Christian Kameir is a Managing Partner at blockchain venture fund Sustany Capital in Newport Beach. Mr. Kameir has been a technology entrepreneur since the dial-up days and led the merger of two of the earliest internet service providers in Europe, after which he immigrated from Germany to California to establish an international investment firm. After founding a Yelp-predecessor in 2004 and selling the operation in 2008, he joined the board of several high-tech companies.
In addition to majoring in business, Mr. Kameir studied classical literature, is certified in NLP, and is a graduate of Muenster’s School of Law. He is known for publishing one of the first law blogs in Europe and drafting laws for the open telecommunication market, specifically innovative services. Mr. Kameir is a member of the Forbes Finance Council and a seasoned public speaker on topics ranging from high-tech investing to blockchain solutions.
Here’s a glimpse of what you’ll learn:
- Christian’s background and why he founded Sustany Capital
- How Christian assesses different investments and how he decides which ones to pick
- Common pet peeves Christian sees when assessing investments
- What transferring from legacy technologies to new decentralized offerings looks like
- Christian explains what a reversal of the attention economy means and why people should pay attention to it
- The language and words Christian looks out for when listening to a cold pitch
- The level of importance Christian puts on existing teams for a company seeking investments
- Missionaries versus mercenaries and its relation to a company’s employees
- The importance of a team’s growth strategy, company culture, and the benefits of tech-savvy employees
- How some lawyers have caused damage to projects and products
- Christian talks about Bitcoin, decentralized autonomous corporations/organizations, increasing shareholder value, and how blockchains-based solutions work
- Where to learn more about Christian Kameir and Sustany Capital
In this episode…
Advancements in technology and artificial intelligence have brought many changes to a wide spectrum of industries, including the growth of Bitcoin and blockchains. Because of this, companies looking to improve their operations and compete in their respective industries need to consider adopting new and advanced technologies. Not only that, but they should also ensure that their teams are tech-savvy to stay ahead of the competition.
These are some of the things Christian Kameir looks out for when assessing possible investment options for his venture capital firm. He also believes that the kind of language used during a pitch matters—so, companies looking for investors need to be well-prepared.
In this week’s episode of Elevate Hire, host Greg Toroosian is joined by Christian Kameir, the Managing Partner at Sustany Capital. Christian shares his insights from the venture capital world on investing in companies, adopting new technologies, cold pitching, and the benefits of hiring tech-savvy employees. Keep listening for more.
Resources Mentioned in this episode
- Elevate Hire
- Sustany Capital
- Christian Kameir on LinkedIn
- Christian Kameir on Forbes
- The California Consumer Privacy Act
Sponsor for this episode…
This episode is brought to you by Elevate Hire, a talent acquisition firm which provides leadership and senior level recruiting services for early-stage companies. Elevate Hire also offers advisory and consultancy services for select clients.
Elevate Hire was founded by Greg Toroosian after more than a decade in the Talent Acquisition space, working with startups, globally recognized brands and recruiting agencies, because I found that too many early-stage companies were struggling to recruit and retain top talent during crucial times of growth.
Because recruitment and talent retainment are keys to having a successful company in today’s fast-paced economy, Elevate Hire is committed to helping you recruit the right top tier talent, at the right time, can differentiate the most successful companies from the rest of their field.
If your company needs assistance with talent search, hiring process improvements, choosing and implementing recruiting tools, team training, or if you’re in need of an advisor, get in touch with us today to find out how we can make this work so that you can start building the company of your dreams.
Click this link to learn more about us and the services that we can provide for you and your company.
Episode Transcript
Intro 0:04
Welcome to the Elevate Hire podcast where CEOs founders and executives of early-stage companies talk through their experiences and building teams.
Greg Toroosian 0:16
Greg Toroosian here, Founder of Elevate Hire and host of the Elevate Hire podcast where I talk with CEOs, founders and executives about the challenges and successes they’ve had while recruiting for their teams. In this episode, we’ll be going through unique perspectives and insights from the venture capital world, and how you can use this investment assessment framework to interview your key hires. This episode is brought to you by Elevate Hire, a talent acquisition advisory consultancy and execution firm who recruit leadership and senior level team members for early stage and rapidly growing companies. We believe that recruiting and retaining talent is key to having a successful company in today’s fast moving and currently uncertain economy. Being able to recruit the right top talent at the right time can differentiate the most successful companies from the rest of the field. If your company needs assistance, recruiting key team members, improving your hiring processes, choosing and implementing recruiting tools, structuring and training your team or if you need an advisor then we can help. For more details visit elevatehire.com. My guest today is Christian Kameir. Managing Partner at Sustany Capital who operates thesis driven venture funds focused on decentralized value transfer and legal technologies. He has a wealth of varied experience, including being a general counsel, a software engineer, a professor and lecturer, and even multiple stints of being a Founder and Managing Partner. I’m very excited for him to share some of his wisdom and advice with us today. Welcome to the show, Christian.
Christian Kameir 1:39
Thank you for having me. Yeah, I
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Greg Toroosian 1:40
i appreciate you finding the time in your very busy schedule. And especially today when you’re actually at a virtual conference. So thanks for fitting us in. So to start, I like to actually hand it over to you. So can you talk us through your background, your career, how you got to where you are today and why you actually ended up starting something in Sustany Capital?
Christian Kameir 2:01
Sure, yeah. So my partner and I have been in technology investing at this point for some 20 years. I originally started out as a software developer all by a double. A not very good at it. And so I didn’t do my first computer, a Commodore 64. And my second one, Atari 520 sd, which didn’t have a hard drive at the time to stick in other useless languages. And so yeah, I decided eventually to go to law school. And when I came out of law school that was the beginning of the World Wide Web craze and ended up becoming General Counsel for some of the very first internet service providers in Europe. So we were obviously selling dial up services and at the time and had 1500 people running around installing modems in people’s computers and configuring those to dial numbers. And fast forward we got super lucky to sell that company at the height of the.com on February 27 2002, what’s now the law Just internet service provider in Europe. And so I consequently retired from the law that particular day and then a few months later also moved to Southern California and set up a venture fund. And our original focus was mostly on things such as Voice over IP modems, online player games. And eventually that brought us to the space that we are in today intermittently as indicated, I ran a few startups myself and a lot of very expensive learning experiences. But yeah, in like 2015, we started focusing on the blockchain space, eventually then formulating the latest vehicle here, capital Sosna Capital, solely focused on what we call value transfer systems. And so we have also had a strong team here, but we also have an outsourced team in India that builds the defi solutions for our soldiers. very technical in nature, most of our employees have engineering degrees.
Greg Toroosian 4:05
Very cool, very cool and unique. I mean, one, if you look at your background and your profile, very unique, you know, going from Tech to legal professor, founder, managing partner, and then the way that you guys are set up, it’s, I don’t know, many funds that are set up that way. So that’s really, really cool. We obviously had a chat beforehand, and you shared some of your best practices and your framework that I really want to dig into here because I see a lot of synergies with how you assess for your investments, compared to how, as recruiters or even founders, we can look at assessing talent. So could you share with us your, how you generally assess the investments presented to you and how you decide which ones are right.
Christian Kameir 4:49
Yeah, so as a preface, what we like to do, we kind of like to obviously put out what we’re looking for, right? So, call to action is what we’re looking for, in general. Speaking and I find this to be true in the employment space too. People don’t pay nearly enough attention to that. Like, you want to obviously cater to your audience. So you want to know what someone’s looking for. So in our particular case, we’re looking for a very particular software implementation. And we put out a lot of content all the years that people have access to that they can just figure out within half an hour or an hour of their time whether or not they should actually send us an email, pick up the phone call us the leaders. We are not advisable, by the way. But anyway, so. And so from our perspective, it’s rather simple since we have been doing this for two decades at this point in time, the best pitchers are those who might perspective where I can use a napkin to schedule out my return, right. So if you want to raise a million dollars, how to make a depending on the state of your development, how do you make 100 million dollars out of that explain that to me, and there’s a lot of common work to do. And that homework needs to be done regardless if you talk to us but as in what is your total addressable market? This is for when most entrepreneurs already strike out. And I think that’s also a valuable exercise. If you’re an employee, are you going into a growth area or something that’s about to be disrupted? But what, why would you want to spend energy, so to speak in that particular space, unless you happen to want to learn something like cobalt, and you just figured out Oh, there’s a demand for cobalt again, because all the people that are on cobalt, they’re all died fairly soon. Government is still losing a lot of computers that Ron does.
But generally speaking, my advice would be like a future prove yourself in the sense of is this a growing market is a declining market, right. And it’s probably not the best strategy right now to become a commercial driver. I assume there’s going to be not a whole lot of demand in the future of self driving cars. But other than that, it’s a lot about knowing the numbers, right? So know your customer acquisition costs, what’s the lifetime value of the client? And obviously have a business model. And that goes in my mind for a year as well, right? Because if you can explain your worth, for your particular job and your particular value proposition and position to your employer that makes it very easy to hire, you’re not like if I spent $100,000 on your year, how does this investment of $100,000 make me to make 200,000 or 3000 or 5000? If you can explain that, to me, that’s a good, good strategy to get hired. Right. That’s a
Unknown Speaker 7:45
very good point.
Christian Kameir 7:46
Yeah. So and then, as far as businesses are concerned, as an investor, what you’re looking for is product market fit and the way if you want to translate this to an employee’s situation that’s kind of similar right? Like, you’re competing, obviously, with other people typically, for a particular position. So how do you fit into that equation? How are you? How are you? Are you unique in your value proposition? And then again, from an investor’s perspective, what we invest in has a lot to do with what’s the timing for this particular space. Right? As then we have the saying NBC that goes something like you don’t want to invest into the first social media startup you want to invest into the last year and then have a strategy. What I mean by that is, and again, this is more fundraising later, obviously, but have a strategy of if we’re giving you a million dollars today, is that something that will take you to profitability, or what are the next steps to raise money next right, to be viable in the future? Yeah, so that’s kind of the highlight and our hope, and I think some of those translate fairly well to the public. But
Greg Toroosian 9:01
yeah, for sure you actually touched on more there than I thought we would. So even as a candidate, as someone interviewing how you can highlight your worth, to the potential employer, there are some key gems in there. And then also as an employer, how you can value the worth and longevity of this employee, like, is it worth an investment?
Christian Kameir 9:22
Yeah, I mean, in my mind, everybody in the company regarding the corporation, whatever you’re doing, you should understand how this fits into that particular entity generating also
Greg Toroosian 9:33
hundred percent Yeah, even if you’re not in a revenue generating role, right, you should be adding value and there should be $1 amount attached to that. Because if you’re not outsourcing that, or using a consultant or anything like that, what is the value of you being there? No part of an employee, then incorporating that fringe costs and all that good stuff that employees have to do. So can you share some of your pet peeves, you know, when you’re speaking to people or assessing investments from founders or even speaking at conferences, you know you sometimes are next to people that you or hearing stuff where you need to have a radar for for your own assessment, right? Yeah. So
Christian Kameir 10:22
yeah, I literally just got off another call with five different pictures, quick pictures. And consistently what we see is people simply not doing their homework. And I’m a stickler about that I’m a stickler about you doing your homework, knowing your numbers, and knowing your language. And so it starts with I touched on that earlier with just knowing what your market is. And a typical, like pet peeve example, I’ll give you a simple metaphor. If you’re pitching us and you provide let’s say a SaaS solution caters to the real estate market. Your market is not the same as the value of all real estate. Your market is the number of clients multiplied by how much you can charge them a year should be fairly obvious, but you’d be very surprised how many times I’ve seen a slide that says this is the total addressable market like you’re building houses I thought you red flag right now seems so obvious but as I said, I have seen this more times than I care about. And then everything else really fades from there on your key performance indicators, right? What do you need to do to choir customer No, your customer acquisition costs more than your lifetime values. Simply do your homework and you should do this regardless of your talk to us. You should sit down before you write a line of code before you hire your first employee before you spend $1 marketing come up with a thesis at least sometimes obviously, as hard as Others when you kind of open up a new market, but there’s really very little in the sense of new markets, usually addressing a market that’s being addressed differently, maybe right now, but you’re typically not inventing something new. And that’s another. It’s called pet peeve of mine, that people still don’t seem to understand what’s the difference between an invention and innovation? So people show up at our office here all the time, saying, Have we invented this? And like, No, you didn’t invent this. And so what I mean by that specifically is, and I’m making a very simple example that and that’s something that almost everybody seems to be getting wrong all the time, is that Edison did not invent the light bulb. The light bulb was around for more than 100 years. Edison innovated on the concept of the light bulb and created the incandescent light bulb. So that’s the difference right? So yeah, you didn’t mention And so but this is kind of important in terms of how you think about things, right? You want to realize what is the invention? And how do you innovate on top of innovation, by having sat This language is kind of the most important technical tool that you have at your disposal. Specifically, we’re technology investors. And so that’s what we’re looking for. So the basic technology, regardless of what you’re building, is your language is your comprehension of the words that are being used in that space, right? You can’t become an accountant and not have that particular language at your immediate disposal, right. And as a trained lawyer, you’re particularly obviously sensitized to that. And usually what we do in more complex contracts, we write down a word and it might seem benign, like what is a dog, it has four legs, and first, but you write it down and you define it because you define it. Using it moving forward in this particular context, right? Because there’s a lot of words like simple words like money, like dollar, which in particular contexts have particular meaning. Yeah. And this is utmost importance in the context specifically of technology. But then more specifically, in really innovative technologies, where you’ve got the convergence of multiple disciplines. And that’s something that I experienced personally every single day where we have a meeting, a panel discussion, and people start using words that they haven’t defined for themselves as a starting point. So you can actually have a very useful discussion if, in my mind, a profile is a set of data and in your mind, that’s identity, right? That’s kind of one of my latest passion projects, because, again, we’re investing in technologies like I need to understand how your technology is handling certain things. Right. How’s that? Legally relevant how this is the legally relevant information technically implemented. And so I think this basic homework is lagging a lot or that what we see, as of late specifically, it’s lagging a lot. Specifically if you go into kind of a more into an area that hasn’t been asked yet which rights are sold to mean that we operate in. And so what encourage everybody if you want to break into this new space, in our case, that have decentralized software solutions, specifically in the value transfer system space, which, by the way, this is the largest investment opportunity ever, as in this is two orders of magnitude larger than the initial creation of the internet and World Wide Web, because we actually through this technology, addressing this the worldwide web for the first time So what you’re seeing right now is really the commercial Web rights being controlled by very few entities for access and by even for your entities for eyeball distribution, right for control. And so that’s being addressed at scale right now by hundreds and hundreds of projects around the world. But what this means is, you have a lot more opportunities to engage with this technology, and mostly in the space of what we call onramps. As m, there’s a lot of legacy technologies that at this particular stage can only make use of the technology if and when the legacy technology has been adapted to it. So a very simple example, a lot of systems today work on database technology, right? So you got an entry in your database that shows the ownership of let’s say, a house or car or another, another acid or another, right. So all of these things eventually will be A quote unquote, let’s call it a digital asset. I’m not going to go into the details of these definitions at one time, I don’t think I think I would call your listeners a lot. The point being is, that hasn’t been a great opportunity, in my mind at least to get engaged with that space to actually help our business by creating all these on ramps off their legacy technologies to new systems, right. And a lot of business will be required to do so. So that’s also, I think, kind of a call to action to pay a lot of attention to new regulations that are coming out new regulations, more often than not enable business opportunities and job opportunities. So I just talked to a startup yesterday in the United Kingdom, and they are basically responding with their solution directly to new legislation that requires pumpkin bar owners to keep track of their payments. patron’s, but at the same point in time, they still need to be compliant with things like GDPR. And that’s a, it’s a very interesting intersection. And so you can see those opportunities. And if you can see those as the startup, and if you can see those as a potential hire, I think you have an enormous leg up, right. And there are a lot of changes coming down that we see where these technology paradigms will disrupt a lot of the legacy system, which includes, by the way, and then I’m gonna stop talking about that particular. That includes also what we call the gig economy because the gig or sharing economy as sometimes called, is mostly right now sharing your time and attention with the oboz and airbnbs of the world right through, obviously increasing their own market chairs, and decentralized systems. And there’s always Already proof of concept for those hours for decentralized ecosystems etc will allow people to engage with let’s say ride sharing platform and so forth with out these middleman really so as a as an employee if you know that right if you know that these technologies are coming down he would you seek employment at a company like that that is about to be disrupted and or what you seek out if you’re already within the gig economy, this decentralized system which let you keep more of the value that you’re creating,
Greg Toroosian 19:38
for sure. That was a lot there. And I want to pick into a couple of things I didn’t want to interrupt because I was super value. Curious just my own sort of Geek side coming out and just from my own knowledge, companies using or industries using this legacy software legacy databases and obviously time have data that have been collected over years and years and years. Is there? What does it look like for them to transfer to new decentralized offerings? Like taking all of that legacy data?
Christian Kameir 20:13
Yes. So let me hone in on one particular example that will be applicable to most companies. So most companies will have storage of personal identifiable information and might have customer data. You have a database that contains a feel for your first name, your last name, maybe your date of birth, maybe things like social security number and so forth. And I think everybody listening to this, at some point in time will have heard about all the hacks that have happened over the past decades, right. So the Equifax hacks were 140 6 million records of personal identifiable data of US consumers that were stolen, Target, AT&T, Yahoo. And so at this point in time, there’s copies of all of this data around right And as a result, as a side effect and externality of these hacks, the likelihood that your identity quote unquote, will be stolen within the next 10 years is 300%. Wow. So that is an obvious market opportunity, but then also obviously a cautionary tale. And so things like in California, the California consumer Privacy Act that kicked in at the beginning of the year, trying essentially to address these problems, and they modeled it to some degree, the after the general data protection rights in Europe specifically, which goes somewhat further, but in some respects, very similar. So the point here being as that as a company, having personally identifiable data in a database is a huge risk, right? So you cannot afford that to be stolen. And by the way, we also informally consult with law enforcement because they want to see, from all perspectives, what we see in development. And from there, we found that actually most hacks are never been reported. So a real number of companies that had their databases infiltrated, is probably much, much higher, right then then what we knew, and the serious Yeah, and so, the, the obvious reason is that has an immediate effect on this company’s well being as well in essence so far. So, it seems intuitive that they will try to handle this privately before this ever makes news. But the point here being at the end of the day, that the only recourse in my mind at least that you have as a company is to not ever have this personally identifiable data. So this is to some degree already possible and will be more and more the case also a the obvious thing here is that databases can be broken The period it’s impossible, right? And the typical example that should frighten everybody. Chances are if you call your credit card company, someone in a low lever, which country is answering the phone and that person, an individual now sees everything that pertains to your personal and financial life, right? Your mother’s maiden name, your social security number, your transaction history, he or she has full access at that point in time to which it really makes no sense. Obviously, also, if you think about, like simple things, have turnovers in those call centers, it’s pretty high. So for someone who’s making $3 65 cents an hour who gets laid off, it’s very tempting to walk out with a USB stick with a few thousand client records on there that she can often quote unquote dark markets for a couple of years. dollars apiece. And so moving backwards to like how to handle this in the future third sources, this new kind of buzzword in our space called self sovereign identity. It’s the concept that you will be able to own your own data at any given point in time. So the way you can technically imagine this, and in this case, I’d like to make a metaphor because even those metaphors, I use way too much in technology. But I think it’s, it’s helpful to visualize that. So you have credential documents, but think about your passport, your driver’s license with that people ask for at various stages for IE, you want to board a plane, and if it’s national, they might want to see your passport, driver’s license, if you want to leave the country, they’re probably asked for your passport to visualize it. So what happens physically as you’re handed over the border agent, checking agents will inspect comparables for what tissue sees on the screen handed back to you. So They typically don’t get to make a copy. And they shouldn’t, right. And that typically also not really interested in what is your first name, your last name when you were born, and so forth. But this scenario is, quote unquote, pretty safe. And that’s kind of the scenario we need to integrate as technology where you get the same function that this physical bearer instrument, which is kind of his physical authentication document has in a digital form. And so we now since have a few years have the necessary technologies, they are just not widespread use, but in my mind is very, very, very important for any business, to start looking out for those and thinking about strategies of not actually needing to have customer data outside of when I need to fulfill it outside of when I need to actually do a very specific task because, again, it’s it’s a huge security risk. And on the flip side, we are actively looking for companies that we can invest in that will go After the violations of those data rights, because it comes down to there is probably about 4000 databases right now that have your data. And some of them have several thousand records. Like if you have ever been on facebook, facebook has probably four to 5000 data points on you. Wow.
Unknown Speaker 26:24
And given a lot of worrying.
Christian Kameir 26:29
Yeah, there’s way more companies that you don’t know of that have this data. And yeah, most of those companies buy additional data. I mean, Facebook Live, purchasing data from Walmart and Target and then will readily sell this to them. And the larger point here, and that’s another kind of call and kind of point to pay attention to is it’s kind of the reversal of the attention economy. So what I mean by that is, we have a lot of companies Today, their market cap is entirely based on the fact that they can sell you attention. If you think about Google and Facebook, what are they actually doing? Right? So they often refer to the fact that they are in the data business, that’s incorrect. They use this data to qualify you or more importantly, to profile you, the reason for profiling you is as an as a law enforcement to target you. And so whereas the targeting at one point in time started out somewhat benign, in the sense of I’m gonna sell to my appetizers, the fact that you are male at a certain age living in a certain region, that seems to be not benign enough, right. We have moved on a long time ago from that simple targeting, to actually moving to a form of social engineering as a service. So that kind of the highlight of that was the Cambridge analytic Heck, but this is going on every single day. But as in I use all of your data, your location data that searches that you made to them actually social engineer you into doing something that’s most prominently the case. And you might have seen studies on that in the case of YouTube, where they basically, in a way radicalize you because you’re not paying attention. If you get something that’s very nuanced. You’re paying it on the road. It’s black and white, if something enrages you, and so forth, right. And so, that’s how we got to this orange color. So the long line that points to this as there’s a lot of efforts that we support that need to happen to reverse this paradigm, where we stopped doing social engineering as a service, we stopped stealing people’s time, if you will, and attention or attention measured in time. give people the actual information when the actual when they actually need it. And there’s unlimited opportunities in that space. Once you realize that this is the case, because companies like Google, for example, make four or $5.4 million an hour stealing your attention.
Greg Toroosian 29:20
Okay, you just added to it just added to the wrong—
Christian Kameir 29:26
this Oh, it was the things that I’m passionate about it. And they seem like from where I’m sitting so, so obvious in terms of where are the opportunities today, right, because yeah,
Greg Toroosian 29:37
I think for you, you know, you’re, you obviously have your pulse on all of this. You see a lot of the things that are being created, you’re obviously very smart, and you’ve come through this whole world. So for you, it’s glaringly obvious for the general public, you know, and it’s crazy, even when you mentioned the Cambridge Cambridge analytical scandal. Obviously, I knew all about it. I’d read up on it, but it’s one of those things with everything. That’s gone. It gets pushed to the side, you kind of forget about to go along your day and people are back on Facebook. And they’re doing this and interacting online every single day creating all of this data, but on the other hand, are worried about people using the data don’t want to be targeted, or, as you mentioned, social manipulation. So yeah, it’s worrying. It’s scary and it gives you a lot to think about and obviously in your world you are hopeful for how that can change will be addressed in the future. With these new companies, one of them wanted to touch on your definitions, topic, just a bit of advice, maybe for listeners or people that want to pitch you or sit next to you in a conference. If they’re either using words that haven’t been clearly defined in a new market, or if they’re coming to pitch you cold. Would you prefer people to say I’m going to talk? I’m going to use this word profile, for example, with this definition attached to it, and I’m going to use this word with this definition before they go into a pitch or explain anything.
Christian Kameir 31:07
Yeah, specifically, if it’s in a technical context, okay?
Christian Kameir 31:12
Because again, it’s like people in the blockchain space should be able to explain to me what a blockchain is.
Greg Toroosian 31:20
you’d hope.
Christian Kameir 31:22
table stakes, its basics. And you again, you would be surprised how many people can do this? Or if I asked you what does money mean to me? What money? Yeah, we are into money technologies by value transfer technology, that that will be one. That’s often my first answer. My first question,
Greg Toroosian 31:42
oh, asking someone who’s pitching to you if they guess okay. Yeah.
Christian Kameir 31:46
Because, I mean, those are the basics that are relevant for your space. What is money? What is blockchain? What is identity? Right? Because those are the topics you’re trying to address. So you better understand those and you better understand the nuances. And ideally, in an ideal world, I learned something from you. Right? Yeah. Because our approach to investing is that we use the scientific method as much as possible. In my mind, that’s the only way to go about that. The only way you learn you, that means you put out a thesis, and then you’re looking to get this thesis invalidated. And so I think that’s also very important in business in general, and also for employment in general, because there’s basically a spoke to two methods to this as either you’re a believer, or you have a thesis on something. If you believe in something, you’re constantly looking for verification of your belief. Right, right. And that makes it very hard to learn something new, right? If you have a thesis, you’re constantly looking for people That can invalidate the thesis so that you can learn something that you can expand on your thesis and are hopefully successful in what you’re trying to do. So whenever we put out content, it’s specifically intended for peer review. Yeah, because if I’m wrong on something, I want to know this as soon as possible, so I can stop being wrong about him and make the decisions based on facts and not on a thesis that cannot hold true.
Greg Toroosian 33:27
That’s got a lot of similarities to
Unknown Speaker 33:31
when we sell
Greg Toroosian 33:32
the benefits of having a diverse team, right? You want people or even like a disagreeing, dealing with conflict or diversity of thought and all of that stuff because you want people that you don’t want everyone thinking the same coming from the same schools coming from the same background and looking at one problem the same way you need that diversity there to come to the best solutions or, you know, disprove whatever it is that you’ve put on the table. To figure out how to go about in a different way, you can’t do that if you’re thinking the same way. So that takes me back now to obviously the whole general point of the show, which is the team building and, and hiring. So, from, from when you’re making investments, what level of importance do you actually put on the existing team members that come to pitch to you or that you’re going to invest in?
Christian Kameir 34:25
Yeah, I mean, needless to say, team is one of the most important things and goes goes without saying, but aside from things like product market fit, and generally understanding the space, so yeah, what we’re looking for in those team members, first and foremost, at least in my mind, is flexibility. And that comes down to what I said earlier: yeah, you shouldn’t have a thesis on your business, but be flexible in your approach, right? Because chances are whatever you started with, you’re not going to end up with by Right, have to be flexible, then you have to be able to receive feedback. And again, you will be surprised how many people will start an argument, that they are right rather than listening to feedback, because specifically in our case, I mean, we’re very narrowly focused on a few things. So, if you pitch me a payment system, I have seen 100 different payment systems. And I know generally speaking, where the pitfalls are, and generally speaking, what I space is heading right, so chances are, I’ve seen much more than then
Unknown Speaker 35:37
the average, the average founder.
Christian Kameir 35:41
So in a sense, if people were looking at these pitches more as an opportunity to learn, I think it would go great, really long way and it’s very well received on our when we get the feedback, and actually, we get this quite a bit when people respond to us. Yeah, yeah, I learned a lot talking to you. And now I see where we were on the wrong track here. And we’ll come back to you once we adjust to that feedback. But that’s also oftentimes what we look for. Right. As an investor specifically you don’t say we don’t invest in a.we invest in a lot to see where you are today and how you go about things tomorrow so that comes all back to are you flexible to adapt to market conditions and are opportunistic to apply certain things to the current market conditions? Are you understanding where the market is heading? And how do you go about that? Right,
Greg Toroosian 36:43
or how it can be impacted by so many different external factors. I mean, we’re right now in the middle of it, right, the COVID pandemic has made so many different companies pivot
Christian Kameir 36:53
and there’s another battle crime within our spaces, a little bit of class. I guess that goes down to Along the lines you want to invest into mission versus must
Greg Toroosian 37:06
when I invest in missionaries versus mercenaries,
Christian Kameir 37:09
yeah. So mercenaries will eventually give up, but so they have a limited threshold. But missionaries will keep working at that. And oftentimes, that’s typically if you understand the environment, that’s what you need to be looking for. A new employee is either passionate about this topic. Yeah, wanting a particular solution or technology, see succeed? Are they still working on something at least at home in their head or while they’re driving on a particular topic because they’re just passionate about it and want to see you succeed, this will get you 10 times further than someone that you’re paying a lot of money in incentivizing with money because at the end of the day, money is really not a really great incentive method.
Greg Toroosian 38:01
Yeah, I had a show recently with a very mission driven company who don’t have a ton of money in the bank. And that was exactly what we spoke about, you know that they’ve seen such an increase in productivity with their team since they went remote. Because of that very, they’re excited. They’re mission driven, they are very engaged and bought in. So they’re always looking for how the company can succeed and progress and even in this current state pivot to come out the other end even better. And if it was just a money thing, if it is a very transactional relationship with your employees, you’re not going to get that right. That’s, that’s very good advice. So what about that’s obviously the founding team, you need that versatility there, obviously the domain expertise but you want them to be versatile for change and taking input. What about their team growth strategy if they’re starting out like anthem People.
Christian Kameir 39:01
Yeah. So, again, this is going to be somewhat specific to our space. I heard a very great analogy. Unfortunately, I don’t remember who brought it up. But I found it very useful and had never heard it put in this way. So you can look at certain job descriptions and certain people that might fit that job description in various ways. And they are taken to the example of let’s say, someone who worked in finance or their particular job in a bank. So, in banking, not all that much has changed over the past 20 years, right. So you walk into a bank as a teller and you have a checking account, you have a savings account, you have certain loan conditions. It has been a pretty stable area. So what this translates to and I see this, probably once a week, I see a pitch deck and that will say, hey, we’ve got this person here that we hired to head out the Finance Department or whatever it is, who has 20 years at XYZ bank and experience. And the right response to that is no, this person doesn’t have 20 years experience, he has 20 times one year experience, because he has been doing the same thing for the past 20 years over and over again. And more likely than not, this is going to become a liability in your particular situation. Right. And specifically, again, this is very particular to our space, since we’re looking at high tech and innovative solutions, right? If you are building a stealth fighter, right, and you’re hiring a jockey, that jockey will have a hard time navigating the stealth fighter might have been the best jockey in the world, the fastest jockey in the world on any horse, but the stealth fighters just are not very suited for that right. So that’s kind of the comparison between your bank Being able to run a decentralized financial system. It’s very, very, very, very different and cannot be compared at all. So if you’re looking at expertise, make sure that the expertise actually translates to what you’re trying to do and build. And more often than not, I have probably seen it a few hundred times where this argument was made to us as and this person has been doing this for 20 years. It’s like, yeah, that actually, in my mind, backfires. Yeah,
Unknown Speaker 41:32
yeah, that’s, that’s good. Right. Great advice. Yeah,
Christian Kameir 41:35
you don’t want that. That legacy thinking team. I’d rather you find someone who came fresh out of college or something who’s trainable and adaptable, and shows flexibility of mind. And there may also be a particular point and again, it might be somewhat specific to our area, but unfortunately, colleges Specifically, have done little to keep up work. What is this the current business environment, they’re not training people to what we need. More often than not. They have to unlearn whatever they were taught in Business School, for example. And it’s just utterly no longer applicable. And the other part to that, and that’s probably the more important part and call to action is, you want to be interdisciplinary. What I mean by that is, so we created all these artificial disciplines. We have accounting and business and finance. And so we send people to school to do just this one particular thing. Well, they are all very, very artificial. A lot of these areas will be disrupted by technology and are being disrupted by technologies and the obvious one being quote, unquote, artificial intelligence, by the way, tell whatever term in my mind, it’s just nonsense to band together because there’s a really good definition of intelligence. from someone at Harvard, it’s basically the creativity and the option to create future options of action. And like all the approaches that we’re taking today, even to like general artificial intelligence, a kind of more like brute force, if you will. And that’s kind of the opposite in a way that is more like expert engines. And so this goes full circle. Experts are tools. And so this is what we have been doing for decades now we have created tools, right? So we’ve created this person who’s basically a hammer. At some point in time, we don’t need that hammer anymore because we got this automation to do that particular hammering and that’s what your current accountant does. In my opinion, we should stop and close basically every single law school. Really, we have more lawyers in this country, and I used to be one. Yeah, we have more laws in this country that we will ever meet. If every lawyer wants to make minimum wage, every citizen has to be sued three to five times a year. But the point being is what we do need is people who have interdisciplinary knowledge to where they have technology, knowledge and legal knowledge, for example, which is very relevant nowadays, because investing in legal technologies, and we see so much damage is being done with this disciplinary thinking where lawyers don’t understand technology. And technologists don’t understand the law. And you need to be pretty sufficient in both in order to provide useful solutions and I assume a lot of that holds true and things like artificial intelligence and soon and so forth. And so I for the most part, unless you’re just super excited about just one particular area, don’t have to Try to become a tool. I’m trying to become an expert. Right? And maybe if you want to become an expert in something, don’t do this in your free time, but be a generalist. Focus on basic things that make you great at what you can do, such as metacognition, such as emotional intelligence. Being able to motivate yourself, being able to realize flaws in your own thinking, just those basics will do you way more good than knowing the latest tax laws or something like that. Because all of those again, the more specialized you are in a way, the more likely you’re going to be that you’re going to be disrupted like a lot of physicians, like physicians, being the after in front of lawyers actually being the largest employment group in the United States will be disrupted, right. There’s already fully automated dentists in Japan.
Greg Toroosian 46:00
Wow, I did not know that.
Christian Kameir 46:03
And needless to say, if you are your robot, your dexterity is several orders of magnitudes better than that of the human hand.
Greg Toroosian 46:12
Yeah, of course. Yeah, you see, I mean, you see every industry being disrupted now at least starting to be with some sort of robotics, AI and automation. You know, food takes a huge for that right now, for example. I think what you said that line just to re repeat it, reiterate it and for people to really digest it, or recruiters take this in any hiring managers as well think about this really, but if someone has been in one industry, one company, one area of expertise for however many years, 20 years, they don’t have 20 years of experience they have one times 20 times one year experience in that specific field or that specific niche because if you’re going in into. And I do think it does transfer to a lot of startups because most startups want to be disruptive or are trying to disrupt an industry or iterate on something. Regardless of what industry that is, you need people that have versatility of thought, you need people that are looking at things from outside of the box, they’re not just going to say, oh, we’re attacking the payments industry or banking. So let’s bring someone who has done that forever. You want someone who’s done things that actually show that they can be successful in this whatever role it is that you’re hiring them for. So look at their past, look at their flexibility, their versatility, things that they have done that will show you or prove to you that they can be successful and add value instead of the box of that industry X amount of years and that’s going to be valuable. It’s
Christian Kameir 47:50
not like making a general statement there that these people aren’t useful. It’s just utilizing what you want to use them for. Exactly what it’s like. Like product design, maybe we should not listen to that particular person in that particular regard because he’s gonna look in the rearview mirror and
Greg Toroosian 48:10
everything and look five years down the road. Yeah. And those people, unfortunately have just been subject to innovation, speed and whatever innovation has been in their company or industry.
Christian Kameir 48:22
And in our space, particularly in the last five years, I have seen so much damage being done specifically by in this case lawyers to projects where they have been invited and whoever was leading the project made them basically the mistake to look for them for product at once interest and it killed the product, killing the product,
Greg Toroosian 48:45
because they’re too risk averse, or they just didn’t understand the application of it.
Christian Kameir 48:51
It’s a motive, unfortunately, a multitude of things. So really, it starts like the basic mode and that might be more particular to the United States. framework then to other jurisdictions, but the basic mode of lawyers to tell you what you cannot do and should do, right? So if you hire a lawyer that typically tells you don’t do this to this, well, that’s only so helpful. You want to have them Tell you what, what can I do, right? Yeah. And then also what, in this particular example you want to be able to do is explain to your CEO or whoever’s leading the project, the actual Not, not the paragraphs and what they say, but what is the intent? So what I mean by that specifically, a lot of times regulation can apply to a particular scenario. An example would be like a bank doing things like no, you’re just enforcing, you know, your customer regulations and anti money laundering regulations. There is a reason why this financial institution needs to do this because they are custodian of your fund. Right? They hold your quote unquote money in their accounts or your accounts. And so they need to know who you are. Well, if that’s the case, if you’re replacing the bank, well, think about if you want to put yourself in that particular scenario if there’s a technical way around being that custodian. And they are, in this particular case, there are scenarios like that. And that is kind of, again, this is probably way more specific to the space that we are involved in all by it. I see this to be applicable across all verticals, as in, the more you can be noncustodial. As in, I don’t want to take over ownership of your funds as in possession of your funds or something else. And also don’t want to take ownership and possession of your data because that is just a risk on my book. can avoid this and still provide a service to you. That’s the better route to go. Interesting. And so from that perspective, this comes back to the advice that laws in general have given those startups that engage with these old regulations. Look what the banks did. They did KYC. They, they’re looking back. And so rather than thinking, Okay, well, what are we? Well, we are a technology company. We are not a bank, trying to provide technology that does the same things that a banking service provides and moving funds from A to B. But the main purpose is actually not to do it in the way that it has the
Unknown Speaker 51:40
non traditional way. Yeah,
Christian Kameir 51:42
yeah. And so that that is one in my mind, again, a very glaring example. And I’m sure we can find many more what is true as well, I’m sure, I’m sure.
Greg Toroosian 51:54
I know we’ve gotten pretty far into this. And it’s been a lot here. So I’m grateful. Write advice and perspective. So thank you for that. Are there any additional key pieces of advice or any actions that listeners can take and apply to growing their teams?
Christian Kameir 52:13
Yeah, I mean, there’s one overriding theme that I personally see for the next let’s call it decade. So everybody on the call has probably heard about Bitcoin, at least as a word and maybe it has heard the word blockchain and what it does the most interesting part that is very little talked about is the new way that capital is going to be formulated and formed in the future. So what I mean by that specifically, this concept that sounds daring to most that have not heard of a decentralized autonomous Corporation, or organization mostly. So the point being is right now if you don’t employee, you’re typically going to a corporation to seek employment, right. That’s the Typical, the most common scenario. So the main job, the main algorithm of any corporation is that of increasing shareholder value, right, so the main algorithm is they’re responsible to their shareholders, not not to the employees. And so as a corporation, that’s the argument. Then you implement another algorithm that sits below that, that says, Well, how are we gonna create more value for shareholders or we make me to make more profit. So how do we create profit? What’s our business model? And my favorite, quote unquote, company to pick on in that regard? is Google right? Because they are you can see this misalignment. What I mean by that is, so in the case of Google, you got shareholders, right, you got the operators, you got employees, you got users, you got customers, they all have a whole whole lot of different incentives, right. As a shareholder, you want the most profit? Right? Yeah, can I blame them as an operator? Yeah, you want to extract the most of your employee base to great shareholder profit and pay yourself a bonus, as an employee, you probably want to get paid the most, get your bonuses and so forth. As a user, you want to get in this particular case, the best search result. And here, in this particular scenario of these five different groups, the biggest rub here is that the user is not the client, because the client of Google is the ping advertiser. So obviously, Google in Google’s model, you’re not actually the user or client, you’re actually the product. So they are selling you to the clients that they are actually advertising. So that creates a misalignment of interests. So there’s a misalignment of interests between employees and shareholders as misalignment of users and customers. And so coming back to what I said earlier, The actually the most interesting part that’s not at all talked about much, I think, is that concept of a decentralized autonomous organization. That’s a big car. There’s no big corporation. There’s no company that has an algorithm to increase shareholder value. You can easily either join the network, you download the Bitcoin software, you install it on a device, you start running a node, and if you run enough firepower, you can start earning it. You can also just join an exchange and buy bitcoin and if everybody in that network does their job, the price and value of it cannot go up and you can use it and so forth. So the larger point here is that you have an alignment of interests. every stakeholder has the same objective. So that’s why this whole concept of decentralization a lot of people keep confusing and above distributed. There is a huge difference between decentralization of incentives right? So there’s a lot of claims like, well, Bitcoin is now run by all these miners in China. So it’s like dominated by these pools. Well, that doesn’t change a thing. What I mean by that is if there was one note, running this Bitcoin software, what interest What does not have to mess with the system? Yeah, it’s benefiting the most anything in its power to be trustworthy. So people keep trusting that network. And because there’s no no, like, no force that compels them to participate in the system. Everybody can just leave and say, Oh, yeah, I don’t trust a particular network anymore. Yeah, opting in? Yeah, so it’s different from a corporation is different from the government. It’s a better organizing principle. It’s organizing the members that voluntarily joined this particular network. And my expectation personally is that every vertical eventually will be dominated by an organizational structure like that. As in ride sharing services will be dominated by a DAO, by decentralized or decentralized, autonomous organization that lets everybody in that network get the maximum out of the network by pure voluntary contribution to the network in terms of the ride sharing, ability and capacity. Same with things like sharing your home and Airbnb scenario. Same of many, many other systems you can think of, because it, it, creates this alignment of incentives, which by itself does misalignment creates enormous friction and enormous externalities that we’re all paying for right now. I mean, there’s no reason that the bank should be able to charge your overdraft fees, there’s no reason that a bank should make 30% of the money. profits from simply payments, right? Because think about it this way, if you’re going into a store, you’re handing over $100 bill, and you’re getting hundred dollars worth of value, how many fees were involved? There Were None. Yeah, was instantly settled. Everybody was happy, no one asked for your passport and so forth. So that particular example. This is what this particular technology paradigm is trying to achieve. And one other example that we’re using right now is that of voice over IP, also by P as one of the original peer to peer solutions to where anybody can download the client, run that software, and now exchange voice for free. That was one of my very early businesses in that space. When I moved here. And before I set up my own voice over IP server at the time, a call back to Europe cost me $1 15 a minute. Wow. So we would still be doing that if it wasn’t for us. Voice over IP protocols. And the point of being, as you will see many, many more of these protocols that are now being enabled by this technology paradigm shift. And it’s more a technology paradigm than it’s a technology which maybe that’s the last thing I’m going to tell you about because it’s probably one way to decide but there’s this enormous confusion still around what’s blockchain technology in that blockchain? blockchain technology is very old, and not very old, but it was created in 1991, I believe, or just simply hashing blocks in a certain manner for security reasons. So it’s a security protocol hashing protocol. blockchain itself is mostly determined by the incentive mechanism. So it solves the problem that you have in decentralized systems where you can trust any other actor in this particular case of arranging running the software. Everybody is aligned The interest, that’s the point.
Greg Toroosian 1:00:03
Thank you for that. Yeah, I know. You know, personally, I’ve looked into read up a lot on and still I don’t understand every definition and the
Christian Kameir 1:00:13
another very simple metaphor for you. Okay. So, blockchain based solutions are all about building virtual digital vending machines. So think about your vending machine. You have your quarter or your dollar note, you put it into the vending machine, you look at what you want, you push the back end up. So blockchain based solutions allow you to do the same thing with anything. Well, you can approach this with let’s say your car title. The vending machine authenticates you as the rightful owner. You deposit your car title and I come by authenticating myself with the vending machine and grab this car from you. Very cool. So and Over the next decade, this is what we need to scale in all areas of value transfer. And at the end of the day, that’s all that, like, socialize, makes up, right? It’s the rights, the assets that you own, and how you move them. It’s about social collaboration.
Greg Toroosian 1:01:19
Thank you. Thank you. Well, I think on that note, we can probably sign out because you’ve shared so much wisdom, so much information. I think I need to go and take a break just to digest it all and probably listen back. So we’ve been talking to Christian Kameir who is managing partner at Sustany Capital. Christian, where can people learn more about you, Sustany and actually find some of the articles that you’ve been writing?
Christian Kameir 1:01:46
Yeah, I typically publish something on Forbes every six weeks or so when I get around to it. And so those are mostly like tid bits of basically all. thesis around certain topics because they’re also limited to 1000 words by design. Okay, particular site and then usually what I do as I advance my thesis on that topic I republish this in a wider fashion typically on Hacker Noon. Mm hmm. a very prominent side in our space and kind of double up, double up on that content.
Greg Toroosian 1:02:27
Great, great. Perfect. Well, thank you for that. Thank you again for taking the time and sharing so much and I look forward to staying in touch and catching up soon.
Christian Kameir 1:02:37
Sounds good. Thanks for Thank you.
Outro 1:02:42
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