That is not the case anymore because being an entrepreneur became high status.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Right. And so a lot of people are considering entrepreneurship because they want status, not because they're actually entrepreneurs. They want to be successful entrepreneurs. And you can't be naive about this because we look at 10,000 companies a year. We invest in 20, 25. So a tiny fraction, 0.2%. So we reject 99.8. Now let's say we invest in 20 good ones. Of those, how many will be successful?
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
maybe two. So only two of 10,000 will be successful. Now of those 10,000, did we miss some of the others? Probably. So let's call it, there's a total of 50. We invested in 20, the best 20, but actually the total best was 50. So let's call it four or five successes out of 10,000. That's the numbers. the chances are really, really slim.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So if you're doing it, it's something you kind of have to be doing. The success of it can't matter into the equation. It's the doing of it that is the reward. The reason the Bay Area keeps winning is because we don't really care about the money. We care about the process.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
The advice I'll give to your listeners is not self-promotional. It's actually what I think would be helpful to them, which is to go to NFX.com and read the content there. It's the second or third most popular VC website in the world after Andreessen Horowitz. And they've just got 600 people and we've only got nine. So we're batting above our weight here. The articles there are really great.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And then I flew on to Asia and I got a job at Star TV because they had, anyway, they were doing technology and media and whatnot. Then I got fired from there and I went to Beijing and I was studying Mandarin. And then I got misdiagnosed for the heart disease and sent home.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
evergreen, thoughtful. It's like getting a startup entrepreneur business degree. I wish someone had told me about technology windows. So there's an article on the website called technology windows.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And also you should read venture capital 3.0, which lays out what has happened over the last 50 years with venture capital and like where we are and how the whole ecosystem works with the startup industrial complex and all that stuff. just so that you understand the waters that you're swimming in as an entrepreneur.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
But the technology windows way of looking at the world is something I wish I had known 20 years ago. And they haven't taught this at HBS or at GSB, and hopefully they'll start soon. I'm trying to teach it on campus, on both those campuses now. But these technology windows open, and like I said, we were 80% lucky and 20% good. It's probably 90% timing and 10% effort.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And everyone says, oh, it's sweat. It's not the idea. I'm like, actually, I disagree. It's actually the idea at the right time is kind of everything. And so what you'll see is people being really great venture capitalists for like a decade, and then they stop being a great venture. How is that? Well, because they were investing in a particular type of company when that technology window was open.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And now that it's closed, they don't have a network in the new technology window and they can't get into the best deals. And so it's time for them to retire. So becoming a great venture capitalist, and you were saying I'm a horrible investor. I'm like, no, you're not a horrible investor. You just haven't picked a sector at the right time with the technology window.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
But once you start to be able to read these technology windows, you'll be able to place yourself in the flow of energy. And then you'll just get more lucky than not. And if you just stay in the game, you eventually get lucky. And then everyone says, wow, you're a genius. You're so smart. You're so talented.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And as the great Sarger from CRV said, he said, the most important decision I ever made was just living in the Bay Area. Like everything else. He said, because when I came to the Bay Area in 2003, like all the energy was moving here. I was just like floating on it. Moving with it. And then he led the seed round in DoorDash and you know, billions of returns and how he's running the firm.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And he's just so humble. And he's like, ah, I'm just here, you know, great, great guy.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
My pleasure. Thanks for having me on.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I think what was happening was, this might be interesting to your audience, which is I was struggling between the fear of having no money and the fear of living a boring life. And I was grinding up toward the realization that I was more scared of living a boring life than I was of not having any money or anything to eat.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
That's the thing. I felt like I want to live an amazing life and I'm willing to die for that. So when I got back to Boston, I went and took a job at a venture capital firm. And then I learned all about venture capital and how that all works. I was smiling and dialing, trying to sell money for battery ventures.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And then they came to my room and said, here's your recommendation to Harvard Business School. Go to Harvard Business School. They had all been to Harvard Business School. So I applied. I got in because they said I should. And I had done all the things. And then I got in and I went to that. But that, again, wasn't quite the thing. Again, this was the normal track. This was safety.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
This was the fear that I grew up with of not having enough to eat. And by the time I was done with HBS, I felt like I had turned over enough rocks. I knew that I could always get a job for $60,000 somewhere because I had this HBS degree. And then I had to decide, do I go back into venture capital or do I become a startup founder?
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And this guy named Mike Zack at CRV, Charles River Ventures, he said to me, I'm listening to you here at dinner. It's our sixth meeting. We're ready to make you an offer, but I can see that you need to be an entrepreneur and you need to go do that. You'll be a better venture capitalist later once you've done that.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
A lot of people are considering entrepreneurship because they want status, not because they're actually entrepreneurs.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And he was the one who finally slapped me in the face and said, dude, you're an entrepreneur. I was 31 at the time. And so that's when I started my first startup. And then we almost went out of business twice.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Right. So here's the thing. Here's my advice to your crowd is don't become an entrepreneur. If one, you haven't been an entrepreneur since you were six or 12, and it's just part of your DNA, or you have an idea in your head that you can't not do. And both things were true for me at that time. I had been a little entrepreneur since I was six and I had an idea I couldn't not do it. I couldn't sleep.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I was so excited about it. I was having visions about it. It filled my soul. And so I had to do it. And Mike Zak thankfully saw that. And he said to me, you need to go do this.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
That's exactly right. Especially if you're going to raise venture capital, which most companies shouldn't. But if you are, it's a prison. You have to exit that company and give the investors their money back. You're just in the prison. You've got a sentence until you exit.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
But it's very tough. And there are many, many nights where you're just not sleeping and you're totally suffering and you have to remind yourself, I chose this. And my wife would remind me and I would remind me. And it was still very, very hard that, look, I chose this. I chose this. I chose it because it's very painful.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
The basic idea was that the internet was going to be about us and our friends, not about Nicole Kidman and Tom Cruise, because all the other media technologies were for one to many. Radio, one broadcast, 100,000 listeners. Television, same thing. Magazine, same thing. The internet was the first media technology that was many to many. And so I realized it's going to be about us.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We're going to consume media about us.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
That was like 98, 99, yeah.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
No, I had been at a venture firm, so I had seen how you fund these things. And I had seen many people take this leap and live this life. And I had interviewed hundreds and hundreds of founders who were living this life. So for me, I was already acclimated to the cold water.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I was really an entrepreneur from the time I was born. When I was six, I started selling worms, and then I was selling seeds, and then I was selling shellfish, and then I started a T-shirt company, and I started a boxer short company. I started 18 companies before I was 18. I was struggling between the fear of having no money and the fear of living a boring life.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We were 80% lucky and 20% good. The 80% luck was that we raised our Series A round one week before the crash. I'm actually, excuse me. during the crash. The crash started on a Monday. We got the money on a Friday afternoon that same week. The venture capitalist actually sent the check. And so we were very, very lucky.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And so by the time we could even gear up to spend any of the money, it was very clear what had already happened. So we didn't overspend. So we were able to extend long enough to survive. But the 20% where we were good was that we iterated really quickly. We were one of the first companies to do A-B testing. And we took ourselves off salary for about six months leading up to the financing.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So we had 13 people and I think seven of us were on salary and six of us were off. And we were working 12 hours a day and iterating and iterating and testing and trying and breaking old paradigms and throwing out old stuff until finally something hit enough. The other part that we were good at was I talked to 43 venture capitalists before we got funded. Remember, these are all my friends.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
These are people I had known for years working in the industry, and they all said no to me.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
That's right. And I think for people who have succeeded at school and for people who've succeeded in large corporations or succeeded in government or succeeded in the military, it's hard to imagine how many at-bats you need to get one hit, how many ideas you need to have before you have one good idea. And it's just a benchmarking exercise.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And so for people who are saying, I'm not the right height, I'm not the right color, I'm not the right gender, I'm not the right nationality, therefore I'm not getting funded, that's mostly bullshit. Because the white guy from New England who went to Princeton and Harvard, who knew everybody in the industry, had everyone say no to him.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Because it was not a consensus idea, it was not an easily digestible idea, and I had no traction yet.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
No, I just continued. I knew this was coming. I knew I just had to figure it out. And I just needed enough time to figure it out.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I was. I had a girlfriend at the time.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
No, not at all. Not at all. She was fantastic. I stopped sleeping on October 3rd and we raised money on April 9th, I think. On October 3rd, I woke up in a cold sweat realizing I didn't know what I was doing. I was going to have to go off salary that I was leading these 13 or 14 people into the abyss. I hadn't learned nearly enough working at the venture from watching people do this.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I needed to know much more about product and all that stuff. And so I just bribed it. And my girlfriend, who's now my wife, she couldn't care less about money. She couldn't care less about technology. And so for her, she just cared that I wasn't sleeping. And she was like, well, you're happy not sleeping and being stressed all the time. That's you being happy. Fine.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Don't become an entrepreneur if one, you haven't been an entrepreneur since you were six or 12, and it's just part of your DNA. Or you have an idea in your head that you can't not do.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
There's a difference between viral effects and network effects. Viral effects are to get new free users. Network effects are to have retention, where the network effects create so much value in the product to people that they never want to leave. And no competitor can get them to leave. Two totally different things.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And there's an article on NFX.com, which everybody should read, called Viral Effects Are Not Network Effects. So what was happening at this time was that we had a massive viral effect, meaning we sent out our latest iteration of the product to 400 people on an email. And within eight days, one million people were trying to hit the website and it crashed the website.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Luckily, it was a very clear signal. Had it not been clear, that would have been harder. A clear signal is a zero or a hundred. But if you get like a 43 or 37, that's the worst. Because if it's a zero, you just move on to the next experiment.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
The maybes are the hardest. And so luckily it was a big viral effect. We started getting millions of people hitting the website. Basically, we put up a dog test. Which breed of dog are you? Answer these 16 questions, and we will give you this beautiful, cute little dog type with four paragraphs about who you are as a personality. And this went crazy.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
I think in the end, we had 100 million people take that test. So it took us like four hours to make. It was like another experiment. We just kept experimenting. And then we were able to raise the money, and we didn't understand network effects. This was the big aha. Network effects didn't come until 2004.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
So we took off in February 2000, and then we didn't really understand network effects until 2004, and that's a whole different story.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
You need retention. So we were building self-assessment tests. So you had to put out a new self-assessment test every week. And this is the business of fresh produce. It's like being an e-commerce vendor or something like that. Or your job, you have to put out a new podcast. This is what we call the business of fresh produce. And it's a manufacturing line.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And it's a business, but it's a hard business. But it was working for us because a lot of people were coming. And so we could just put up ads. We got profitable for one month. And then we moved out to San Francisco because I couldn't hire anyone in Boston. We started this in Boston and we just couldn't hire anybody who knew anything about anything. And so we had to move out here for hiring.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Here's my advice to your crowd.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
And so of the 14 people, 13 of them moved. The 14th person Who did not move is a woman named Mel Schneeberger, who changed her name to her husband's name, Mel Robbins. And she's now the number one female podcast in the world.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Right. She was the one who didn't move with us. Anyway, she kept iterating, too. And now she is where she is. So she's fantastic. And so we moved out to California. We got an office and then the fresh produce kind of started running out. There was no network effect. There's no retention. People would come, they would enjoy, they would send to their friends.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
We would get new users and then everyone would kind of leave. The internet only had 600 million people at the time. We registered 150 million of them. Incredible. But they would only come and stay for one or two or three hours and then they would leave. So then we're like, okay, let's build out a matchmaking site where at least people will come and stay for three, four, five months.
Leap Academy with Ilana Golan
Venture Capitalist, James Currier: Mastering Network Effects to Scale Your Startup | E102
Okay, now let's build out a social network. And there was no name social network for it. We called it a member directory where people could see each other and comment and share and that kind of thing. And then we built out an ad network, which was like a marketplace, which had a network effect. But we still didn't understand what we were doing.