Peter:
Jon: You would have more product startups and some may succeed seminar. And from those you would have like the PayPal mafia where they start churning and then you would have had more Pinterest type companies here.
Jon: Because Pinterest pinterest's largest user base. I if I understand correctly, is Utah.
Peter: Or at least was when they started. Look, I think or once they got scale, I think one of the challenges though is that back in the day venture capital was a lot more regionalized than it is today. Right? And so as a V.C., you would look at deals and you'd say, Well, I can invest in this one that's got like a cool product but no traction.
Peter: And I'm not I don't know if they'll ever get traction or I can invest in this other one that the product's not quite as good, but they're growing super fast. Right. And so which do you back right as a VC is, you know, being rational and being, you know, good fiduciary over your capital for your investors. You probably invest in the company that's got real revenue and growing fast and, you know, doing well.
Peter: And even if the product's not the most innovative, like, it kind of doesn't matter, right? Because like, as long as they can keep growing and you can fund that growth, you can get a good outcome. So like I agree with you to an extent like VCs could be more risk taking, right? Push the boundaries a little bit more.
Peter: But I also don't blame them for being rational. and like, the other thing is, you know, one of the beauties of product led growth is that if done right, it can be super capital efficient. Right. So part of the argument is, you know, if if we've got such great product people, right, how come how come they haven't just built a product led growth business, especially today where.
Peter: So why? Who cares? No, you don't. You don't need money from locals. Like capital today is more fungible than ever, and you can get it from anywhere in the globe, right? We've got some of the biggest venture funds and and hedge funds and private equity funds in the world that have come in and invested in Utah. Okay. So like blaming it on the local VCs, I don't think like I think that played maybe ten years ago.
Peter: I don't think it plays today, but.
Jon: It takes ten years, 10 to 20 years to build an ecosystem.
Jon: So we could be on the cusp. And right now, sure, there are far more VCs not in Utah who are now willing to invest in Utah. Yeah. So maybe they'll change. So like little change, let's not blame the VCs and even, you know, technically it might just be it might be their LPs who are really driving a lot of it.
Jon: Hey, but why get it now?
Peter: So I feel like you're a little offended.
Peter: But I think you are a little offended. You're like, But I'm a good product person, right? So.
Jon: But but I may not be an Uber product person.
Peter: I guess one way to look at it is be to be offended if you're in product or product minded that you know, what about what I said? I think the other way to look at it is to say, you know, we run circles around startups in Silicon Valley when it comes to sales. Okay. Right. That's why so many of them open up offices here in Utah.
Peter: Right. So I don't I wouldn't view it as like, hey, like, where.
Peter: Suck at product? It's more like we're really good at sales.
Jon: I tell you a secret. Okay. So one of my other friends who. Who created an office in Vegas. Yeah, it was going to be touting the Utah horn. He said that he had the amount of psychologists he had to have on staff or therapists for his employees was just too much. He says people who come to Vegas bring Vegas like problems with them, and it affected the workplace tremendously.
Peter: It's interesting. I mean, Utah is not without its challenges, right? Like we have very high rates of addiction.
Peter: Suicide, you know, but this on the flip side, we also have an incredibly strong support base for a lot of people. Right. Really strong communities. It's very safe.
Jon: So is Utah at the point where the next the next Instagram, the next be real, potentially could come from Utah? Or would they if it did, would they have to relocate to San Francisco like Gary did?
Peter: Honestly, I kind of don't think so, because I feel like I feel like every time that VCs have tried to back something that's more product led growth here in Utah, it hasn't it hasn't done well for whatever reason. Right. And then that creates this like feedback loop of like, hey, stop investing in product led growth. Companies focus on you know, more self-serving companies.
Jon: I mean, Eric Carlson from Lucid chart would say about this.
Peter: Yeah, I think look lucid is a great example of a product led company right, in Utah.
Peter: Great team. But how much money did they raise in Utah? They got some money from Kickstart. Okay. Right. But and the other thing, as much as I love Lucid, right. It's been a long, long journey for them, right?
Jon: Waiting on that IPO. Preparing for it.
Jon: Okay. Well, now we know Peter's thoughts about why he thinks Utah sucks for product.
Peter: Yeah, that's. Those are my exact words.
Jon: That's the summary. So make sure you like and subscribe right questions below. Go to venture capital firm if you want to see anything else. Any other closing comments? Peter, before we throw the book at you?
Peter: Do you disagree? Do you think Utah is a phenomenal place for product led growth companies and that we're really good at cultivating, growing and helping them succeed?
Jon: I think we're definitely getting better, but I think the the talent and it's like, look at Ryan for Basco, for Pinterest, right? Pinterest plucked him up and he relocated there. They took Kirk. We met and he relocated there from Snapchat. And so I see this really strong trend of these companies grabbing like these really good potential individuals and then relocating them to San Francisco.
Peter: Yeah, but doesn't that like just reinforce what I'm saying that we as a system and as a community, we didn't retain them?
Jon: You saw my ego. They got like pulled out. I said that I've admitted that these guys are leaving, which would then leave like a deficit, but I think they're coming back. So I'm curious to see what happens. But again, like if you look at a per capita basis, I think that's also something that you always have to look at is, Yeah.
Jon: Per capita, what should we expect? And when people used to raised rental caseloads, people would say Utah should have a Fortune 500. And if you looked at it on a per capita basis, I think Utah was barely large enough to support one Fortune 500. Yeah. Salt Lake City, the such as Salt Lake City metropolitan areas. So looking at that at standpoint, Utah could be doing really well and that might be a better way to compare.
Peter: Yeah, look, you know, the talking out of the other side of my mouth. Well, no, I'm not taking ideas out of my mouth. The reality is I like product led growth companies. I have a preference towards product led growth companies. Right. So, you know, there's part of me that would rather fund those types of companies than ones that are uber reliant on building out a really strong sales force to push their product.
Peter: But that doesn't mean that there's a lot of them for me to back here in Utah. And I also have to run, you know, every VC has to run this like calculus of like if I back this company, is there somebody else is going to back them on the next round and the next round and the next round.
Peter: And when you're a real, very regional market, you're kind of dependent on the other regional players. And if they're not willing to back that next round, it gets increasingly challenging. Now I think that's going away because I think VCs are coming in from other markets. I think people are living here and deciding to stay here and that Utah is losing its, you know, weird vibe that that would keep people away.
Peter: So I agree with you. I think over time it's going to get better and better for both product led growth companies and businesses that are driven, you know, sales driven.
Jon: So do so maybe my last question is, in order for these product companies to occur, yeah, do you have to have almost a PayPal mafia that happens around it? So Facebook was made by the Napster mafia, right? Was it per well, what's his name? Founder of Napster. I'm going brain dead.
Peter: yeah, I know you're talking.
Jon: About, but. Yeah, but he did he anoint Facebook and then bring his mafia with him. And I wonder if you look at things like Pinterest, someone who might have been at Facebook, who had a bunch of friends who made a lot of money off Facebook, were then taking that risk and not ultimately the VCs and that. So for Utah to ultimately get to that level, you have to have enough of these product companies that that shared enough of their wealth with the first ten 200 employees that they could then be angels and then anoint the next companies that they saw.
Peter: Yeah, I think to an extent that's that's true. I mean, basically you you have this knowledge, right? And you need to find ways to transfer knowledge to more people. Right. Whether you do that through a quote unquote mafia like PayPal mafia or Napster mafia or, you know, whatever.
Jon: Sean Parker. Sean Parker. So the name I wanted to see Warby Parker. I know it's not.
Peter: Perfect, but it's Sean Parker. Yeah. okay. Yeah. I mean, you need that transfer of knowledge and if people keep getting scooped up and pulled away, then that knowledge never stays, right? It's the same thing with like the internet, right? How many of the early companies like Adobe and others were actually started in Utah but pulled out and brought to Silicon Valley because, you know, there's more money, more resources, more support, more people, right?
Peter: And Utah historically was just a tiny little market.
Peter: You're not convinced? That's okay.
Jon: I'm alert and I'm alert. I was a little hurt when I heard you this morning. Make that comment. I'm like, what? That happening here? These voices that don't invest in Utah.
Peter: And then they badmouth us all as being bad product people. But they went back as even. Yeah.
Jon: You struck a nerve. Found a nerve right there.
Peter: Well, I'm glad we had this conversation, so.
Peter: Guess I could dig in a little further on that nerve.
Jon: Now impacted the nervous Impacted.
Peter: Good. That's the goal.
Jon: All right. We'll go to venture capital firm, join us soon for our next podcast. We're trying to publish like once every two, twice a week. Is the goal the goal?
Peter: What do you think? Drop drops, Drop us some notes in the comments.
Jon: All right. Well, thanks. And we'll see you later. Venture capital firm.
