Neo is concentrating its bets on fewer companies and people

Transcript

From the transcript TBPN publishes with the episode.

1. 1:42:02

   What's what's been your strategy, you know, backing a lot of these companies quite early but then seeing them get marked up at such an insane, you know, pace? I imagine... I mean, one of the biggest challenges is like deciding when you want to defend your ownership and take pro rata when you're not necessarily getting a ton of new information if a company raises, you know, a $100,000,000 and then two months later they raise a billion and you're like, okay, well, there's more revenue than there was two months ago but the the market is still evolving and and that that just seems like in some ways being super early stage, you're like insulated from from from a lot of chaos, but that feels like the the top sort of concern.

2. 1:42:48

   It's... Yeah. I wish I had an answer like I know the correct thing to do every time. The reality is it's... What you're describing is it's just kind of hard to know because it's... The market is kind of crazy, and when something is... If if we've invested early and it's done a lot, then, you know, to put in more than, really have to look at each one as if it's a brand new investment, you know, because otherwise, it can psychologically kind of mess with you if you're thinking thinking about how much it's already grown. Is it time to... Would I sell or so on, and, you know, putting more in... If you were there early on, it may seem, you know, like hard to imagine it continuing to grow.

3. 1:43:35

   And I I try to look at things from a standpoint of if this was a new investment, what would I decide rather than the

4. 1:43:41

   Yeah. Or it's easy like when when you've seen incredible performance already, it's easy to like fall, you know, you're so in love with the company, right, because it's been this massive winner and the team's amazing, but even entrepreneurs go through this where you're too in love with an idea, sometimes it blinds you on the realities of what's actually happening in the market or its true potential. How are you scaling Neo Scholars? Like, is it is it something that is already like at at at scale and you're just going to maintain it?

5. 1:44:12

   Opposite of scaling. Yeah. We're making it smaller. There you go. And by by which I mean I mean, I'd say across across the things we do, the biggest learning for me has been that we're even better at at picking winners than I thought we were, and to have even more confidence in in my own and my team's selection abilities. Basically, they're to concentrate our bets on fewer, whether it's fewer companies or fewer people. So the Neo Scholars class this year is only 10 people compared to 18 or 20 in previous years and 30 before that. So it's... Means investing more time in a...

6. 1:44:54

   Per person in mentoring them and giving them even more really bespoke attention. Similarly, the... Our... What used to be called Neo Accelerator is now Neo Residency. That used to be a cohort of, like, 20 or 22 or so companies, whereas now it's more like a dozen companies and and more money per company. So I'd say we've just... For us, scaling isn't... Is not a goal. It's... We're not trying to become something that funds hundreds of companies a year.

7. 1:45:27

   I'd rather fund a small number of companies that become transformative. So... Yeah. So we're very much just betting more on ourselves, betting more on our own abilities to pick winners and on our own convictions.