Steve Pretre, partner at World Innovation Lab (WiL), takes us on an extraordinary journey from his upbringing in Silicon Valley to becoming a key player in the insurtech and venture capital worlds. He shares the thrilling journey of starting Metromile and leading it through the IPO stage, highlighting some of the biggest challenges of starting an insurtech startup. Steve also dispels the skepticism about corporate venture capital firms (CVCs).
Steve Pretre, partner at World Innovation Lab (WiL), takes us on an extraordinary journey from his upbringing in Silicon Valley to becoming a key player in the insurtech and venture capital worlds. He shares the thrilling journey of starting Metromile and leading it through the IPO stage, highlighting some of the biggest challenges of starting an insurtech startup. Steve also dispels the skepticism about corporate venture capital firms (CVCs).
In this episode, you’ll learn:
[3:47] Discover invaluable lessons from the pioneers of the insurtech industry
[7:40] The story of Metromile: “I was excited and naive enough to think that we could pull that off.” - Steve Pretre
[15:43] Early-stage investing isn't just about funds but also about providing strategic support to startups
[22:40] Insights into corporate venture capital and why alignment of goals is paramount
[27:18] The importance of staying true to your business vision and not blindly following VC advice
The non-profit organization that Steve is passionate about: Woodside Wildebeests
About Steve Pretre
Steve Pretre is a partner at World Innovation Lab. He is a veteran of multiple successful startups and has deep operating experience across product development, marketing, and strategic planning. Prior to joining World Innovation Lab, Steve was the co-founder and CEO of Metromile, an early innovator that paved the path for the current wave of insurance startups. He also held executive roles at Asurion, leading their mobile applications business unit as the company grew.
About World Innovation Lab
World Innovation Lab is a venture capital fund supported by various governments and global corporations. WiL invests in companies looking to expand into new markets. They assist US startups in entering Japan and Asia and support Japanese startups in global expansion. Notable recent direct investments include Algolia, Asana, Automation Anywhere, Auth0, DataRobot, Kong, Mercari, MURAL, TransferWise, and Unqork. WiL also supports established and emerging venture funds. Additionally, they collaborate with corporate investors to enhance innovation through new business creation, startup partnerships, and cultural change. WiL acts as a bridge between startups and corporations in key innovation hubs globally, initially focusing on Japan and the US.
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Even through the process, I try and be pretty transparent of these are the things I'm looking at. This is what I'm thinking about as I'm looking at it. This is why I'm asking for the data that I'm asking for and giving the feedback of here's the things that I think you should be thinking about should be changing.
And I also caveat that with you should never change your business based on something a VC says. I'm looking at it for two weeks. You've been living this for probably a year or more. So you understand the solution a lot more.
Gopi Rangan: You are listening to The Sure Shot Entrepreneur - a podcast for founders with ambitious ideas. Venture capital investors and other early believers tell you relatable, insightful, and authentic stories to help you realize your vision.
Welcome to The Sure Shot Entrepreneur. My guest today is Steve Pretre. He's a partner at World Innovation Labs. He has been a founder, he's been an investor, and he's been in the Silicon Valley for many, many years.
So we're going to ask him about his journey. How did he become a venture capital investor now that he is wearing a hat as a VC? How does he look at founders and startups? What advice does he give to founders based on his own experience as a founder? And what gets him excited? What kind of topics does he invest in?
Steve, welcome to The Sure Shot Entrepreneur.
Steve Pretre: Thank you. It's good to be here. And just to let everyone know, Gopi and I have talked about this. I don't like doing podcasts. I'm doing this because Gopi is a good friend and wanted to do this with him specifically.
Gopi Rangan: Well, thank you, Steve. I know that this is not something that you do often.
It's a very rare special moment that we're able to get you on the mic. Let's see what we come up with. Let's start with you. You are a very rare local Silicon Valley citizen who actually grew up here. You never left to go anywhere else. You actually built your entire career and life here, right?
Steve Pretre: Yeah. So I was born in San Francisco, went to high school in Half Moon Bay and was the fourth kid ever to go from Half Moon Bay high to Stanford and knew the other three people who'd gone just a few years before me. So all four of us were there at the same time when we were there. So it was, uh, Kind of a interesting experience going from what then was a farming and fishing community and into a place like Stanford.
Gopi Rangan: Let's start with the early career. Like what got you into the world of technology? And what was your journey?
Steve Pretre: Well, I mean, obviously growing up in the area, it was something that I'd seen growing up, you know, Steve Jobs founding Apple. That was all happening as I was growing up in the area. But it was interesting first startup I did was actually in insurance, um, at RMS. Hemant Shah was the founder there. He and I actually lived in the same house on campus undergrad for a couple of years before he graduated and founded RMS.
His father was chairman of the civil engineering department at Stanford, which is where some of the early research that had built technology came from. And. That was just a very unique group and experience of probably 90 percent of the people at the startup when I was there. And I was kind of one of the first 10 to 15 people there were all within a couple of years of each other from Stanford knowing each other undergrad. And so we were building a company but also kind of growing up together in a lot of ways. And I think that that was a unique culture and just some incredible individuals from there that have gone off and started other companies, run other companies, become VCs. It was a pretty unique group that I learned just a tremendous amount from.
Gopi Rangan: RMS is a revolutionary company. At the time when it was created, it was one of the first risk modeling companies that took technology seriously and was built on that. And that has really transformed the way insurance companies work.
Steve Pretre: Yeah.
Gopi Rangan: You spent many years there and eventually you decided to start a company.
Steve Pretre: Before we jump to that, RMS, like you said, modeling company, I think that's where I'd learned insurance and kind of started to fall in love with the industry and how risk was quantified and how it was kind of transferred across the markets and understanding that.
And RMS was pretty unique, but it also was One of those of timing is right to where as the company started, bad things happened, which were good for the company in that, you know, within a few years, you had Hurricane Andrew that came through almost kind of wiped out half the industry. And then you had both Loma Prieta and Northridge earthquakes.
And I think that those events we're just a wake up call for the entire industry that made them realize, okay, we've got to figure out better ways to manage model risk and we can't do it. The traditional means actuarial data does not help us do that. And so it forced an adoption of a new model of doing this.
And so the company was in some ways lucky to be right place, right time with a solution for That was desperately needed. And so learn through that. From there, I actually ended up going to another company called Asurion. And again, there it was. The person that I had worked for at RMS became the CEO at that company when they were doing probably about 70 million in revenue at the time. He brought me in a few years later, but it was a company at the time that was doing handset insurance.
You know, it's AppleCare before AppleCare and doing it through the carriers. And again, it was one of those unique timing to where. It was just at the time that cell phones were taking off... initially flip phones and then obviously the launch of the iPhones and was able to take advantage of that.
And there it was seeing how insurance could work. when plugged into the right kind of distribution channel. So this is a product that you told someone to go buy, you know, insurance for your phone after you've bought it, less than 1 percent of people would ever do that. But a product where important value proposition and offered at the right point in time of you just got this phone that was 800 in today's dollars, probably 1, 600.
It's free with the carrier plan, but. If you break it, lose it, whatever, you're going to have to pay for it. And people are like, Oh, wow, that's a really big expense for me. Oh, but you get this, you know, insurance product when it covers any of those cases, enormous adoption. But it was because of the company's ability to really get embedded in that channel and learn how to sell effectively through that channel.
I think when I started the company was doing a few hundred million dollars in revenue and 5 years later it was doing multiple billions of dollars in revenue. So being able to kind of watch again a change in a product that people needed that hadn't existed before, plugged into the right channel, being able to get to scale, I was thinking about when, like you said, I did end up going and when I left Asurion meeting up with my co founder Dave and starting Metromile.
Gopi Rangan: That's an important moment. I love how you describe your career. Everything revolves around measuring, managing risk. And when we do that well, then there's more fairness in the world. The world is a level playing field. People are more eager to buy things that are a little bit risky, like gadgets and things like that. That improves quality of life. So overall, it's a good thing when there's more transparency on how we measure risk. Metromile was a pioneer. You were a pioneer in the insurtech world, when all of this was brought into the world of insurance. Technology had never really touched the world of insurance in such a significant way until then. RMS was one of the early companies that attempted to do this. But insurtech revolution started with companies like Metromile. Were you scared? Were you excited? How did that happen?
Steve Pretre: I was excited and naive enough to think that we could pull that off. And learned a lot through that process, and there were definitely some things that surprised me along the way. And you know, thinking about Metro Model early on, of this idea, and the data was very clear at the time, of looking at the changes in society particularly the peoples in their 20s and 30s moving back into urban areas, starting to use more public transportation, Uber and Lyft were starting at the time.
And so there was a segment of the population that was just driving a lot less than historically people would drove. And so we could easily see large portions of that segment driving 3000 miles a year. Three, four or 5, 000 miles a year and looking at other carriers pricing the way it was set up.
And obviously you can see that by pulling their rate filings and looking at the way that it's in there. Now, the difference between someone driving 2, 000 miles a year and someone driving 20, 000 miles a year might be 15%. And it just didn't make any sense because it's just obvious that, you know, the more you're driving, the more you're on the road, the more likely something is going to happen.
And so I think that insight looking at that and thinking about the opportunity to potentially go and build an iconic brand, right? And say, we can actually build a brand that people know. And it does something to actually help a segment of the population that is being dramatically underserved. And so that was the challenge that made it fun.
And it kind of knew enough to be dangerous, but not enough to convince myself that it couldn't be done. And so choked into to go try and do it.
Gopi Rangan: The high risk, high mileage drivers are subsidized by low risk, low mileage drivers. And that's not fair. It would be good to put a cohort of high mileage drivers who are priced differently and low mileage drivers who are priced differently. That would be the right thing to do and that's what you wanted to bring to the world. Absolutely a fantastic brand that has built over the years and I would call it a great success story. But the story hasn't played out exactly like how it could have, the potential was far more amazing. What happened?
Steve Pretre: Yeah, I think there were... The company went IPO. It did. And I think there were a number of things that definitely learned along the way. One of the biggest ones, when I look at companies now on the other side, the direct to consumer model with insurance is just, it's hard, particularly when you're not at scale like a Geico and a Progressive and others. And even though we built a great brand, built a great product, delivered great service, and I'll credit Dan who ran the company through the IPO for just doing a tremendous job to do that. And I was talking to him a couple weeks ago and told him I still every time I talk to a founder, half the time they're like, "Oh, I'm a Metromile customer. And I had this and this had happened and it was an amazing experience. And wow, you guys did a really good job." And that's a reflection on him and the job he was able to do. and this is not just a Metromile thing, but thinking about insurance and a couple of adages that people always use of insurance is sold, not bought and the idea that if you look at the vast majority of insurance products, People buy when they're forced to buy them. They're not buying them as a discretionary purchase. So you buy auto insurance because you're required to have it to be out on the road. You buy homeowner's insurance because your mortgage provider requires that you have it.
There are a few life insurance and a few other categories where it is a discretionary purchase, but in most of the cases, it's something that people aren't going out and shopping for people aren't excited to go by and even like looking at the assuring model where left to their own devices, less than 1 percent of people would buy that product, but offered the product at the right point in time, it's paired with another transaction.
I'm doing it fits with that. There's a value proposition. I understand it more than half the people are going to buy the product at that point. And so looking at with Metromile, the, the challenge of going direct to consumer, trying to build a brand, and just trying to get people to engage even with a value proposition that was obvious for them.
I'm driving less, I should save more. This is a perfect product for me. It's just harder to get people to switch than I would have anticipated going in. I think that was one of the lessons learned. The other lesson learned was certainly think about insurance and the regulatory environment. The 50 state regime of going and having to get kind of...
You have to almost educate a lot of the
regulators on what this is.
Educate regulators, but just the process of I've got to file in 50 different states and get approved and just going through that, I think regulators serve a good purpose. I'm not anti regulator, anti regulation, but if you look at it from a startup's perspective of the most important thing to a startup is speed.
Speed, efficiency, keeping costs down, being able to move quickly, and just that process of I've now to go to go and I've got a three to six month process that I've got to repeat 50 times before I can get in all 50 states is very debilitating. And particularly when you start thinking about something like a Metromile type of product, you know, in some cases when you say, okay, the direct consumer model is hard.
Well, your alternative is to partner with bigger people where you can go through channels and sell. Well, if you're going to a large partner that is operating in all 50 states, you're saying, well, I can only offer this in 10 states that doesn't work. And so I think that that regime, as much of a consumer protection and other benefits is provide for a startup, it was harder and more of an issue than I expected it to be starting out.
I thought, yes, it'll take time. It'll take perseverance, but just kind of think that friction was challenging.
Gopi Rangan: You are the co founder and first CEO of Metromile. Congratulations to you for achieving what Metromile has achieved so far. You got the attention off all large insurance companies to take a look at technology more closely.
GPS telematics and various other things for auto. But every other aspect of the insurance world is now closely paying attention to technology. Another thing that also happened was startup founders felt like, "Oh, there's a huge opportunity here that I could actually build an insurtech-focused company, focusing on an industry that's largely sleepy with very little R and D."
So there's a massive opportunity and that attracted a lot of very good founders. You kind of led the path for future insurtech companies to come into the world. Is it difficult to build an insurtech startup? What's your advice to founders? Yeah. Starting companies in this space?
Steve Pretre: It's obviously challenging. It's got its own unique set of challenges, but it's doable. It's very doable. There are a number of factors I think about when founders are coming to us. And one of them is going back to kind of what I was talking about the is insurance bought or sold. And if founders coming to me and saying, "Oh, I've got this product, the market is underserved, it's underinsured", and a lot of times it's people who are coming from an insurance background and seeing a market that, "Oh, wait, only 20 percent of people in this market are buying insurance. It should be a lot higher than that." I asked the question of, well, who's your audience here? I mean, I think that's something that people really should understand. Is it that the end customer out there is sitting there saying, "Oh shoot, I don't have insurance for this. I'm missing out. How can I get insurance? There's not a product available to me or too hard to buy or too expensive for some reason." Or is it that The people selling the insurance feel like I could sell more of this if it was easier for me to sell. And so whose problem are you actually solving? And both are very legitimate audiences to be satisfying.
But really understanding with the product you're doing, is this a product where you're enabling the sellers or enabling the buyers of the product? And so what problem are you really solving? And then once you've determined that, focusing your solution around, okay, These are actually the things I'm needing to solve in terms of what is my go to market look like, what is my product look like and really getting that focus.
Gopi Rangan: Like what problem are you solving? Who are you solving the problem for? Get that down clear before you create a company. So that clarity is important. Now you are a VC. You went from the founder side of the table to the VC side. How did that transition happen? Why do you like being a VC?
Steve Pretre: I like being a VC because I like working with founders and today I'm focusing on an early stage fund that we're doing with Tokio Marine as their CVC effectively. And I think the great opportunity there is, great company, they have, depending on how you count the entities, insurance companies in the U. S. that they own across a broad variety of businesses. And so I have the ability to not only invest in companies, but find ways to be strategically helpful to them.
Gopi Rangan: I like that you brought the Tokio Marine story, and so we can talk more about the fund itself. Tell me a little more about the fund you manage at WiL (World Innovation Lab) for Tokio Marine.
What stage do you invest in? What kind of startups are a good fit for you? How early is too early? How late is too late?
Steve Pretre: As you said, right now I'm focusing a lot of my efforts with Tokio Marine and a fund that we have set up to run with them to operate as their CVC. And there we're investing pre seed through Series A is kind of the focus that we're on.
Typically not leading deals. So doing half a million to million dollar initial checks into early stage companies, insurtech, but also kind of have a broad mandate to look at adjacencies, whether it's financial services, climate and sustainability, healthcare, mobility, cybersecurity, there's a pretty broad mandate.
And so we are looking at founders who are building great and interesting companies. Part of why I'm focusing my effort there is I like working with those early stage founders. That is where, you know, most of my career is focused on that early stage and kind of how do you put together the pieces to solve the puzzle of what makes this into a great business and being able to work with founders directly on that.
But then in working with the Tokio Marine team, they own great companies in the U S across wide variety of insurance lines of business. And so having the ability not just to bring dollars, advice, but also how can we actually leverage that group of companies to be helpful? Are they going to be customers?
Can they be channel partners? Can they be advisors? Or can they provide capacity to someone that's starting something up? And so I think that having that combination in some ways allows me to scratch the business development operator itch a little bit while also playing the role of the VC and, you know, bringing both capital and as much advice as we can to the table.
Gopi Rangan: And that's the part I like about the corporate side of venture capital. You're solving problems on both sides. On one side, they're working with founders to help solve a problem that they have come up with, and it's usually very, very exciting. On the other side, you work with large corporations to work with the business unit to identify a strategic priority, and building that partnership with a startup can be super valuable for the large company.
It's innovation outside their four walls, which as a VC, you and I are able to facilitate that. But it doesn't work well all the time because working with large corporations is complicated and working with startups is chaotic for large companies. So, orchestrating that is not that easy. Can we take an example of a company you invested in?
How did you meet the founder? What happened in that first meeting? What did you ask the founder? What got you excited to say yes, I want to invest in this company?
Steve Pretre: So one example, actually a company very closely involved in, it's a company called Voxel. It is in the computer vision space. So they tap into the existing video cameras that are in warehouses, manufacturing facilities, logistics facilities, retail environments, and so on, and are able to use computer vision to identify risk events that are happening that could lead to an injury in a worker's comp or liability claim. And highly technical team, a lot of people who had been working on autonomous driving for a while and realize, okay, that's 10 years away.
It's not going to come soon. Let's actually tackle some problems that we can solve faster. And so a lot of that extremely high end technical capability into this space. And it was actually identified by the Tokio Marine team. They'd met Alex at some event and liked what he was doing. So introduced me to him and we probably spent six months getting to know each other.
He wasn't racing at the time and it was something where I liked him, liked what he was doing. We got together multiple times and just got to know each other. I was advising him as much as I can as we were going along and just built a relationship. So when they did end up raising the next round, he called up and said, "Hey, can we figure out a way to work together on it?
It was very funny. The other VCs on the deal were like, "No, no, no. Why are you letting a strategic in? This doesn't make any sense. They're not going to add value. We don't need them." And Alex really fought to help us get into the round. And it is a case where I've actually really delivered. So in this particular space one of the Tokyo Marine companies is a company called Safety National.
They're a very large writer of what's called excess workers comp in the U. S. And so it's very large companies that have either a captive or a very high retained layer of kind of the initial risk they retain, and then have an excess policy laying on top of that for more catastrophic types of things.
They work with the exactly the type of customers that Voxel is targeting. And it's been very funny as we've gone along the Voxel guys, as they've come and going out and, you know, kind of working with companies to keep finding a wait, Safety National is the insurer, wait, Safety National is the insurer, and has become one where Safety National has come in and helped introduce them to a number of their best customers.
And it's really a case where it's not an insurance solution is a it's an A. I. Solution. It's a risk mitigation solution, but we're seeing the direct impact of the companies that are adopting it putting into a few sites. Safety National has actually paid for a few sites with a couple of their customers, and they see the results and all of a sudden say, Oh, let's start putting it across four and five and six and more sites across the organization because they're seeing the direct impact.
And so I think that's been a great use case. And then I've got to know the other board members and they're actually like, actually, it's good to have these guys here. They're adding value. And so it's just been one that's, that's worked out really well, but it was a case of like any startup, get to know the founder, build a relationship, see where we can add value and then over time become an investor.
And we've been in a case of getting in initially and then, you know, adding to that investment as we move forward and increasing our stake in the company based on the success we're seeing on both sides of that relationship. And that's the way we like to see it work.
Gopi Rangan: Now, there are many things I want to pick up on here, but let me highlight this. It's shocking for large companies when they hear that, Oh, startups don't want us on their cap table. They get offended often. "We're a big brand. We've been around for decades and we are very well respected. We are so popular. How could you not want us?" But in the startup world, it often comes down to the partner that's doing the deal and your relationship and your personal reputation in the world got the fund on the cap table and everything followed through and the strategic partnership has actually worked out really well for both sides. It's great to see that success story.
Steve Pretre: And it's a combination. In this case Tokio Marine is a great global brand and with great brands in the U. S. and in other countries. But I think there is a skepticism with CVCs, with large corporates doing strategic investments of can you actually deliver on the value that you say you're going to and more often than not they don't.
And so I think one of the keys is make sure that you're delivering on some of that value and one of the lenses I've been putting in place is "okay, let's work together on a POC for six months and see if there's a strategic relationship and didn't do an investment" 'cause that process doesn't work.
You know, that's torturous for founders, that's torturous for founders. It doesn't work. It's not the way you can get into good rounds. And so, we wanna move fast and kind of have a decision making process. It's two or three weeks. But definitely putting the lens on particularly with the early stage investments of not what strategic value can we extract from having done this deal, but is there a way for us to add value quickly?
And so you're looking at it from that lens and doesn't always have to be there. There's a company called careful that we invested in. It's actually doing financial services for an aging population. So they are looking at as people get older. How do I start putting the right financial safeguards around their assets?
And so it's some, you know, specific fraud detection is, you know, the fraud vectors in that population are different than others. So doing some specific fraud detection for that sector and then looking at how do we give the tools to that aging person that allows them to start giving transparency and then transitioning responsibility as needed to the next generation.
And so it's building an important financial stewardship. capability that as many of the populations around the world are aging need. And it's a major stress for families. Um, of I've got an aging adult, I'm the financial steward for them. How do I do that in the right sort of way? And so important product, not necessarily something that we're aligned with in the U S obviously working to help them here, but it's one where we look at it and say, well, challenging as that problem is in the U S in Japan, it's an even bigger challenge.
The population is older and it is a product where when the time is right, we're looking at and saying we can add a lot of value. We can learn a lot now in terms of what services need to be delivered to that population. How do they need to deliver it? How can we learn from that? But eventually we're there to help them with, okay.
When you're ready, let's take you to Japan because the need there is potentially even greater than here and we can be helpful in doing that and opening that market for you.
Gopi Rangan: The corporate side often has a long process like POCs and things like that they want to see before they commit to an investment. At least there's a consensus required from business units buying it to the transaction. But you act independently. You don't need many of those things. And you can move much faster than a typical CVC. You've already given two examples from your portfolio. How many startups do you typically invest in on average year? And how long does it take for you to make these decisions?
Steve Pretre: Yeah, we're trying to do two to three deals a quarter. It's kind of the pace that we're on. And like I said, typically doing kind of a half million to a million dollar initial check in to those companies and then being in a position to follow on in subsequent rounds. And every deal obviously is a little bit different, but I've had a couple of deals where we literally have met the company one week and been through investment committee and committed to the deal the next week.
That's kind of the exception, not the rule. In a lot of those cases, it's been a case where we already had a pre existing relationship, we knew each other, and a round came together quickly. We had to move quickly to be able to participate in it. But our standard is kind of two to four weeks. And so, As part of that, we're doing standard due diligence.
We do all of our own due diligence, even though we're not leading because we want to be in a place where we understand the business, we're aligned with the founders, we know how we can help. We don't have to have a POC is done and all that kind of stuff, but we do want to identify, is this a case of we're investing because we think that there's long term strategic interest here, not necessarily short term, or is there an opportunity for us to help out early on?
And to have kind of looked across the group companies and identified, okay, here's where we think the initial linkages and where we could add value in the near term and kind of have alignment on that so that once the deal is done, we're actually in a position to move and add value sooner rather than later. So we want to have a plan around that.
Gopi Rangan: This is great. You're giving the audience very clear examples of how things work, how you make decisions, what's the process. What's your most common reason to say no?
Steve Pretre: There are always a lot more no's than yeses. And you're focusing in kind of the insurtech side. And we don't tend to do a lot of MGA. So a lot of the no's are around MGA businesses. It's either just generally, some of the challenges you talked about earlier of looking at what is the need for this product? Are you fulfilling it? What is your go to market channel? Are people really going to buy through that channel or not?
And so I think that there's A lot of challenges there, there are cases where on an MGA, if it's in a line of business where Tokio Marine is very active, we don't want to invest in something where there's a potential conflict. And so those are generally the most common. On the other companies where we do look very heavily at people that are providing solutions to insurers.
So are you going to lower operating costs? You're going to help with claims. Are you going to be a solution that is data that helps with better underwriting decisions? Is it something that could be used in risk mitigation across the business? There are a variety of different things that we look at there.
I, having been a founder, tend to get excited about businesses very quickly and see the potential. And actually some of my, the people on my team I work with often tease me of, you often imagine what the business could be versus what it actually is. And so I am very prone to that. And so we do very much look at, okay, let's really understand this business and how it's being run.
And so looking at things like the go to market. How efficient is the sales team? Are you actually building a sales team where there's a repeatable process there? And obviously that's a little bit more mature company. Is this product really differentiated relative other things that are on the market and particularly a company that is selling into insurers?
The challenge there is that's a long sales cycle. Have you figured it out? Do you understand how to actually sell product /technology solution? into an insurance company and be successful at doing that. And so those are the things that really start looking at. Do we feel that this is a team that can execute against something in a market that is challenging and takes just a lot of perseverance.
Gopi Rangan: And I see that you do a lot of due diligence on your own independent, even though you don't lead deals. At that level of depth of analysis that you do, I can see and how you form conviction. So it's not dependent on someone else telling you that it's a good deal. You form your own conviction. I can see that and I can see why sometimes the answer could be no. And some of this analysis doesn't give you the answers. It helps you form that conviction.
Steve Pretre: I'm not always the best at this. If we do say no, I try to (having been a founder) give the feedback as to why. And even through the process, I try and be pretty transparent of these are the things I'm looking at. This is what I'm thinking about as I'm looking at it. This is why I'm asking for the data that I'm asking for. And giving the feedback of, here's the things that I think you should be thinking about, should be changing. And I also caveat that with, you should never change your business based on something a VC tells you, because I'm looking at it for two weeks.
You've been living this for probably a year or more. So you're going to understand the solution a lot more. But these are the things from the outside that I'm seeing And part of that is working with the founder to understand and the reason we do the diligence is we want to understand this business because we want to be coming in as a partner and making sure that we're aligned together on this is what we see as the challenges in the business because no business is perfect.
And here's the things that we think we need to execute against to be successful. And are we aligned on that? Because I don't want to do an investment and then I see things differently. And then that's just not a positive relationship. There are going to be challenges. Do we think about them the same way?
Are we going to attack them the same way? Are we going to be aligned on how to work together to solve the problems that are inevitably going to come up.
Gopi Rangan: Steve, you're such a passionate founder. I understand the venture industry is changing. There are a lot of new types of VC firms being formed. But do you ever feel like I want to get back into the game as a founder?
Steve Pretre: No. And, you know, I've done six or seven startups over the course of my career. And one of the reasons that I wanted to be on this side of the table is I realize I actually really like kind of the problem solving of what's this puzzle and how do you put it together and really enjoyed kind of the earlier stages of a company of kind of solving those puzzle pieces and getting something actually working.
Versus the I'm going to spend the next 10 years scaling this thing. And so, you know, being on this side of the table, it allows me to satisfy a lot of that intellectual curiosity of, you know, every company that I see is a new puzzle to try and figure out, okay, well, how is this thing working? And just enjoy doing that.
So the diligence process I often think about is, hey, this is a puzzle solving process. Let me understand this business. I'm excited about it. Let me see how it's working. Let me understand the issues associated with it. And being able to not just be doing one thing, I can look at 10 things a week.
And I think that intellectual stimulation and both, I mean, that's the selfish side of why I want to be on it is doing that. But I've done this for a long time. And can I add back and provide value to the next generation of founders that's coming along and trying to build their business and help them it accomplish the things that they're trying to accomplish.
Gopi Rangan: You do have a lot of wisdom and a lot of experience based on your own personal decisions that you've made for the companies that you've been with and all that knowledge can be useful to founders in the next generation. We're coming towards the end of our conversation and I want to ask you about your community involvement.
Is there a nonprofit organization you are passionate about? Which one?
Steve Pretre: My wife and I are actually, it's more her, so my wife Tina, I give her all the credit for this, very involved in the youth running community in the area. So she in particular runs a program for elementary school and middle schoolers around track and cross country.
And so typically 40, 50, 60 kids a season that she's helping kind of learn about running. And a lot of it is not focused on how competitive you can be, but kind of learning life lessons around perseverance, community, coming together, healthy lifestyle, that she's done some tremendous work around.
They're just helping kids find something that they can do and feel proud about, particularly as they're coming through middle school, which can be difficult and getting into high school and kind of giving them oftentimes the community they can go to in high school and feel a part of and having that be part of their experience.
And so she's developed that over the years and it takes a tremendous amount of time and effort. And she's actually creating some great results. I mean, she's probably had, what is it, eight to 12 kids at this point that have kind of come through that, gone into high school and then gone on to run in division one programs around the country.
And so we're often giving back to to that community, spending a lot of time on that. Um, particularly her, like, like I said, and then, uh, our kids have come through that and gone off as well. And so we support the programs that they're now in, in college quite a bit. So she runs a program called Woodside Wildebeest.
They were trying to come up with a W since we were operating out of, out of Woodside and they discovered that the wildebeest is the fastest W animal in the world. So they came up with it. And my son who. Was, uh, I think about eight years old at the time came up with the logo. And so they have quite a cute branding that they've put together over the years.
And he's now running at Cal and so kind of taken some of those early experiences and turned it into something that has led him to hopefully great places in life.
Gopi Rangan: Steve, thank you very much for spending time with me. Thank you for being candid, and you don't do these type of interviews often, so it's a very special moment for the world to hear your voice.
Thanks for sharing stories based on your own personal experiences. I look forward to sharing your nuggets of wisdom with the world.
Steve Pretre: Well, thank you for having me. I appreciate you taking the time with me as well.
Gopi Rangan: Thank you for listening to The Sure Shot Entrepreneur. I hope you enjoyed listening to real-life stories about early believers supporting ambitious entrepreneurs.
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