Something Ventured Podcast
Host: Kent Lindstrom
Guest: Sheel Mohnot
Kent Lindstrom (00:22)
All right, welcome back. This is the Something Ventured Podcast. I am Kent Lindstrom. I am your host. My guest, Sheel Mohnot. Thanks so much for doing this.
Sheel Mohnot (00:31)
Absolutely. Happy to be on.
Kent Lindstrom (00:32)
I had trouble with your name. I watched like ten video things of people interviewing you. Don’t think I’m that prepared—don’t get excited—but to figure out how to say your name. Nine out of ten of them just said “Sheel.” They didn’t say your last name. That’s pretty cool to be well known enough in the venture world that you’re like a one-name guy.
Sheel Mohnot (00:45)
Yeah.
Kent Lindstrom (00:55)
Well, okay, funny enough, I’m not the only Sheel in venture. There’s a guy named Sheel Tyle who used to be at NEA, then now he’s at Amplo. And crazy enough, like he’s the only other Sheel I know. And he works in venture. And then he recently bought the Portland Blazers.
Sheel Mohnot (01:12)
Okay, good for him.
Kent Lindstrom (01:19)
And so we’ve gone through, you know, he was way more popular on the internet in terms of Google ranking for a while than I was, and then I bet he is gonna be again now that he runs a sports team. Yeah, there’s two Kents in Silicon Valley. I’m a Kent. And I’ve been called the other Kent, by the way. I don’t know if I should be offended by that. But as far as I know, there’s two of us as well.
So Sheel has built and sold a couple companies, started a venture firm with a partner, Better Tomorrow Ventures, which I’m not sure if that means that tomorrow’s gonna be better, you’re gonna be better, or does it not mean anything?
Sheel Mohnot (01:56)
You’re the first person to pick up on this. It means both. So okay, so Better Tomorrow—like we invest for a better future and then we wanna improve ourselves. So actually our management company is called Be Better Tomorrow.
Kent Lindstrom (02:14)
Yeah. Okay. Because the initials BTV just sound like a boy band to me.
So I’ll ask you how you came to venture, but it’s funny—when I started doing this, I listened to a bunch of venture podcasts and the different VCs would talk about how they became a venture capitalist. And so it’s a pretty elite, desirable job. And they all said, “Well, I fell into it,” right? Like a stunning number of people said they fell into it.
And so I would ask them on my podcast, like, how did you fall into it? And the answer would invariably be, “Well, I went to Stanford and then I worked at Google and my college roommate’s dad founded Benchmark and I fell into it.” Right? Never fell into the housing projects. And so I’ll tell this to a venture capitalist, and without irony, they’ll go, “Well, that’s not my path at all. I went to Harvard, I worked at Facebook, and my college roommate’s dad founded Kleiner Perkins.” So when I ask you how you came to venture—
Sheel Mohnot (03:09)
I just fell into it.
Kent Lindstrom (03:10)
Yeah, there you go. Thank you. You started here and you went to India. Like that’s not the normal, that’s not the obvious path.
Sheel Mohnot (03:18)
Yeah. Totally. Yeah. So yeah, okay. So I—Indian heritage, grew up in the United States in Pittsburgh primarily, went to Carnegie Mellon.
Kent Lindstrom (03:34)
Can I ask a question about that? How does that relate to the guys on NPR who give them money who are called Carnegie?
Sheel Mohnot (03:43)
Okay. Yeah, so Carnegie and Carnegie. You can say it both ways. It’s the same background, same heritage. And actually it’s kind of funny because even in Pittsburgh we call it Carnegie Mellon, but there’s a town called Carnegie.
Kent Lindstrom (03:58)
Okay. Yeah. It’s like it stopped being the Ukraine at some point, just became Ukraine and it didn’t get the memo, but here we are. Okay, so anyway, sorry.
Sheel Mohnot (04:07)
Okay, so go to Carnegie Mellon, make software for hospitals, was a consultant. Then I decide to move to India and I was actually inspired by watching a movie. And I decide I’m gonna go to India and try to like fix India, but really it was fixing myself. I did nothing for India, basically. But I worked in microfinance and it was actually for a nonprofit based in San Francisco called Kiva. And I was helping individuals from the West give loans to individuals in India and other places via their credit card. So you could like make a microloan and help somebody buy an irrigation pump for their farm, stuff like that.
Kent Lindstrom (05:05)
That’s pretty cool. There’s that book, that India book they always try to make into a movie. It’s been going on for like fifteen years—Shantaram. Yeah. That was such a good book.
Sheel Mohnot (05:14)
Yeah, really good book. I think they made it into a TV show ultimately. But there were all these rumors it was gonna be like Johnny Depp and I don’t know.
Kent Lindstrom (05:23)
Yeah. That’s a crazy book if you haven’t read it. So you start—it’s a fintech VC and I normally think like focus… By the way, I had Frank Rotman on recently who has a fintech VC. So is he like your nemesis? Is he like your Newman? Or is he like—
Sheel Mohnot (05:39)
No, he’s my buddy. Yeah. Frank’s great. And actually, like when I got started in venture in 2016, he was the first person—I remember just calling him and he was just willing to chat for a long time. And I think a lot of people really welcomed me in and, you know, I didn’t really know anything and maybe still don’t, but I feel like a lot of people, including Frank, really were just like, “Hey, we’ll show you the ropes, ask us anything.” And they really took time. It was great.
Kent Lindstrom (06:16)
Yeah. And those of you listening will remember Frank also co-founded Capital One. I normally think the focused VCs, I generally think they’re sort of like gimmicky and don’t make any sense. Like, “Yeah, you know, I focus on Stanford students.” It’s like, well I can invest in Stanford students too. Or “I focus in the Atlanta ecosystem.” Like, well they’ve got the internet in Atlanta, I can invest there. But fintech—and healthcare too—but fintech seems big enough and both specific enough and big enough that it does make sense for a focused fund.
Sheel Mohnot (06:53)
Yeah, I think that’s right. I would say it’s not like one niche category. Like there are so many niche funds out there. You know, there’s like very interesting funds—Convective Capital is strictly focused on wildfire prevention. And they have like I think it’s like an $85 million fund focused on wildfires. And when we started in 2019, some of the LPs did tell us, “Hey, we think it’s too small of a niche.” And actually fintech is quite large. If you look at overall venture funding, the percentage for fintech has gone down since 2021. In 2021 I think it was like a quarter. And now it’s still, I think, around 15% of all venture financings are fintech. So if you have a surface area that’s around 15% of all venture financings, that’s pretty large. And there’s so many different things that are included in fintech that I think it’s not really one category.
Kent Lindstrom (08:10)
Yeah. And it ended up, you know, we invest only in software… not an ad for the fund, but you know, huge markets, amazing entrepreneurs, perfect guy for the thing. You tell us the future. And we ended up in a lot of fintech. Because you’re just like, “Well, geez, that does sound like a big problem and that does sound pretty exciting and you do sound like the right guy to do it,” and you know, there you end up, basically.
That’s cool. And your office is in the Mission District in San Francisco, which—for those of you listening around the world—I live there too. It’s the cool part of San Francisco. Pretty Hispanic, pretty cool. Led by a supervisor who’s a crazy person, by the way, if I’m getting that right. But most VCs wouldn’t be caught dead there. Your Jackson Square crew. You know, it’s pretty cool. How’d you end up with that kind of—
Sheel Mohnot (09:12)
Okay, so the real story is I live—so in 2015, so a while ago, I bought a small building, ended up being my home and my office. So I live on the top floor where I am right now, and our office is on the ground floor. So I live here, I love it, and it’s really convenient for everyone. We’re kind of like right off the highway. So Jake lives in Menlo and he can come in. And it’s been very—I mean, it’s obviously very convenient for me.
Kent Lindstrom (09:44)
Wow. You’re like a 1920s seamstress living above the shop, going down in the morning.
Sheel Mohnot (09:53)
One funny note on that or interesting note is so where I’m from in India, it’s called Rajasthan and the people are called Marwaris. And there are a lot of stereotypes about us. And my wife was recently looking it up on ChatGPT, like what are the stereotypes about where you’re from? And one of them is they live on top of their shop. And everything—it’s so funny—like everything basically described me to a T and I was like, “Man, am I just not a real individual? I’m just doing what my ancestors have always done.”
Kent Lindstrom (10:28)
Right. Do you have a little broom and you go out and sweep the sidewalk every morning? You really should. It would just be cool.
Sheel Mohnot (10:36)
Totally.
Kent Lindstrom (10:40)
So how has it gone? You’ve been a venture capitalist for like not zero amount of time, right?
Sheel Mohnot (10:46)
We started BTV in 2019, but prior to that I started in venture in 2016, so ten years actually.
Kent Lindstrom (10:52)
How has it gone? Like have you had the big hits?
Sheel Mohnot (10:58)
Yeah. I’d say it’s gone very well. I think, you know, I’ve definitely had some hits. I think it’s all kind of crazy now in the context of what hits means. Like is a billion-dollar company a hit or does it have to be a trillion-dollar company now, you know?
Kent Lindstrom (11:24)
Yeah, let me ask you about that. What is going on? Not only are there like trillion-dollar companies, which kind of makes sense when you just look at their cash flow—like okay, there’s six billion people on the planet on the internet now and there used to be like three hundred million in the early 2000s. But what do you make of—if you were just to read the press without much skepticism, there’s companies that start and they’re like at a hundred million dollars in ARR in like two months. And I’m like, well, if you literally went to a company tomorrow and they just said, “We’re gonna do as fast as we can, we’re not even gonna look at your product and your dad runs the company,” and we’re just gonna sign up—like it would take like three months. So is it really companies really hitting a hundred million ARR in two months or am I missing something?
Sheel Mohnot (12:20)
Okay, so there’s so many things to talk about here. But one of them is none of these numbers are real. Like first of all, what is ARR—annual recurring revenue? And it’s really—you can’t really have a hundred million of ARR in a couple months. There are companies that are growing tremendously fast, and faster than I’ve ever seen before in my 10 years and probably that you’ve ever seen. But a lot of them, first of all, are not ARR. Sometimes what they’re calling ARR is really funny. Companies will announce their ARR number and then I’ll talk to like late-stage investors or whatever that looked at the deal and they say, “None of that was ARR. They were counting trial revenue, they’re counting all sorts of stuff that is not annual recurring revenue.”
And then also companies that grow super fast also could fall super fast. You know, it wasn’t that long ago that one of the fastest growing companies in the early GPT era was like Jasper. They had grown to a hundred million of revenue, if I remember correctly. And yeah, they grew super fast, but then ChatGPT came out and people realized, “Hey, I can just do this with a twenty-dollar-a-month subscription that gets me all sorts of other stuff too.” And I’m assuming the revenue from Jasper fell pretty fast. And so I think in general, companies that grow super fast also can fall super fast. And I think the disruption by the model companies is a real concern.
Kent Lindstrom (14:22)
Yeah. Is it different this time in the sense that if you look at the history of companies, a lot of companies were around for a bit of time before they took off. I mean, if you look at Google, there was some point where they tried to sell the whole thing for like a million bucks. And Chime—nobody gave a crap about the Series A and Homebrew kind of did it and then they took off. Like a lot of companies have that story. Is that not gonna be a story anymore? Or what do you think?
Sheel Mohnot (14:57)
Yeah, it’s a good question because people are looking for hypergrowth, right? Because it’s happening, you’re kind of like, “Well, why would I invest in a company that isn’t experiencing hypergrowth if I can invest in a company that’s experiencing hypergrowth?” And so we have a company in our portfolio that went from about twenty-five million of revenue a year ago to fifty million this year. And that’s pretty good. And really great founder, great fundamentals, and they went out to raise, and a lot of the investors said, “You know what, we’re looking for companies that are growing much faster. We’re kind of looking for that 10x growth.” And a company that by all metrics—if a few years ago you said your company grew from 25 million to 50 million, you’d say that’s awesome. And actually I think it was a little more than that—over 2x growth. And nowadays a lot of funds are saying, “Hey, that’s not interesting.” And I think there’s opportunity there. We don’t invest at a later stage, but I think probably these companies are very well priced and still will have tremendous growth. And this company’s at no risk of disruption by any of the model companies. You know, it’s fintech dealing with money and has licenses and stuff like that.
Kent Lindstrom (16:37)
It seems like that general attitude might lead to some sloppy company building. And/or fraud. I don’t know.
Sheel Mohnot (16:46)
Yeah, I think both are correct. You do definitely have companies out there that are hyping crazy numbers and when you look under the hood it’s not true.
Kent Lindstrom (16:59)
Yeah. Because we have companies that are maybe not in that crazy ten-x growth mode, but when you look at them like a rational human being, you’re like, “Okay, they’re doing a really important thing at a really important segment of the economy. Nobody’s model’s gonna disrupt them. Clearly it’s gonna be an X-zillion-dollar company, but not in one year. It’s gonna take five years because they’re selling to medical practices and guess what—you’re gonna have to go put on a coat and tie and meet with them a couple of times.” Like that kind of thing. It’s just the normal economy.
Have you had any misses? You know, where you’re having lunch with Travis Kalanick and he said you want to invest in Uber Taxi or you’re like, “Nah.” Any of those?
Sheel Mohnot (17:59)
Yeah, I would say, look, we’ve had a ton of misses over the years, right? I would say there are a lot of companies that I wish I was in, but I can’t call them a miss yet because they haven’t achieved greatness. There are a few companies from back in the day that have achieved greatness that I can look back and say, you know, I didn’t invest for a particular reason and I should have.
So I can say back in the day as an angel—so pre me being in venture, and I wasn’t really a serious angel or anything like that—but I had the opportunity to look at Robinhood, had the opportunity to look at Chime. And I can give you reasons why I didn’t do either of them and why I was obviously wrong.
So start with Robinhood. The founders had gone to Stanford with actually at the time one of my roommates, and they actually I think came over to our place. I was thinking at the time, and they had some difficulty raising their first couple of rounds, I believe. And I looked at the company and I thought, “Okay, you guys are offering free trading. That’s cool. But you know what? A lot of folks have offered discounted trading before. There were companies like Zecco, FreeTrade out there that were doing, if not free trading, like one-dollar trades, two-dollar trades. And they sold for like some money, nothing crazy.” And I was just thinking, like, what is different about you guys? And what’s different about now?
And I think what I completely missed was it wasn’t just the free trades. And by the way, at that point, they didn’t really know how they were gonna make a lot of money. So that’s another thing that had to be figured out. But what I missed was they weren’t competing with Interactive Brokers or any, you know, like Schwab, TD—these are places where people like professionals or semi-professionals or individuals like us might trade. And I thought, “Okay, if you’re competing with those guys, those guys will bring their prices down.” And for me, I think at the time I was paying six or eight dollars a trade. And I was thinking like it doesn’t really matter. Like six or eight dollars on a trade makes almost no difference to me anyway. So are people who actually trade gonna care? And I had the examples of those companies previously that tried and didn’t get anywhere.
And I think what I totally missed was Robinhood was bringing a whole new generation of people into trading. And if you look at the average account today of a Schwab or a Fidelity, it’s probably like a few hundred thousand dollars on average. And if you look at a Robinhood, it’s probably like ten thousand dollars. And they really were able to bring in that—I don’t even know what the generation was, millennial, Gen Z—you can’t keep it straight. Now it’s like alpha. But I think they were able to bring on this whole new crowd into investing and then were able to monetize that really well and then actually expanded. And now I’m a customer. And I think people realized that these products they had built for a different class of investor actually were quite good for folks like myself. And a lot of larger-net-worth semi-professional folks started using Robinhood too. But I totally missed that. Mobile was a whole new beast and they were reaching a totally different class of investor. And typically it’s hard to make money off somebody who doesn’t have that much money, but they found a way.
Kent Lindstrom (22:21)
Yeah. That it’s such an interesting thing in venture too, which is that so many hits were not—I mean if you look at Uber, like yeah, Lyft was there first, but it was kind of pretty much the first one. But so many things, like Google was search engine number four hundred and Facebook was social network number four thousand. This concept where you can kind of talk to a founder and they’re like, “No one else is doing this.” You’re like, “That’s not a very good idea.” And then they’re like, “A hundred people are doing this—it’s too crowded.” But that too crowded doesn’t mean that it’s over.
Sheel Mohnot (23:03)
Yeah, absolutely. Like time and time again. Some people say like, “Okay, actually Facebook wasn’t competing,” but really they were with all the companies you and I remember. And you probably remember better than me. Obviously Friendster.
Kent Lindstrom (23:36)
Well, and they came in late and could kind of look at everyone else and go, “Okay, that doesn’t work, that doesn’t work, that’s a good idea, I’ll just take that one,” and you kind of start on third base with a lot of things. Whereas when the social networks before that started, you could sit in a meeting with a venture capitalist and they’d be like, “Well this is ridiculous. No one’s ever gonna put a digital image of themselves online. That would be crazy. That would be nuts.”
It is funny—the misses. Do you think you would get Robinhood right now if you got another shot? My partner rented space to Travis Kalanick, knew him, got the memo about Uber, did not invest, and probably would not if he had it to do over, because at the time Travis Kalanick wasn’t even gonna run the company. So if somebody came to us today with an amazing idea and they said, “Yeah, just FYI, I’d like to raise some money from you guys but I’m not gonna be running this. I’m gonna put up an ad on Twitter and see if I can find somebody,” we still wouldn’t invest.
Sheel Mohnot (24:43)
It’s a great question. Hard to answer. And that point about Travis is a really good one that’s gonna stick with me. But I don’t know. Honestly, I don’t know. And another one I got wrong, by the way—we talked about it earlier—was Chime. And that one, they’re building a neobank and there had been a lot of neobanks. People had tried. And it’s the same thing basically as Robinhood, which is like Simple had tried. I knew the guys from Simple quite well. It sold for 120 million. It was not a terrible outcome, but wasn’t a great venture outcome. And they were trying to reach folks like me. And really Chime reaches a totally different population. So I think in both Robinhood and Chime, I missed who the customer really was. And that was early. And I don’t think I would make those mistakes today, but there are definitely other mistakes I would make. And actually, I can think of two of my great companies from the 2016 era that I probably would not have invested in today.
Kent Lindstrom (25:58)
And what are the great ones?
Sheel Mohnot (26:01)
Well, a couple of them. So at this point I was running a fund called 500 Fintech. I ran an accelerator program and I had the luxury of investing in companies at a two-and-a-half-million-dollar valuation. And we had in that first cohort, I think we had like seven companies and a couple of unicorns. And in the next cohort, it was a sort of similar thing. We had two big successes. And each of them, if I look at today, I can tell you they are.
So the first one, a company called Albert—Albert.com. And it’s under the radar, but recently less so because they just took the jersey patch on the LA Lakers. So if you look right here on the LA Lakers, it says Albert, and that’s my portfolio company. And they reportedly paid thirty million dollars a year for that. And the company’s doing extremely well, is very profitable, probably will go public in the near future. And it started out as a personal finance manager. And that’s like, back in the day there was Mint and so many others along the way. There’s no way I would invest in a personal finance manager today. But at the time I was naive and I really liked the founder. And I was just like, “There’s something about this, like I think it’s gonna work.” And then ultimately it worked because the founder was excellent. And they pivoted their way around to making it work. But along the way, it took them a very long time. You know, they raised at two and a half, then six, then fifteen, then twenty. And like these are all different rounds. And then now it’s many hundreds of millions in revenue and profit.
Kent Lindstrom (28:08)
Yeah. That’s cool. It’s funny, the misses are so much more fun to talk about for some reason. The favorite—you know the Ron Wayne story, the Apple guy? The guy who owned what like ten percent of Apple or something. And he sold for eight hundred bucks or something?
Sheel Mohnot (28:23)
Yeah.
Kent Lindstrom (28:28)
It’s a great story. Although when you think about these things, to be fair, if he didn’t sell he’d be worth like a hundred billion dollars today or something like that. But to be fair, like you would have to hold that Apple stock when it went to thirty million and then went back down to eight million and then went up to sixty million and went back… Would any of us—like none of us invested in Apple on day one and held it for twenty years? So we feel like we’re a little bit smarter than him, but maybe not.
Sheel Mohnot (29:11)
Totally. It’s like I worked at Amazon briefly. I interned at Amazon back in the day and then I chose not to go back afterwards. But yeah, if I had—whatever they had offered me in equity at the time it was like a few hundred thousand dollars of equity, vesting over a few years—that would be worth a lot of money today. But I probably would have just sold it.
Kent Lindstrom (29:37)
Well, and that’s the crypto thing. Like you gotta kinda be crazy. This guy’s worth like two hundred million dollars in crypto. And that means that guy who spent ten dollars on whatever sat there when it went to eight hundred thousand and down to fifty bucks and then back up… You gotta be like, “Yeah.” And that’s why you see, “I lost my password” and that’s why it’s worth two hundred million—because I didn’t sell for five years.
Sheel Mohnot (30:01)
Exactly.
Kent Lindstrom (30:04)
So AI comes in. It seems like it’s one of the real things. What do you think? As we’re maybe not past the bubble, but you can kind of start to see the outlines of what’s happening. What do you think in terms of like what it’s not really taking off as fast as you might think or where it’s having a surprising impact? I’ll give you an example. When I talk to people, other venture managers, and I ask them what they’re doing with AI for their business, I’m very excited to hear what they’re doing so I can copy the best practices. And it’s always kinda like nothing’s really blown me away. It’s sort of like, “We have it write our memos,” or “We have it look at LinkedIn and figure out who’s starting a new company.” And how does that work? It’s like, “Well, just CSU’s changed their job title.” I’m like, you don’t really need AI for that. What is your sense of what’s far more interesting in this area, far less interesting in this other area?
Sheel Mohnot (31:03)
You know it’s interesting. I think we’re all doing the same stuff—we’re all building the same stuff in venture. Like all the stuff you described, and then it’s kind of like piecing stuff together for us and just doing some automation such that my notes are automatically put here and there. And yeah, it feels meh, but it is kind of a big deal in that it saves so much time. I was talking to a partner at a large venture fund a couple of days ago and she was telling me they actually are gonna get rid of some EAs because there’s less work to do because now so much of it is automated. And I think there’s gonna be more of that. But okay, to your point, meh on the margins. It feels like magic sometimes to me still. I still have that feeling of “wow, this is awesome.”
And different phases of AI—like you have it and you don’t. Like living in San Francisco, I think I took my first Waymo like three and a half years ago. That felt like magic then, but now you’re just kind of used to it. And actually the first one was really magic. And then now I have a Tesla that mostly drives itself and it’s just normal now. But I still get that magical feeling from stuff from time to time. Like I started using this company Town, and it just pulls together a bunch of stuff and automatically drafts my emails for me. And there’s stuff like that that is just pretty good. When it gets it right, it’s pretty damn good.
Kent Lindstrom (33:06)
Certainly Waymo is funny. The first time you see it, you’re like, “That’s crazy. There’s nobody driving it.” And then like the fifth time you see it, you’re like, “That’s normal. That makes sense. Like, why is there a dude driving that other car? That seems weird.” But we traveled recently in Europe, like in Germany, and the small things that AI can do are kind of interesting. Like we were on a train in Germany, couldn’t figure out how to open the bathroom door—just couldn’t figure it out. Took a picture of it, and the AI is like, “Yeah, there’s a little tab way up at the top and you gotta pull…” And it’s just like, that’s pretty impressive. And it’s a small thing.
Sheel Mohnot (33:46)
Totally. There’s a million things like that. One—there’s a billboard when you’re driving north into Marin that says “AI will not fix your AC” and it’s a sign for some HVAC company. And they’re wrong because I had an issue with actually my parents’ thermostat. And over the course of an hour I took a bunch of pictures around the house of the thermostat and it was like, “Hey, things are good. That shouldn’t be the issue. Here’s the wiring that you did, it looks fine.” And then I went down to the HVAC system and it had me open up a bunch of panels and I did fix the HVAC system with AI. And that’s the kind of thing you’re talking about. It’s like a little small thing that’s pretty magical. And that probably would have cost a few hundred bucks and time and you can just do it yourself and have the satisfaction.
Kent Lindstrom (34:44)
Yeah. The taking the pictures—not to get off track—but taking the pictures is great because the classic thing that happens is you’ll be reading instructions or you’re learning software and it’s like “click on the reset button” and you’re like, “There is no reset button.” So you take a picture and you go, “You tell me where the reset button is.” And I do it with that little snarky attitude too. And it’s like, “You’re correct. There’s no reset button. It’s the little curly thing in the corner.” It’s pretty neat.
What do you make of the change in venture that I’ve found fascinating—the entrance into the political arena of the big, famous rich guys. Like I just don’t remember. It just used to be kind of you’re here in San Francisco and everybody’s left of Trotsky and that’s what it is. And then in the last three years, almost with a certain amount of glee in the case of Mark Andreessen, these guys have engaged. And also by the way, through guys like Gary Tan at the local level in San Francisco. What do you make of all that?
Sheel Mohnot (35:47)
Yeah, it’s very interesting. I think people for the longest time felt like we’re doing our own thing here in California and in spite of the government, we’re doing it. And then I think really Peter Thiel was one of the early folks to get political. He spoke at the 2016 Republican National Convention and supported Trump. And I thought like that was crazy. And he was right—to support Trump and that Trump ended up winning and, you know, whatever. JD Vance ended up there because of Peter. And it’s all really interesting.
I think in California, we saw how messed up things got and it was for Gary, I think, at risk of threatening what makes San Francisco, California special—being ruined by local politics. And so he got involved and I think did a great job. At the national level, I think I have a lot of skepticism. I would say I’m very centrist. Like I’m definitely not straight Democrat, definitely not straight Republican. I think there could be good things on both sides. I think Trump is insanely corrupt and I think that’s bad for capitalism. And I think everything we’re doing reminds me of growing up in America but with an eye towards India, just making fun of everything that was happening in India in the eighties and nineties. And the corruption—just like everything really reminds me of India. And I remember being a kid going over there, making fun of my cousins for how stupid their politics were. And we’ve got the same thing going on now. It’s really frustrating.
But I think about it in a maybe cynical way, which is there’s this little game that I play with my friends called Sheriff of Nottingham. It’s like a board game. And you have to like—you’re like a customs importer and you let stuff get in or not. And the winning strategy in that game is if you find a corrupt importer, you work with them a lot and you just bribe the shit out of them. And that’s kind of how you win. And there’s some analog there.
Kent Lindstrom (38:38)
Yeah. That’s interesting. My sense is that what kind of happened is people were just ignoring it. Just take the local San Francisco thing, for example. The tech guys were just doing their thing, but they were turning over like seventeen billion dollars a year to the city. And so a whole bunch of people went and got involved and decided what to do with that money. And so when you’re working away at doing whatever you’re doing, there were people who were showing up at the meeting Tuesday afternoon at two o’clock and assigning themselves a bunch of money. Which was also fine, until it just got to the point where people were like, “I’m stepping over a junkie to get to my job at Uber. What the hell is going on? This has gone way too far.” And Gary Tan stepped in.
I think at the national level too you had—the last administration, they weren’t letting mergers happen. They weren’t letting IPOs happen. They were cracking down on crypto. And I think people finally went, “My God, you’re gonna kill us. Like you’re gonna put us out of business.” And I do not like Donald Trump, but my God, what are we gonna do?
Sheel Mohnot (39:47)
Yeah, totally. I agree with that. I think the previous administration in particular just made it so difficult to operate and then you kind of have to embrace—or maybe don’t have to, but then a lot of people were like, “Let me embrace what’s on the other side.” I think the part I struggle with is how much they’ve embraced it and some people think like he’s done nothing wrong. And that’s the part I find fault with. But I totally get why it happened. Like yeah, the Dems were very difficult to work with from a technology perspective.
Kent Lindstrom (40:31)
Well, in between those two things you have California. I’ve done a few billionaire tax podcasts just on my own. And California has what’s called a billionaire tax, and California’s just famous for naming propositions because we don’t have a representative government apparently. And like the proposition will be called like the Clean Water Act for Children and it’s like a tax break for coal miners. I mean it’s nuts how these things work. But the billionaire’s tax—I read it—it’s like lets the legislature make it any amount for any period of time for any income level. Like basically. Which is kind of nuts.
Sheel Mohnot (41:12)
That one is interesting because it actually is not a failure of our elected officials. In fact, the way this whole thing started was one of the DSA guys, I think it was two years ago—one of the DSA representatives, of which there are only a few actually in California—brought up this billionaire tax and it was so unpopular, even in California’s house, that they didn’t even bring it to a vote. So it didn’t get to a vote. And then he took it to the SEIU and they were like, because of our crazy system that you can bring anything on the ballot with signatures, you just need a little bit of money—they are the ones who are bringing it. But actually very few politicians in California are supporting it. So even though I guess that is one—I think the politicians realize it’s a bad thing for California.
Kent Lindstrom (42:22)
It’s called a billionaire’s tax though. It’s the kind of thing people might vote for. And this is complicated. There’s two other things on the ballot that actually counter that. And you have to confuse the electorate, which is so stupid. And there’s so many of these things that you gotta realize there’s like a second-order effect because what it really—the thing that’s chilling. Like just take the simple example that people are talking about: well, we should charge people per mile they drive because you don’t get gas tax from electric cars, right? So let’s say California’s gonna have a mileage tax. Okay, how do you do that? Well, you put a tracker in everybody’s car to figure out how many miles they’re driving. Now the government’s got a tracker in everybody’s car. Like, did you want that? And so the billionaire’s tax—remember you don’t really know who’s a billionaire. “I heard that Larry’s a billionaire or whatever, but is that real estate guy in Orange County a billionaire?” Well, what do you do? Every single person in California lists all of their tangible and intangible assets and reports that to the government. It just gets into that kind of stuff.
But how serious—I’ll kind of wrap up on this a little bit—because if you look at guys like David Sacks, he’s like got pretty far into the doomerism. I don’t know if you listen to any of his stuff, but he’s pretty concerned about the rise of socialism in America, like within a few years. I don’t remember this in previous tech cycles, but the anti-tech thing—the anti-self-driving car, even though it’s crazy sixteen times safer, doesn’t matter. It’s insane. Doesn’t matter. And by the way, do you know who the biggest lobby is? You think it’s the unions—the biggest lobby against? Trial lawyers, right? Because if people don’t get hurt and killed, they don’t make money. Data centers, to a lesser extent nuclear power. This didn’t happen when the mobile phone came out. People weren’t a little bit like “privacy tracker in my pocket,” but people are really stopping data centers. Like Boston’s really not gonna have Waymos and probably New York. What do you make of the kind of anti-tech AI doomerism? I don’t know what to call it, but—
Sheel Mohnot (44:28)
Yeah. I think AI doomerism is something different. I think when I think of AI doomerism—and maybe I don’t have this terminology right—I think AI doomerism is AI is gonna get so powerful that it’s gonna kill us all.
Kent Lindstrom (44:47)
By the way, I’ve asked on this podcast, like Richard Socher, all kinds of smart people, at the end as a joke, because I think I’m kind of funny—”Are we gonna have to blow up the data centers?” And they always never say no. They’re always like, “I don’t think so.” Like, wow.
Sheel Mohnot (45:07)
You know, the first person that scared me about AI was actually Elon Musk. And it was in 2015. And actually Elon and Peter Thiel both put money into this kind of like save-humanity-from-AI nonprofit. And I was at a conference where Elon was talking about it. And at the time he actually was on that side. And I don’t actually—I couldn’t say where he lies today, but doesn’t seem like he’s on that side now. I’m kind of of the opinion that things are gonna be fine and I’m not worried about humanity because we are a resilient people and kind of have gone through many different shifts.
On the anti-data-center, anti-self-driving-car, I think look, there are nuggets that make sense there. Self-driving cars, it’s tough. I think like there’s job displacement fears that are real. Now I tend to think that all job displacement fears don’t really make that much sense. Like as a society, we need to get past it and technology helps. Like—and Mark Andreessen has always said, like what’s really happening when we create like a million jobs is we’re wiping out ten million and adding eleven. Like we ended some cab driver jobs and then added like eleven million Uber drivers, like that kind of thing. Like in the forties, like I think close to like a half to one percent of Americans were like telephone switchboard operators. And that job went away completely. A generation before that, almost everyone was a farmer. And now very few are. So I think humans are resilient. So I’m not really worried about it. But I see like that concern—I do understand. But by no means does it mean we shouldn’t do self-driving cars or anything like that—like we should. But it’s also obviously better for society to have these things.
The data center thing also, there’s some nuggets of it I understand. But on the whole—and the part I understand is data centers—you kind of want them if they’re not giving you any benefit, like they don’t create that many jobs. And it is a strain on the grid. So if you don’t adequately account for those things, then I understand why you wouldn’t want it in your backyard. Because you can get all the benefits of AI without having it in your backyard. But you also wouldn’t want a water sewage treatment plant in your backyard. That’s right. So I think it’s like the AI companies and governments—and they’re doing a good job of this in Virginia. I think people are generally happy they’re getting the tax revenue and that’s great. But I do understand some nugget of the negative folks, but then they’re going way too far and they’re saying like it’s using up all of our water and all this bullshit that isn’t true. But anyway, to your point, there’s a lot of anti-tech sentiment out there and it’s very unfortunate. And I think some of it, like we could have done better messaging around this. I think the AI stuff—people are like, I think Dario might still be saying like, “We’re worried it’s taking all the jobs” and that doesn’t help anything. I don’t know if that’s actually what’s causing the problem. I think there’s just a lot of folks that like any time tech has power now, and any time any group has power, there are gonna be people fighting it.
Kent Lindstrom (49:18)
Do you believe the hypothesis that OpenAI and Anthropic are basically fearmongering—like including the Hugging Face breach thing that happened recently—to get regulated such that they’re inside the tent and everyone else is on the outside of the tent?
Sheel Mohnot (49:37)
I think they’re definitely—I don’t know if those incidents specifically, but I think obviously they’re arguing to be regulated and they’re arguing against open-source AI, which really threatens their business model. And when you get to that scale, of course you’ve gotta fight however you can. Everybody does it. Uber is fighting against self-driving cars too. So you know, that’s the nature of the game. Like you’re doing what’s in the best interest of your shareholders and that’s gonna be fighting against anyone any way you can, including lobbying.
Kent Lindstrom (50:21)
Yeah. Well let me wrap up on this. What are you looking forward to? You’ve had your VC firm for a while, but in some sense not that far along. What are you excited about? Technology—what are you looking forward to? Like what’s the good news?
Sheel Mohnot (50:35)
Yeah. I mean, there’s so many things. I think like we have AI to do a lot of stuff for us, but there’s just like the future is so exciting. Like we have full self-driving. It’s not really full self-driving, but it’s really great for what it is. But I’m excited for being able to just get out of the car and have it park for me. And that’s a total game changer. And probably coming in the not-too-distant future. Obviously Waymo is a different beast, but that kind of thing—it’ll change how we think about traveling around the city. And that kind of automation in every aspect of life is really exciting. And I think the incremental changes we’ve gotten in AI over the past few years are incredible. And it feels like each individual new model—it’s not even really the models, it’s partially the harness around it—they’re just so incredible that I’m excited.
Kent Lindstrom (51:43)
It’s also possible we haven’t seen the thing yet, right? Like mobile came out and everybody was doing check-ins on Foursquare and that was fun. And then Uber came along and said, “Nope, here’s what you do with a mobile phone. You transform transportation.” I wonder if it’s not like that with AI where we’re like, “It’s a note-taking app, great.” And it’s cool. But the thing just—it’s not in our imaginations yet. It’s in someone’s imagination, but not mine.
Sheel Mohnot (52:07)
Totally. And then there’s like the hardware stuff, right? Like what can that change? And I sometimes wear the Meta glasses and it’s like a V2, V3 thing right now, but you can imagine that being an interface for the future. You and I fortunately already wear glasses, so it’ll be easy for us if that is the interface of the future.
Kent Lindstrom (52:32)
Then AI will probably invent a thing that renders glasses useless.
Sheel Mohnot (52:36)
Yeah, totally.
Kent Lindstrom (52:42)
Well, how do people—first of all, I’ll tell you one way. You’re an excellent poster with an A on X. So follow Sheel on X. But how do people, if they want to get in touch with you or follow what you’re thinking, what’s the best way?
Sheel Mohnot (52:53)
Yeah, I feel like X is pretty good. I’m at pitdesi—P-I-T-D-E-S-I—and I think that’s probably the best way. And then, you know, my email’s easy to find if you want to get a hold of me.
Kent Lindstrom (53:04)
All right. Well, thanks so much for doing this.
Sheel Mohnot (53:06)
Absolutely. Thanks, Kent. It was fun.
Kent Lindstrom (53:08)
All right. This has been the Something Ventured Podcast, Sheel Mohnot, my guest. Talk to you next time.