April 11, 2024

Hedge Fund Maze - Kevin Fu | BCL #315

Kevin Fu is the CEO and co-founder of Repool (YC S21), a modern hedge fund launch, administration, and software platform. Prior to Repool, he was the second hire and Head of Revenue at Vitally, an a16z-backed SaaS platform, and has been a repeat early-stage operator at various successful venture-backed tech startups.

Kevin graduated from the University of Southern California with a B.A. in Philosophy and is originally from Pittsburgh, Pennsylvania. An avid rock climber in his spare time, he was also formerly a professional Starcraft II player. He currently lives in Brooklyn, New York.

Kevin: We ended up asnon hedge fund people in the hedge fund arena.

I didn't really know I wanted to start a company until I hadexperiences that led me to think there were signals that made it interesting.

One of the best things you can do is join earlier stagecompanies because implicitly you'll gain exposure to more than just a role.

Having a sales background is you can think about being creativeon how to convince someone to commit to buying something, even if that thingdoesn't exist in the literal form that you're actually going to sell. And Idon't mean lie to people, but I mean being really creative on what is theprototype.

We ended up talking to a lot of hedge fund people, a lot ofhedge fund lawyers, a lot of fund managers, a lot of prospective fund managers,And we learned about the space deeply.

Hopefully you can identify What those actual true motivatorsare and those triggers for longevity are earlier than it takes most people.

Julian: Allright, Kevin, thank you so much for joining me on Behind Company Lines today.

Kevin: Julian, niceto be here.

Julian: Of course, man. It's interesting. You followed the,

I was looking at your background and I was following thiscareer path of yours because I came in when I was early in, in kind of thestartup landscape and SaaS as a salesperson and seeing kind of the progressionof the typical kind of career growth, coming as a BDR and account executivemanager, and then.

Ideally lead a whole team and organization to become a founderyou did that. You had that exact experience going from step by step and I guessas a founder now leading a company, how important and impactful was having,learning the sales process from the bottom of the funnel or the top of thefunnel, excuse me, all the way to, when you need to build a team and actuallylead a product yourself. How impactful was that experience for you?

Kevin: Yeah, I thinkit's been really helpful. Obviously, it's not essential, because when you lookat many founders, prototypical founding teams, and some of the most successfulcompanies, a business backgrounded person in the pure sense is definitely theless common.

But I do think, especially today, where other than when you'redoing like frontier tech, like AI, or something in hard sciences, A lot ofgeneral SaaS has moved to the point where you're no longer building the 10xbetter thing or the 2x better thing that people like to talk about in podcastsor old business books or in business school.

Frankly, a lot of modern SaaS businesses are like, someonealready solved the first order revolution problem and someone probably hasalready done the second order. You're often building something that's 25, 30,40 percent better, which is enough to move buyers. And a lot of it is executionon marketing and go to market.

And so I would make the following two claims. One, I certainlythink it can be a very viable background, more than a lot of people wouldtraditionally think. Obviously, you definitely need a technical co founder inmost cases, if you are not technical yourself. But the second is, I actuallythink it's a background that I would postulate will become more common, becauseIt's more important than ever to have a really strong ability to execute on goto market.

And that's something that's really hard for people who don'tunderstand it. It's sales and business is really one of those conceptuallyreally simple things that is very hard to actually grok in the particulars,right? Why am I losing this deal? Why is the marketing not working? How do I gozero to one?

There are so many talented teams building really impressivetools. that fail or give up. And I always wonder, is that because you weren'tbuilding the right thing? Or did you just not know how to go to zero to one? SoI think it's been great for us in particular, and it has some discreteadvantages. And then it has the obvious drawbacks of, me not being technical aswell.

Julian: Yeah. And

thinking about like the switch from Having more of I would sayassassin mindset. Maybe that's too dark of a term, but as like an accountexecutive, where you're really honing in on particular buyers, even from, Ithink up until maybe business development manager even had a revenue as youwere leading in a, in an early startup.

When did that transition from, okay, I'm going to go get thesetarget accounts and I'm going to cross them off the list and make sure that, Iwe can secure those accounts, get those logos to, okay, how do I think about awhole strategy and incorporate other aspects of sales that aren't just myindividual contribution and leverage other technologies?

When was that transition? And how did you I guess what were thechallenging parts of that going from like very narrow minded to now more broadand using more tools and things at your disposal?

Kevin: Yeah. I'll sayinitially it was not intentional, right? When I started my career, it wasn'tlike, Hey, I'm one of those college kids who was a gunner and I'm going to godo this one day, and this is the perfect career path that'll get me there.

So to be clear, I didn't really know I wanted to start acompany until I had experiences that led me to think there were signals thatmade it interesting. But in short, the way I would answer the question directlyis I think that it happened a bit organically and that I kept going earlier.

So almost less than the role itself. I think if you are a salesor business or non technical person listening, one of the best things you cando is join earlier stage companies because implicitly you'll gain exposure tomore than just a role. I don't think if you had like a pure sales career at alarge enterprise company that you would probably end up with a lot of skillsand mindsets that would translate well to.

Starting a company, certainly much less as an example to mybackground that you articulated, I was a business development manager at Troopstwo companies ago. I started as the founding sales hire, and that just meant Igot way more exposure to the rest of the business in a way that I didn't at thecompany I was at before that, which was a company called Mapbox, where I wasmuch more in the traditional we're at scale, you're a salesperson, you don'tget to participate in product thinking, you don't get to participate inStrategic decision making.

At Troops, because I was early, I got to actually be more of animpact in the rest of the business, right? So I'm the tip of the spear fortalking to customers. So that meant that the product team would actually cometo me and I would get to contribute to product direction and think about thosethings.

And then you also just literally see them, right? You'resitting across from these people in this small room of 10, 15, 20 people, andyou'll osmosis in some of the knowledge. So I think it definitely was a bigchange. I think every time I switched jobs, I went, Oh, like I have so muchbusiness context, I really understand what it's like to build a business fromthis stage.

And then I would go somewhere else and go, Oh shoot, here's allthis stuff I had no idea about because it wasn't even in my realm ofconsideration. So a little bit of an indirect answer, but I would sum it up assaying a lot of it was not just the literal sales roles itself, but being in anearly seat.

Maybe the other part I would say that's more direct is. I spenta lot of the flexibility I did have intra any role trying to be involved on therevenue operation side of sales, which you don't have to do as a salesperson.But I think that helps you be more strategic because you really start to diginto processes and understand abstract concepts like how just changing aprocess can lead to a meaningful business impact.

And that translates very well to thinking about broaderbusiness problems as a founder or early stage operator generally.

Julian: Yeah,

you mentioned a second ago the barrier to entry maybe youmentioned it in an interview and I'm just, memorizing remembering it now, butthe barrier to entry with technology is becoming so much more, low that you canhave a lot more founders who have less of a technical background to then testout products build businesses, and actually create really exciting kind oforganizations, and how, in your opinion is that an overall theme because of theadvanced technology and what advances in particular are you Oh, these fewthings have really led to people being able to start up companies more quickly.

Obviously this kind of bleeds into Repool and what you've beenable to create, but what advances of technology are allowing people to spin upeither businesses or hedge funds, things that had such a high barrier to entrybecause of other technology, administration costs, all these other more complexnecessities.

Kevin: Yeah, I thinkthere's the obvious technology side, and as a non technology person in someliteral sense, I won't delve too far in there. I think the AI related tooling,obviously, and no code make it easier to spin up tools. But frankly, that's notan area I have any skills. That wasn't part of the zero to one at Repool, evenas a relatively new company that went through YC.

That wasn't how we did our zero to one. But I do think for alot of people, if that's an area you're willing to invest time, I bet you canget some pretty good dividends. For me, I think it's primarily two factors. Oneis more of a macro factor, and then the second is something that isinteresting. If you have a sales background, you don't have to, but itcertainly derives from it.

So the first is that I think we, the royal we, just understandhow to build businesses better than ever before. So you just can focus on theright things faster if you have been at other fast growing companies throughyour career. And I think, 10, 15 years ago, a lot was just less understood.

Companies were just less efficient. They spent more time on thewrong things. It's a bit abstract, but I just think there's a lot of people whohave been at companies and been part of the journey. And when they go do theirown thing, they're not like clawing around in the darkness like eras of old.The second that I think is potentially closer to being sales specific, butsomething that some people can be good at without that background is figuringout how to test your idea, which may or may not involve no code tools or AI.

But I think one nice thing about having a sales background isyou can think about being creative on how to convince someone to commit tobuying something, even if that thing doesn't exist in the literal form thatyou're actually going to sell. And I don't mean lie to people, but I mean beingreally creative on what is the prototype.

I think a lot of people are a little okay, I got to build theactual MVP platform, but you don't have to. I love this story at Troops. Iwasn't there for it, but it always stuck with me. So Troops originally was aintegration platform company. And basically what they did, cause they've beenacquired by Salesforce, is integrate your CRM, your system of record, with yourcommunication tool, Slack.

And this was before Slack was big, so they took a big swing, sokudos to them for that. But more interestingly, the idea was to test this ideaof, is it interesting for founders and businesses to get contextual businessinformation in their communication platform, i. e. Slack, before they builtanything.

They just had an intern who would just pretend to be like AIslash automation. And the whole idea is that you would like type in messagesand try and query your database. And this intern, he would just sit there andlook at what people are saying and then just respond. And that is, you don'tneed anything to do that.

And that was always such an impactful story for me becauseit's, Thinking about how you can test the value. It doesn't scale at all. It'sclearly not an actual product, but they went, okay, like this works. And webelieve from a technical perspective, it's possible to build the totally humanoutputs that this person is saying.

And that's what they took to VCs, I think. And certainly that'swhat they built conviction around. And you could do that, like tomorrow, if youhad an idea around some sort of AI messaging tool, do you know how you do it?You don't go use a no code tool. Just pretend to be the AI. Say, hey, I'm goingto organize your data for you.

via this software, and your pilot customer to prove to yourselfand to, your co founders or whatever that this has legs, just do it totallymanually. So I think that type of creative thinking is really valuable. And,salespeople will tend to have slightly better skills around, I think, pushingthe boundaries of the value props and such.

But that's not essential. I think anyone can figure outcreative ways to Test that early conviction.

Julian: Yeah it'scrazy that the timing of this conversation,

I was having conversation with a friend last week about, adviceanother founder gave to me, which was some, he likes to sell it before hebuilds it.

Not meaning that he's collecting money and then he doesn't haveany promise, but it's about a hypothesis. Selling the hypothesis, confirmingthat people would also want to buy in, and, obviously you're delivering value,but that value can take shape in a different way depending on what thosecustomers want.

But you don't know that by trying to build something and thentrying to go out and find people to use it or that would think it valuable.It's the complete opposite way. You have to go to the customer first, and ifthat means Getting a few people enthused about what you want to build. Oftentimes you hear about founders saying that they talk to a customer who wants tobe an early buyer of a product.

And then they start a wait list. It goes based on greathypothesis, an idea of how to execute, and then a lot of feedback and a lot ofiteration. But I totally agree with test it now before you spend all this time.Building and building all these it's timely, timely technology and investment.

Kevin: Yeah. And Ithink maybe as a final note, that really does relate to the, we understand howto build businesses more. I think that there are a lot of smart people andaccelerators who really push that ethos. So it may seem obvious once you hearit, YC is an example. This is something they always say, you know, do thingsthat don't scale is one of YC's very famous mantras.

And I think everyone hears it and they're like, Oh, I get it.But. Actually doing it well and coming with those creative examples, like whatit actually means to do. They don't mean literally just do impractical thingsfor the sake of it. It's really pushing this ethos of figuring out how tovalidate hypotheses faster.

So more people are good about it. There's more content thanever before on examples of how to do it. And as a result, I think more peopleknow how to do it. So to the direct question of, why is it easier to startcompanies than ever? Not only is it easier to literally build and theirsoftware automation, AI agents and stuff, but also people are just better attesting if they should even be building the thing that they're going to build,which is really great for entrepreneurship and value creation generally.

Julian: You mentioneda moment ago that there were some signals that you didn't really think aboutbecoming a founder. And then you had some experience at a startup and kind of.Caught, maybe a bug or some kind of excitement towards building startupcompanies. Describe those signals that you saw in your experience and whatultimately led to you being like, okay, I'm going to do probably one of thehardest and craziest things, which is start a company and build it myself andtry to find people who want to do it with me.

What were those signals and what did that eventual transitionlook like?

Kevin: Yeah. Thefirst thing I'll say is it definitely is way harder to start a company, I thinkfor most people than they realize. I thought. I had been tempered by fire bybeing a very early operator twice at two venture backed startups.

My previous company where I was head of revenue, I was thesecond employee, but it does end up just being, I think, harder emotionallythan you expect, even if you consider yourself a super stable tempered person.And I really underestimated that. And so other than those founders who reallyfind the happy case immediately.

It's definitely very tough because there's so much uncertainty.No one's telling you what's right. In fact, probably no one can tell you what'sright. So the kind of conviction in the face of total uncertainty is much moredaunting than I realized, but anyways, to your direct question, right?

Julian: When you werestarting to really realize that you wanted to build a company, what were thosesignals and what was that eventual transition like?

Kevin: Yeah. So forme it was realizing that I really enjoyed a lot of the I thought I enjoyed theuncertainty, as I just said, there was more of it than I was prepared for. Butwhen I looked at what I enjoyed at work. I liked the environments and the timeswhere we were figuring things out because I participated in those.

It wasn't like I liked watching other people solve them. Iliked when we didn't have a sales process and we didn't know what our go tomarket was, and I got to be not just a participant but an actual creator. And atester of what those things would be. I liked crafting the processes and seeingmy own ideas actually come to fruition.

And sometimes they are right, sometimes they're wrong. It'salmost a bit egotistic, in some sense, where you go, I have good ideas, right?A lot of people think that way. Like most people are shit talkers, basically,in some form or another, whether internally in their monologue or externally.Very, the magic of that is you never actually have to test.

And when you're a founder, early stage operator, You do, youthink you have a good idea? Okay like you're responsible for it. So let's seeif it's a good idea. I love that. I think both, I found that process reallyfun. I enjoy changing processes, seeing the impact evolving, seeing them getbetter, more than just the raw execution, which I think, That's true, thenthose are characteristics that make you likely to have grit and success as afounder.

And then also the other thing you look for is actually, are yougood at it, right? Maybe you enjoy it, but you're bad. That's just bad news foryou. I thought that I was quite good at those things. And every time I lookedat a new role, I said, I want more of that. I want more responsibility becauseI think I will make good decisions and I enjoy making those decisions and Ienjoy owning them.

And the earlier you go, the more of that you get to do. And themost of it you could possibly do is as a founder, right? In some sense, being afounder is the ultimate test of, does this person have a good thesis at a bothmicro and macro level? So that was probably, I think, the big realization forme as a concrete one that I think a lot of people can relate to.

When I was at Mapbox, I joined at 150 employees. And when Ileft, it was a hyper stage or hyper growth stage. And I left at about 400 inunder two years. And when I look back, I said, wow, I really enjoyed the firstpart when we were smaller, more than the last part. And when you look at why,it's because you're still figuring more things out.

You have more autonomy. There's less, Standardization, there'sless monotony. And so I said, go earlier, get more of that. And then did thatthree times in a row until became a founder.

Julian: Yeah.

And what was the conception behind Repool and wanting to workwith hedge funds? It's not something necessarily that people think of thatneeds to be.

guess we don't really think of hedge funds more than, what wesee in the news and what we see publicly and outside of, people who work withinthe industry.

Kevin: Yeah, I thinkhedge funds are one of those interesting things where everyone knows abouthedge funds, but I don't think a lot of people know much at all about any ofthe details about what they actually do or how they actually work to any usefuldegree.

So what I'll say about the topic though, too, how did I, a nonhedge fund person, my background is all for people listening, General go tomarket SaaS at various venture backed companies. No real theme, I'm not likethe fintech guy or I don't have some like specialization from college or amaster's in some esoteric topic.

I wish I did, but I was like a generalist SaaS guy and it wasdefinitely a case of a founder story of people attacking one problem and thenbuilding expertise slowly into a space they didn't understand previously. Andbasically, in short, we were interested in solving a pretty different problemat first, Which was trying to drive more efficient retail trading behavior.

And you can see how that might lead to it's like poolingcapital together in trading as one pool of capital. And long story short, thatfrom my understanding and a lot of effort and a lot of lawyers and money isbasically impossible, which is probably something that a hedge fund personwould have known instantly.

And basically we ended up talking to a lot of hedge fundpeople, a lot of hedge fund lawyers, a lot of fund managers, a lot ofprospective fund managers, And we learned about the space deeply. Mostlybecause we're actually trying to solve a slightly different problem. When werealized we couldn't solve that problem, we went, wait now we know all thesethings about the hedge fund industry.

What can we do here, if anything? And we really realized thatthis was a space that was surprisingly large, that a lot of people don't thinkabout, which I think is nice. And the types of problems that the space has. arelargely that it's a pretty antiquated industry from an infrastructureperspective.

So it, they're very advanced, hedge fund managers aregenerally, elite, top of the top people leaving firms like Goldman andMillennium, Citadel, Jane Street, etc. But we're not helping them trade better.I'm not here to advance how someone generates returns or alpha. What I'm hereto do is the unsexy plumbing.

That they also don't know how to do, which is all of theinfrastructure that enables them, the reporting, the investor communications.And because this is an area where people focus on what drives returns, Therehasn't been a lot of innovation on the kind of less sexy back off supportstuff. So it's a very antiquated, services driven industry with a lot ofobvious opportunity for software workflow that would improve the managerexperience, allow them to have more time, and drive better communications andexperience also with their investors, which actually is quite important.

And that is actually a much more approachable problem thanthinking about hedge funds in the context of Being a really crazy,sophisticated trader seeking niche edges in the market and executing esoterictrading strategies with assets I don't understand. It's actually from firstprinciples, okay I need to fundraise.

What does that sound like? It sounds a lot like them. And Ineed to manage my investors after they come into the fund. That's like customersuccess. And I need to share information with them and they need to be able tohave a digital experience. That's like surveys or onboarding, or investormanagement.

I thought ultimately that the problem set was veryapproachable, surprisingly, and then a good fit for technology and relativelyuntapped. So we ended up as non hedge fund people in the hedge fund arena.There is a ton and is still a ton to learn. But maybe as a final note, I thinkit's actually that we're an interesting example of not necessarily needing tostart a company rooted in a deep problem that we previously understood andstill finding TBD, but a reasonable degree of success.

Julian: Yeah, it'sfascinating is thinking about, a lot of companies are seemingly doing similarthings where they're taking an industry that hasn't had a lot of innovation andupgrading it using other tools and other kind of standard systems and reallyjust creating a more sophisticated process, which is You know, obviously it hasthis effect of, creating this easier adoption or, for those who are wanting tobuild on your platform.

And I'm curious on who those people are. Are they, hedge fund,current hedge fund managers that want to continue to diversify theirportfolios? Or are they coming out of a larger organization or larger company,like you mentioned, and now wanting to kick off on their own? They have somecontacts, they want be the entrepreneur of their space and prove out some oftheir thesis on how to invest and what to invest in.

What's the kind of profile people are seeing?

Kevin: In Canada, ademocratization play where, you know, one day everyone will have a hedge fund,it's perhaps a little less exciting than that. We're basically just targetingexisting hedge fund managers or prospective highly sophisticated traders orasset managers, and, The profile of the person as well is usually someone thathas a very deep bench of finance adjacent experience or is literally a trader,right?

So someone who's been at a large asset advisory firm or who hasbeen at a hedge firm themselves. And wants to go off and start their own thingis probably the most common profile. It's a very sophisticated, highly educatedmarket. It's not some random person in tech with two ears says, I'm going to gohave a hedge fund.

That's not really the idea. It is who you'd expect, and to becrystal clear, since we haven't actually really talked in detail about whatRipple does, we basically build vertical digital hedge fund back officeinfrastructure. So traditionally, when you launch a hedge fund.

It's a lot like any business. Let's say you and I wanted tostart some sort of podcast software. We need payroll. We need to form theentity. We need a corporate charter. We need accounting. We need to report toour investors, blah, blah, blah, blah, blah. And now there are great tools forthat, right?

Stripe Atlas is maybe like a loose analog. A hedge fund at theend of the day is literally just a business of a certain shape. Now it's backoffice needs are particularly complicated because the reporting is very complexand intensive. And it's highly regulated and specialized, but in short, it isstill in some sense the stuff that any business needs to run, just hedge fundaddition.

So to wrap it back to what we do, there's a lot of these thingsyou need. You need lawyers, you need fund admins, you need KYC and AML, youneed investor onboarding and servicing. You need compliance and filings, youneed portfolio analytics, you need banking, you need onboarding andoffboarding, etc. And traditionally those are all completely separatecounterparties.

So being a emerging manager, much like being a founder, imagineif we still had to rack our own servers like entrepreneurs of old, right? Andthen we had to still get individual HR software for payroll and then one forinsurance, right? Now there are tools for founders and one of the reasons tobuild companies is I just go by Rippling and Stripe Atlas and like suddenly Ihave a company and I can do all of the legally required things, end of story,I'd never think about it again. That doesn't exist for hedge funds, right? Sothe novelty and approach to repo is we essentially provide in a centralizedplace. That tooling.

So in short, if I was talking to a hedge fund manager, I'd saysomething like, we build digital fund administration and other fund back officetools like launch, compliance, and banking, as well as investor servicing allin one place, right? That's essentially what we do.

Julian: Yeah. And

you mentioned it, it's not something that necessarily stays thesame. Is it, adopting, adapting a lot because of some external pressures or isit internally wanting to create better technology? What do you mean by it's notnecessarily something you can plug in and never think about again, is itbecause of the technology?

Kevin: Yeah, It'smore that the regulation around the space is changing, so there are somespecific sides, right? It could be accounting standards, right? It could be newasset classes, like crypto. It could be compliance, right? As an example, theSEC just released 664 pages of what are called the new private fund rules.Yeah. In Q3 of last year, 664 pages of legal docs is a lot of pages and a lotof changes.

And, fund managers are not willing to, stay on top of thatthemselves. So they outsource it. And that's an opportunity for someone like usto help not only understand what they are, but a lot of what those things areactually require new tools, new workflows that are well suited to software.

Information disclosure, reporting requirements, etc. And so Weabstract away the responsibility of how do I abide with the new side letterrules for investor disclosures? Don't worry about it. Repool is going to takecare of that for you and we're gonna make it really easy to do when it doescome up.

So that, that's what I mean.

Julian: I got it.

When you think about the industries that are, are you seeinglike new emerging industries being invested in? Is there anything like thatyour customers are particularly doing that's You know, something that's new andI guess unexpected to the space of, investing in a certain sector or a certaintype of fund.

Yeah, anything that's that you didn't expect to come out of it?

Kevin: I think thoseare two separate questions, right? Are there things I didn't expect for sure? Ithink in terms of just like a quick note, I don't know how interesting is thelisteners, but as a quick note, what is changing in terms of asset managementtrends?

It's like venture, which is probably something all listenerscan. Venture at the day is still venture, but what types of companies aregreat, what types of companies will be great in the future, what the metricsassociated with a great company are, those all shift like from a Zerpenvironment to a post Zerp environment with the advent of AI, right?

I think assets are similar. It's not it's very rare that atotally net new asset comes, right? This is a hundred year old industry. It'smuch older than venture. Crypto is like the only exception. And most peopledon't just add asset classes opportunistically. It's more that a new group ofpeople who trade crypto rise.

It's not like someone who's Oh, I'm an equities guy. Like I'mjust going to start doing crypto. Like you have no, it's not like AI companycomes out and I'm over here at repo ah, we're, a hedge fund software, but likeAI is here. I guess I'm an AI guy now. And right. That's not relevant to theskill set of people who are already in the space, but where you generate alpha,what strategies are in vogue, definitely change, right?

Like right now, as an example, on the alternative asset side,private credit, real estate are quite hot. I think that's just a result of theparticular macro environment we're in. Maybe five, ten years ago. Equity wasvery popular and it's very cyclical. I think in five, 10 years, depending onthe macro, it's like the industry slowly moves towards where there's the mostopportunity to generate uncorrelated and interesting returns.

But that's a bit in the weeds, I suspect.

Julian: Yeah. I'mcurious about your, like the go to market strategy in the sense that like youmentioned, there's always all these updates of information. So I'm assumingthat being a source of. Information or review or summarizing, or being able toimplement a lot of the changes that say come from regulations is going to be ahuge advantage to your company being on top of it for SEO traffic.

You can make blogs, you can really gain a lot of traffic whenyou think about, strategies of go to market or even just creating inboundinterest or, for your overall business, what are the ones that, you'reimplementing now and do you feel like they're unique to your industry or, thego to market strategies are becoming more general in terms of, where to be,where to find your customers?

Kevin: I definitelythink it's very industry specific. I think there's two buckets. There's what doI do on the zero to one? And then there's what do I think will be interestinglater? So what I think will be interesting later are some of the things youmentioned, right? Like whenever you're in a space where you're primarilyattacking old school legacy players, one thing that generally tends to be trueis that they're slow moving.

They don't have great brands because they do so many things.And they often, if you go old school enough, don't have much of a web presenceat all. So there's not like a thought leader, right? There's no like a hubspot. of hedge fund operations. If you start googling questions on how tolaunch or operate a hedge fund, you'll probably start running into some weird,esoteric, questionable looking blogs pretty quickly.

And so I think that's a huge opportunity is you can build brandauthority and such that has long tail impact over time. That's something we're,as an example, excited to do as we grow. But that's just not helpful for zeroto one, right? Those are like seeds you plant that pay off in five, six, sevenyears.

I think in any market, you have to have a really strong thesison what is actually the most effective channel or one or two channels tops foryour particular industry and buyer. And I don't actually think that's likely tobe the same between most companies. For us, a particular nuance here is thathedge funds and asset managers are extraordinarily conservative with respect totheir service providers because there's a lot of, if it ain't broke, don't fixit, don't rock the boat.

And then. They can't afford to mess things up. So you can havea shiny looking toy, but if they don't believe that you're going to get the jobthat is essential a hundred percent of the time, then they don't care about theshiny tool at all. So for us, a lot of the like typical startup advantages oflike really be aggressive on doing a lot of things fast, but do some of themshittily and maybe your customers forgive you.

I think that's a very common macho, right? Go fast and breakthings. That's not at all. Good for us, right? That isn't and can't be how weoperate. And then from a go to market perspective, I suppose it's a little bitseparate from how do we literally acquire interest, but it is relevant to go tomarket because that informs how we think about communication, that thinksabout, that informs how we think about feature development, that informs how wethink about messaging, team composition, burn, because those are all parts ofyour go to market story when you talk to clients.

In, the most high level trivial sense, yeah, we do advertisingand we do cold outbound, but the more subtleties on what does the go to marketthesis look like in terms of who you are as a company and what you're puttinginto the market is pretty unique to the particular space and problem that we'reattacking.

Julian: Yeah, and youmentioned for, the other founders out there, working with industries that are alittle bit slower to adopt You know, they have those kind of ideas aboutchanging technology and maybe even just being averse to it. What advice wouldyou give in terms of building trust with your customers and leading them into adirection where, I think a lot of other founders have maybe a little bit moreof an advantage being, and when you sell to tech, any tech company is alwaysquick to try a new product or new tool for the most part.

But what advice would you give to founders when they're sellinginto a slower to adopt industries?

Kevin: I thinkthere's Three things in brief. It's to be very honest and transparent. Thesecond, which is free, right? You don't need to be far along or have a lot ofcapital to do that. The second would be to be very careful about how you buildthe company in terms of personnel which is generically true.

I think very few people actually do a great job executing thereand we haven't been perfect there but is very important when you're in anindustry that's credibility driven and people are generally skeptical and orit's slower moving. And then the third piece would be being really carefulabout what doors you open in terms of what you build.

Because everything you build opens a new door. And if you're ina space that moves very slowly and or requires a very significant investment toget to a viable MVP, you want to be very careful not to casually open doorsthat you don't understand the consequences of. But I think to elaborate brieflyon those three, being honest, communicative, I think because it's reputationalin software, if you mislead someone, which I think some companies do, or you'reaggressive on your roadmap and it doesn't materialize exactly, there's probablya higher degree of forgiveness here, but in these types of industries, there'svery little forgiveness and you Also, I think, command trust by being honestabout what you don't do.

Basically you want to let people understand where the bodiesare in the closet or what you don't have so that they can make an informedbuying decision so that when those things don't happen, you've already toldthem they won't happen, so there are no surprises. I think that's reallyimportant.

And then you can be a partner with them to overcome the areasyou don't do and strategize with them as to why that's okay or how they canachieve it in other ways. And to the second point, building the company rightin terms of personnel, I do think as an example of a hedge fund space specificnuance, being a startup is not at all a good thing in this space, right?

No one who's an asset manager other than VCs, because the assetclasses are surprisingly Transcribed bifurcated. No one knows what YC is. Ifyou're a venture company selling SaaS to other SaaS companies, you run aroundgoing, oh, we're a YC company, we're backed by Sequoia, or whatever, and youjust get credibility that is frankly probably unwarranted.

And that's great. That's part of the magic of going from zeroto one for many spaces and companies. No one cares, and they don't even knowwhat those things are which maybe is insane to founders who think about andromanticize about having those VCs involved. I promise you if I tell a clientwe're a YC company, 19 out of 20 of them are going to go, what is that and whyshould I care?

And so you have to be very careful back to the building thecompany, right? Like we have had to make certain hiring decisions that probablydon't pattern match well to other general startups in terms of hiring fromindustry, because I don't want people to go who's this 30 year old, hopefullysmart, but like random startup guy.

I have hired very quickly people who come from the street, WallStreet that is, or from other fund admins, to shore up our credibility and helplegitimize our operational expertise much faster than you would make thosetypes of hires in other industries. Again, it's working so far, we'll see ifthat was right, but that's definitely not something that we did At previousstartups, we weren't like, we got to hire this exec from Salesforce right now.

In fact, there's a lot in Silicon Valley traditionally whereyou go, don't hire those people. So that was a bit of a uncommon decision wemade that I do think can be very helpful in these situations. The last node,which is like being careful about what doors you open. I think it's very commonat startups to build a feature and then abandon it.

And you're testing and experimenting. And I'll give an exampleat my last company, we built like a surveying tool. We weren't like a surveyingcompany. It was just. Relevant to what we were doing and so many peopledemanded it. And the price we paid is, it's if you give a mouse a cookie, itwas actually worse now that we built this tool because everyone demanded likethe V2 and the V3 and the V10 of that tool and we weren't going to build thosethings.

So we would have been better off never opening that door in thefirst place. And I think that type of accidentally open the door and thenpeople see this like incomplete thing and they think about that a lot isparticularly relevant in a space like this where people demand. operationalexcellence in the things you have built.

And so if you build something, you better be prepared toentirely take it away if it's not correct and you're not going to invest moreinto it. But you can't just leave a half baked product out in the wild in aspace that's mature like this.

Julian: Yeah. I knowwe're coming to a close here. So I want to get to my rapid fire questions andreal quick before we, we end the call.

First question I always like to ask, founders is what's thehardest part about your job day to day?

Kevin: I think forme, it's Honestly, just time management. You have to context switch so much. Idon't think that's a particularly profound comment. I think it's a commonsentiment. And you often can't get all the things done that you want to getdone, which is pretty obvious.

And so being very good about focusing on the most importantthings is a skill that is particularly important here that I would havehistorically said I was really good at. But at Repool, I think I'm likechronically quite bad at, which I'm not sure how bad I should feel about. ButI'm trying to get better at.

And then the other is to really, try and find augmentations tothat. So things that I would have never considered before, like knowledgemanagement systems, certain organizational and to do tools, maybe even offshoreexecutive assistant augmentation to help supplement my workflow are things thatI am actively working on or exploring or already using here at Repool justbecause it's so hard to do all the things that I want to do.

And that I think I, I definitely underestimated coming into therole because there's just so much stuff that I have to do that I hadn't evenconsidered as things that existed to be done in the first place.

Julian: Yeah. Yeah.

What would what would you be doing if you weren't working onRepool?

Kevin: Honestly, forme, I would probably look at joining an AI company, personally. I get excitedabout new technology. I'm almost a little remiss that I'm working on Repoollightly in the sense that whether or not it's as big as some people say, I dothink AI represents this obvious new frontier of technology. And, basically,why it's exciting to me is less because I have some view on what it's going tomean for humanity or something.

It's just clearly going to have a lot of opportunity. There'sgoing to be totally new, cool tools that get built. There's going to be a lotof greenfield space to build new and interesting businesses. It's if you knewhow big tech was going to be as a sector, and it was 2010, would you want to gointo tech?

Yeah, honestly, in some sense, it's almost like Easier. Likepeople always talk about how all the easy problems are solved. Whether or notwe think that's true, I think I agree with some part of that sentiment. And AIis like a fresh slate. There's gonna be all sorts of AI companies that come outin the next three to five years.

I think in that second mover wave that, 10 years from now,people are like, Oh, that was such an obvious AI company. And so if you want tobe in a position to potentially be part of a company that undergoes Thatjourney where they become a household name or you yourself want to be afounder. I almost think being part of the first wave and learning about thespace is great because actually if prior technological waves are anyindication, very few of these first wave players will actually win.

It's actually the people who start companies In three to fiveyears, once the industry matures, they're going to build the bulk of the valuethat's generated in this space. And so if I didn't know any better, and Ididn't have a pre existing attachment to some space or company, I would just gobecome a sponge about the AI industry and if I, this is assuming I wanted to bea founder and hopefully have come up with some set of interesting ideas thatI'd be able to take on in three or four years and make other interestingindustry connections to talented technical folks who could become my co founderwhen that opportunity arises and I'm ready to take the leap.

Julian: Yeah. Ialways love the, you mentioned the fresh layer. I always love the ideas thatnecessarily weren't possible before. Being more of a possibility because of, anupgrade in AI technology, being able to, handle some new data set and maybemake these particular assumptions or, help with a particular function, maybeshorten the time a business does a certain task so they can actually operateeffectively.

There's so many ways, I think I get really excited about whatthe new technologies enable. Same with, crypto and Web3 and how those willimpact other industries. It's what were those ideas that maybe were too earlyto start that we'll start seeing come about is the exciting part I like.


And in regards to when you do research outside of Repool forthose, really this is just a selfish question. What books would you recommendother founders, whether it's. Fiction, non fiction, take you away or put youright into exactly what you need to do on a day to day basis, what's stuckaround with you.

And lasted the test of time. What are some book recommendationsthat you

Kevin: have?

Yeah, I'm smiling if this has video for those who can't seebecause I'm not a books guy when it comes to business at all. Maybe that'sheretical to say or not optimal for my image, but I like books primarily. Idefinitely like books, but I like reading for my own personal enjoyment and Ilike reading a lot of science fiction which I do think is good for me.

I'm just not leveling up through books personally, so twofollow ups. I would say though, I have read a lot of business books, notnecessarily of my own volition. I do think for non sales backgrounded folks, inlight of some of the things we said earlier in the conversation, reading someof the classic books on go to market probably are super interesting and usefulfor engineers.

In fact, I think it's asymmetrical, like I can't just go readsome 500 page book on react and suddenly have any utility as an engineer,right? Like it, it, that no, not at all, but an engineer can totally go readsome sales books and walk away with like crystal clear, actionable,implementable insights if they're building their own company and they're on thefront lines of customers they can use that will level them up.

Just getting some foundation on how to approach and structure asales conversation, some theory of value, some sales framework that could bethe Challenger sale, that could be Sandler sales, anything like that. There's abunch of these like classic sales books that are quite still in vogue withactual sales professionals that I would encourage people to read.

In terms of how I level up, if that's how I was going tointerpret the question, I like watching YouTube videos to stay on top oftrends, and

I also like podcastsquite a bit, so I am a classic, tech person that I listen to a wide variety ofthese tech podcasts, some of which are quite popular and some of which arequite niche, and I do definitely recommend that.

Maybe my last is I also read some news sites. I love like MattLevine as an example on Bloomberg. I think it's an incredible way to rapidlylearn really esoteric but interesting financial concepts in an entertaining,digestible fashion. He's one of the top writers on Wall Street. And then, I dothe classics.

I cycle through like TechCrunch and The Information andSemaphore and Axios and The Verge here and there. Not too much because I thinkthat's a lot of time. But to just stay appraised as to what's happening in theindustry.

Julian: Yeah. Whatare some of the podcasts, that from a, CEO standpoint, that really are helpful,whether it's from a strategic standpoint or just understanding your industrythat you enjoy?

Kevin: Yeah, I listento quite a few. BG2 is a very recent one with Bill Gurley. And that, that's, inBrad Gerstner, that's quite popular. Anyone who listens to All In has probablyseen those folks around. I do some of All In. I think that's a pretty common onefor people who are listening.

Those are like the most well known that I would say I listento. On the AI side, there's a podcast called No Priors that I quite like fromElad Gill and Sarah Guo who runs a boutique VC firm. I think she was at likeGreylock or something like that. Before that and then there's a bunch of themore typical business ones, right?

What is it called? Like, How I Built This or whatever. A lot ofthe other podcasts I'm more selective depending on the title of the episode.There's 20VC does an interesting podcast. I think that's Harry Stebbings. Someof the Bloomberg ones, some of whatever. Who's that guy who interviews a ton ofpeople?

Lex Friedberg or whatever. Friedman. Again, it depends on thetopic for me I'm not a blindly consume every episode because I just franklydon't care and I have limited time, so I'm selective about what else to do. Butbasically If I look at a podcast and the title seems interesting, I'll open it,I'll look at the agenda, and if particular topics are interesting I'll consumethose on my commute to and from work.

And that's my most regular form of consumption.

Julian: Yeah. I likethe new wave of social content. I feel like even though there's a lot of clipsand stuff that are kind of clickbaity I'm super into it because they get medirectly to a topic. I'm, probably wasn't really thinking about investigating,but And then I find out, something interesting or explorative that or, fallinto a rabbit hole of some other subjects.

So I liked that. And especially with YouTube and all theseother resources out there, we try to do a pretty good job about it. And I thinkwe do.

But Kevin, last little bit before we come to a close where canwe find you? Where can we support you? Where can we, be a fan of what you'redoing?

Obviously we will find you on Repool, but LinkedIn's. Any othersocial platform that you frequent which you'd be a

Kevin: LinkedIn, andI'm not honestly a particularly active person. I think there's a lot ofpressure these days to build a brand or something, but I don't really thinkthat's particularly necessary.

I think that's just noise for most people. Build a brand ifit's helpful for you to build a brand is what I'd say, and I don't think it'shelpful for me to build a brand in the space I'm in and I don't think there'smuch of a brand to be built around a 30 year old founder of a hedge fundinfrastructure company for hedge fund managers.

In the sense that I don't think hedge fund managers will becompelled by that. So I focus my time where I think is higher leverage. Soyeah, I guess on the off chance you ever run into a prospective hedge fundemerging manager with a serious background that wants to launch or has launchedand is looking for service providers or just wants to level up their backoffice in LP servicing, whether they be a hedge fund or a private equity fundor venture fund.

Repool has tools of different kinds that can enable bettersoftware driven experiences, and at the least, we'd love to talk to thosepeople and hear how they think about the world. I suspect that's a relativelyniche ask, but, there it is.

Julian: Find them.Yeah, we'll find them with with all the content we spread.

I'm sure they'll fall into our algorithm at some point.

Last question I wouldlike to ask is Is there anything I didn't ask you that I should have? Any lastpoint that you wanted to touch on? Any last little subject, anything you'reinterested in sharing that maybe isn't Repool related but is part of yourheart?

Kevin: Yeah, maybejust one comment. Cause, we're three years in. I've invested in other startups.My batch mates from YC are quite far along. Some of the companies are failingor dying or have split up. And obviously some are really successful. Andeverything in between. But I think the number one thing I'd say to prospectivefounders in a question I wish I had contemplated harder and more seriously,both for yourself and a prospective co founder, is like to really think aboutthe non best case scenario for the company and evaluate how you will feel inyour longevity and whether you'll still want to work on an idea in those cases.

It's obvious in some sense hearing it, but I really do thinkmost founders don't contemplate hard enough. Is this actually a 10 year journeyfor you? Perhaps longer? Because we're so enamored with like the XYZ companyrockets to a hundred million ARR in two years and now they're a unicorn.

Realize that if you get to just a million in ARR as a venturebacked company, you're probably already outperforming, 50 percent of companiesthat raise a seed round of funding from VCs, which is already A small bucket oftotal aspiring founders. And my point is that like most companies will end upin a success case that is not the glamorous one in TechCrunch for theinformation.

And the journey is probably much harder than what you think itwill be. So just really understanding what your motivations are and what willcause you to have longevity. I really believe that persistence trumps talentand grit trumps intelligence. Past a reasonable bar. I think Jensen Huang atNVIDIA was just talking about a similar theme very recently when he talkedabout how Stanford graduates should experience suffering in order to fostergrit and longevity.

And I think some people were memeing about it cause it's like abit of a ridiculous sounding sound clip, but I, it really resonates with menow. A lot of the people I see bail on the journey, it's cause they only wereprepared to really continue in their company. If it was a 99th percentileoutcome and now they're just like a 75th percentile company and they thoughtabout that but they didn't really think about that or they really are motivatedby things they're passionate about and they accidentally ended up buildingsomething they weren't passionate about and so these are all so obvioussounding but every time I see a company retro or I talk to a founder like Itjust takes you time when you're actually the one experiencing it to arrive atsome of these seemingly external obvious conclusions.

Similar to like, when you want relationship advice, it seemsreally complicated for you, but it's so easy to opine about other people'ssituations, right? Like when you're in it, everything is muddier, harder.There's way more factors, way more context. But as like a simple example,right? I think a lot of people really only can persevere if they're building acompany they're really passionate about in some personal or societal way, butthey will often end up accidentally not being able to do that, and then they'llconvince themselves they can stick with it for a while, but inevitably thewheels will fall off.

And the lesson and takeaway in me saying this is hopefully youcan identify What those actual true motivators are and those triggers forlongevity are earlier than it takes most people. It shouldn't be that thewheels fall off three years in. Maybe you just the wheels fall off a year in.

That's great. That's two years you get back that you can go dosomething that you care about more. Or you honestly don't delude yourself inthe first place into opening the can of worms and you make a different pivotearlier. You make a different decision earlier. I just, I think about that alot.

There are shades of that in repo, even though we're marchingon, that fortunately for me have happened to be okay. But frankly, I wasn'tthinking about, because, as I said at the very beginning, I didn't set out tocreate. A hedge fund company. And I think in candor, the original idea wewanted to solve was a lot more personally interesting, but I am personally muchmore motivated by a lot of the intellectual satisfaction, the actual act ofbuilding, the growth, stuff like that.

So I have longevity, but I look around me and a lot of peopledon't. And that's, a shame, not just for your own time and career, but alsobecause if you did still want to be a founder, you could just build somethingelse that hopefully becomes big and valuable to the world. And you're just notdoing that thing.

So that was quite long winded. And I think there is a lot ofcontent out there that says similar stuff, but because it's one of those thingswhere it's so rarely actually internalized in a useful way, I will add to thestack of people saying something like that and really encourage listeners toread it.

Deeply ask themselves those questions.

Julian: Evan, thankyou so much, man, for adding to the stack of, people really, realizing thetruth about building companies, asking the questions. It is, fun and excitingin a lot of different ways, but it is the reality of taking a lot ofresponsibility, especially when you start having customers and delivering onthat.

It complicates things more and more as, as you go down theline. So reflecting on the reality of it is It's imperative to not only staysane as a founder, but, realizing, are you operating the business also at theright capacity, or are you being effective? A lot of that introspection isneeded, and I think it's always a good reminder for founders to hear it.

But Kevin, amazing to have you on the show. Thank you so muchfor joining Behind Company Lines today.

Kevin: Thanks forhaving me.

Julian: Of course.

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