Ego Dissolution with Raj Kapoor. How to work with acquirers to create outcomes for investors.

Raj has a common theme with his startups Snapfish and Fitmob. Both of them needed to be pivoted and focus on survival. He found buyers for both and his mantra to founders is to dissolve the ego and make sure your company sees another day to battle. He spent several years at Mayfield and invested early in Lyft and led the autonomous driving strategy for Lyft.

Raj is a co-founder and managing partner at Climactic, a venture capital fund focused on climate tech. He was also a strategic advisor at Lyft, former CEO/co-founder of Snapfish and Fitmob (now ClassPass), and a former managing director at Mayfield Fund.

Brought to you by TiE Seattle
Hosts: Shirish Nadkarni and Gowri Shankar
Guest: Raj Kapoor

Brought to you by TiE Seattle
Hosts: Shirish Nadkarni and Gowri Shankar
Producers: Minee Verma and Eesha Jain
YouTube Channel: https://www.youtube.com/@fromstartuptoexitpodcast

Transcript

SPEAKER_00 0:01

Welcome to the Startup Texas podcast, where we'll bring you world-class entrepreneurs and PCs. Share their heart and success stories. This podcast has been brought to you by Ty Seattle. Hi, it's a global non-profit. Hi, entrepreneurs. Hi, Seattle. Become a member. Is it www.seattle.org?

SPEAKER_01 0:43

My name is Gary Shankar. I'm a member of the board of Thai Seattle. I, along with Sherish Natkarni, uh are hosting this podcast, uh Startup Exit. This is our episode number three. I've known Sharish for a long time, and we have an exciting guest today that Sharish will introduce shortly. Uh Sharish is a serial entrepreneur and soon to become a serial author. He's on a second book, Winner Takes All, and it's out uh wherever books are sold. Sharish, uh, hope you keep writing more books. Over to you.

SPEAKER_02 1:20

Thank you, Gauri. Uh hello, everyone. My name is Shirish Nadkarni. I'm a serial entrepreneur, author, and board member of Thai Seattle. Uh we are very pleased to welcome Raj Kapoor to our podcast today. Raj is a co-founder and managing director at Climactic Venture Capital Fund focused on climate tech. He was also a strategic advisor at Lyft, former CEO, co-founder of Snapfish and FitMob, now known as ClassPass, and a former managing director at Mayfield Fund. I got to know Raj when he was a VC at Mayfield Fund and was very impressed with his personal story, which is why we invited him today. So welcome, Raj. Thank you. Great. So uh Raj, let's start with your early life. Uh where did you grow up and where did you go to school?

SPEAKER_03 2:12

Sure. I grew up in Bethlehem, Pennsylvania. Parents both came from India, so first generation American. Um it's Bethlehem's a small town in Pennsylvania. We were, I think, the first Indian family, even featured on the front page of a newspaper with my mom wearing a sari and a a tiger rug from an uncle that I think used to hunt tigers. And um so it was very different growing up there. And uh went to a public school, a school called Freedom High School. Our rival was called Liberty High School, so freedom versus liberty. And uh ended up going to Carnegie Mellon in state for for uh my undergraduate and uh and then my career in business school after that. That's great.

SPEAKER_02 3:00

So you started uh Snapfish during the dot-com boom, uh, but then the bust happened uh right after that. Uh what was the opportunity that you saw with Snapfish and how did you navigate your way through the dot-com bust?

SPEAKER_03 3:18

Yeah. So I was lucky enough to be, you know, a lot of I think um success is around luck and timing, and then there's some experience and skill applied to it and hard work. But from my perspective, I was lucky to be um graduate going into business school um from 1994 to 96 when the internet was just coming out, like where the commercial internet was born, the browser Netscape was born. Um, I started this internet club with someone else at Harvard Business School and got very involved in this new world of interactive network media. And prior to business school, I'd worked at a telecom company that was early on playing around with that whole area around ISDN and ADSL and trying to figure out content. And so when the protocols came out and it was much more open and browsers, uh, I just saw a ton of opportunity, ended up joining a startup called At Home, which was a consortium of cable companies to launch broadband services around the country because everything was dial-up before then. And while I was there, I looked at lots of different application categories. I kind of knew I wanted to be an entrepreneur coming out to Silicon Valley in 1996. And um I really loved music. I'm in a band, I DJ, and but I didn't see a business opportunity there because of the rights issues. And also at the time, the bandwidth wasn't uh high enough. Um, the second thing I looked at, you know, was around TV and film. Again, rights issues there felt like it would take a long time and difficult. And so that left another media type, which was photography. And looked at that. I had three other co-founders that were Indian, so we were looking at various businesses together. Um, and the four of us decided that this is a really interesting space, which is photography, because we saw the transition from film to digital. We saw that photos are owned by the person, so there wasn't a rights issue that's there, and there was a virality to it because even back in those days in 1999, um, we knew that customer acquisition would be a challenge. How do you acquire customers? And so um the idea that we had, it was borrowing a little bit from someone I had met and learned from, which is Bill Gross, who started Idea Lab. He had the audacious idea to start a company that gave away a pre PC for free, free PC, as long as you look at the ads.

SPEAKER_05 6:00

Yeah.

SPEAKER_03 6:01

And um and I studied the model, and I don't think anyone's quite sure whether it would work. But I thought, well, if he can give away a PC, why can't I give film developing? And then what you do is you get the person when they're a film user, they're uploading, or we're trying digitizing their images and putting them online. They want that repository, they'll share it uh through email. And back then AOL was doing, they had You've Got Pictures as well, but it was a very clunky service. And they'll hopefully purchase products, so it could be gifts, could be prints. Um, and in addition to that, each time they're viewing photos, we can show them very personalized ads because we'll ask them questions up front. Um, and so that was the plan to give away free film developing. And then once you get a digital camera, this is your place now. You're gonna put your digital photos there too, and you're gonna process them and print them if you want and do whatever you you want to do it. So it was a photo commerce site. And um most good ideas are not unique, and probably a hundred other startups were there in the same six-month period um that we had to compete with. Um, there was the most notable competitors were Shutterfly and O Photo, and then we were Snapfish. And so um that was the beginning of Snapfish. Um I was uh introduced to Mayfield to Yogan Dalal. And here are four bright young um Indian founders coming in and pitching him, and he liked the idea. And another friend from business school, Brad Garlinghouse, who now is running Ripple, but he was at a VC firm called CMGI. And they both syndicated the deal, and just on a PowerPoint, we were able to raise 7.5 million in 1999, uh, which was wonderful. Um and then we proceeded to launch and found that the idea didn't really work. People were um nervous about giving us their film because it was through mail. It would also take a while versus instant film developing where you one-hour photo, you know. And the difference was that they don't have a copy of it, they're giving the film. If we lose it, their memories are gone forever and they're so valuable. And so that was a big learning. Um and we had to reconstitute the company. But before we learned that, we were told the best time to raise your next round, and this was at the height of the dot-com boom, is before you launch and have metrics. So we were able to raise another, I think it was like another$36 million before launching. That's crazy. Um back in those days. Those were crazy days. Um after we raised the money and launched, realized it didn't work, then we had to pivot. And then the short story there is um in 2001, um, the dot-com boom busted. Financing was difficult. It was also very expensive to start companies like this. You had to buy like a$7 million EMC storage server, you had to um host your own uh website, etc. Um, and of course, you had to pay for customer acquisition, which was increasingly, even though it was viral, it wasn't enough growth. And so um as things really started to implode, we decided to sell the company and um hired a banker. Uh banker didn't do much, didn't find any buyers. I had to go back to our partner who said he's a film processing company, a private company, District Photo, and they said, Well, if you don't find any buyers, maybe we're interested. And so I called him and said, Guess what? We don't have any buyers. And I either have to shut down the business or um or we sell it to you. And so he bought it for like 10 cents on the dollar invested. So I had to go back to all my friends and family and the VCs and hand back not very much money. We took the company because we had hired ahead of growth, which was a mistake. So we had to take the company from 200 people down to 25 people. We moved to windowless offices in San Francisco in a not so great part of the neighborhood. And then after we had become a small subsidiary of District Photo, we reoriented the business around digital cameras and they started to take off. And people needed something to do with their digital film, they wanted physical prints or other items, um, they wanted to easily share them, especially if there's a lot of photos. Emailing a hundred photos didn't make sense. So we pivoted to digital and the business really started to take off. Uh, another interesting point was that as that happened, the retail industry woke up, and within one year, most of the prints that were created out of digital cameras all of a sudden ended up at retail so fast. And that was a huge threat. So I thought, if you can't beat them, join them. So we created a white label version of Snapfish, and they had all tried using Kodak or Fuji's websites, which were really crappy. And so they were open to going to a company that had a lot of users like we did, and that was really understood user experience. And so we were able to, and I I had aimed low and told uh my partners that let's see if we can get some small retailers to start. We ended up closing Costco, Walgreens, and Walmart within a year. And they were the major leaders of film developing, and so we launched all of their stores, um, online services, white label. Company became profitable. We launched also internationally into the UK, and then an interesting thing happened where you know I was basically an employee of this uh private company, but he had created a bonus program, um, almost like a stock option, but really not because it was a separate company. And um and I thought he's never gonna sell, he's just happy, keeping as it is. And I was surfing one day with some friends, and this is why you know being in the Bay Area is an advantage sometimes, because I didn't know I was gonna go surfing with a banker who was representing HP, trying to buy online photo companies. And she talked to me in the water, and she was like, Well, you're not for sale, and I was like, No, no, no, no. I think let me find out. I don't think I think we could uh we could be for sale for the right price. And that ended up uh ultimately, I didn't hire a banker. I did the deal myself, and we ended up selling uh for$300 million to HP, in addition to a long-term contract to our parent company for um mail order processing and gifts and all that stuff. So turned out to be a great win, and that's when I ended up leaving and joining Mayfield.

SPEAKER_02 13:25

What a great story. Thank you so much. Wow. Yeah. So um uh you were at Mayfield for a number of years, uh, and then you left again um to start your second company, Fitmob. Uh so what was the inspiration for Fitmob and why did you leave Mayfield to start Fitmob?

SPEAKER_03 13:45

Yeah, so you know, I enjoyed my time at Mayfield, but after about seven years or so, I had the itch to go be an entrepreneur again. And part of it was um what happened in 2007, 2008. I really got the climate bug in the sense of I always like to have some purpose and goal outside of just making money to focus my life on. And I heard Al Gore and John Dorr from Kleiner Perkins on stage at 10 and was convinced that this is the biggest problem humanity faces. There's lots of problems, but this one was big and really difficult, and I wanted to dedicate my time to it. So I um first created a social game on Facebook on the side while I was working at Mayfield. Surprisingly, I got a half a million dollars from the EPA, Environmental Protection Agency, to launch this game because it was an awareness game around climate. And I got a Zynga, ex-Zinga product manager and a team. They built it, they launched it, it didn't really work. Um, people played it, but they didn't take the offline actions that I was hoping to build awareness. So then I talked to um Mayfield about this, and and we all looked at this clean tech bubble that was happening. And uh what we ended up doing was focusing Mayfield around what are the opportunities that are more capital-like um in the space um around uh climate. And we looked at utilities, we looked at software, we looked at fintech, I looked at transportation and found this marketplace, found found this company that had a marketplace for rides which would make it more efficient. And I was very convinced that that was going to be um an interesting thing, and it was called Zim Ride. And so I led the series A, and that later became Lyft. I was spending a day, a week at Lyft, and I was really excited about the operating side of it. And so I ended up um talking to my partners and saying, look, I think I want to do something more hands-on. And the first thing I did was um, so I left Mayfield and started something called Co-Founder Partners, which would co-found multiple companies, three maybe, and I work on each of them and have a real more hands-on approach, almost like an incubator. Um and then through that, I met someone, uh, Tony Horton. He's a famous fitness instructor. And he has a program that is probably one of the most successful ones called P90X. And I did his program and it changed my life. And at the time, my wife was also um a medical weight management professional. She's a doctor. And I saw the obesity problem, I saw the lack of fitness, and I looked at the model and thought, wow, there's something broken here. People join gyms, and the gym doesn't really want you to come. They just want to take your money. And um, so I wanted to change the way fitness is there and came up with a concept of a marketplace connecting high-quality trainers in the neighborhood to groups of people, mobs. We came up with FitMob. Um, Tony could be as involved because of uh competitive dynamic with the his projects he was working on. So I ended up um rather than doing co-founder partners, one failure mode that I was told is that you'll just fall in love with one of your companies and go, and that's what happened. So I started FitMob, um, which was that kind of marketplace. That too, initial idea didn't work, just like Snapfish. Had to pivot it. And there's a longer story there, but in short, we ended up a model that was more like open table for classes, which looked a lot like a company in New York that had started earlier, ClassPass. And we were going head to head. Um, it was a very brutal battle. It didn't feel like Uber versus Lyft that two companies could really succeed. And so um I sat down with the CEO, another uh first generation Indian, Pyle, and we talked about merging the two companies, which is what we did. And so we brought the two companies together. Their company was bigger, we just called it ClassPass. I joined the team for six months to do the transition, uh, help launch internationally, and and that company now merged with Mind Body, which is the largest provider of fitness software in the world, and ClassPass is the market leader. So I'm hopeful that that combined entity, which is still private, um can have a wonderful successful um future and exit sometime.

SPEAKER_02 18:34

Great shorty. Um so now um one of the issues with uh starting a marketplace uh chicken or egg problem, as you know. Right. Um so with FitMob or perhaps with ClassPass, uh how did you get started? You had to obviously get the gyms on board uh when you had no customers. So how did that process go for you?

SPEAKER_03 19:00

Well, it was even more complex. Um what I had done was I wanted to remove the power of the gyms and just go to trainers and make the space fungible. So you're just subscribing to a trainer and you're not subscribing to a gym. And the workouts can happen outdoors, they can happen in spaces that would be rented in the neighborhood. And um there are two big problems with that. One was that it's a three-way marketplace. I was expecting the trainer to find the space, but we had to find the space and match it with the trainer and match it with the customer, and that was that proved to be challenging. Um, in addition to that, we needed a space requirement that if there's bad weather, it needs to be indoors. And so outside of California and Florida and other the sunbelt, you know, it would be a challenge. And you need to be able to play music pretty loud early in the morning, and that's a challenge. And um, I negotiated with the park system and got permits, but there were very strict uh rules around noise and and music, and then finding spaces was also challenging. So that's why we ended up pivoting the model to really just help the existing studios, yoga studios, gyms, etc., fill up with a subscription uh rather than trying to create kind of a new entity in doing that. It proved to be too challenging.

SPEAKER_02 20:34

Got it. But even convincing the yoga studios to join your platform must have been a challenge when you had really not got many customers, I assume. So how do you get the problem?

SPEAKER_03 20:44

Yeah, and that's where something I learned from Lyft too, like they had a program early on called the Pioneer Program, and it's basically throwing capital at the problem. And um they would acquire drivers and then give away a lot of rides through couponing so that the drivers have enough critical mass to be on the system and then slowly bring the couponing off because people find value in the service, but they needed that extra jolt to go try it. In our case, um we tried giving a uh first month free and to go work out in all these amazing studios, and then we were subsidizing that first month uh of visits, and that helped solve the problem because then we could call up a studio and say we um that are ready to use it. And it's not that they would sign up and no one would come.

SPEAKER_02 21:43

Right, right. Excellent. All right, so um uh let's take the conversation to your journey with Lyft, and I'll turn it over now to Gowry to carry the uh conversation forward.

SPEAKER_01 21:55

Great. Thanks, Yesh. Raj, what a fascinating journey you've been. On uh just listening to you, you know, a lot a lot of our listeners should be inspired. One thing that struck me was you never worried about pivoting. Yeah, whether you do this with uh your companies or with your funds or any of this, it you just said this is not the right time and pivoted and didn't hang on to your, you know, oh, I gotta do this kind of a thing, which founders get stuck in sometimes because it's uh how how is this something you all along had, or was it one of those that you were forced into? What was the journey? I'll come to the lift part of it, but I found this part of your story very fascinating that you never worried about pivoting. You thought, this is what I gotta do, I gotta do, and convinced everybody around you to do it. Is that something you did naturally or is it something you learned?

SPEAKER_03 22:54

Well, I would say pivoting is always hard. Um, it was difficult to make the decision each time. But there are, I think, two things that allowed me to do it with more ease. One is coming from an engineering background where you're looking for truth. And and it's like, and with a you know, the the beauty of starting an internet business is that you get data. And you can there's still a lot of judgment that's necessary, but I was looking at more like there's a truth here somewhere, we just have to solve it. And we have to apply the data to it versus I have this grand idea and I am going to uh do that. And that gets to the second point, which is that I think there is a surrendering of ego. So, for example, when I was pivoting FitMob into what looked like ClassPass, and then realizing that it's better to merge the company with our fiercest competitor. Um, one of my advisors, who's also our legal counsel, is an amazing guy, Ted Wang. And he was the advisor and counsel to Dropbox, Facebook, and others. And he pulled me aside and he said, The only way this is gonna happen is when you meet Pyle live face to face, you need to let go of your ego and tell her that you copied her. And only then can this like tension dissolve that's there, and that's in fact what I did, and the tension dissolved, and it became more like, okay, how do we make this work versus two people kind of butting heads in doing it? So I think um ego dissolution is an important element too, because it's not about your you know, you have an hypothesis, but it's not like you've figured it all out.

SPEAKER_01 24:59

Yeah, and I think this uh the word you use, you go ego dissolution, because to be an entrepreneur, you got to have that, you know, bravado confidence, a little edge and a lot of ego to get to that point, right? Then you gotta look inside and say, hey, uh, this is the right time to do this, and we have the same confidence to let it go because you saw the larger goal of the company and your idea surviving. Otherwise, the other option was it probably, you know, sort of gets to its own destiny, but not at the rate at which or even the size scope at which you got there. I think that's part of it is a great learning for young entrepreneurs because they they watch a ton of social media and everybody says, You gotta go, you gotta go, and really don't know when to really reflect. That seems like a great lesson. Uh, share ego dissolution. That's a word I think I'm gonna remember that phrase I'm gonna remember going forward.

SPEAKER_03 26:00

Yeah, it has spiritual background around that when you that's what we are at our core. Uh, but that gets a little bit deeper. But um, yeah, I I think the other piece of it is that it it's it's rarely works if you are pivoting the company to something totally different. But if people joined you, like in the case of Snapfish, they joined because there's an emotional satisfaction people get about their photography, it creates beautiful memories. Our pivot was how we got to that end goal. But the end goal of we call it bringing smiles to people still existed. How to get there was changed. Same thing with FitMob, it was about fitness, it was about getting people to be more active. So, but how we got there changed. But the people that joined for that mission remained excited about it.

SPEAKER_01 26:54

Yeah. Um, Sharish and I are old enough to remember At Home, then it became At Home Excite. Uh, because uh uh at that time in the early 90s, I was on that team that uh what became Sprint. It was uh cable companies came together and formed At Home for the internet and uh the version earlier than Sprint for the wireless. You know, it was it was interesting to watch both of those uh then the early days of Netscape when D uh when CDs used to come out. You know, send those out and the browsers. It's an area that uh very few will remember, but we do remember. Uh shifting to left, right? So I remember Zim Ride uh in the early days that sort of became uh left. We were involved uh here in a company called Glimps, and that had early early days of location intelligence, and Zimride was uh using that very uh very well. But left um had this uh in just looking at it from the outside, lift had this uh uh I almost say a culture of uh uh being in cooperation with the community. I think that came from Zimbright, I'm not so sure. But Uber was this we're gonna take the world and the world's against us. It may have come from the founders, but Lyft didn't have that, they had that pink um uh you know mustache and all that came, maybe came later. But Lyft never said, I'm gonna take everybody down. And Uber said they did, and they were unabashed about the whole thing. Was that a topic of conversation uh inside? Was it a conscious, or is this something the founders culturally permeated through the company?

SPEAKER_03 28:52

Um, I think it's hard not to reflect your personality into a company. And the personality of the founders of Lyft were very different than the personality of the founders of Uber, and their mission and the way they view the world was different. However, I would acknowledge that part of what Uber did was um to have that kind of fighting mentality to overcome some really difficult forces around tack taxi industry. And um, and so they so that was probably necessary at a time to break through. But then once that is broken through and the the network, whether it's Uber or Lyft, continue to grow, now you are a fabric in the city where you have to be in harmony more. And I think Travis had a challenge pivoting to that as a leader. And it was necessary, and then Dara was able to come in and make that pivot. Uh you know, nicer, gentler Uber. We were able to come in and stay authentic to the founders' concept of cooperation and working together and working closely, which benefited us as well coming in. But the industry needed that um the kind of there's a there's a time and a place to fight. The question is then how do you evolve over time so that you can grow and and maintain?

SPEAKER_01 30:30

True, true. Yeah, I mean they they had the world domination eliminate taxis approach while there was going to be a coexistence, seems like it was obvious from everybody. But uh so Lyft uh the Uber, Uber was running away, had these bad big ambitions. How how did Lyft what was Lyft's strategy at that point to say we're gonna be a number two or survive? Because uh Uber was raising maybe more money and going after this with big ambitions, and uh they were going to take on the world and they were going to fly planes and you know, all kinds of things. Seemed like Lyft was very true to its original mission. What was what was then the thinking that Lyft can do this and be okay doing it and make it?

SPEAKER_03 31:18

Yeah. So um, you know, that's a discussion that we had when we first invested, and I was on the board, and then later I came and joined a full-time chief strategy officer for four and a half years. So that was then my what I lived and breathed. I would say um initially um it wasn't a feeling like we were number two, it was like we're gonna we're gonna fight to be number one. However, we knew that the market was big enough for two players. The number of rides potential in a city is massive. And also, it wasn't this like scarce supply. There are lots of potential drivers, and drivers are comfortable driving for both. And because we didn't want to have an employee model, we also you have to allow them, you can't restrict them from driving uh to both, and and that's what they ended up doing. So we felt that the market was big enough to support even a strong number two, but of course, our planning was how can we be number one? But there are points of market share that you it gets more expensive to fight, and so you have to be careful about when you do that and when you don't. Then in terms of scope, um, when I joined, and even prior to that, like the mantra has been to focus. And there's a large enough opportunity in rides, and we can be really good at it. And then there were some adjacencies that were important, so like it the future is self-driving, we need to address that. And so that was what I worked on. Uh, as well as the future is electrification. So, how can we help drivers go that direction as well? Uh, the future of shared rides to reduce congestion, so we launch shared rides as well, where people are sharing. So, so there's enough uh innovation and there's enough market size to be really focused on on what we were doing, which isn't always the case in other industries.

SPEAKER_01 33:25

Let's take this driver aspect, because that was that was a key aspect of you know, bringing the drivers and uh passengers together. Passengers were always there, they were using taxis before you eliminated friction of payment, they started using Uber and Lyft. So, but the drivers, at some point, Uber thought drivers were there was their sort of I wouldn't call them enemy, but it was a very contentious relationship that they led to autonomous. Uh they went down this autonomous path, and so did you. What was the initial thinking behind autonomous cars? Because even now, even though it's launched in San Francisco, I think there's protests from all kinds of uh agencies and others about uh crews and Waymo and all that. What was the initial thinking that people would be very comfortable getting into driverless cars? Uh, or was it that driver-assisted cars could be the transition in the original without getting in the technology part of it, just the key aspect of how you attract a passenger to sit in the car?

SPEAKER_03 34:30

Well, I think um it wasn't really about driver-assisted. Like that doesn't really do anything to help the economics. Um it was something that was happening in the industry. Um, and it was it's certainly we believe that it's safer uh that's there, but really the belief was that um the experience um is is uh for for consumers uh in a driverless vehicle, there's a lot of benefits there that that can be uh one is um some people are worried about the safety with a driver. And so now you know it's just you. Um you have that, you don't have to worry about that other person that's there in doing it. Two is that um it should be safer than a human by an order of magnitude, and that's what our design goal was. So you know there's still they're still rolling out um right now, today, Waymo Cruise, etc., in San Francisco. And yes, there will be um there will be instances where the system is not perfect, and um, but it should be far less than what a human faces in terms of the miles per act you know between accidents, as an example. The challenge with that, which I think we underestimated, was that um you can get a lot of media coverage if uh self-driving car blocks something and you know, versus a human does that all the time, but you're not gonna get the same level of coverage. And so statistically we were right, but there's a perception challenge that I think is probably larger than what we thought uh when these vehicles were launching.

SPEAKER_01 36:12

So given that you were in the early uh, I mean, almost one of the early entrants in the autonomous, so where do you think the uh where do you think it is, and what do you foresee for the next three to five years in autonomous driving in terms of technology or experience?

SPEAKER_03 36:32

Yeah, there's technology, cost, and experience. I think experience is fine. Um it is there is a education on how safe it is for a consumer that needs to happen. That's the most important thing around the experience. But once you're in the vehicle, it feels great, but it is a little bit jarring of like, whoa, there's no one in the front seat driving. Um, so that's that is a big change. Um cost. Vehicles um are still not uh they're not um yeah, they're they're basically too expensive uh on a cost per mile basis when you account for the lifetime of vehicle, the change out of the sensors, the compute powers that's necessary. Um we're but that cost is coming down over time. So I'm confident, but we're not there yet. The other piece that is the reality is that the reason why we're able to now operate these safely in cities is that they do have a uh human takeover. So that if the vehicle is not sure about what to do, um a human will be called in to help make a decision. So it's human assisted. And that increases the cost per mile too, depending on how often a human is is being involved. Um you have to have one human that's watching the entire ride, or can you be watching four rides at the same time and doing that? So I think that's gonna take some time where the system gets more intelligent and it does gather data and learn. And the long tail of events is what you know matter there because it can do the basics already. It's the long tail that makes a big difference. Um so I'd say that we are um we are probably a few years from economic viability. But from a technical viability, it's there. It took a while, but it's there. Um highways is a little bit more challenging because you're going at high speeds and you can't afford to have a mistake. You can make more mistakes when you're going 30 miles an hour than when you're going 70 miles an hour. That'll take some more time.

SPEAKER_01 38:36

Got it. So now uh just to uh Toyota bought it, I'll just the last question on that topic. Toyota acquired you guys that that unit rather. And in your mind, do you see the OEMs changing the experience? I mean, still still it's a car, the way you you drive a car, I drive a car. Could it be that it doesn't, in theory, it doesn't need a steering or you know, it doesn't need the same space constraint as a as the as the current car is you know front and back or right? We could all we could all be sitting and just having this podcast, you know, vague in some a pod that moves. And there may be use cases outside of just transportation for those, but uh is that is that something that OEMs will experiment?

SPEAKER_03 39:26

Uh yes, I think down the line because we're not there yet. Um I think you you need to get vehicles as they're designed today at a cost working to where they are. But there are some beautiful designs, and there's a lot of ideas. And I used to give a presentation on this in the future of transportation, where um there's no reason to have a a steering wheel or anything, so you can have more cabin space. You can fit more passengers in, you can do more in there. You can use, is it for is it while you're sleeping, you're working, you're being entertained, you're socializing, and you go beyond um just transportation into why can't your office be mobile? Why can't your office be moving to wherever you need to go? Why can't your house be mobile? Um, you know, I'm running a venture fund now called Climactic, which invests in climate tech, and one of what we're doing is electrification of transportation. And we invested in a company called LightShip, and they've created an all-electric RB, and it's beautiful. Um, and it is uh you would love to live in it. And you can imagine someday if that's autonomous, where um your home is mobile. Um, and and you don't have to, while you're sleeping at night, you're going to your next destination, kind of like you're going in a plane.

SPEAKER_01 40:46

Oh, awesome. That's a good segue to your new fund that your most current venture. What's uh what's the focus? Uh I mean, uh climate tech is the focus, but what's the uh area you're doing it in? Because these seems to be fairly long. Can you elaborate for our audience about the fund and what are you guys looking at in investing or what have you invested in?

SPEAKER_03 41:09

Yeah, so first of all, um, you know, for me at this point, after having invested in some climate-related opportunities in transportation and and also spending time at Lyft, um I saw both an opportunity for impact as well as returns as we went from clean tech, which was about disrupting the energy space, to climate tech, which was about decarbonizing every industry. Venture makes money on huge disruption. And digitization was one of those. And a lot of your careers are successful based on digit digitization. Decarbonization is the next big wave. And everything needs to be decarbonized. We need to do it for our planet. Some people say 2040, some say 2050, but it needs to happen. Um we don't have enough technology to get us there. BCG of going to a net zero planet is there with today's technology, and that has to be moving at a much faster pace. Like wind and solar is cost effective, but it's just not being deployed fast enough. Um and we need large-scale storage of energy to make that work. So um we're going in looking at all of the different ways that you can help get to a net zero planet, and what we're focused on is businesses. So if you look at the consumer, I don't believe the consumer should be asked to or is going to reduce their energy footprint, especially in the developing world, as they're just coming online. I don't think the consumer is gonna pay a premium for green products. So, really, and I don't think that the government is effective enough to legislate our way to success either. It's not gonna happen. So we're really relying on businesses. 8,000 plus businesses have made a net zero pledge in the world. That's 90% of worldwide GDP is under pledge. They need help in getting there. Our fund is focused around not as much deep tech, more around software, data, and services to help enterprises and mobility get there. So we do seed level investing uh at the early stage, partner very closely with founders, and help them sell to the enterprise or provide a mobility solution that helps get to net zero.

SPEAKER_01 43:36

Awesome, Baraj. I could go on. I mean, your stories are so fascinating. We could go on in one of your uh versions for a long time. But thank you for your time. It was a fantastic, uh, fantastic podcast. And uh thanks for taking the time. And uh for our audience, uh ego dissolution. That's uh that's the word of the day. So uh please subscribe wherever you listen to our podcast and uh give us a great review. And uh thanks a lot, Raj. Appreciate you taking the time.

SPEAKER_04 44:10

Thank you. Take care.

SPEAKER_01 44:13

Thank you for listening to our podcast from Startup Big brought to you by DI Seattle. Assisting in production today are Isha Jain and Mini Verma. Please subscribe to our podcast and rate our podcast wherever you listen to them. Hope you enjoyed it.