It Doesn't Go According To Plan

Jason Jones

Devin Miller

The Inventive Journey

Podcast for Entrepreneurs

9/19/2020

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The Inventive Journey

Starting and growing a business is a journey. On The Inventive Journey, your host, Devin Miller walks with startups along their different journeys startups take to success (or failure). You also get to hear from featured guests, such as venture firms and angel investors, that provide insight on the paths to a successful inventive journey.

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it doesn't work as you plan it it's just like life i mean as much planning as you want to do you start and it's totally different than what you expected so you have to adjust you have to be very flexible you need to adjust you need to be ready to burn money you need to you need to realize that it takes a long time and it costs a lot of money and you're going to have to figure you're going to have to figure out you're you're going to have to navigate through that in order to get to the other side [Music] hey everyone this is devin miller here with another episode of the inventive journey i am your host devin miller the uh serial entrepreneur that's founded several uh seven and eight figure businesses as well as the founder of miller ip law where we help uh patents and trade or startups and uh small businesses with their patents and trademarks and uh on today's episode we have another great guest uh jason jones and uh he will uh share a little bit more about himself but as a quick intro so he uh it launched his first startup in uh around 2006 and has since then uh or created about an additional or a total i can't remember which of uh six or six businesses um several which have uh continued on after his departure and now he's on to his uh current business which is uh centrifuge and it's uh kind of a blockchain or decentralizing assets and finances and he'll be able to share a little bit more about that and how that they've created that and what they're doing different in the finance space um so welcome on to the podcast jason thanks devin nice to nice to be here thanks for having me my pleasure so i gave this a short intro about a little bit about what you guys have done and what you're doing but maybe if you can walk us through a bit of your journey and uh how that's uh how what led up to where you're at today sure thing so um number one um i love your podcast i love that you're talking about the entrepreneurial journey this is something i'm passionate about and uh and it's what i do every day i live an entrepreneurial dream right that's i'm i'm a dreamer right i like to create new businesses and create new ideas and um and take something that's just a little flicker in your mind and kind of convert it into an actual real a real business so um from a career perspective um i spent uh my early years um out of college um working at some big investment companies i worked at fidelity investments and at goldman sachs and had a couple big hedge funds and and i had a very um successful career as a analyst portfolio manager for for hedge funds i could have stuck around there and had a very comfortable life um if i chose to do that but i would get in every day into that job and think to myself i i know from from my head like this is a good place to be i'm going to make a lot of money from my heart i just don't want to do this i want to i want to build i want to build things like i'm just a builder and i didn't have any chance to do that and i when i projected myself out i could see myself continuing to you know work as part of the engine but not actually building the engines that that's that's kind of what would uh what bothered me and i remember when i um when i announced that i was leaving and stepped out the door to start my new business that was that was a major defining moment in my life i felt like i am now in control of my own life whatever i do from here on out it's up to me to you know put food on the table for for myself and my family um every day from here on out it's not i can't just sit back in some cushy job and get paid i have to earn the money every day hmm that wasn't started so maybe just jumping into that just a little bit so you know goldman sachs is that sorry or you said that's where you're at right so certainly a name recognizable big company to your point you know provides a bit of that security and nice probably nice perks and benefits and paychecks and that so with all that what was the motivation or what was the tipping point or when did you say okay yes i have all these but i really want to go pursue my own journey i mean typically it's not just you know maybe it was but typically not just wake up one morning say okay i'm done i'm going to go pursue my own journey so was it kind of a general process or was there something that you know had this idea that i just have to pursue or how did you make that decision or final decision to go pursue the entrepreneurial life um i knew i was gonna be an entrepreneur my entire life um my my family my grandfather was an entrepreneur my grandmother was an entrepreneur my dad you know growing up we probably started 12 businesses every few years there was a new business that we started was it was fun um and there was definitely a rollercoaster life growing up of highs and lows of you know entrepreneurship um so i grew up with that um and i also you know i had my paper out and i had a moving business and i had a painting business house painting business so i was always kind of building businesses for myself um i went to babson college which is number one in entrepreneurship i went there because i want to be an entrepreneur so it was always my dream to be an entrepreneur it's like my driving passion when i graduated i wanted to build a foundation for myself i felt like if i had a good foundation in business i would be that much better when i'm ready to do this for myself for real um and that's why i went to work at the big kind of investment companies learned a lot about accounting and finance and kind of how how businesses are structured and figured out how to how to value a business how to you know what are the what are the levers that you know drive success um all that was great and every day when i was in there all i could think about is how can i do this for myself every day so it was just about gathering up enough courage to say i'm ready to go on my own never look back so you finally gathered up enough courage you said okay as much as i i enjoy the comforts of a big business and you know the notoriety or the you know benefits and everything else i'm gonna go out on my own so you know as you decided that was it you already had an idea lined up and you're getting you know you got the thing that you're going to go after i was like hey i'm going to make the leap and i'll figure it out as i go along or how did you kind of make that transition from you know not in a bad way big business or corporate or corporate you know corporate job to what was your entrepreneurial journey yeah so um i had a plan but um but until you actually start until you actually start something like all the plan you can do all the planning in the world and then when you have to start something it gets real right so um i had a plan on how i was going to create this data-driven hedge fund um because i was working at hedge fund and that's what i knew so i was going to build this data-driven hedge fund and i stepped away knowing hey i have an idea i don't know anything about starting a business like this i know how to you know be an analyst at a business like this but in order to start this but you know i have to start somewhere and i can either spend the next 10 years of my life kind of getting wealthy for myself but building up this other guy's hedge fund or i can just go out on my own and start it got gotta start somewhere so i went out and started burning money as i came up with an idea of how i could actually launch a hedge fund how i could convince people to invest in me who was nobody um how i could do it and that was really hard that was really hard um i loved it but it was really hard and i realized i needed to pick up kind of side jobs to support myself as i built the business it was one of one of my first lessons that i learned is that there are there are some businesses that are services businesses that are kind of profitable from day one which are great businesses and there's other businesses that are kind of product oriented or take a long time before they make money but when they do make money they make a ton of money and the hedge fund is kind of in that second category right you you're only you always hear about successful hedge fund managers those are guys that make that have like a billion dollars or 10 billion dollars under management and they're living off of fees fat fees but when you're starting you make nothing you make nothing so um you have to i had to figure out how to like put it all together put the business plan together put it all together and also you know keep my head above water by side jobs so i was a consultant for uh for about two years i was a consultant while also running my hedge fund um and that that also introduced me to this idea like you don't need to have one job at a time you can have multiple jobs at a time that's okay wear a couple different hats learn a couple different things get a couple streams of income coming in if you can so um so yeah so that's what i started doing i started consulting while building my business eventually got the business off the ground i ran that fund for seven years uh ran the fund and launched the second fund so i had a hedge fund and a venture fund i invested i i ran both of them um brought people on board um and grew and grew it so that was a good experience that first one okay so you ran so it wasn't necessary if i were to if i'm putting words in your mouth certainly stopped me but it wasn't necessarily you didn't enjoy you know the goldman sachs type worker you know managing funds and managing assets is more of hey i want to do it my own way i want to be my own boss or make my own decisions and guide the path that i want to take and so when you decided to jump out it was kind of hey i'll take the lessons i've learned from goldman sachs and others is what they're doing and then fight you know develop my own way or my own path and own clientele and start to build the business is that is that kind of accurate what you're saying yeah and it was really more about building the business than it was about sitting and picking stocks like i hired people to pick stocks and help help there a little bit but my passion is really in putting the business together as opposed to you know i don't mind making investments and i'm decent at it but it's not really where my passion is really and how to put all the pieces together to make it all work okay so you jumped out of that and you know you mentioned that you know it took a few years to build things to get thing you know figure things out and you said burn cash or i would say paying for an edu you know a real education you know you get a the the money that you burn is really oftentimes your lessons that you learn of what you shouldn't do or how you should do things better or whatnot but you did that so you know so you did that for a period of time and how long have how long of a period of time did you continue to run those couple different funds seven years they did it for seven years and actually i launched my fund september 2nd 2008. that's when i launched like 10 days later the whole world blew up yeah exactly exactly so oh man that was a not great timing um my fund actually did really well i was i was up for the year in 2008 so i had a good year um 2009 i was not so lucky well the market came roaring back in 2009 it was all the really bad companies that got decimated that did the best i was short those companies like really bad companies and the good companies didn't do as well in 2009 so 2009 was actually a tough year for me um whereas 2008 i was okay um but uh but generally yeah so it took me a while to get started my my hedge fund actually never i enjoyed doing it but it never like really took off the venture fund did a lot better and uh and i did well with that and that was you know so i same firm two different businesses so that was um that was one thing okay then at the same time i i started um playing around with you know with technology and i was an internet analyst by the way so i started playing around technology and i was like this is really cool that you can like take people they can come to my website they can open an account and they can start investing or i can start investing for them they can pick a strategy and i can start investing for them and i played around with this idea this was 2008 so this is my second business um and we played around this idea of like um of of doing that like an online investment firm and there were three companies that were founded that year my company was called elf clone and then there was two others one of them was called kaching the other one was called kovaster kovester raised bunch money and then they burned out kaching had a weird name then all of a sudden benchmark invested in them and then the founding partner of benchmark left benchmark to become the ceo of kaching and we were like watch like it's like you never hear about that like he left his venture firm to be the ceo they changed the name to wealthfront it's now a giant robo-advisor right so that that was that first year we were just creating it wasn't they weren't called robo advisors back then we were just kind of creating this concept um but they ended up being rope advisors those are the very early stages of the of the robo advisor trend um and alpha clone continues on to this day it's good it's good good company um based in san francisco um lived in well you did that for you know so you did that you saw a little bit of the evolution you made it through 2008 you know profit in 2008 2009 you weathered the storm along with a whole bunch i'm sure of other people we did that for seven years and that brings us up to about 2015 or so and what you know so as you're doing that what made you decide what was the next jump for the next transition or the next venture along the journey then i launched um no it was 2006 to 2011 that was my venture fund uh i'm in my my hedge fund um two years to get going really so i guess was uh five years of running it two years to plan five years of running it um but anyway 2011 um i found a lending club which i thought was a really cool concept you could take like i didn't know anything about credit but i did know about online marketplaces and this idea that somebody has credit card debt at 25 and i could come in there and i could give them a loan at 10 using lending club i could give them a loan at 10 at 10 or 12 they could refinance their credit card down to 10 or 12 percent i get a great return and i directly benefit somebody who now has refinanced their credit card and taking kind of their financial life in putting that in order and i just thought that was such a cool concept like i'm investing in somebody else's credit i'm helping them straight straighten out their life and i'm also getting an awesome return so it helps me and it helps them so i just thought conceptually peer-to-peer lending is the coolest thing ever like i just love this using technology build a marketplace taking two people who couldn't find each other beforehand but now with an online marketplace could connect so we um so i i totally just fell in love with that business and i was like all right i'm going to launch a fund and a robo advisor in the peer-to-peer lending space so that was my next venture so i launched a robo advisor that's uh that's now the largest marketplace landing robo advisor um and uh that's that's done uh pretty well so far so you do that was with the drive with launching the robo advisor more of hey you know i'm worn out with the fun you know the funds that i'm managing now there's more of hey i see this is where the evolution of where the marketplace is going or hey this is really cool technology and i want to go you know dive be you know on the forefront or the cutting edge and i want to get it now or all the above or how did you kind of you know what made you jump from or jump from the the couple fungi rose or doing at that time over to more of the robo advisor evolution you know i just found i found um we were looking at lending club as an investment in our venture fund and that's when i actually opened an account and started playing with it and learned about business models like i love this and and said okay this is like this is better than anything i've done before i just want to go you know all in on this okay so um there was about a year where i ran both and then i was like i'm just going to close down my funds and i'm going to just focus on this i built up the roadvisor and i built up the robo advisor i said okay let's have a little conference get all the all the all the uh peer-to-peer lending ceos in one room so we can figure out who to invest with um they can if they want to pitch to me there's probably other people who want to do that as well that conference business which was supposed to be a side business became huge and um it grew it grew in the u.s and then we expanded to china and to europe and it became one of the largest fintech events you know in the world um so that was like out of nowhere i didn't expect that at all um so for about five years i ran both the the fund and the um and the events company we built them both up we got them to like 50 people um and uh and global kind of the global network uh that worked really well um those those live on today okay no i think that makes makes sense so so then you so you know you kind of had you know almost a trip it seems like you know you kind of stayed in the the same realm of you know asset management and investing and whatnot but then as you know new opportunities came along it's something that made sense or was exciting or otherwise you saw that's where the you know saw things that's where things are headed you kind of try to to make those transitions or curves so as you did that and so now you did the robo fun for a while and then did you sell you know did you sell your steak did that get acquired did you shut it down how did that kind of transition to where you're at you know the to the next venture yeah so we raised some venture money for that uh the new management team is running that at this point um i still own a stake in it um but we have another team that runs it um and uh and same with my events company um we have uh we have some investors in that as well and there's actually my my co-founders for the events company continue to run the events company after about five years i was getting the itch to do my next thing and um i was kind of looking at uh just the whole my whole trend is the whole trend has been about the internet waves of the internet where where the internet's taking me and um and i thought the blockchain was like the next next layer of the internet that was being built and i felt like that's something i really wanted to focus on so um at this point in time i had now started and built uh several companies um and felt pretty confident in my ability as an entrepreneur and i went to a company called consensus which is a venture incubator for blockchain companies and i became an entrepreneur in residence there and i basically it was a job where i could sit sit back and kind of look at a bunch of different kind of emerging companies and um and and uh management teams and help where i could um and it was i was like a kind of a kid in the candy store at that point it switched at that point from being uh a builder to being like an advisor to very early stage companies and i helped a bunch of them kind of get going um i also kind of honed in on what i cared about and that's when i found centrifuge my current blockchain company um and while i didn't start centrifuge i found them you know a couple months into their existence and um and after uh about a year of getting to know them while i was kind of at consensus i ended up kind of jumping the fence and going to join them to build centrifuge so so when you got to the current which is centrifuge so did you you know if they were already established did you go in and say hey i think we're doing really cool i want a job there hey i want to invest or hey i want to explore opportunities or kind of how did you how did you you know as opposed to starting your own thing you just say hey i've got an idea i want to make my own thing how did you kind of get involved with them yeah good question so at first i was like hey i want to invest like this is what i think this is very cool and this is right up my alley i want to invest but then as i started looking at them closer i fell more and more in love with what they were building their vision and then i approached them and said hey you know like i want to help you build it like so if you need help building it i you know consider me a a candidate and you know my timing was right i was lucky i i just reached out on a whim and they needed somebody like me um right at that time so i just kind of slotted right in it was nice timing and it it all worked out pretty well yeah but that was that was a little odd for me because you know i i built a bunch of companies and then now all of a sudden i'm helping another co-founding team build their their vision um and trying to do that kind of maintain that that leadership and vision side but also supporting what i know is their vision making sure we get their their mission fulfilled okay so you did that and that's where you're you're currently still out there right you're still there still working for them so you know a couple ques because it seems like you know there's a lot of different personalities and you know as far and i'm probably more of what i'll describe of you know you want it's fun to build a company up to a point or a size or a point in time right meaning there's a fun of figuring out the new business figuring out the market how do you get in what pivots you make and then you start to grow right and as you start to grow it it kind of evolves right so it becomes less of a startup and more of a business if that makes sense in the sense that you know it's no longer figuring out as much of those problems you know how do you get the initial product rather now how do you grow it how do you expand the team how do you reach more customers and so did you know was part of what you saw is kind of you know as you move from and if i again put words in your mouth certainly taught me but was it you know kind of hey is i is i see the company go to a certain size the fun of doing the entrepreneur the startup and that kind of you know shifts and then that's kind of when it naturally makes sense to go on to the next venture is that does that line up with what you're saying that that is my personality that is my stage i like the early stage the innovative stage as soon as it kind of forms into a real business um that's when it's time for me to move on to the next thing um it's just um it's just where my interest lies and i at this point in my career i've got 10. i've got a list of 10 businesses that i want to start um and it's just about kicking them off you know like going there spending some time like really digging in putting a team together getting the vision in place getting it rolling um probably you know seeing customer traction kind of getting that early stage traction but once like all the pieces are in place and now it's time to just totally scale that's probably right when i want to take off and start the next thing um i am definitely on the list yeah so i am not definitely not done and i have a whole long list of ones that i'm planning to do i have the same problem where i always have a whole bunch of lists but i always have my role has generally been that you know i have you know seems like i'll have two or three ideas by the time it's lunch and then another couple ideas by the time it's dinner oh yeah and 95 of them are all bad ideas that i should never really pursue my my thing has always been is i'll write it down put it on a sticky note or on a piece of paper i'll come back to it in a week and if i'm still excited about it is when i had the original idea it probably has some air and if it after that we can say oh that's a stupid idea there's that's never going to work then i tend to move on so i think that you know i think but that having there's certainly that mentality of it's fun to grow in and to get a business start a business and grow it to a point and then as it gets big and it takes on a life of its own then it's fun to go to the next scene so i certainly get that uh that uh mentality and i tend to probably fit in that same bucket so so as you guys can i'll go ahead i i was just gonna say like i thought you know i i started my career thinking i want to be an entrepreneur i get to be i get to babson and get to school and i learn about venture capital and i was like venture capital is awesome i can i can invest in 10 different companies and i can help 10 different companies grow once they can be an entrepreneur 10 times over right so i did that uh i ended up launching a venture fund and i did that um but that's not that didn't didn't hit the point for me like this is what hits the point to me it's starting a business growing it moving on doing it again and again and again that it's not being entrepreneurs being an operator and building building building building building um that's what i love to do so uh when you're a vc you don't get that same you you're sitting on the sideline helping you're not actually building a different different mentality yeah it makes sense so so now as you've done that you've gone through the different businesses um you know what which which idea or which one has been your most fun and it probably isn't the current one because that's usually the answer but if you say hey i've done the six businesses if i could say this is when i had the most fun and why it is which one would which one of it would it be i mean the probably the events business um vince business was hard but it was so different it it opened the world to me right i was you know a jet setter for five years flying all over the world to meet top business leaders and you know help them kind of like big sponsors that were coming to the events or big big time speakers that were coming to the event so every day i'd be talking to you know world leaders um world leaders in the in the financial services space um so that was a totally different um experience than the others where it's really like heads down like turning the cranks kind of getting the getting the levers and the pulleys working right you know um the events one was more a platform with uh with media and platform and reach globally that was an interesting experience from that perspective yeah okay no i think that makes sense so well as we start to wrap up towards the end of the podcast and always plenty of fun things to talk about um and never enough time to do it so with that i always have two questions i asked at the end of the podcast so we'll kind of jump to those now so within all of the or both you know working for goldman sachs making the different startups working with them growing them and everything else but then all of that as a back set what was the worst business decision you ever made um worst business decision or one of the worst most of my companies have been perpetually underfunded so there's there's this level of money that you need to raise do do a company properly some people get crazy amount of venture money and then they're over funded and they don't have any drive i would say um my my businesses a couple of my businesses could have been a lot bigger if i had raised more money earlier on um so i would say that's uh that's one of the um one of the lessons okay and you know and i think that's it's a hard balance right because a lot of times when you're looking for funding it's a balance of hey we need enough money to get things going if we don't have enough runway we're going to run out and we're going to have half the air things halfway built and you're not going to make it through and it said on the flip side you take too much money you give up too much equity right and so then you're you lose control of your business or you otherwise you know aren't able to do it and then i'd also say you know one of the other things that i think is interesting is that you also you take too much money too early on it can actually hamper the business in the sense that now you have too high of an evaluation right now you're saying now because we you know the last round we were evaluated and i'm just making up a number 10 million dollars we have to we don't want to have a down round so now we have to adjust the fire company being worth 20 million or 50 million the next round and sometimes you take that money too early or too much too early it can actually hamper the business because you're not able to continually grow it as you know have an uproar so i think on a lot of friends you know getting that right balance of taking the right amount of money without too much or too little is always a hard balance because you never know what how much money you'll need when you'll need it and how much to take and how much not to take so i certainly think it makes sense so now if i to jump over to the um the second question i always ask is so if you're talking to someone that's just getting into startups or just getting into small businesses what would be the one piece of advice you'd give them um one piece of advice i would say that um you just you need to have a lot of drive and you need to be really creative it's not going to work it kind of started how we started it doesn't work as you plan it it's just like life i mean as much planning as you want to do you start and it's totally different than what you expected so um you have to adjust you have to be very flexible you need to adjust um you need to be ready to burn money you need to you need to realize that it takes a long time and it costs a lot of money and you're going to have to figure you're going to have to figure out your you're going to have to navigate through that in order to get to the other side and the other side may not come and it may be something that you give it a shot and it doesn't work and then you you know go back to a career somewhere um or you just figure it out you just keep scrapping so i would say that's it keep scrapping that's my that is my tip but you didn't hit on one thing that i thought was and it's always a hard thing in the in the one sense you want to be as frugal as you can right and that's kind of a lot of time to start a mentality is hey we've only got so much money we don't have you know most startups and you always hear that you know the flip side of you know like an uber or something that they just have so much money that they went and just burned a whole bunch and you know went crazy with it but i'd say the vast majority of startups who don't hear which are the vast majority of startups you're saying hey we only we want to be as conservative as we can with cash we want to extend the runway so how do you decide when it is to spend the cash when it is to make the investments and when is the time to keep cash reserves or to hold on to that money what was your guiding principle um that's tough right i would say um as the businesses start to scale i'd say it's even tougher because then you have something that's successful and you're kind of trying to plan your cash flow you never want to be in a position where you are accelerating but you don't have the cash to you're going to run out of cash to pay your employees or just kind of keep growing as you need to grow so that very delicate balance of um i'd say cash flow cycles is really really hard as you start scaling and i think a lot of businesses fail because they may be successful but there's these cash flow cycles where they have these trough these cash troughs and it could completely wipe them out before they get to the next next growth cycle so um uh i would say managing cash having you know being good with the books good with accounting um understand like projecting out where the cash is going to be the next 12 or 18 months that's super important all right no i think that's all that's all good good input and good insight so so as we're wrapping up people want to know more about you know you how to use blockchain as far as you know with assets and management and what you guys are doing at centrifuge they won't ask anything about you and your journey of the different uh funds you've done and the different things you've built or just want to connect to reach out they want to invest or any of the above what would be um the best way to reach out to your connect up with you uh probably on linkedin you can find me jason jones look up centrifuge on linkedin you can find me there if you want to find me on twitter it's the dr j um but either way um probably easiest is linkedin all right well certainly uh invite people to to check you out there and uh connect up and either support uh use or otherwise or use use investment vehicle or assets and whatnot and check you out more information from you well thanks jason for coming on it's been fun to have you on it's been a pleasure um to hear about your journey and a little bit about how you got to where you guys are out today and uh wish you guys the best next legs of your journey and i'm sure they'll be exciting ones for those of you that have your own journey to tell and want to come on the podcast and share it feel free to go to inventivejourneyguest.com and apply to be a guest if you're a listener make sure to click subscribe on either any of the platforms you're listening to so you get a heads up on when this episode and all the new episodes go live and uh certainly if you have any uh needs for and help for uh patents and trademarks as a startup for small business feel free to reach out to us in miller ip law jason thank you again for coming on it's been a pleasure it's been fun to hear your journey and wish you the best our best next part of your journey thanks devin it's been it's been fun i appreciate it all right [Music] you English (auto-generated) All Sales Recently uploaded