North Star Leaders Podcast

Lindsay Pedersen

The world needs what only your business can bring. And as a leader, it's your job to deliver. But where do you focus? Where do you direct your time, your team, your budget, and your emotional energy? We're learning this together on the North Star Leaders Podcast. In this podcast, I talk to purpose-driven leaders about the choices that they make to create audacious economic value while also realizing their distinctive purpose. I'm Lindsay Pedersen, brand strategist, author of Forging an Ironclad Brand, and host of the North Star Leaders Podcast. Let's get to it. Today, I am really happy to be joined by Aviel Ginzburg. Aviel is a founder-turned-investor. He's currently general partner at Founders Co-op, the leading seed stage investment fund in the Pacific Northwest. He has funded a multitude of highly successful companies, and he was co-founder of Simply Measure. Aviel, welcome to the show.

Aviel Ginzburg

Thank you so much for having me.

Lindsay Pedersen

It's so good to have you here. To start us off, Aviel, what is your favorite thing about what you do?

Aviel Ginzburg

Oh, you know, what's interesting about that question is, I think my favorite thing about my job is how varied it is. So, I almost want to say my favorite thing is that depending on, honestly, this going on in my life, what's going on with my interests and hobbies, there's a different part of my job that I enjoy the most. And so, I'd say sometimes, and maybe right now, the thing that I'm finding the most enjoyable is working with really, really early stage founders who are in that process of finding their first customers and product market fit. And sometimes I'm more obsessed with a big technological shift, or I could be really excited about... Frankly, I may be crazy for this, but I actually like the fundraising process. I like negotiations. Sometimes that's my favorite part of the job. And so, I think a really fun part about being an early stage investor is that you can spend your time in so many different areas. And so probably at a meta level, that's what my favorite part of the job is. But right now, I think it's working with really early-stage people who are just so close to figuring out who their customer is. And I just love having those conversations and helping them work through all of the little signals and signs and details.

Lindsay Pedersen

That's so wonderful. It's like on a really high level, you thrive with variety. And so, you are in a role where you get to change domains all the time.

Aviel Ginzburg

Well, yeah. And frankly, I remember my first job, which was as a software engineer, and I was the second engineering hire at the company. And so I was just so happy because I got to work a little bit on the front end, a little bit on the back end, a little on the new product, a little bit in sustaining products. And then we raised money and started to grow. And the founder and CTO was like, Well, Aviel, we've got to pick your career path now. Do you want to be a front-end engineer or a back end engineer? And it was like that moment where I was like, Oh, shit. Some days I want to be a front end. Some days I don't want to be. And so, I was like, Actually, I think I'm going to quit and start my own company.

Lindsay Pedersen

Did you really? Was that the impetus?

Aviel Ginzburg

It was. I always knew that I wanted to start my own company. But that was a forcing function to say like, Oh, well, you're now making me sort of specialize. And the thing that I love is sort of the variety and the ability to sort of change and evolve what I'm working on. And so naturally being a founder, you're wearing so many different hats. Your job is different on a daily basis, monthly basis, yearly basis. And so, for me, it was like, well, that was fun. But now it's time for me to find something where I can do that.

Lindsay Pedersen

What is it that's special about the early, early, early phase that you're loving right now? What is it about that that is so compelling for you?

Aviel Ginzburg

I think I would probably say it's really chaotic. But there are patterns inside of that chaos. And I think maybe at a fundamental level, like my brain gets a really strong dopamine hit when I can help see a pattern across that. And so, like as an investor, I work with many companies at once. And so, I don't know more than any of those founders do about their own business. I don't have any secret insights or answers. But what I do have is a perspective where I'm talking with dozens of people doing things that rhyme at the same time in situations that rhyme. And then I can see patterns across all that chaos to help them make sense of what they're seeing in the moment. And so, I think that is where that comes from. It’s like the sort of excitement and validation I get from being able to be like, oh, this is what's happening. And you don't realize this. And I know this is happening because of these three other conversations. And now I got to go back to those people and tell them, wait, wait, wait, wait, look what I just learned. And so that is the part that is just ridiculously satisfying. And I think right now and where I spend my time, sometimes it's with later stage companies, earlier stage, like with a large portfolio, my weeks and months can be different depending on companies’ needs. But right now, I'm spending a lot of time with a really early stage folks. And so that's sort of the mode that I'm in right now.

Lindsay Pedersen

Tell my listeners a little bit about Founders Co-op.

Aviel Ginzburg

Yeah, so Founders Co-op, I'll just start by saying currently incorrectly named because we are not a co-op, we are a venture fund. Okay. But the reason why it's called Founders Co-op is it was originally founded in 2008 by my partner Christopher and former partner Andy Sack. And so, it was a small fund that was raised from money of local founders in Seattle. And then the idea was they were then going to invest in the next generation of founders. So, the name Founders Co-op was because it was a cooperative of founders pulling their money together.

Lindsay Pedersen

Made up of founders.

Aviel Ginzburg

That was going to be deployed centrally. And in the early days, it was like a little bit of a venture fund, a little bit of an incubator, a little bit of an accelerator. Like it was feeling its way through. And so, as I started getting involved in the second and third fund and Andy stepped away, we very much crystallized on what we are is a venture fund. So, a centralized fund that makes X investments these days about 30 out of a fund into companies at their earliest stage. And so, Founders Co-op has been around through 2008 to today. We're currently investing out of our fifth fund, which is a $50 million fund. And so out of this fund, we'll write probably about 30 checks of an average check size, first check size of a million to a million and a half into companies that are sort of everywhere from, hey, we've got an idea all the way to, hey, we've got a product and market and a little bit of traction and we need some help to take it to the next level.

Lindsay Pedersen

One of the things I've heard you say in other settings is that when it comes to being a small company, focus is singularly important. So, I heard you say part of what gets a big company to escape velocity is being really, really good at one thing. A company can even be terrible at 90% of what it does. If it's excellent at that 10%, it can be massively successful. So, focus doubling down on what's really working. And I'm curious at the seed stage, how much is there tension between diversification and being a heat seeking missile and having focus?

Aviel Ginzburg

So, I am a fund and as a fund, I have a portfolio. And why do you have a portfolio? It's for diversification. I don't expect all of my investments to work, but I don't need all of them to work. I just need a few of them to work spectacularly. So that's on that level. Then there's one level below and now it's the company and I'm the founder. And as the founder of the company, I'm going after a market and I say to myself, there's a variety of different ways that I could tackle this market.

I could do ABC; I could build ABC. There's all these different variables. And as a human and probably a smart human, because I'm back to your company, you're like, hey, I'd like to have a little diversification too. I'd like to put a little bet here and a little bet here and a little bet here because I don't want to be wrong. Life is short, my time is limited. It's not just about me spending money on the wrong thing. It's about me wasting my precious years on something that doesn't work. So, wouldn't it make sense for me to spread my bets out?

But the reality is, the answer is no. When you were building a really early-stage company, you have so many constraints, you have so many limitations. And the most successful companies are the ones who make a bet and are very, very right. And there's different types of bets that you can make. In Amazon speak, there's one-way doors and two-way doors. The one-way doors are this is what we're doing and we can never undo it. The two-way doors are we're all in, but there's a way to back this out and try something again. And I find that the most successful companies and frankly, the ones I enjoy working with the most are the ones who are always all in on a very specific focus. The ones who we're doing a little bit of this, a little bit of this, a little bit of this, can grow.

They never, never become big and they never become wildly successful because they're never excellent at one specific thing. But there is this tension here because a smart founder is going to say like, ah, like this sucks. I don't want to go all in on the wrong thing. And so a really interesting pattern that I've seen develop is successful founders who have built a company before now have this pattern of saying like, I want to start multiple companies at once as a chairman or I want to start like a little venture studio or I want to do an incubator. I want to do this. And the reason why they all want to do that is for this exact same reason, which is that they're smart enough to know how lucky they were to be right the first time and they can't bank on that happening again because so much of being an early-stage startup is luck. Like things out of your control.

I mean, when you think about how COVID wiped out startups, interest rates wiped out startups, but even things of like, wow, I'm selling into this enterprise and Gartner wrote this paper that said everyone should buy this competitor. And now suddenly, what the hell just happened to my pipeline? Like so many things are just wildly out of your control. So, I get the urge to do that. But ultimately, you are just so constrained as an early-stage company. And so, the best ones are the ones that are laser focused and are just like, I'm going to be good at one thing. I'm not going to worry that that button is broken, that our email list is all messed up, that this is like, no, what is the thing that works? And let's be excellent at that. We'll deal with the rest later. And frankly, you probably never deal with a lot of those things. You realize that they just were never important at all.

Lindsay Pedersen

It's interesting because there's like, what is going to fuel the CEO? Like kind of like there, and it includes risk profile, you know, their level of risk tolerance and I'm sure life stage, all sorts of things. And then as the portfolio manager, there's a tolerance for risk at the individual level that's different because you have diversification. So how do you work with leaders like that to give them the air cover, the courage to be really singularly focused, even though it does mean that there's risk that they'll incur that they wouldn't if they were diversified. What are the things that you bring to bear to help them through that?

Aviel Ginzburg

So, there's sort of two mental models I try to bring to the table. And I think the first is that your biggest, let's say your most precious resource as a founder is your time. It's not actually the money in the bank. And you should be thinking about yourself as a human and as my time being well spent on this. And so what you should be doing is you should be optimizing all of your actions and thus your company on making sure that it's the best use of your time. The saddest thing I see is founders who are trapped in slow growing companies that are never going to get anywhere, but aren't failing. And then the next thing they know, they're not in their 20s anymore. They're in their late 30s. They've got kids and they don't have another one in them. And they're like, what the hell just happened to my career? And so that's model one. So, it's like, if you fail, that's okay. Because you learn something really quickly and you get to do it again and you get to do it again. And so, with that, I also say like, look, we are investing in you as a really early-stage company, recognizing that you are a bad business. Like by definition, you're bad. Like you don't have a lot of money. You don't have customers. There's so much risk. This idea is probably wrong. But how am I going to view this is whether or not it was a good use of my investor's capital. And the way that I look at it, if it's a successful or a failed investment, is did we learn something? What we could have learned is like, nope, there's no business to be built here. Or like, this is absolutely the wrong way to do it. It is fine to learn something like that. But the cases where you invest money and at the end of the day, you're like, I don't really know why this didn't work, but actually like, did it work? I don't, it was just sort of like, bleh. And those cases feel like a failure for everyone. Including the founder, because what does he or she do next? You don't have like a strong takeaway for that next act.

Lindsay Pedersen

So, it's like, there's risk. You can look at risk in so many different ways. But if you kind of define success as not merely the company flourishing, but also were there learnings that are going to be super valuable for whatever comes next, that helps you to be courageous and to be really focused with time and emotional energy because our goal is actually to learn something, either to succeed or to learn something deeply useful for the next thing.

Aviel Ginzburg

And I think that creates alignment as well because it's not fair for me to have a portfolio and then give a founder a million dollars and say, even though this isn't working, you owe me the next two years of your life to figure out if this can work or not. Like, that feels unfair because you have all of your eggs in one basket and I don't. And instead, it's like, I want you to be on the same page as I am. I want you to feel like this is worth your time and you're very quickly getting to clarity on that.

Lindsay Pedersen

Right. And that intersection is where both of your interests are at that intersection. Like, then there actually isn't a conflate. There isn't tension because you both want that. At the seed stage, how do you think about the role of purpose? That's the word that a lot of people are using right now. I call it the North Star. Given that it is so early, is it counterproductive? Is it productive to really know what the purpose is that early in a venture?

Aviel Ginzburg

I mean, it's so wild because I've gotten now, because I've been part of Founders Club for a long period of time, but I was also helping run and select the companies for Techstars Seattle starting in 2011. So, I've gotten to watch from sitting across the table with, we don't know what we're doing. We haven't written a line of code to I'm now a public company. And every year, we'd always bring those founders back to talk to the next generation. And I've gotten to watch as those stories and narratives have changed every single year. And history constantly gets rewritten about purpose, mission, and everything. And I think, frankly, most purpose from a company level is a sort of living narrative that exists in service of motivating and pushing the organization forward. I think at the earliest stage, when I think about purpose and North Star, and frankly, I think what I see in the most driven founders, it is an internal energy, which is something where they feel, and it can come from a variety of places. It can come from an insecurity. It can come from a slight. It can come from childhood trauma. It can also come from healthy places of just like really, really being a type of person who always challenges yourself, being always about everyone can do better. I can do better. It doesn't always have to be negative, but some sort of infinite energy resource where you're never comfortable in the moment, and you're like, I always need to try the next thing, always make myself uncomfortable, always looking around the next corner. And I know that can sound horrifying because you're like, does that mean you can never relax and you can never be comfortable? And I think for the reality is like a lot of humans just can't. I'm sorry, like we're apes, like we're animals, like so much of the insecurity that we feel right now is sort of fake and manufactured by all of the various niceties of society and things around us. And I think if you can tap into that as your purpose, which your purpose is just to move forward and to do better, like that is the best. And I'll just say that's the internal piece. But I mean, there's great founders who are just like, I really love this customer. I really love this industry. I really love this technology. I really love it. But I don't believe that that should be your core impetus. And in fact, if it is, that often leads to failure because let's say you're two co-founders and one of you is like, I'm really excited about this because I'm really excited about the technology. And the other one's like, I'm really excited about this because I'm excited about the market. Well, you know what? Almost all early stage companies pivot, whether it's like, we need to change our technical choices to the much more common, we need a different customer, we need a different market. Those companies break up and most companies fail because of team and founder issues and things like that. And so if your alignment, if your purpose, if your North Star is not just like you and me, us co-founders, we want to dent the universe. Why do we want to do it? I need to, I can't not do it. That is, I think, the greatest purpose. And so sometimes like, it leads you to do irrational things like starting a company. I was just having a conversation earlier today with a founder who's just like, Oh my God, like, why did I not just stop doing this several years ago and just go work at Microsoft? Like, I have everything that my family wants. I’d have this comfortable life. I'll do this. Like, it's like, I think, you know, I've got to go to the board and just tell them like, we either got to sell the company or I need to be out. And then we have a conversation. So, I guess that piece of the conversation was several weeks ago and then we're talking today and he's like, I'm ready to go for another year. I'm so fired up. Like, it's just like, it's completely irrational, but it's so wonderful, wonderful energy.

Lindsay Pedersen

I mean, you use the phrase infinite energy resource, which, I mean, it actually feels germane for many, many things. But given that there's such scarcity around time and energy for founders, for startups, if you have an energy resource that's infinite, you got to use it. If you have that scarcity, that's exactly what you need. I think there's like, to me, like what a North Star is sort of like, what's the thing that won't change? Because lots of things, maybe everything is going to change, but what's the thing that won't change? Is there such thing as a company that's so early that there actually isn't yet any first principles? There isn't anything that won't change that you hold sacred because you're a heat-seeking missile. It seems like there's kind of a funny balance between having something that is true and will always be true, but also being flexible enough to go where the heat is.

Aviel Ginzburg

Yeah, I mean, I think there has to be that flexibility because I think that the most successful companies are the luckiest. Like, I think that it doesn't matter how good you are, the majority of your success is still out of your control. You can do everything right and still lose, and you can do a lot of things wrong and still win. And I think that those folks where if you, so again, maybe getting at a meta level, if you're North Star, is that like, we're going to always be thoughtful about how can we exist and should we exist? And like, ask those questions constantly. That to me, that may be too pragmatic, but that can be a North Star in itself. And that can help you find where you should be and what you should be doing. But it's okay if your purpose changes. I am very much a capitalist and have many criticisms of nonprofits and their incentive structures and things like that. But to go back to the idea of a North Star, so many nonprofits are like, why are you created? I used to volunteer for two years. I worked at a food bank every Friday afternoon and it was really rewarding. It was great in terms of perspective and getting to spend time with people who were not just in the tech world. But the thing that I learned, and this wasn't just from my own observation, this was from the people who were working at the nonprofit complaining was like, everyone would come to this realization of like, huh, our North Star is to end food insecurity, but none of the things we're doing actually end food insecurity. We're just trying to treat food insecurity and as long as we do that, we get the funding and I keep my job. If we ended food insecurity, I wouldn't have a job and we wouldn't have a purpose. And so, like that is where, you know, I love the purpose being something much more meta like what I laid out, which is saying, should we exist and how can we exist? And just constantly be thinking about that question.

Lindsay Pedersen

Yes. And then there isn't that sort of conflict of interest-ish sort of thing of, well, if we achieve our vision that we actually put ourselves out, we no longer have a job. Yeah. Yeah. We talk a lot on this show about self-care and rituals for setting oneself up for a great day and a great week. And I've heard you talk about how as a leader and as an investor, your primary role is to make decisions and to help other people make decisions. Like being a good leader is the capacity to make better decisions. And I love this almost as a definition of leadership, but it seems like self-care is huge for that. If your job is to make sound, ever better decisions, your capacity in your animal body needs to be really significant. So do you think I'm on to something there? And how do you take care of yourself and build your own capacity and encourage the leaders that you work with to build their capacity?

Aviel Ginzburg

Yeah, that is hard. And I mean, I'm not going to pretend that that's something that I've always been as thoughtful about as I should. In terms of my own self-care, like I've burned out before. I tend to go, you know, more in cycles where I'll ramp and ramp and ramp and then I'll need to figure out like, okay, how do I pull back? How do I not drive off of a cliff? I think that's a very common pattern in founders. But I think one thing that I have learned to do for myself as well as something I've coached for founders is that it's okay if you have a bit of a split personality, if you have different personas, as long as you have awareness of that. So, what do I mean? Which is that you can have CEO you. And that means I show up at work and I am rallying the troops. I'm closing a candidate. I'm selling the vision. I have this belief I am invincible. And I have strong opinions. And then I go home and I'm a nervous mess about like everything is going wrong. Everything's falling apart. Like, you know, I don't know what I'm doing. And you might say that's really unhealthy to have those completely different personalities. But I think if you surround yourself by great people, whether it be your partner, your mentors, or even your investor, I love working with those founders where we're talking in the evening about everything that's wrong. It always feels like all of our conversations feel more like a really rough therapy session. And then you see him or her in action the next day. And it's just like as if none of those problems actually exist. And exude that confidence, which I think is important because as a startup, you need to sort of pull the future that you want into the present. And unless you can project that, you can't do it. But if you only do that, you're a narcissist at best. And if you only are worried about everything happening, you're never going to facilitate the sort of luck and the alignment that's necessary for you to accomplish that. And so the roundabout way of getting back to the question about self-care, I think it is finding that right balance for you as a human of like dealing with the really hard things and ignoring the hard things and how do you find that right balance in a way that you overall will feel honest and consistent. But at some moments, if you look at any point of yourself in isolation, you may be like that is a big dislocation. And I think in a real way, when people are hypercritical of people in leadership positions and CEOs and politicians, it's because we mostly see them in those juxtapositions and then we're like, well, you did this, so you're this mean, awful person. Or like, oh, she did this, like nicest human in the world. And it's like, no, we're like great leaders can be very inconsistent and like they need to be because they need to live in all those moments, I think, to take care of themselves and to get the job done.

Lindsay Pedersen

I love that. That is so insightful. It makes me think of how in some ways, as an individual person, we can transcend all of our roles and just be the CEO of our life. And so like, in our life, we've got lots of roles that we play and we've got lots of human needs that are sometimes they're being met and sometimes they're not being met. And so, if you transcend to, okay, right now, I'm stepping into the role of I'm really freaked out about what's happening with whatever, our unit economics. And then you step into I'm leading these people and I'm going to lean into this other part of me that's really optimistic and generative and fueling. And then I'm going to be with my kids and I'm going to throw the ball with them and I'm not. But it requires, I think you used the phrase self-awareness. It's like transcending to be the CEO of your whole life. And then just like being really intentional about what you're bringing to bear in what moment. And that can help prevent burnout because you're nurturing various aspects of your life at different times.

Aviel Ginzburg

Yeah. That's so well said. Yeah. That is much more concise way of saying. Way harder to do than to say. Yeah. And I think it's also a hard thing to do on your own. It's like one thing that I'm doing now alongside, I guess, separate from Founders Co-op is a thing called Foundations in Seattle, which is an invite-only community of founders. And so to use that same framework like purpose and why does that exist? Like I have the belief that a successful startup ecosystem requires a mechanism in which people in all different stages of the journey interact with each other. So whether I am just starting out or I'm in the heads down mode, can't be distracted or I've been there and done that. Maybe I'm retired. How do you get all those people to have rhythms that overlap? And if you get that going, you get a flywheel going. And why do you need that flywheel? Because doing this stuff on your own, like you just said, is so hard. And it doesn't mean that you necessarily need someone to, you know, cheer you up and be supportive. But depending on your personality, sometimes it's someone that you can commiserate with. Sometimes it's somebody that can inspire you. Sometimes it can even be someone where you can be frustrated that they have the success that you don't have and you need that in the moment. And so it's just like but what we do need is entrepreneurs need to be around each other for that reason. And I think to your point because it's so difficult to do it on your own.

Lindsay Pedersen

Yeah. It's like back to your we're social primates. We're not meant to do these things alone. And being a founder can be inherently somewhat lonely. It's like there's a loneliness to it which is not in service of the person or of the company. So being around other people who get you not even just get you but like have like stories have sources of commiseration it seems vital. I love that. So that's Seattle Foundations.

Aviel Ginzburg

Yes. So, it's just foundations but Seattle Foundations.org not to be confused with Seattle Foundation but it's just foundations.

Lindsay Pedersen

Oh, thank you because I actually did for a second before this conversation I did get confused about that. Good. Okay. Oh, Aviel this has been such a wonderful conversation and I've learned so much from you. I have a few rapid-fire questions before we close. Are you up for that? Like one or two or three word answers? Okay. What is your favorite salty snack?

Aviel Ginzburg

Pickles.

Lindsay Pedersen

What is a place where you've always wanted to travel?

Aviel Ginzburg

Iceland.

Lindsay Pedersen

What is the best way to spend a Friday night?

Aviel Ginzburg

It's supposed to be rapid fire. I'm going to go rapid fire as if it's a night like tonight on the water.

Lindsay Pedersen

Ooh.

Aviel Ginzburg

Like on a boat or like on... Just I want to be looking at the water.

Lindsay Pedersen

Looking at the water.

Aviel Ginzburg

Because here's what happened in my brain. Like it's a Friday night. It's nearing the end of the summer. I want to be able to see in the distance. I want to be able to reflect on this whole summer that I've had. Like I don't know, something about just like that feels perfect to me. Maybe with a glass of wine. That's all I want. Look at the water with a glass of wine today.

Lindsay Pedersen

It's like the Friday night of the summer. It's like it's the end of the week.

Aviel Ginzburg

It's the end of the summer. It's the end of the week. The school has started. It's the last warm day. Like I want to just like send it off with a cheers and be like, this has been wonderful. It's time to get back to work.

Lindsay Pedersen

I love that you're doing that tonight. What is the book that you last recommended to someone?

Aviel Ginzburg

Oh, the book that I last recommended to someone was Braiding Sweetgrass.

Lindsay Pedersen

Oh, I love that book.

Aviel Ginzburg

I took sort of a weird detour during COVID knowing nothing about farming or living in rural America. I bought a farm, a 40-acre farm in Southern Oregon. And then as we were remodeling, I ended up with like because you couldn't get help out of there. Like met a guy who's a monomany and he just like lived on the property. We became really close friends and he helped me remodel a bunch of stuff. And so, like it was just this weird like I'm in this weird COVID bubble being open to this whole other culture and then reading that book and then also like getting the perspective of I'm actually like on a hayfield. Like so it was like it was a whole like it was a beautiful like moment in time.

Lindsay Pedersen

So, it was a whole vibe. I love that book. And it's like soulful. I love that. Thank you so much for taking the time to be on this show. If folks want to learn more about you or about Founders Co-op or foundations, where should we send them?

Aviel Ginzburg

I would send them to follow me on Twitter or on LinkedIn. I post content all the time and it's usually about all those things.

Lindsay Pedersen

Awesome. And we'll have those links in the show notes too. Thanks again, Aviel. Thank you. Thanks for listening to this episode of North Star Leaders. Make sure you don't miss an episode by subscribing on your favorite podcast app. If you know of a North Star leader whose insights would be valuable for this community, please message me on ironcladbrandstrategy.com. Also on that website are show notes, transcripts, and a way to sign up for our monthly newsletter. I hope you join us again for another episode of North Star Leaders.