I start with a business crush, meaning there's an idea and I can't stop thinking about it. And then a week later, I'm still thinking about it. And now I'm thinking, "Oh my god, this would be good and we could do that and we could add this person." And it's just building in my mind and I'm falling in love with my idea intellectually. And if that sticks with me for like two weeks, I generally do it.
Kevin, thank you for making the time. So nice to see you.
So, I wanted to just give people a scan at 30,000 ft of the landscape, meaning your chronology for a second. So, this was prepared by the robots. So, don't believe everything you read, but let's just go through some of the basics. I'm not going to spend too much time, but please indulge me for a second. So, 1985, graduates from Yale. I think that was economics. Begins his career at Credential Investment Corp., all right, New York and London. 1990, earns his MBA at INSEAD. Subsequently works at Euro Disney in France. Then United Media. We're going to come back to all of that. 1995 helps launch the blank website. I'm leaving that blank for a reason. We'll come back to it. And then after that, DoubleClick. That's where if people interview you, I know you don't do very much media, but in the few that I've seen, that's where a lot of people start.
Then goes on. DoubleClick sells for 1.1 billion. Ryan steps down 2007, founds AlleyCorp. We're going to spend a lot of time on AlleyCorp. Co-founds Gilt Group. Business Insider, later renamed to MongoDB, then co-founded Zola, a wedding registry company, and Nomad Health in 2015, a marketplace connecting clinicians with temporary healthcare jobs. I'm trying to give people an idea of the breadth of fields. 2015, Axel Springer acquires control of Business Insider. Got some numbers here, but who knows? 442 million, something like that. Hudson Bay buys Gilt Group for an announced $250 million deal. MongoDB in 2017 goes public on NASDAQ 10 years after its founding. I know there's a lot of stories behind that. 2021 we met, I guess, or had dinner next to each other 2 years prior to this roughly. Co-founds Therapeutics, developing new medicines for psychiatric conditions. We will certainly talk about that. 2023, skis 101 km to the South Pole. So that stands out as an outlier. Then June 2026, OTSKA completes its acquisition of Transcend, 700 million upfront plus up to 525 million contingent on future sales. July 2026 announces AlleyCorp's 335 million second fund focused on backing companies at their earliest stages. I think you're doing a lot more kind of deep tech investing also. This is a crazy bio, Kevin, and there are so many reasons I wanted to chat and learn from you. And I wanted to start, we're eventually going to get to things like recruiting and talent scouting, but I wanted to talk about trends and gazing into the crystal ball, looking into the future.
So, I've read that you sometimes do an exercise of listing trends on a whiteboard, right? Throw 20 trends up. And I'm going to read a bit. This is from foundersjourney.org. So one exercise I do is to list 20 ideas on the board of trends that I believe are going to exist for 10 years and then what are the implications that come out of that. And you can look at societal trends, healthy eating, automation and restaurants, gig economy. And this is where I think I miss a step. So first I get the first part, you ask if I bet that's going to continue for 20 years, the market's going to grow by 5x. He asks what will exist that doesn't exist today. So sometimes I miss that second step. But could you perhaps just walk me through how you think of trends and spotting opportunities in those trends? And it strikes me that I think that 10 years is important as opposed to like one or two years, but could you speak to that?
Yeah, first of all, 10 years is important because to build an important company, unfortunately, you can't do it in two or three years. It does take 10 years. And so, you've got to bet on a long-term trend. So, if it's something that is hyped today and is going to be done in 2 years or started 5 years ago, you're too late.
And it's very hard. I've gotten it wrong many times, but sometimes you get it right. So, DoubleClick was internet advertising was going to be very important. And that trend we absolutely got right. Unstructured data in databases was, and that was a 20-year trend. Psychedelics was a very important trend. I became a big believer that that, you know, would be significant for mental health and that we are five years into that 10-year trend.
Nuclear energy is something that we made a bet on, a very significant bet on two and a half years ago and are in an incredible company there. The creator economy is something that we made a bet on several years ago and have an extremely successful company there. That's a trend that is continuing. There are other trends out there and more specifically value-based care is a trend.
Value-based care is a way the government has structured it so that you can go to multiple hospitals or doctor's practices and work out ways for them to reduce their costs by focusing on a specialty often. And if you reduce their costs, then you can share in the savings. And so we have multiple companies there. And sometimes there are trends and I'm not able to think of the right way to benefit from or the right product. Longevity and this focus, still haven't come up with the right thing. I have a conference called DOC which is in Napa Valley in October that is longevity and science. And so that's to learn more, but I don't have a product idea yet on that.
Why do you do events? Are the events opportunity and talent scouting mostly? I understand that learning is sort of a bedrock beneath both of those two, but what was the impetus behind an event like that?
Yeah. So I have four now and some of them are linked to my business. So Deep Tech New York, it's 450 people talking about the most fundamental deep tech trends that are happening out there, material science, things like that. Then I have one, Digital Health New York, which is next week. Then DOC, and then I have one that's called Odyssey, which is just ideas that's less commercial and just getting a hundred very smart people together. And I look at that as more intellectual nourishment. I don't think of it as directly, you know, generating business. If I meet fascinating people in different areas, good things will happen. Some of them may be business-oriented and some of them may not be.
Could be dragging a 100 pound sled behind you in Antarctica.
Yeah. No, I'm leading 20 people as part of Odyssey to China in a month. And the theme is what does China do better? There are things they do worse, but there are things they do better. There are definitely things they do better. And I haven't been in a long time. I don't do a lot of business in China. So I just felt like I need to see that. And so I'm bringing heads of VC firms, bunch of interesting people on that trip. You know, we did one, took 16 people skiing that are off-piste skiers to a place in Val d'Isère. Fascinating conversations in the afternoons. I'm going to take 30 people to Switzerland on a hiking trip next May. Anytime I'm surrounding myself with great people and we structure it in a good way that these conversations are happening, then I'm going to get a lot out of it.
All right. So, I had planned, but plans change when the conversation gets flowing on hitting early chapters and I want to hit early chapters. But before we get there, I remember sitting next to you in Portugal, however it was 2019, and the first thing I thought was, "Good God, what does this guy do for exercise?" I mean, you seem to take, unless your genetics are just like Usain Bolt or something, fitness, movement, exercise very seriously. And we'll probably get into what that regimen looks like a bit later. But when you organize these trips, so I organize a few trips a year for friends. How long are the trips? In the case of say the hiking off-piste, like you got to check some boxes before someone's going to be like avalanche ready and so on. In the case of the hiking trip, how do you think of composing the group? How long is the trip? What goes into creating that?
So, the hiking trip is 3 or 4 days. It'll be probably 30 people. And my structure will be probably a 4-hour hike, 8 till 12, which is a good size hike. You can go longer, but four maybe five. And then in the afternoon, we'll have sessions. So, there'll be someone talking about climate change. There'll be someone who's talking about, yeah, psychonautics or whatever is happening that we think is interesting or, you know, consciousness. And so you should feel like you had great content, you got to know other people, you had great conversations. And then at dinner, a lot of that comes together and you get to hopefully come away knowing 20 of these people who have been selected because they come from different walks of life but are doing something very interesting.
So with 30, does that mean that you would have something like 10 who end up getting up to speak? And at dinner, is that structured in any way? And the reason I ask is that there can be unstructured events. One of the characteristics of Dialogue that I really enjoyed in the early days, when it got bigger, it changed. Also didn't realize I was in Peter Thiel's secret society when it came out in the media. Who knew? In any case, in the early days, I remember they had very small tables, four to five people, and there would be a question at each table, and someone would have to take the responsibility for effectively acting as moderator. And there was frequently assigned seating to ensure that you would get exposed to a variety of folks. And I thought that was really an astonishing way to squeeze a lot out of a few days. But in this case, if it's unstructured, how do you think about seating and grouping people? Right? Because if it's just one long like Red Wedding Game of Thrones thing, then if somebody's at one end and someone's at the opposite end, they're not going to interact necessarily, right? Is it Jeffersonian or like...
No, at 30 it's too big to have one conversation. So, what I would generally do actually is in the first two nights have seating so that it forces people to mix it up and maybe on the last night not do it. So then you can say, you know, the person I really want to catch up with is this. And you should have that opportunity of someone you spent some time with. On my bike, I have an annual biking trip where we just classic 4 days do a lot of mountains. Last year in the Douro Valley in Portugal, might be in Italy, things like that. There's only eight of us. And each person has a topic that they, one meal is going to be a 20-minute conversation that you're going to lead. And it can range from very early on we were talking about crypto when it wasn't so obvious. A good topic when you are relatively well off, how do you handle money with your children? Always a tricky issue when all of us had kids. So wide range of topics.
On the trend side personally, I remember for instance way back in 2008, 2009 I met Toby who was still CEO of Shopify and they had 10 employees, something like that. Got very lucky, ended up becoming the first adviser to Shopify. But in part, the reason I committed to that is I thought, okay, one year, two years, who knows? But in 10 years, will there be more people online? Will there be more e-commerce? I feel like that is a no-brainer. Toby and his team, Harley and everyone were also very focused on being basically first movers on mobile. And I was like, okay, well, will there be more mobile phones, more broadband? I mean, that seems obvious, of course. And so ostensibly someone will probably win a decent part of that market. Sure, why not give it a shot, right? And there's a lot of luck involved with these chance encounters. But I feel like you over time have probably developed a more sophisticated lens or kind of multi-dimensional lens of looking at trends. So, if you're hosting a company offsite and they're imagining where different industries are 10 years from now, can you walk through maybe common pitfalls or mistakes that people make when extrapolating trends or forecasting? Are there any follow-up questions or frameworks that you use to hone in on something that might be an opportunity or disqualify something that is shiny but is actually a suicide mission?
Well, one of them, and again, if this were formulaic, we'd all be doing it and it would be easy. So, there's definitely some gut feel and some instinct, some guesswork in here, but I'm always thinking about, let's imagine Shopify does very well. Who else works with them and supplies them? That's a second order. And so, let's think about that. You know, the people who are providing the picks and shovels to data centers are doing very well. And how does behavior change? You know, what does that mean? Sometimes that has a result that people will stop doing this and be doing more of this.
Can you give an example of that?
Well, I'll give you one example in second order that we sat down in 2003 and didn't quite do it and thought about bandwidth prices going down and they were going down. The reason there was no video in 2003 is because it cost about $10 per thousand to serve content and you could get about a dollar in advertising. So that model doesn't work. But we looked at the trend and thought, you know, by 2005, 2006, they're going to cross. And we should have started YouTube and we didn't. And it's not a coincidence that YouTube started in 2005 and then crushed it. And that was the second order that led to a company that today is worth $300 billion.
That was a good acquisition. Incredible acquisition. So I won't belabor this, but I think it's, well, number one, deeply fascinating to me. If we look at for instance Gilt Group, right? And maybe you could give just a brief description of what it was. Why don't we start there just very brief? What did Gilt do?
It's a good news and bad news story. So this was an unusual one where I spent a lot of time in France. I have a French passport, speak French, and everyone in France in 2006 knew Vente-Privee, which was basically Gilt of France. And they were doing a billion dollars in revenue doing this concept of flash sales where during the day at one moment they would have discount merchandise of high-end brands on sale. So the equivalent if you had time to go to a sample sale, which you don't. And I remember walking by a sample sale in New York and there were 200 mostly women in line. And I remember thinking, you know, the person who lives in Philadelphia or Austin, you don't have sample sales, is really the New York brands. And there's a lot of people who like to be in that line. And these guys had figured that out. So I started it, it became a phenomenon. So in our second year we did 175 million in revenue, which is crazy. It's merchandise. You have to buy it and package it and sell it and return it and things like this. And we did an incredible job of providing that. And so in year four, we were doing $500 million in revenue. This is quite a while ago. And then the problem was, which does happen, is the market changed on us.
Right? This is the part I want to ask about.
Okay. Yeah. And so what happened was when we started it, let's use Marc Jacobs. Marc Jacobs did not have a website in 2008, 2009 because they sold to Bloomingdale's and people like that. They were a wholesaler. Why would they have a website? They got a website. They started discounting their own things. I had been filling that gap completely. And at the time, Macy's had a terrible website. They at least got it to mediocre by 2011, 2012. And so did other department stores. Then Farfetch was there. So all of a sudden, I'm competing with a lot of people for that merchandise. It got a little commoditized. And we couldn't figure out a way around that.
So this leads to my question. Because you have to take shots on goal and sometimes the competitive landscape or the evolution of the competitive landscape is difficult to glean. But did that experience with Gilt inform how you think of durable capitalization on trends? In other words, like how you capitalize on that window but avoid getting crowded out when you have 10 other people do effectively the same thing?
Yeah. Yeah. And it gets back to do you have a moat and we were trying to get to be big enough that we would have that moat. And we got to be quite big but not big enough. I mean, I was talking to Theory once and they had 20,000 items at the end of the season to sell. I could buy a thousand. Good, but doesn't move the needle for them. And so I just didn't quite get there to have an impact on the market. It's hard to know exactly how big you're going to get, how fast, how much success you're going to have over your vendors. And so we almost got there but didn't. And one of the lessons there, you know, I went to the board and said, I think we should sell the company. And everyone's like, well, we were worth a billion dollars. We thought we could sell it for 400. It's disappointing. But I said, we have a falling knife here. And so we went out and we only got $250 million. Sachs came in and paid for it. And 3 years later, they said, I'll sell it back to you for $5 million.
Wow. Better late than never.
Exactly. It wasn't a great sale, but it was a lot better than it would have been because I didn't like where things were going. And the conclusion has been that I haven't touched really e-commerce since then. It's solved. Startups have to solve a problem. Even if you don't realize that problem is there, when you see it, you're like, "Oh yeah, that is a problem I had." And right now I can't, I mean I can get anything delivered to my house in like 27 seconds. I can return it. It's inexpensive. So I don't know how to do better. I don't have any ideas. I mean whereas in many other fields, cure for cancer, nuclear energy, psychedelics, there are things to be built that have not been built that will improve the world a lot.
Let's wind back the clock as I promised listeners earlier. So we're going to get to the helps launch the blank website. Before that we have Yale economics, Credential Investment Corp, investment banking, INSEAD, Euro Disney. Was there anything that you learned or developed in those chapters that then helped you when you moved to United Media? Like is there anything sort of crucial or critical?
The key thing is I was quite financially oriented and very comfortable. I've always been very comfortable with numbers and understanding the fundamental trends and the business and that is a component of business and life. And so all of that was business and then I wanted finance and then going into operations at Disney. So we had to manage hotels and it was an exciting project. We launched Euro Disney, you know, 15,000 hotel rooms, 50,000 people every day, huge project, launches one day. So I learned a lot about that but I decided I didn't want to work for large companies anymore. So I thought there's a lot of training, wasn't incredibly enjoyable. I then wanted to go back to New York. I got a job to be the CFO of a 180-person division of United Media. For me, that was a big job. I was managing 50 people. I managed all the operations and the finance. And it was a turnaround. Made a lot more money. For me, it was a huge step up. I was now CFO and COO.
And what is the blank that I'm leaving out here?
I still remember I read an article in Business Week that talked about a thing I did not know which was called the internet. You may have heard of it. And I remember reading that thinking, "Oh my god, that is incredibly cool." Like we could all be in touch with each other. We can send each other messages. We could buy things. And remember there was no browser at the time. So by 95 I launched because we owned a lot of intellectual property and one of the things was Dilbert. And so I launched the Dilbert website which became extremely successful and the reason was there were a lot of tech people who could use the internet without a browser and so we had enormous traffic. I started selling advertising which was a hard-coded ad just up there. IBM was the first person. They took it for two weeks. I made up a price on the spot. I mean how do you price something that's literally never existed? We did our own merchandising. So we started selling t-shirts and ties and things like that. And so a year later, we had a very successful business. I went to the parent company and I said, "This internet thing is going to be big and we have a head start. So why don't you give me..." I was thinking he's a loyal corporate citizen. "Give me a couple million dollars and I'll build up an internet division. We could do it for other companies." And the disturbing thing is the guy I was talking to was very nice, smart, traditional media guy. And he said, "No, because we're going to wait for the next internet." I'm like, first of all, I know you don't know what you're talking about. There is no next internet. And the disturbing part is I remember thinking, you're just really too old for this. And he was exactly the age I am today, 61 or 62 and a very successful executive and other things just wasn't in touch with what was happening right at that moment. So I then concluded this is not my future and that but I believe in my thesis. I thought this might be and it turned out to be true.
Was that a gut feeling or were you tracking numbers outside of traffic? What made you feel that?
I could see at that time if you're around in '96, it was just early but starting to boom. Companies were starting, more and more people were online. No one was getting offline. They were starting to buy things. They were starting to use maps. You could just see it worked. The things we take for granted now that you can buy something from anywhere, see content from anywhere that never existed. And now I saw that I'm like, this is a no-brainer. Everyone in the world is going to be doing this. So I think it was like your point on is e-commerce going to grow? Yes, it is. It's just better. It was a sort of, it was a no-brainer. And so I said, I'm going to go out and start an internet company. I met, it was a very tiny world at that point. People in Silicon Valley wanted to bring me on to join existing companies like I don't know if you remember Excite. A bunch of companies like this. Drove by them on the 101. And at that point I had a year of internet experience which made me one of the most experienced people at the time. So people were super excited to have me join and do something. And then I ran across two guys who had started DoubleClick six months before and who were very smart, very technical and I still have great relations with both of them. And so they said why don't you come join us and I wanted to stay in New York. I thought that was going to be a successful company and so I joined. I was the 10th or 12th person and then became, I started for a couple months as CFO, became the president and then became the CEO.
What do you think contributed to that ascension to CEO? What skill set or otherwise contributed to that?
I felt like a founder. Technically, I'm not, but I felt like I was. And so, I just was a team player and wanted to make this company successful and I adapted extremely quickly to making decisions very, very quickly. You have to make your decisions faster than other people because if I wait, so for example we opened offices in 25 countries in those first three years and our competitors were only in six. And when I went to Microsoft or Procter & Gamble, they're like, we do business in a lot of countries, we need to work with you. And then once you had all of them, the smaller players were like, well Procter & Gamble and Microsoft and we're working with you so we'll work with you. So we just ended up almost dominating our space and I think I did adapt to that of fast decision-making, understanding the numbers, willing to take risks. We were in 20 countries before our first country was profitable. And we made some mistakes along the way, but in general, we built the world leader. DoubleClick today as an independent company would be worth 100 billion.
So I want to talk about that. Not exactly building the parachute on the way down, but the AlleyCorp model, let's just say, especially in the first few years, because I hesitate to put it under the label of incubator because it's different in a lot of ways, unlike say a Y Combinator. It's not a bunch of people coming in with their own ideas that you select, then you take a tiny percentage for a tiny amount of money and teach them how to pitch a demo day. It's not what you do. My understanding is I guess in the early days you and your partner were putting in maybe 500k each into each company acting as co-founders. Right. Building each for about 6 months as a proof of concept and then going out to raise venture. Is that a fair description?
But we really built the product generally launched the product. And then went out to raise money. And so we were really focused on those companies and we did three and then we did another batch of three. We did a total of six. Three of them were hugely, hugely successful. Gilt, Business Insider and...
After the formation of AlleyCorp, when were those founded?
All between 2005 and 2008. And the last three were started in the same year.
At that time. Were you doing eight companies a year or did that end up?
Much later. Because it was really only two of us. And my, at the time my partner, he's retired now, but Dwight Merriman is one of the most brilliant technical minds that we've seen. So he's really the brains behind the DoubleClick technology and the technology along with one other person. And so we had this great partnership where everything technical he really handled. I didn't even worry about it. And then everything on the business side, finding the CEO, you know, building it, raising money, things like that, I focused on that.
It seems like you have a number of incredible strengths and I'm sure there are more, but there's the trend opportunity identification, there is recruitment of talent, capital formation, being able to raise money, right, in some cases a lot of money depending. And as you mentioned with DoubleClick, right, getting to 25 countries before the first is profitable because when a larger company wants to partner with you, they're going to want that global footprint and you raise the capital necessary to reach that critical mass, escape velocity, choose your metaphor. And I'm wondering how you think about that when in the say first three to five years of AlleyCorp when you were founding companies and some of them took longer obviously, MongoDB I think stands out as an example of that. But let's just say with Business Insider for instance, right, I listened to an interview we did with Henry Blodget and you mentioned how in the beginning you had a handful of people covering everything. And we could talk about the problem and the gap that that addressed, but just for the time being, I think this is worth spending a moment on. So like in the beginning, you had a handful of journalists handling everything, right?
No, they were only handling New York technology. It's important to start narrow. So they handled New York technology.
Okay. They were handling New York technology. And then at a certain point though that I imagine right they were spread thin but then once you got the traffic that allowed you to hire more and so you could stairstep it in a way that I think a lot of people would be hesitant to but ultimately that allowed you to dominate the space and I'm not delivering that in a very eloquent way. So maybe you could explain it. And I'm just wondering how that type of thinking manifests in other companies that you start.
And Gilt and Business Insider, even though they're very different businesses, we did the same way, which is that Gilt started with one sale a week of women's clothing and then we went to two and then three and then five and then maybe a year later added men's and then kids and then travel and then home. And in Business Insider, we start because it's better to do one thing really well than a bad job on everything. And so we started with only three people. So we discovered New York tech which wasn't that big. But we did a good job and then expanded and had a Wall Street vertical. And then added another vertical and then as we added more people they would add a vertical eventually defense, retail, things like that. And then got to 600 journalists at one point and did a great job. Roughly when we sold her afterwards we had six people covering defense.
That's great coverage. When you and Dwight were putting in the initial million dollars split 50/50 presumably you're taking I don't know 30 plus percent of the company something like that.
Day one more and then it gets diluted down.
Exactly right. You're planning for that dilution with the later raise. In the early, let's just call it the 2005 to 2008 period, how did you get very, very smart capable people to quit their jobs and come run these companies?
They have to believe that one, the idea is a great idea. They have to believe that we are adding value and that there's something here and that we should do it together. And those are the only two things they have to believe and then we can help them. And so we had just sold the company in New York City that was the most valuable startup company ever created at that time. So we had credibility in they thought we're going to get you in to raise money and help you do that and we did and we're able to do that. So that was the pitch. But we've, you know, Henry Blodget is a perfect example.
Business Insider. He's an incredibly talented person at the time. Had a mixed reputation because what had happened on Wall Street years before, but a great writer.
Just for clarity, he basically said he was uncomfortable with something that was standard practice. Right. That was his sin.
Yeah. No, I stand by what he said and did actually. But he came on board and I knew him a little bit, but brought him in and after 30 minutes, he's like, "This is a great idea. We should do it."
What did the pitch look like?
So simple now you won't believe it. There was no business news site that was online that was inherently online. And at the time Wall Street Journal and Business Week did not update their sites during the day. And so all the things we did, we're not maybe the only ones, but we're one of the very first ones are standard today. Meaning we posted multiple stories as it built, got more information, had punchy headlines. Tested our headlines. So, it's just hard for people to switch mediums. So, Business Week doesn't worry about their headline in the magazine, right? Does a good headline give them more revenue? Doesn't matter. Cover, but they don't care about the headlines of the article. And so, we would try four headlines, which was incredibly innovative at the time, for five minutes a piece. And then see, oh, this one is pulling better. Let's use that one. So, all these things are absolutely standard today. And Henry was very good. I mean, he's incredibly talented. And we got Peter Kafka, some people who are still very significant journalists today. We got them early on in their careers, but it took a long time. I mean, it took years, but luckily, we had enormous growth. Also, it was hard to raise money for it. Our strategy was, we're never going to do marketing. So, by the way, you've never seen an ad for Business Insider. We're going to write stuff that's so good that eventually we'll have 100 million uniques. And everyone's like, that's not a strategy. That is not a strategy, right? And that is exactly what happened.
Yeah. All right. Now you have how many full-time employees do you have at AlleyCorp now?
Okay. So, still not gigantic. All right. When you go back to yesteryear, back when you and Dwight and maybe there were one or two other people, how did you do the opportunity analysis to decide on what you were going to launch? Like how did you stress test what seemed...
Yeah. No, it was just the two of us.
Okay, great. So, how did you choose what to do?
Literally just sitting there in the conference room, brainstorming ideas, talking about it, thinking about it. Sometimes we'd go months and had nothing. And then you have to just trust at a certain point that you know, be no different if you met someone who's single and is out there dating and said, "How do I know this is the person?" You have to hope you know when you know.
What does it feel like with some of these ideas or any others, but preferably earlier examples? What does it feel like?
I recognize it because I start with a business crush, meaning there's an idea and I can't stop thinking about it. And then a week later, I'm still thinking about it. And now I'm thinking, "Oh my god, this would be good and we could do that and we could add this person." And it's just building in my mind. And I'm falling in love with my idea intellectually and if that sticks with me for like two weeks I generally do it. Like I don't actually spend more time. I know if I feel it and see it because there's no sense doing a business model. I mean who knows how many people are going to be looking at Business Insider. If you don't know that you don't know anything. The question is, are people going to read their business views online? Can we do a better job than the established players? And can we do it differently? Do we have a vision for that? In the beginning, I want someone who is going to focus on product. I don't need a finance person. I don't need marketing. I need a great product. And Business Insider was a great product, which is why we got to 100 million. And Gilt was a great product.
Also, Business Insider was in a sense in your sandbox because presumably it's dependent on advertising, right? So like you knew that once you had the eyeballs, you could...
Yeah. But that's develop that as a business. You know, it's harder to get the eyeballs than it is to sell advertising. You know, if I hand you 100 million uniques, you just go out there, hire a guy to sell advertising, and he'll sell it. Getting the 100 million uniques is 90%, 95% of the job.
At what point in the process are you like, you know what, I know exactly the person at Union Square Ventures or fill-in-the-blank friendly VC who would love this idea if we can show a proof of concept?
Yeah. No, I don't think that way. I think, and I'm always wrong, sometimes I'll think, I bet this person would like it. But the way to do it, once we go out to raise money, then at the time we would go out to 20 firms, 25 firms, and half the time the person I thought wanted to do it didn't want to do it for whatever reason, and someone else fell in love with the idea. So, I don't reset that. I'm always always shocked by... The fundraising is a we'll solve it later kind of situation. As also I never think about exits. We need to focus on the product. Do we have a product that everyone wants to use? If you solve that, everything else follows. You can raise money. You can hire people. You can do everything.
When did you guys, and I'm going to mispronounce this, invest in Valar Atomics. Is it Valar?
Valor. I had a 50-50 chance. That's V-a-l. When did you guys invest?
Nuclear company. Three years ago. Not even three years ago.
Okay. So this is small modular nuclear reactor. Exactly. So the next-gen nuclear reactor. How did you approach this? Because you know nuclear is, pun intended, hot.
It wasn't. No. Because fusion was kind of on fire. I mean there you had the Commonwealth, you know, fusion systems at MIT and you had, you know, Sam Altman raising his SPVs. I guess I'm wondering how you decided on that investment.
Yeah. And so this came directly from my deep tech team. So, it wasn't my relationship, but we just thought like always that there's an incredible team idea and that they're going to execute well. It was at a $20 million valuation 3 years ago. They just raised, it was announced publicly from Sequoia at 6 billion and they have been crushing it. Where we got lucky is that the US government was not behind nuclear at that time. And I'm not always the biggest fan of the Trump administration, but on psychedelics and nuclear, I think they're right on both, and they have moved both of them forward in a very substantial way. Yeah. By the way, most people know France must have 70% of its energy for 50 years from nuclear. Absolutely no problems. Great thing, stable. I am convinced that this should be an important part of our energy future.
Do you guys as you're raising or as the companies, the portfolio companies are raising money? I mean that's a crazy markup, right? I mean just an amazing markup. Does AlleyCorp take money off the table in these large rounds along the way strategically or do you guys just park it and wait until the end? How do you think about handling that?
So, we've done it once so far and in the past I would personally take some money off the table, especially the QSBS enabled money, which can make sense. You get $10 million tax-free and so it's worth doing that. In general now we think it's a good idea for a smaller fund like us in rounds four or five years in to sell a third of our position. So over the next year we will be hedging in some ways and we will go out there even though we feel good about these companies but I think that's a sensible thing. It returns some money to everyone. It returns some money to the team and you know some of these will do really well some won't. So I think that's a good idea.
What does your LP base look like?
It's very small. I'm the largest LP and then...
We have mostly family offices and some institutions, some small endowments. So we have maybe 40 or 50 LPs.
I mean, you have a spectacular track record. And the second fund, correct me if I'm getting this number wrong, or correct me if Astra is getting this number wrong: July 2026, $335 million second fund, something like that. The first fund, at the end of this quarter, will be roughly at 60% IRR. And my family office, the fund you were talking about before, also is at 60%.
And the $335 million fund is in that ballpark. We haven't had anything to date in our three sort of funds that's been below 50% IRR. So we've been very lucky. We've had some great companies and things are going really well.
You could raise a huge fund if you wanted to, and maybe you could do more follow-on investing. Maybe you could have a separate fund for growth rounds, etc., etc. Why not do that? What are the reasons for not?
So one, what I like to do and what I think we are very good at, and the team likes to do, are build companies, whether we start them, most of them we're investing in, and we think a lot of the true value add is in those first five years. There are plenty of funds. We're not trying to collect assets. You know how VC funds are typically 2% and 20% on the upside. Big funds focus on the 2%. We focus on the 20%. So I just don't want to be in that business of accumulating assets. Our funds will get bigger, but it'll be because we add verticals, we add some time, we might add a geography at some point, but I want to keep doing what we do well.
And what we find fun. I gotta wake up every day and feel like I love what I'm doing. And I think we're, you know, in our own small way helping to change the world. You mentioned Zola. There'll be, I don't know, 150, 200,000 couples this year who will use a wedding registry. That was an idea I had 12 years ago. That's great. The nuclear company, I sat down and had drinks with the governor of New York three weeks ago. She's doing a great job. One of the things you wanted to talk about was nuclear and how we can bring that to New York State because we need to lock down and get more energy costs and bring down costs of energy and help data centers, and we're a part of these things. And psychedelics. I hope there are, if we're sitting here 10 years from now, I hope 100,000 people who have PTSD have been helped by methylone because we discovered that compound and, you know, are going to help bring it to market.
We can chat about methylone. It was a beautiful molecule and we will talk about it. Before we get there, I want to take a break from some of the investing stuff just for a moment. How did you end up pursuing a serious level of ping pong?
You know, it just started in high school. I had a table in the basement. So I was one of the better people in my neighborhood, and then we had a high school tournament, and then my sophomore year, and I won that, and I realized I was pretty good. Then they had a regional tournament. So I went to that and I won that, and then I finally found the state level tournament and I got my ass handed to me there. Then I started playing in New York because New York has great ping pong.
Was that the defeat that you needed? You were just like, 'Oh, okay.'
Yeah. All right. Well, I just didn't play enough. I didn't have a coach. I was just playing in my neighborhood. So then I found a ping pong club that doesn't exist anymore, right near here on White and Walker. Found a guy named Musa who was 14th in the Olympics in 1992. He's from Nigeria. He's a freak of nature. And started playing with him. And so then I played some tournaments. And then when I went on the board of Yale, I called up the ping pong team and said, 'Hey, can I come play with you?' And they're like, 'Sure.' And then I went and played with them and realized that I could hold my own there with the varsity team. And so I would go play with them. I still do when I can get up to New Haven. And so I just like to play with, you know, I'm not incredible, but I'm pretty good.
How often do you play and what kind of coach or coaching do you have?
So I actually weirdly still play with Musa and then with another guy as well. My son is pretty good and so he and I, he's 28, he's in New York and so we'll be playing tomorrow actually. You know, I probably play every two or three weeks. I just love it. It's incredible.
Sounds great for your brain. Also, you know, the Chinese will all say, and I think they're not wrong, that it's unbelievably good because brain is hand-eye coordination, reacting extremely quickly and subtly, and so that's got to be very good for you. All right, talking about the brain. We are going to get back to methylone, but I want to talk about vacation.
First, got a quote here. Again, feel free to fact check. This is attributed to one Kevin Ryan: 'I think everyone should take four to five weeks of vacation. I would rather have somebody who works 47 weeks of the year pretty intensely.' All right. And then it says, knowing that a CEO will be influenced more by his behavior than by policy, he takes 8 to 10 weeks off annually. No, but you're not entirely off the grid when you take that time. Can you tell me what your split looks like and was it the same in the early years of AlleyCorp? Like how long has that been the case?
I told all my cos that when I was building DoubleClick, obviously, as you heard, pretty intense, and we went public 24 months after we started, just another project.
Different world now, huh?
Yeah. Yeah. It was the good old days and I knew I had to change my life and I could only do three things: family. I took my kids to school.
I got it. So you were burning the midnight oil on that one and that led to the realization.
I've never burned out at all because I paced myself and so I needed to be working hard, spending all the time I needed to with my family and staying in shape. Everything else I cut by like 80%.
And that's costly. That's time with friends.
I used to be the guy who'd do the cool cultural things all over. Gone. I used to watch my 20s sports on Sunday afternoon, all gone. I prioritized those three things. And then eight years ago, my kids went off to college and things and I could layer in new things and different things and have more time. And so it's always become more interesting. But I didn't ever want to be in a situation where my kids are 18 and I thought, 'Oh my god, I didn't spend time with them.' And we did spend at least four to five weeks vacation doing great things together, great memories.
That's extremely important. Today I spend 8 to 10 weeks out of the office. I do work every day, but sometimes it'll be two to three hours just keeping things moving. But I can do that. And sometimes it's a full day. Like I'll be, week after next, I have a wedding in Ibiza. So I'll be there for four days. And the first five days before that I'll be in my house in France. And so in the morning I will be doing intensive sports, incredible biking there. You need to come at some point. I love great biking, tennis, swimming. And then I have already blocked out that I'll do the three hours, 9 to 12 New York time, locked in for meetings. And then one of the days I'll also do the night shift. So I'll do eight hours the next day. But that's an amazing day. Or if I ski in France, back by 3:00 and then work from 3 till 8:30 and then have a great dinner. It's an incredible day.
That is an amazing day. 'How to Change Your Mind' by Michael Pollan. What did that do for you?
So I reached the age of 54, which was eight years ago, and had never thought about psychedelics at all. Certainly never tried anything. Just never, and didn't know very much. Read the Michael Pollan book. It was on the New York Times 2017 10 best books of the year, which is something I always go over to see what I should be reading there. Read the book and it literally did change my mind. It was called 'How to Change Your Mind.' And I realized later than most people that I was wrong, that these medicines could be very useful for people and that there was a lot of academic results even at the time that showed that they could help PTSD and depression, anxiety. And at the time, I was still on the board of Yale. So I went and I realized at Yale, and I think you talked to John Crystal at one point.
Interviewed John Crystal on his work on ketamine, foundational work with respect to depression and much more. Also have had conversations with Ben Kendi, who I'm so happy for.
I just spent a week in the desert with Ben.
Oh, you only... Fantastic. Anyway, John Crystal is great. I'm trying to get together with him in the next couple weeks. Realized Yale had done amazing work. Got them all there. They have a Yale Center for Psychedelic Research. And I just became persuaded in terms of long-term trends. I wasn't thinking about investing at all at the time. I was just thinking this is something I am persuaded that most people don't realize is going to be very effective and very important. I'm probably one of the bigger donors to the Yale Center for Psychedelic Research doing great work. Then in 2021 I decided, in talking to Ben Kmendi, who was a professor there, superstar, that the next phase was going to be a for-profit phase and it was the right thing. And the reason is it takes, whether we like it or not, it takes roughly $200 to $250 million to get one compound through the FDA process. And I wish that were less, but it is what it is right now. And we're not going to be able to raise that money from a nonprofit point of view. Even though, you know, I think you contribute, I contribute, but it's not going to be enough. And so then I said, you know, we should look and see if we should start a company in the space. And then worked with Ben and a guy in my team who was on the AlleyCorp team, Blake Mandel. And so we worked on the idea, came up with this methylone, largely due to Ben, and then said, let's start this, we think it has very promising... Blake spun out of AlleyCorp, which sometimes happens, to be the CEO of the company, and then we started the company.
