Episode 44: How to be Successful by Helping Others Succeed – with John Frankel

Who is John Frankel and the key takeaways in this episode?

John Frankel grew up in England and spent his formative years at the University of Oxford, where he earned a masters in Mathematics and Philosophy. His early entrepreneurial drive started with a sales adventure going door to door selling cases of strawberries where he made 50 pounds a day. He has since then moved on to a higher calling by working at Goldman Sachs. He has served as director of over 35 companies and is an investor in more than 76 companies and now is co-founder of ff Venture Capital.

Listen to the full interview and learn:

  • What inspired John to set up ff Venture Capital
  • What ff means
  • How he got started as an Angel investor
  • His personal advice to those who are planning to approach a VC company
  • And more…

The Questions

[02:05] How did you become the person you are today and what shaped you in your early years?
Answer: At least you lead off with a simple question. I grew up in England, I think you can tell from my accent, but Ive lived in the States now pretty much for the last twenty five years.

I live in New Jersey, I have an office in New York. When I grew up in England as a Londoner born and bred, I guess I’m a [inaudible 00:48] on a level given I was born within the sound of bluebells in Abingdon Hospital.

In my formative years, I spent three years at Oxford. I’ve got a master in Mathematics and Philosophy.

It sounds very grand, but I went to Oxford because I got the opportunity to do so. I never really enjoyed Mathematics but could do it so I felt that it’s a good foundation.

And I really wasn’t articulate and couldn’t write well. I said “Well, if I study Philosophy, maybe I’ll learn how to write.”

So yeah, that’s probably how a sixteen year old thinks and that’s how I thought when I was sixteen. I think, from an early age, I have had a sort of entrepreneurial drive. I remember people work their way through college in different ways and forms.

One of the things I used to do in the summer was to go down to Spitalfields fruit market in London and fill up my car with cases of punnets of strawberries. And then I would go and sell them door to door. And that was a nice little business. I think I used to make about fifty pounds a day.

[23:32] What company do you admire the most? As you relate to their culture and why?
Answer: Now that’s a good question and I’m not sure I have a clear answer there. And for the simple reason being that I haven’t had the opportunity to look inside a lot of other cultures. As I referenced earlier, I was very impressed with Goldman’s culture of the mid 80’s to the early 90’s. There was something really inspirational about the fact that you could do things such as: it would be a Thursday afternoon, and there was a presentation on the other side of the world in Hong Kong on Sunday and you needed to be there and you needed people to get up in the middle of the night in the UK and in the US, working in departments that had nothing to do with you, and all you would have had to do was to ask. And you would turn up on Sunday and everything would be working and so that ability to work just across the vision, across departments without having to go and ask their manager’s permission and everybody was sort of chipping in. That was an amazing culture.

[22:34] Is there a book that changed your life?
Answer: Yes, when I was thirteen. I have to tell you I don’t read a lot of books. I don’t know why. But I just don’t. When I was I think fourteen. It may have been twelve but I think fourteen. I read Einstein’s theory of relativity that Einstein himself wrote: it’s very accessible. And it just changed the way I looked at the world. The notion of the sense of reality. Sense of the environment around me. It’s a great book, it’s incredibly accessible and I still think back today to some of the things I sort of read on it. It’s a little dry that- yes.

Culture According to John Frankel:

Culture is something that’s important with me and grand with me. I worked as I mention in Goldman Sachs for many years and it’s a firm with a culture change over time but the early days of Goldman, there was some really good lessons to take way. And we tried to sort of build it on the firm here.

So I’ll describe our firm as a listening firm and a teaching firm and what I mean by listening firm is we believe whatever we know today we’re getting more tomorrow. And if you’re in a conversation with someone, if you’re doing all the talking, you’re not learning because you’re not listening. So we like to learn, we like to test our assumptions. We like to see if there are things that we can be doing better than we did before. So we’re very introspective. If we hold an event, invest in a company or whatever, when things are going great, we go “okay, things are going great but what are the things we can improve more?” So that is the listening part, the teaching part is really part of just sort of trying to bring in every one along. So it’s a very inclusive culture. We don’t have an open door policy here, because no one is in an office. It’s an open plan environment and sometimes I can be a little noisy and a little jarring for folks.

Go To Quote for Inspiration

What John Frankel Wants His Company to BE:

  • BE Founder Friendly

Links and Resources Mentioned in this Interview:

Where to Find John Frankel:

Connect with John on

FULL EPISODE TRANSCRIPT

John: Welcome to Be Culture Radio. My guest today is John Frankel. John, how are you?

John: I’m doing great, how are you doing?

John: I’m great. I’m so glad you’ve spent some time with us today and you’ve chosen to be with our tribe here. We’re excited to have you and, as I do with most of my guests, we want to know a little bit about you, John.

Where did you come from? How did you become the person you are today and what shaped you in your early years?

John: At least you lead off with a simple question. I grew up in England, I think you can tell from my accent, but I’ve lived in the States now pretty much for the last twenty five years.

I live in New Jersey, I have an office in New York. When I grew up in England as a Londoner born and bred, I guess I’m a [inaudible 00:48] on a level given I was born within the sound of bluebells in Abingdon Hospital.

In my formative years, I spent three years at Oxford. I’ve got a master in Mathematics and Philosophy.

It sounds very grand but I went to Oxford because I got the opportunity to do so. I never really enjoyed Mathematics but could do it so I felt that it’s a good foundation.

And I really wasn’t articulate and couldn’t write well. I said “Well, if I study Philosophy, maybe I’ll learn how to write.”

So yeah, that’s probably how a sixteen year old thinks and that’s how I thought when I was sixteen. I think, from an early age, I have had a sort of entrepreneurial drive. I remember people work their way through college in different ways and forms.

One of the things I used to do in the summer was to go down to Spitalfields fruit market in London and fill up my car with cases of punnets of strawberries. And then I would go and sell them door to door. And that was a nice little business. I think I used to make about fifty pounds a day.

I don’t know how to translate that from [inaudible 02:01] but we’re probably thinking in terms of two hundred fifty dollars today. Not bad as a way to sort of work your way through college. And then I sort of joined Anderson and became a chartered accountant. I thought it was a good foundation for business. I left after four years knowing that I didn’t want to be an accountant for a living and I joined Goldman Sachs, and I worked lively there for two years. I was at Goldman for twenty one years and I left Goldman in ’08 and founded FF Venture Capital. FF Venture Capital is an early stage Venture Capital Firm where the FF stands for Founder Friendly. We’re very focused on the companies we invest in. We don’t just see them as stocks and shares. We don’t just see them as stocks and shares, we see them as a – as people, as folks that we can really work with and help bring around their vision and we are right: they’re going to make a lot of money. LP’s will make a lot moneys and we as an investing firm should do well as well.

John: Now John. FF Venture Capital, that inspiration came to you, how? What drove you to do it? Because what you are talking about is not from our perspective, and we talked about some Venture Capital as firms and what you’re talking about is a little bit different, right?

John: Yeah but the part wherein it was really quite different – I’d been at Goldman for twenty one years and in late ’99 I started Angel Investing. And I started Angel Investing because it was very different from what I was doing in Goldman and yet resonated with me in its various ways.

If you put on your sort of risk analytics hat, Angel Investments are not related to the market. When a team grows from three or four people to thirty or forty or three hundred or four hundred, it’s really got very little to do with the economy. It has very little to do with interest rates. It has very little to do with whether stocks are performing or not. It’s very much to do with the specifics of that company. And I felt that everything else I did in my life was very much driven by the market. You know, I worked at Goldman and the investment has made it in the public market and the light. And I felt that something that was not parlayed was that was a good thing to do.

So I started making Angel investments, investing in startups, small teams going after interesting spaces. And I found I had a certain sort of liking for that space and a certain ability to sort of read where things were going. And that seemed to be really successful. And so when I left Goldman in ’08, I gained myself a little time, a little pause to work out what I wanted to do but found myself being seduced more and more into looking at startups and getting involved, and I said “Look, if it’s something I want to do professionally for the next – balance my career, balance my working life and let’s do it properly.” And so I went and tried to convince people to give me money. And the strange thing about Venture Capital is everyone talks about how hard it is for startups to raise money. When you’re raising your first Venture funds, you’re asking people for ten years of illiquid money and commitment for that period of time.

In good markets it’s easier than bad markets, but if you remember ’08: we closed our first firm in November ’08. It was too much after Lehman blew off.

John: Wow.

John: On many days markets were down five percent on a given day or more and some – there were a few friends and family who decided to back us and we sort of were able to hang up a shingle and get going and then we raised another fund two years later and have one two years later and that’s sort of been archived.

So we built a really interesting organization. Now we’re well north of twenty five people. We have built a good reputation within the industry as folks who really work hard to help their company succeed.

We are unusual in the number of people we have. We’re about twenty over the average. But that’s because we really want to work closely with our companies.

John: And I know from the research we’ve done on you and your firm, you aren’t the typical VC firm and I want to talk about that a little bit if it’s okay with you.

John: Certainly.

John: And I want to start by getting your definition of company culture because I think that’s a great place for us to dive in.

John: It’s kind of interesting. Culture is something that’s important to me and grand with me. I worked, as I mentioned, in Goldman Sachs for many years and it’s a firm with a culture that has changed over time but in the early days of Goldman, there were some really good lessons to take away. And we tried to sort of build that in the firm here.

So I’ll describe our firm as a listening firm and a teaching firm and what I mean by listening firm is that we believe whatever we know today, we’re getting more tomorrow. And if you’re in a conversation with someone, if you’re doing all the talking, you’re not learning because you’re not listening. So we like to learn, we like to test our assumptions. We like to see if there are things that we can be doing better than we did before. So we’re very introspective. If we hold an event, invest in a company or whatever, when things are going great, we go “Okay, things are going great but what are the things we can improve more?” So that is the listening part, the teaching part is really part of just sort of trying to bring in everyone along. So it’s a very inclusive culture. We don’t have an open door policy here, because no one is in an office. It’s an open plan environment and sometimes I can be a little noisy and it’s a little jarring for folks. But the flip side is that our communications internally are very good. We don’t put our partners sitting in offices and hopping into their own goldfish bowls. Everyone’s in one open space and that we think significantly helps our communication. It sort of an acceptance that good ideas comes from anyone and from anywhere. So there’s no sense of people owning relationships and being sort of gate keepers to relationships within the organization. It takes a lot more coordination last time. Every now and then we mess it up. But we really try to talk as an organization of one voice. We try to collectively get a lot of people to think about the problems that come up as we work with companies. And overall we prefer it to the sort of more fragmented models that we’ve seen in other firms.

John: John, it sounds like to me that you’ve build a very linear organization in a marketplace that has a hierarchical companies in the VC world, and it’s amazing. I know my listeners are really enjoying hearing this because it sounds like you get the best from everybody from the organization and you tend to embrace the theory of what I believe is very important but what you think I want is equally important as you- at least you move about once a month as your organization amongst your people. Is that- am I correct?

John: You’re correct and it takes a lot of work. We’re not a bit of a meeting culture. Probably across the organization are half standing meetings. I don’t think that any one goes to all of them. Yeah a week we try to keep meetings to thirty minutes, forty five minutes. Yeah, anything over an hour starts to really stretch. And because we really try to do all the communication between meetings. We try to make sure the people updated between meetings and the meetings come in as a sort of culture. The other assets of company culture which I think are unusual, but it doesn’t feel that unusual to me, is that everybody has access to a standing desk. If people want to sit on boards in the office, they can sit on boards in the office. We have a sort of a healthy dynamic that we’re trying to drive. As we look at sitting, we think it’s fundamentally unhealthy. If you want to sit it’s fine. But I think it’s been described as the new smoking in that it is taking potentially five years of your life, but it’s also a sense of turning around to employees and saying “Look, yeah, if you want a standing desk – great. You can have a standing desk.” And it’s a sense of showing that we care about our employees’ health. So you know, that’s another dynamic there as well. We also- almost by definition, we’re investing in companies for themes that come about so we’re accepting of quirkiness within the organization. We don’t expect everybody to be the same. We’re not sort of clones. There are lots of different personalities here. So we’re accepting of giving people a lot of time to determine- a lot of scope rather, to determine how they work, where they work. The office feels that sometimes it’s more like a co-location space than a normal office. And we think that’s the right way to do it.

John: Well I think you’re right on track. It’s – having been on the interiors business for thirty years and owning my own interiors business with my partner, we see that the trend today is completely open and the offices are being turn into huddle rooms and with everything you’re talking about, you’re way ahead of the curve, John. [crosstalk]

John: I don’t know. I don’t know if I’d say we’re way ahead of the curve; we’re just trying to have fun. So all of our desk surfaces are glass. A lot of the walls here are glass. And you’ll see lots of drawings on the walls, sometimes there are schematics on how systems are laid out, how funding realms can be done. Every now and then it’s a cartoonish drawing, either by one of our engineers or by a four year old that stops by the office. We have- we keep the fridge tank topped up with beer, and every now and then we open up a bottle of wine. We try and keep this a fairly creative space. And we really see every employee within the organization as creative. My job and the jobs of the other partners here are really to give everyone the tools to succeed and in their given field and where they focus.

John: Let me talk about that a little bit because when your firm looks at companies to invest in, you said earlier you looked at the trends and what’s going on. Do you also look at the companies’ philosophy in culture and how it plays into their success and does that have any role with the decisions you guys make?

John: I see it’s kind of interesting because when there’s three or more people, which is usually when we start investing, there really isn’t much culture. Culture comes about as organizations grow. I think most of our CEO’s have a common view on culture but there’s a good distribution across them. We’re investing in companies where you have founders that are fundamentally hippies, and the culture is fundamentally hippie-ish. And we’re investing in companies where the founders are MBA’s and they’re much more sort of buttoned down. You know, the common culture we see across start-ups and the one that I think is really worth calling out versus other industries is- there’s an enormous amount of altruism, of the willingness to help out others. Everyone’s competitive within their own space but there’s really a willingness of folks to sort of go above and beyond. We find our earlier companies play together incredibly well. And it’s powerful because they see themselves as being part of the same tribe, part of the same team as it were. And that’s sort of a super culture. And we see across the US, certain geographies are different because their local cultures are different, and I don’t want to call out any specific locations so don’t ask me. But there are definitely different cultures as you go around the US. But the predominant ongoing culture is this altruistic sort of “giving back” culture and that’s what we see on the entrepreneurial side.

John: Now, John, can you share the success of one of the companies that you invested in and that you’ve fostered? One that had a great culture that helped accelerate their growth and when you look back today you’ll say “They got it and they always got it, and we were just there to help them.”

John: Well, I mean, yeah, I only take so much credit or any credit at all. But you know, one of the companies out there that I think your listeners have probably heard of is Indiegogo. Indiegogo is a crowd funding platform that is probably the largest crowd funding platform in the world. They- we invested in early 2011 when it was the Maize Larva or the Top Larva Folks. And they’ve grown now to probably somewhere around about a hundred and fifty people and if I’m wrong that one fifty is probably closer to two hundred. I think on any given day, seven thousand campaigns are run in Indiegogo. A couple of campaigns are open right now: one is for Beehive. Last time I looked they’ve raised about eight and a half million dollars. Other one is the sequel to Super Troopers, creatively named Super Troopers, to add another one to the raised two million dollars and raised it on the first day and I think that now the new target is three and a half million.

It’s really an interesting platform and what I love about the people is they are so focused on the culture that there’s a couple of things they really need to do. Once a quarter they have an off-site. And that off-site – it takes all the new employees and explains to them how the culture works, how there’s a strong community aspect to what they’re doing, how there’s a strong “give back” to what they’re doing and that, I think, is pretty cool. The other thing they do – this is a good hiring strategy for folks out there. I hope Larva- the Maize won’t be upset with me sharing it- is they give dinner every Wednesday night. Free to all employees. And they invite them to bring their friends. Particularly the friends that might want to work at Indiegogo and people get a really good insight by looking from the outside-in and getting a sense of what the company is about. That’s the sort of cultural things they do and I think it really helps to find the companies and organization if they’ve gone through some really dramatic growth over the last few years.

John: John, let me ask you. What’s your opinion on a company matching its culture to its environment to their brand? I mean many times through the years I’ve seen people that have really high-tech killer websites and you walk in to their office and you were like “What happened here? There’s a brand disconnect.” And do you find that when you’re looking at companies? If there is a brand disconnect, how does it leave you feeling? And if there’s not, how was it? What does it do for you, John? Either way?

John: We invest in companies at the consumer phase and enterprise phase. And generally we’ve seen pretty good consistency as a sense of one thing to be what you’re about. And I’ll go and tell you, another company your listeners may have heard of is Plated. Plated delivers you all the ingredients to cook gourmet meals at home already portioned out. It’s a really interesting company; they’ve grown pretty dramatically. So they’ve grown from seven employees two years ago to somewhere around about two hundred and fifty employees. Actually I’ll take that back. I think three hundred and fifty employees. They are growing just dramatically.

John: Wow.

John: And when you think about managing that culture and they have a lot of employees who’re in head office. And they have a lot of employees in their distributions center around the country. And it’s a great product and they really care about how all the pieces sit together. And one of the things they’ve strived to do is not to create a sort of two-tier system. So every employee has stock options. It doesn’t matter what they are doing. They really- all of these communication practices, they put them in place to ensure that. And I think when I talk to Nathan and Joshua, the founders, this is part of their brand integrity. They’re all about fairness, they’re all about quality in what they do and I think that works its way down because ultimately you want the people handling your food to have a certain set of values, and I think they get that. And if you’re going to build a company that’s going to last and grow over time, you really have to do it with that kind of sense.

John: John, I want to ask you one more question before we go to the lightning round.

John: Okay.

John: And that question is this: what advice would you give my listeners when they want to approach a venture capitalist and they want to say like “I want you to invest in my company”? If there’s a single piece of advice that you would give them, what would that be?

John: Oh. I’m going to turn that question around a little, because there’s a lot of things that people would advise around this. But I think the most important thing is once you’ve found the firm you want to work with, understand that if you take money from them, you’re going to be joined up at the hip for the next seven to ten years. You’re going to be working with them for the lifetime of those companies. So I liken it to a marriage, except it’s harder to have a divorce. And the average investment period is longer than the average marriage. So give them that. Take time to talk to other founders that they’ve worked with. And find out what these people are like when they’re under pressure. Find out what they’re like when things are going good and when things are going bad and whether people have buyer’s remorse with them. I think that’s really important, to really reference the people that you’re going to be working with. Because when you find the right people, the right people for one founder may be different than the right people for another founder. When you find the right people, it’s a great relationship.

John: Great advice. Great advice. I- now, my listeners, pay special attention to what John just shared with you because it’s an insight that isn’t lifeless, it’s priceless. We’ve got to thank you for that, John. I want to take you to the lightning round if I could.

John: Okay.

John: Is there a book that changed your life?

John: Yes, when I was thirteen. I have to tell you I don’t read a lot of books. I don’t know why. But I just don’t. When I was I think fourteen. It may have been twelve but I think fourteen. I read Einstein’s theory of relativity that Einstein himself wrote: it’s very accessible. And it just changed the way I looked at the world. The notion of the sense of reality. Sense of the environment around me. It’s a great book, it’s incredibly accessible and I still think back today to some of the things I sort of read on it. It’s a little dry that- yes.

John: John is a really smart guy, so my listeners would understand. Do you have a quote you go to for inspiration?

John: Be genuine to yourself.

John: I like that. Now, what company do you admire the most as you relate to their culture and why? Outside of your own.

John: Now that’s a good question and I’m not sure I have a clear answer there. And for the simple reason being that I haven’t had the opportunity to look inside a lot of other cultures. As I referenced earlier, I was very impressed with Goldman’s culture of the mid 80’s to the early 90’s. There was something really inspirational about the fact that you could do things such as: it would be a Thursday afternoon, and there was a presentation on the other side of the world in Hong Kong on Sunday and you needed to be there and you needed people to get up in the middle of the night in the UK and in the US, working in departments that had nothing to do with you, and all you would have had to do was to ask. And you would turn up on Sunday and everything would be working and so that ability to work just across the vision, across departments without having to go and ask their manager’s permission and everybody was sort of chipping in. That was an amazing culture.

John: That sounds pretty cool. You get a lot done with that kind of culture, don’t you?

John: You really get a lot done with that kind of culture.

John: And they did. Many times over Goldman has. John, if you have to describe the culture of FF Venture Capital in three words, what would they be?

John: Well that’s easy. It would be “Be Founder Friendly”.

John: Be Founder Friendly. Okay, I like that. Now John, how can my listeners connect with you or your organization?

John:  So you know, our website is ffbc.com. I’m on Twitter: @john_frankel. And I’m clearly active there in sharing important views and it’s a pretty good channel to communicate with me. Email – email is broken. I just ran some analysis. I get five thousand emails a year that I should pay attention to. That’s a lot. Email may be a great channel but devoting more than three hours a day to email is something no human should have to do. And so email is breaking down for me as a channel. So I think our website is a great way to get a sense to what we’re about and to see if we’re a match and sort of reaching out to me on Twitter is also a good channel.

John: Is there anything you’d like to show our listeners before the show is up?

John: I think just one last thing, which is: there’s a lot of talk about all of this investment technology being above all, and if you think it’s above all, ponder it. For most people, thirty percent of their time, their wait time, they’re either on Facebook or Twitter or Instagram. They’re watching something on Netflix or HBO Go, or on their Apple TV. Or they’re playing a game on their Xbox or their Android phone or their iPhones, and they’re engaged in all of this technology and if you go back ten years, none of that existed. And all of the drivers that lead to these great consumptive experiences are just accelerating. They’re all following exponential curves, so ten years from now we’re all going to be doing – accessing potentially technologies that we can’t quite grasp yet in very different ways. And so in the history of humankind, you never had that amount of change in human engagement in such a short period of time. The next ten years are going to be very exciting. I don’t think it’s above all, but I think it’s something worth paying ton of attention to.

John: I would agree with you. And John, I just want say thank you so much. VC groups are known to be a pretty tough lot and I just want to make sure that my listeners know that John is a genuinely good guy. We just reached on in if he wanted to share his thoughts on our show and he agreed to it and you know what? I just want to thank you for being so genuine and taking the time to spend with us today, and I never end this show without showing my guest my favorite quote it’s from Maya Angelou, which is: “People will forget what you said, people will forget what you did but people will never forget how you made them feel,” and I just want to thank you for making me feel welcome in talking to you, John.

John: Not at all. Thank you for inviting me on to your wonderful show. I really appreciate it.

John: Thanks so much. I really wish you the very best and be well, my friend.

John: Be well.

John: Bye bye.

John: Cheers, bye.