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0:14 energytechnexascom. Welcome back to the show. I'm excited to say we're here with the executive director of Texi, Sandy Guitar. She's been part of the innovation ecosystem. Gosh, since it started,

0:26 like after like the ion and everything really happened here, in the last six years. So we'd love to hear from you what Texi is, and then we'll jump into your kind of personal history getting

0:37 involved in the ecosystem. Sure, thank you. So I've been involved in the ecosystem since about 2018, 2019, I would say. But literally just started at Texi. Texi is a nonprofit organization

0:50 focused on building talent for energy innovation. We focus on building talent by this really novel idea of collaborating across Texas universities and MIT to help Texas students build some real life

1:06 experiences in energy innovation that will set them apart from their peers and allow them to launch into the real world, if you will, in a way that puts some heads and shoulders above the rest. So

1:21 these students will end up with a vision for energy innovation that allows them to succeed either in one of two ways, either as an entrepreneur, namely a founder for a startup that is taking on

1:34 energy innovation in some capacity, or what we call an entrepreneur, a visionary leader in a global diversified oil and gas company as an example, or in a traditional energy company that is looking

1:47 for energy innovation. So those are the two sort of routes that our students will typically take. And we're selecting very early among the campuses of UT Austin. Rice University, University of

2:00 Houston, Texas AM, Prairie View AM, and a handful also from MIT. So from that pool, we select some of the best and brightest that we call taxi fellows and focus a lot of our programming on those

2:15 fellows. So it's for bachelor's people doing an undergraduate degree? Well, actually both, that's a great question. So it's 23 graduate, actually, and 13 undergraduate. And one of the reasons

2:26 for that, I think, is the any energy innovation focus. So it is often a graduate student that says, I know this is my area, perhaps I'm doing research already in that area. And so this

2:40 opportunity is very low-hanging fruit for them. There are some, of course, undergraduates who already know they want to get involved in energy innovation. And so we also welcome those undergrads.

2:45 So they become part of the program for like one year How long is that?

2:56 Do you call it a fellow shape? How long do you become part of the program? Yeah, so the broad efforts of taxi are ongoing. The programming that we do that focuses on those 75 or so taxi fellows,

3:10 the sort of students that we focus in on deeply, that is a one-year program today. But it is also a program that allows you to renew. So we do have some fellows who are in their third year, a

3:23 handful that are in their second year. The majority of the fellows are doing a one-year. So do they get credits for this? How does it gel with their program? Not, they do not get credits. So

3:36 this is a volunteer organization. So one of the things I love about it in that it means for this to make sense for everybody, it has to add value. This is not a check the box exercise. You're not

3:49 going to get a three-hour credit and tick that box towards graduation. Instead, what you're gonna get is something that you can't get through credits. The ability to access Houston's corporate

4:00 backbone in energy innovation. The ability to connect with the CEOs of our startups. They're already present in Texas. And the ability to connect with sources of capital as well, along all of

4:13 those dimensions. That's something that you can't get in the classroom. We're not competing with the classroom, we're augmenting the classroom with real-world experiences And what's the premise of

4:25 going multi-school? Is it so you can really get the best of the best from the schools or is there a different teaming dynamic? Yeah, great question. So the premise is, and I think we would all

4:35 buy this premise that today, Houston is the energy capital of the world. But tomorrow we need to be the energy transition capital in order to sustain our situation To do that, we have to help grow

4:51 talent. So as you know in my prior life I was helping to grow capital and now focusing on growing the talent side of the dimension to meet that objective. I think there needs to be some

5:03 purposefulness in the pivot towards talent building in energy innovation. And that's what we're trying to do. I find students, like it's not the culture issue in Texas broadly And I find having had

5:21 the opportunity to be in both coasts. Sometimes the mentality is like, if you're going to like an MIT or Stanford, the expectation is you should start a company someday. You should try once or

5:32 twice. Whereas here, because the energy industry is so successful, everyone's very fixated on. You should go work for an oil company once. Like that's the starting point for your career. And

5:43 interesting, yeah. And so that becomes challenging for people wanting to like have just a different vision for their life. But if early on in their education career, we can show them both paths

5:55 and we can show them what great looks like if you fast forward the movie in 10 years in both paths. I think it gives students a better opportunity to say, okay, considering my own personality,

6:09 considering my own competencies, which of those paths best suit me? As opposed to, let's just get in the stream with the largest momentum and let it take me down. We're trying to make sure that

6:21 there's enough velocity in both of those paths and the ability to reflect on who you are and where you want to go to get you in the right stream.

6:30 That's so true because I think back to my college days, I never thought I would start my own company because no one ever spoke to me about that. It was like, yeah, I'm going to study something and

6:39 then get a job and that's going to be my career. Just having that exposure early on, so even if you go and get a job or get a corporate. but you have that at the back of your mind, like what do I

6:50 need to know at this job so that maybe five years from now or 10 years from now? What was your undergrad? My undergrad was in chemistry and French. Oh, it's not remember the chemistry part. And

7:00 Jason, your undergrad? I was mechanical engineering. Okay, so you two are even more likely than me and I'm in the way back machine compared to you guys and mine was English lit, right? Okay,

7:08 it's nice, yeah. Thankfully I got an MBA, so

7:11 I know a few things beyond English lit but it was not a well trodden path Although back in those days I think liberal arts undergrads where you know, commonly found themselves into corporations but

7:23 in today's world, I think, you know, there's, it's a little more of a complicated marketplace. I do want to ask because we don't get an English lit on the show, what is your favorite book? I'm

7:35 just all out of detail. Oh, like that's an impossible question for - You have to love them all but there's - But I'm a real Shakespeare person because I really like those sort of high values the

7:46 tension of, you know, the moral marketplace of how things happen. So like an ophthalal or something like that, or a King Lear, or an outbound spot, that type of stuff. Yeah. I honestly haven't

7:58 read a King Lear. I'm just like one of those things where I stop reading after college because like, we just got like so busy. Yeah. And I feel like the problem with reading, like Shakespeare,

8:06 any sort of like classic is like, you actually have to like pay attention. Yeah. And King Lear is like a player, right? So I mean, you can only read it in a class You can't really just go on

8:16 Broadway and still add some of those, 'cause they're often more interpretations. But the part that attracts me to those dramas is they are heroic and epic, right? And so I think that's, you know,

8:28 interesting. I read all kinds of rubbish, but that is the stuff that if you're gonna ask me like, great stuff. But that's the founder's journey, too. Yeah, totally. It's like it has to be that

8:37 kind of - Epic, it is an epic and painful way. We're trying to do big things, right? With this innovation path You know, listen, I would highly recommend to our students to actually specialize

8:49 and create technical skills in today's world. In

8:53 the world I grew up in, it was common for corporations to build the technical skills in you. So my first job was with Anderson Consulting Accenture and they sent you for three months to their

9:05 university and built, you know, became a programmer. They taught me that. Now today it doesn't happen that way Today you need to know that in your student days and you're meant to be pretty, the

9:18 ROI should be their day one for the corporate. So I think that's important to recognize that the world has changed and it is important to create your technical skills, whether you're a liberal arts

9:27 or not, early in your journey so that you're ready to get going when you graduate. Yeah, no, I totally got that. And so to bring that back to Texi, like we're building, you're building a

9:37 different skill set that creates value So what is I guess lacking in current talent, the way they're currently being trained that you're gonna imbue them with. Nick, how do you do that? How do you

9:50 train them? Yeah. One of the big things lacking is, there are two things I would say. Number one, I think many places don't have a sort of logical way to teach entrepreneurship. It's still a

9:58 relatively new discipline at the university level, and MIT has an amazing path for that They call it the disciplined entrepreneur, and it follows the model of

10:16 Bill Ollett, and Bill and his team have great influence in our program and the universities we work with in creating, in helping create

10:28 classroom experiences that give you the 24 steps on how to be an entrepreneur. Breaks it down, and I think that's a really important component. But in addition to that, what we bring, that is

10:42 outside of a classroom is that real-world component. And listening to students today, what we often hear is, I've got great education here, but how do I transition that to something very effective?

11:00 And I think there is a gap there to fill. So obviously internships and such are there, but are there a consultancy projects? Do you, are you networks into the community that you're interested in?

11:12 And do you have the ability to, during your student days, what I call try on different hats, try different perspectives and opportunities so that when your, you know, this big graduation day

11:24 comes, you have a sense of where you want to take that first step. And that's a lot of what we're trying to do. And I think, you know, students with great privilege, which I had, you know,

11:36 have some of those opportunities in their own networks but this is also a leveling out. process where everybody in our program gets the opportunity to build out their network, to build out their

11:48 programming that sits on top of their college experience that can differentiate them as they think about being an entrepreneur or an entrepreneur. Is there a,

12:01 I guess, I don't want to call it a KPI, but is there an objective to actually like start up a company and then start

12:09 it out? Totally. Okay What we want to do is, you know, if you fall forward the movie five years from now, we want to look at the outcomes of our taxi fellows in particular and see that they have

12:19 established themselves in positions that are differentiating in energy innovation. And that might look like being in the C suite of a startup, or it might look like being in MA or in an established

12:34 energy company of those would be very successful outcomes for us. Then of course, there's all kinds of KPIs that lead to that, including just at the engagement level, right? So we measure what

12:46 kind of engagement we're getting from our students in our programming. And then we're trying to add on to that programs that differentiate and that are relevant to today's market in those two areas.

12:60 So I've always been about measuring, you know, and with a sort of, we're a startup ourselves, right? So I think we've been through proof of concept We got started in '22. We tried the concept.

13:12 The concept definitely had legs, right? This obviously before my joining. And then over the last, I would say a year or two, we've tried a huge range of programming in the same way that you would,

13:25 if you were a startup, put out to market, you know, many, many products. And we're now reading the market to say which of those products are really differentiating and

13:35 relevant and move the needle forward for our students. and we're gonna try to, you know, our goal in the next year is to narrow into really what's working, go deeper before we go broader. I will

13:47 say about going broader though, you know, years from now you can expect taxi to be a larger organization, more member universities, more students in the funnel producing, you know, a higher rate

13:58 of KPI. Yeah. Do you give them exposure to different technologies? Do you teach them like how to build a company, like finance, business? What is it that you're actually giving them exposure to

14:09 exactly that they're not getting it at school? Right. So with regard to the partnership with MIT, there are energy ventures courses that MIT and we are helping sort of facilitating the rollout of.

14:22 And in those energy ventures courses, you learn how literally to make, build a company. So the first level of programming would be the disciplined entrepreneur. That's that 24 step of how to be an

14:33 entrepreneur Sitting on top of that is Energy Ventures course.

14:38 This specifically goes into energy. And coming out in November is Ben Sultoff's new approach that takes the disciplined entrepreneur model from MIT and layers on top of that energy innovation

14:52 specifically. So taking on the headwinds of things like

14:60 capital inefficient company building, building in a regulatory environment, building an environment where subsidies come and go, these kinds of things that we experience uniquely in energy

15:12 innovation. So we also then have an accelerator program in the summer. So once they build those ideas often in those classrooms or in classrooms native to their own campuses, either way, and then

15:26 they can compete to be part of a 90 day accelerator after which they'd be ready for capitalization. Yeah, so let's see, we should probably talk a little bit about the book. 'cause I think it's

15:38 kind of a centerpiece of the conversation. So on the cover, it's like a 24-step entrepreneurship, and I don't know if anyone's gonna know this reference, but it reminds me of the board game,

15:48 Candy Land. Yes, I totally, yes, I'm sure it's meant to, right? It's meant to be that, and what's different, so Candy Land is like a game of two-year-old, can play probably, and you just

15:58 kind of roll dice and you kind of go down, and there's like little rainbows you can land on that'll like skip ahead. But what's different with just one entrepreneurship is some of those rainbows

16:07 take you backwards. And what ends up happening is you're kind of going down this path and you're supposed to kind of take these steps laid out for you. And as you learn about the market or you learn

16:18 about what's technically feasible, you say, oh, do we need to take the step back to restart? And so it's really giving you a roadmap for how to be iterative with innovation as opposed to lucky.

16:30 And I think that's the disciplined part of it. So good, yes. That's exactly right And all three of us in the room here have. tried startups, you know, I've built a venture capital investment

16:40 company, you guys have also built companies. And, you know, we all talk about the joy of failure, right? But actually practicing that is the only way you can really understand it, right? To

16:52 see what's on the other side of that, you know, snakes and ladder kind of worlds, right, that we're in. You can still win the game if you hit a snake 'cause there's a ladder around the corner and

17:06 it may be to a better location. So yeah, now we're overplaying the game, board games. But, you know, here's another thing, board games are fun. And I think this should be a fun, you know,

17:16 I'm a big believer in finding joy in our work life. And I talk about this all the time to my kids is like, life is just too short, right? And we've got to find our own product market fit as

17:29 individuals on this planet in this short journey that we have to make sure we're doing what we need to be doing here. when you find that you should, you'll be having fun. You'll know it, wouldn't

17:40 you? Oh, that was like the perfect segue. We gotta hear about your story, about how you got here

17:46 now. Yeah, 'cause you weren't, I mean, you said 40 days of being the executive director at TechC, so what were you doing before? How did you land this job? Okay, yeah. Yeah, tell us about

17:55 your background, which is very impressive from what I've heard. Thank you. I'll go in the way back machine, but make it brief. So I was born in Belgium, because my dad was in an oil and gas

18:06 company, and he was building a chemical plant there. And literally, they were moving around so many times, my mom and dad, that I grew up in the drawer of a hotel. Like they pulled the drawer

18:16 out, stuck a pillow in it, put it there, you know? So, and we moved all the time. Each of my brothers, sister and I were all born on different continents. It was just the way our world ended

18:27 up. I grew most of my pre-college years in the UK, but I wanted to live in America My dad's American, my mom's British, and I just had this idea. of America, as many Brits and non-Americans have

18:40 of, my gosh, it's a promised land of sorts, right? This was back in the day when we have four channels in the UK at this time, four television channels, one of which would only show American TV,

18:52 and the other's like BBC news. So if you've watched that before, and you're 12 years old, there's only so long you're gonna be on that channel. So you go to channel four, which was the big

19:00 channel there, and you'd saw America. And so when I was 18, I said, you know, to dad, I don't want it, I was gonna go to Durham, which is a great university to read economics. And I was like,

19:12 sounded as boring as could be to me. Like, and I said, can I do a gap year? Because it's quite common in the UK to do that. And my dad was like, hell no. 'Cause you do a gap year, you'll be

19:22 allowed, you'll end up on the street. All right, okay. And he was like, but you can go to America at a few university and go where I went. So I ended up going to the same university my dad went

19:31 to, which was a small liberal arts college in Tennessee

19:36 had the most transformative four years in what was America to me, actually not at all representative of America, yet that's what it was. It was a journey for me. I then took another global journey

19:47 with something called the Watson Foundation. A Watson Fellowship is something that I think everybody should know about because it is an opportunity in 40 different colleges in America where IBM's

19:59 Thomas J. Watson Foundation will pay for you to travel the world to explore anything in the world that is natively interesting to you. So it might be I like to throw clay pottery, it might be like

20:14 rug weaving. For me, it was business decision-making. I was fascinated by the cultural impact on business decision-making, so I traveled to India, Japan, Australia to do that Ironically, you

20:24 became an economist is what I'm hearing. I'm a micro-economist. Yeah, I guess a micro sort of owed organizational developmenteconomist type person came out of that That's it. you know, spent a

20:34 year not getting jobs until I found Accenture, what's called it. And then started about 10 years of consulting

20:42 and then was a trailing spouse, actually, in an opportunity to work for an oil and gas company, works for that oil and gas company till I had this amazing mentor. And this is how real life works.

20:52 I think you find the person in the company that cares sufficiently about you and not just the company that they have, you know, the advice that makes a difference And they said to me, you know,

21:02 you're going to do well in this company, but you're going to hit a ceiling. And in that same sentence, she said, my husband's hiring in his venture capital firm, which you'd be interested to

21:13 apply. And I was, I first googled venture capital. Well, we didn't actually have googled them, but I looked up what venture capital was. And I was like, yeah, so I knew absolutely nothing.

21:23 But I got a great opportunity in the year 2000 I started my first venture capital fund of funds there. And then at that location, I met the co-founders of WeatherGage Capital. So four of us in 2006

21:38 formed WeatherGage Capital. We were trying to make a difference in the venture capital investment space by investing not only in the big grades, but also in emerging managers that we believed could

21:51 make actually even more returns than the names quoted on the front page of the Wall Street Journal Largely because they were actually investing smaller amounts of capital, and it's always hired to

22:03 make high multiples on smaller numbers than it is. If you're investing a billion, you have to make it 3 billion. Yeah, yeah. So that was the central thesis there, and a very successful thesis.

22:12 We invested four fund of funds with really, really strong results. And today, I'm still with WeatherGage, but we're not investing fresh capital anymore. That gave me the opportunity to spend more

22:25 time in other areas as well. and joined HX Venture Fund, which was also a novel concept that whose focus was to bring expert venture capital into our ecosystem and to help our founders in Houston

22:42 create great capital stacks for their company. And then recently left that firm one and sort of took a step back and said, what next? And for me, I'm a general partner in seven fund of funds and I

22:57 thought the eighth one, you know, the way I like to say it is the eighth piece of chocolate cake just doesn't taste as good. The other, you know, I love chocolate cake, but the eighth piece is

23:07 no longer as exciting and I wanted to go somewhere adjacent. And at this stage of my career, helping young talent fulfill their dream in energy innovation, scratches that at many levels. So when I

23:22 saw Taxi, the opportunity to work with the brilliance of MIT. and also with a very established

23:32 and very successful programs resident in our member universities. I thought, gosh, that's an opportunity that could really get me excited. So I feel privileged to be here and yeah, I'm early in

23:45 it and let's see where we go. Yeah, no, I mean, it's just so fascinating to hear you talk about your background because most people say, hey, if you're gonna go into venture capital, you need

23:54 to either be a founder or like, you know, have, you know, all this, like, be it, have some operational experience. Or no LPs. And LPs and stuff. But you, you know, you studied English Lit.

24:05 And what do you think? What were the skills that you had that allowed you to thrive in the venture capital world when you joined that venture firm? And what were the things that you had to learn

24:17 pretty quickly in terms of like finance and numbers? And then what were the skills you thought you had that allowed you to thrive? I don't think there's a lot of rinse and repeat in my story, but

24:27 the odd thing is if you ask a lot of GPs, they all have these weird stories, and there's not a lot of rinse and repeat in all of them, other than, you know, some central things like the Kauffman

24:37 Fellows Program or Cheryl Entrepreneurship itself. What I think allowed me to swim against the tide, in a way, was, you know, I think it is important to be able to articulate and to connect with

24:51 people in ways that look for what is of mutual interest and advantage. And that's something I sort of picked up somewhere along the way. You know, consulting does that too, and I have a background

25:05 in consulting, so trying to look for what really helps the client. Like the win-win situation. The win-win situation is central to finding your market. And I think that's applicative. And I don't

25:16 know why, but I've always wanted to, I have a quantitative mindset, I like to measure success. qualitatively

25:29 and quantitatively, I believe that both can be measured in clear ways. I think clarity is really important in this practice. And I personally find it fascinating to keep twisting the dials, if you

25:40 will, trying out the market and leaning into what seems to work more. Make the whole practice of that. Yeah, I guess that's it. And I guess you get a lot of that from consulting now when you

25:51 talked about it is that quantitative, being able to like analyze, think strategically, 'cause that's what you're helping in the end, your entrepreneurs do. Yes, that's exactly right. Well, and

26:04 to be clear, you know, we talked about this earlier. I'm not the venture capitalist that helped build companies. I have tremendous respect for that venture capitalist. Our business is one step

26:16 aside from that as a fund of funds. In many ways you're the LP. So in many ways we are the LP, right? we're a source of capital to venture capitalists. And, you know, what's unique and

26:28 wonderful about that as a fund-to-fund managers job is to do a market map of venture capital everywhere. So it was my job to really understand all the VCs I could and what differentiated good from

26:41 great for what we were looking for. Give us the secret answer. So that is a very useful mindset to be bringing now to TechSee because as our fellows develop their ideas, I hope to be able to

26:54 leverage my network to their benefit. And that could be in venture capital, it could be in any area of life, right? It goes to the importance of networking and I've worked long enough to have some

27:06 connections that I hope to be beneficial to because there is an importance there. And I would encourage our listeners to keep being active in their ecosystem, whether they're in Austin or College

27:19 Station or Houston or Prairie View, Networking is extremely important and finding always what you think great looks like and kind of spending time with that. I think is an important practice to do.

27:33 What about you guys? What was a pivotal moment for each of you in your talent development? I don't want to go first. I think it's important. It's important to all of our listeners who don't think

27:44 care about it. I don't think we're stories where things didn't go right. Well, as we all know, we're probably exactly where the movement happened. No, I mean, and for me, I think

27:53 it's also realizing the relationships that's the most important at work and the things that stress you out the most is how you're dealing with people and how you're reacting to how people are dealing

28:03 with. And I think for me, it's like when I first started having people reporting to me, for example, and thinking that everyone's going to be like me, they're gonna want the same things and

28:13 realizing that's not true. And then the second thing that I try to kind of reinforce and like what we're doing today is like, you know, things personally because when we're like discussing things

28:28 and there's like

28:30 They're disagreements, right like we have disagreements. It's like how do you create that environment where we can disagree? but we're not let we don't leave the meeting feeling like I wasn't heard

28:41 or My point so it's not about me being right No, these are huge points. Yeah, and so I think for me is like realizing more than the knowledge I know it's how I deal with situations and show up as a

28:56 leader in In a work setting that's more important Then like cuz things you can learn right other people can know and you can ask them about it You know, I think in the in the career journey at the

29:09 beginning you hear a lot of nos and towards the end of your career Journey, you're actually giving a lot of nos so the art at least in the venture world to where you're typically saying no 20 times

29:22 to one yes,

29:24 and I think many worlds alike that, is saying no with kindness, with understanding, and still being helpful. Oh, I'm terrible at doing that, I'll be honest. I think it's hugely important, and

29:35 I don't actually believe you're terrible at doing that, 'cause I know what you've evolved. She called me grumpy every time I do her poorly. No, but it's like, but I have new friends like that.

29:44 We have a good relationship, so I can call you grumpy, and I know you'd be fine, like even if you're being grumpy or like being very stern would be in that moment, I don't take it personally,

29:53 'cause I'm like, okay, he does have a point, or even if he doesn't have a point, like, let's just go with it, it's not important enough, right? So it's like, I think it depends on the trust

30:02 in the relationship too that you have. That's so important, right? It's hugely, it's everything, actually. But I think to answer the question, so I've never worked in a real business, I guess,

30:13 and have always been in an entrepreneurial seat And so I have the benefit of understanding how companies have to grow and navigate. And I think the hardest thing I've had to accept is, you have to

30:30 like communicate a lot. And it's like so hard, especially when like, when you're like, especially in the founder's seat, like literally things change week to week. And like steering the

30:40 organization is very challenging, especially when everyone has like their job and they're like, you hire them, you're like, this is your job. And these are your KPIs And if the organization needs

30:49 that to change in six months, it's, you don't get to just say, hey, this is what we're doing and that's fiat. Like that's not just, it's not the way America works. And, you know, you have to

31:03 spend a lot of your time communicating to the team, your stakeholders, like around the organization, the market, like entrepreneurship is a job where you just talk. Yeah, sometimes you have the

31:16 execution side of us And I have a big side that it. it doesn't feel like you're doing something. Yeah, executing, when you're communicating. But actually, it's imperative. Yeah, Jason made

31:26 that point to me this summer. I was away on vacation and then I get a slack from him about a question. I was like, the team knows this. I've told him this, we specifically spoke about this and

31:37 he's like, No, we weren't a caller, no one you. And I was like, But we spoke about it, I have a call. We admit it. He's like, It doesn't matter. I can prove it, I'm right. Yeah, it

31:46 doesn't matter. If the team doesn't know, that means you have to say it Again, and again, and again, not saying that it's you. But so I was like, That's a really good point. Instead of saying,

31:54 They didn't listen to me. It's really on you to make sure that that pointhas been communicated well. And maybe I said it once, but it's not enough. It hasn't like percolated into consciousness yet.

32:07 And one thing I would say, when we select taxi fellows, we look very closely at the softer side, the qualitative aspects of the candidate pool. it's enormously important to have this kind of high

32:23 level of communication, the ability to build trust, these soft skills that go around, you know, the engineering core or the financial core, the business, whatever that core is, right? It's the

32:35 difference between good and great for sure to me. Are you ready to lead

32:58 the decarbonization charge? Energy Technexes is your platform for growth, offering unique resources and expertise for energy and carbon tech founders. Join us at energytechnexescom and start

32:58 building your Thunderlisset. No, and my question was also about, you know, with you building funds of funds and being in venture capital space here in Houston, in Texas, where we don't have a

33:03 very mature ecosystem. How did you develop that, you know, where the funds that you were working with mostly not from here and how have you seen that have all over the past two decades that you've

33:13 been here? So in my first two fund of funds, nice vision weather gauge, you know, we were not based in Houston. I lived in Houston, actually, but worked remotely and headquarters during that

33:24 time was in Palo Alto. Okay. So just flew, I spent a week a month in Palo Alto and funded funds differentiate by providing limited partners access to funds that they can't otherwise identify and

33:38 access themselves. So you do end up being, you know, building a portfolio of venture funds that, you know, look like the sequoias or the excels or the injuries and horror witches, et cetera,

33:51 because that those are ones that many LPs can't get to themselves and are willing to pay for the ability to curate that group. I guess who's who's paying, like is the LP obviously, I assume they're

34:04 management fees, but did the venture firms themselves give like preferred returns or anything or how does that work? Yeah, no. Here's it. It's a great question because. I'm a big believer in

34:14 understanding how capital flows as to what true KPIs are regardless of what people say. In the fund of funds business, what you need is very patient institutional capital that is seeking high return.

34:27 And so that ends up being endowments and foundations typically. Also employee retirement systems. So the state of Texas is Texas teachers, Texas employee retirement systems to give a couple of

34:38 local examples. And they got a kick insurance in the butt, or an insurance, are they got a kick inflation in the butt? They do, right? So they have a institutional asset allocation, which will

34:47 be stocks and bonds and private equity. And within private equity, they'll have a certain amount for venture capital and a certain amount for buyouts. Each of these pieces of the asset allocation

34:56 stack have different risk and return expectations. Venture capital along that continuum has perhaps the highest risk and highest return dimension to it. So an institutional investor is seeking out

35:12 of this allocation of their total portfolio, something like a net 3X on their money here, understanding the risks can be

35:24 at the company investment level, sort of one in five wipeout, right? That's significant. But despite that, you net 3X. So obviously you have some funds or some companies in there that are doing

35:38 seven to 10 times their money and many companies that don't work out at all. To go back in the way back machine, I remember reading a list of our portfolio companies and seeing the word Google and

35:49 thinking what in the world could that be, right? It's in our portfolio, it's backed by some very tremendous VCs, it has to be something important, but I don't know what it is, right? Fast

35:59 forward the movie about seven years later, full-letter word in the portfolio company stack, Uber.

36:07 German is my second language. So I'm like, Uber, okay, what in the world could that be? I know that as a German word, but I don't understand what it was. This was back when phones were not yet

36:18 understood to be something that could call a car to you. That was just absolutely below your mind kind of idea. And we were able to get in at about7 million valuation. So ridiculous X. So then

36:31 what I'm trying to say in that is that's the dispersion of returns in venture capital is the broadest where you see the broadest dispersion returns in any institutional marketplace. What you have is

36:43 an efficiency and people will pay a fee quite rightly to be able to make sense of that inefficiency. If you can get in the top end of the dispersion returns there, it's going to be worth whatever

36:56 the top desktop captures like 50 or 60 of the returns. Exactly. That's it. This is what they call the 660 rule. So 6 of the investments create 60 of it. 60 more sharp, okay, interesting. Yeah,

37:10 660 rule. And it's amazingly true to the VC space today. I'm very curious, 'cause you have the experience, how much of the funds are good by luck versus skill?

37:23 Meaning they can repeat with the second and third fund being in that. I think the investment-wise interesting thing about venture capital is the repeat level in terms of technical skills is high,

37:32 where VC funds typically fail is actually on the human dimension. What is very hard is to create a venture firm

37:42 of small, who maybe has four partners in it. Each of them are extremely bright. Each of them need to bring their own value to the corporation, but is there alignment that sustains? Alignment that

37:54 sustains is really hard because if you have four people and they're all trying to put points on the board, At any one point in time, somebody will look more successful than the other. Is the carry,

38:06 which is essentially the performance incentive in alignment with the points on the board. Now, in any one year it may not be, but over time you have to continue to get that alignment. And where

38:17 the alignment can really go out of whack is where somebody has had a long track record of success, but then has gone to the field in some way, right? So they've earned their way to a high level of

38:29 compensation, but they're now no longer delivering. Oh, and that's either because of of luck or because they already made it. Something's happened in their life, for whatever reason, not hungry

38:39 anymore for it, million human reasons while that happens. And then you have a younger person who's extremely attentive and hungry and building that, but they don't yet have a lot of caring. And so

38:52 you have to make sure that you have alignment of the humans in this organization. kind of tying back to our earlier conversation, that's where the hard stuff is. And then what you'll see is many

39:04 venture funds fail off to fund two or three. And the reason is they get the first fund together, the team's tight. The second fund's really hard because there are no KPIs yet that measure, right?

39:16 Because you're too quick. Too quick. You don't have your multiple uninvested capital yet, and your IRR is not exciting yet, right? Those are the two key measures financially. So you often get a

39:27 pass at fund too, because everybody, sophisticated investors, no, you're not going to have KPIs by them. By fund three, you should have KPIs. And that's when you start comparing the result,

39:39 who's actually, what's the attribution analysis for that investment? It would be the institutional investment marketplace speak to that, which basically means who made the biggest difference? And

39:52 then things start to happen in the team. You've got more capital now so you're going to grow the team as you grow the team. or some people getting put out, or some people getting put in, and

40:02 that's where the tough stuff actually is. It's actually not that hard to avoid venture cups you can't invest well because you can see it in the numbers. If you do your homework, you'll see it. It

40:13 is much more complicated to find teams that will endure innovation waves, human change waves, et cetera Is it harder for people who are maybe not performing as well, right? And they're like,

40:31 let's say two of them, two partners are doing really well and the other two have lower returns or numbers. And then, is it those other two that you see like, they're like, I don't know if we want

40:43 to be committed. Is it the comparison? The comparison is awfully the heart of it or there'll be, you know, innovation waves change, right? So it might be, let's take energy innovation as an

40:53 example so many specialties within that broad field. And it might be that you start as an energy innovation broad because it's your fund one, and you don't want to narrow the playing field. But by

41:03 the time you're in fund three, you're now eight years advanced, right? Eight years down the line, the whole marketplace has moved, and did it move towards your partners or away from them? And

41:14 were they able to pivot in that change? So the best teams pivot together and recognize broad expertise and deep specialization, both, you have to have both, right, to navigate changing innovation

41:28 waves. So I'm like trying to connect dots on my head. So one of the things you said earlier was bigger firms just can't return as well, 'cause they have too much capital to deploy. And it seems

41:38 part of it is because the team dynamics are such that you're kind of like adding skill. You don't get that focus level anymore, especially if you're kind of, I don't call them dead weight, but

41:47 like if you're pulling along folks you maybe aren't aligned with where that market needs to be. Another way I'd say it is you start to institutionalize Yeah. And you necessarily do. Because once

41:57 you have 30 to 50 employees, which is for VC is a big number, you have to start institutionalizes. Now you've got a head of HR, and now you've got platform services and all these other pieces.

42:08 And in a fun one, fun two structure, you don't have any of those things, right? We all wear multiple caps. And in that journey towards institutionalization, the total goals can change. And yeah,

42:23 it just becomes a slightly different business Not a bad business, by the way, as a fund of funds investor, you want to diversify your risk. So we actually like to have some larger funds in there

42:35 because they tend to be pretty stable, right? One particular innovation wave isn't going to make or break that firm. This other startup firm might shoot the lights out, but an innovation wave

42:47 change, or a change of administration as an example in our sector, can kind of create or knock out the whole opportunity set.

42:56 I wouldn't say institutionalization is a bad thing in venture, but I think you have to understand what you have and really measure risk broadly and make sure you're balancing the risk with a return.

43:08 And that's why some firms choose to say small, as opposed to get large, 'cause it's like the - Seed investors as an example, right? Seed VCs typically like to stay small because they're going to

43:19 hopefully do bottom-up math and say we're gonna invest in what two to five million in our first round, so it doesn't make sense to have a two hundred million dollar fund because we the team can't

43:30 manage the number of companies that would be required to appropriately deploy that capital. And then what we say in venture often is size dictates strategy, right? So if somebody's pitching a two

43:42 hundred million dollar seed stage fund, there's a lot of eyebrows raised, right? Because that size, they might be saying their seed, but if you look under the covers, it's very hard for that to

43:53 happen. What really happens is if you have two or three GPs around the investment table on a Monday, that's how you have to think about it. If you have a200 million fund, each of you is going to

44:04 deploy about 50 million each. Yeah, yep. Right, across three partners, and let's call the other 50 million there for reserves or whatever. So if you're not gonna deploy 50 million, I'm gonna

44:16 measure you have to get 50 million to work in two to three years, that's the investment period, and you're in seed Yeah. You're actually going to be biased towards riding a slightly bigger check.

44:28 Bigger check, yeah. Because you can't personally manage to just, so idea the so? And right, too, companies those of all of boards the on you're 'Cause, yeah. Yeah year. a six or five probably

44:31 than more

44:37 back off the math, just to count, so 50 million dollars, the average seed check is like250, 000, that's like 400 deals you would have to do, like that's like one of the day. I gotta do one a

44:48 day, and it's just, yeah, it's - Unless you redefine the seed game to be a very passive game, that's the only way you can play that game, is say, All I'm doing is writing a check. I'm not going

44:58 to be an influential part of the board. So that's a different game, and it doesn't tend to be one that produces, in my opinion, institutional returns. So it is interesting, think, break down

45:08 the, if you're analyzing a venture firm, break it down to that Monday morning boardroom, and what the motivators are As the baton has passed around to say, what have you done for me lately? What

45:19 have you done for me lately? Right, yeah, so bringing it back into the context of where we are today, Texas focused on energy transition, and things have changed quite a bit in the past six,

45:32 seven months, in terms of where people are investing, right? So we've already seen investment in green technologies has fallen, a lot of projects have been canceled, Um, compared to last year,

45:47 um, I think there's like an 18 X decrease in terms of projects that went forward in terms of value and projects that are going forward, uh, now, how is that impacting, uh, what you're doing

45:60 today with taxi, maybe the interest in students or like, you know, how, how are you keeping it, um, optimistic for them? Yeah. Yeah. Yeah. You know, the good news, most students are

46:10 inherently very forward looking and optimistic Um, and I think that's a huge asset and your love, there's a bottom up sort of passion project, meaning the love of the technology often is where you

46:24 get started and then you're building out companies. And hopefully through your group meeting the peers that help you do that. I think one of the, um, tail wins to the headwinds you mentioned is

46:36 finding a motivated peer group. And that's exactly what we're doing at taxi. We're going to put our students together. with the best and the brightest who have the same passion and energy

46:46 innovation. And we're gonna put them together in a room. And so the Cami here was gonna get to know the MBA here and the ME here. And when you have that extraordinary business idea, you often

46:59 don't have a lot of time. You're gonna go stick something on LinkedIn and find your partner, right? You're gonna use your network. And what we're very intentionally doing is building a network of

47:09 very smart, motivated leaders in energy innovation and allowing them to get to know one another within Texas. The results that we believe will be innovation that takes root here in our own state and

47:22 indeed in Houston, so. And how long has taxi been running now, is it? Since 2022. 2022 is like three, four years. So we're sort of, yeah, we're just getting started. Yeah, yeah, yeah. So

47:32 what are you bringing in like now in terms of like looking forward, you know, for the next couple of years, you're coming in with like, your capital background,

47:44 do you have any ideas on how you want to change things or new initiatives that you wanna launch to go to a taxi? 'Cause you said your programs are about what 70 or what you do, but there's other

47:55 stuff that you do at Texas. Yeah, and beyond the programming, you're right. What we do is try to benefit the broad campus of each of our member universities and Houston broadly as well So we'll do,

48:11 we welcome over tunes like this. So thank you, Energy Tech Nexus. And we work with other ecosystem builders as well to try and be some connective tissue between those events and also to direct our

48:23 talent pool to folks like Energy Tech Nexus who can help them build that next path. So it's a really talent management pipeline and I think it can be used to great advantage, yeah. So one of the

48:36 things you said a couple of times now is understanding capital flows. the capital flow within Texi. Yeah, all right, Jason,

48:45 here's the thing. I put my own game, I get it. I think that's a great question. So corporations that care about the talent being built in Houston and in Texas, that is our backbone. And we're

48:60 very grateful. Without those corporations support and some key individuals, we would not be able to do the work that we do So a big shout out to those groups. And we use that as capital to fund

49:13 programming for our students. And so we have, I think we're in the top 5 of nonprofits for making sure our dollars go all the way to the student. And again, how are we doing that? We build

49:26 programming to spread the word about energy innovation, to bring site visits, to bring speakers and to have them get to know one another Texi Fellows, for example, go in one of - four committees,

49:40 and those committees create their own programming, it's student-led. Oh, wow. Okay. So the four committees in this year's cohort is like Corporate Connect. If you're really interested in getting

49:50 to know corporations, the startup world, if you think you already know that you want to build a startup with something called Mentor and Mines. If you don't know whether you're going to be an

49:60 entrepreneur or an entrepreneur, but you really want to get closer to mentorship and some of the top C-suite mines And then the fourth group is ecosystem builders. These are the people who are

50:11 focused on making connections with one another across Texas as well. So, you self-select into one of those four committees and then the committees create site visits. They create speaking

50:24 opportunities, et cetera, for the tech C community and also beyond. So, how about that one? I'm going to make a very crass analogy. I think so that there's, this reminds me of like, in some

50:35 ways, like a business club about what I was part of in college. But that was entirely student run, no resources outside of like the students getting enough like dues to like order pizza. Yes. And

50:46 I forget what the organizations call now, but when I was at Duke, it was, I think it was like Duke Business Forward. And it was student driven. A lot of the members actually became entrepreneurs

50:57 afterwards, 'cause we were just like. 'Cause it self-selects a little bit for that. We were self-selected for that. And it's, but this is like turbocharged, right? Because now you have

51:05 institutional support from the university, from industry. But it's similar in the sense that the analogy I was drawing in my head is it was like being part of a business, not a business for

51:16 community, but it was like a business club in terms of crossing the different organizations. Yeah, so it sounds quite similar in concept. There is an analog there, absolutely. So having been

51:29 through that, what's your advice to me? What made it really work in college? I got honestly, it's one of those things where I joined it. because I wanted to meet my peers and wanted to learn

51:43 about things, but I was also like a big nerd in college, like working on engineering all the time. And so I'm surprised they like took me. And I was like, I think all college students had this,

51:53 but I felt much more shy back then. And so some of it was getting out there to meet the cool kids. Yeah, it was, meet the people that hopefully later are your, you know, peer mentors that later

52:07 maybe even more than that are part of your startups and your career journey in some way. That actually, you know, when you step aside is probably one of the biggest takeaways from these kinds of

52:19 programs, right? If you can create connections that sustain through your career, that's massive, right? That's why many of us actually end up going on to MBAs, right? It's, you know, you

52:30 learn something on the business side, but you create a network that really matters, so That's one of the things I wish I had the opportunity to do, So anyways, yeah, I mean, I guess as we are

52:41 closing in, I would love to ask if you have an ask for, you know, our listeners, so most of our listeners are entrepreneurs or working corporate are entrepreneurs.

52:54 Yeah, do you have an ask? You know, how can they help you with your ambitions at taxi? Yes. So to the startup founders and colleagues, leaders of startups, the ask is if you're interested, if

53:08 you're at the point of your career to send the elevator back down and to get to know, you know, what is the sort of you, a number of years ago. We would love to welcome you into our community as a

53:22 mentor, as a speaker, et cetera. And to show folks how you got to your journey, you know, we had the CEO of RevTerra and the CEO of Sembita just about a month ago, speak with our. fellows and

53:38 specifically connects in a small group with our interns as well. That was a wonderful opportunity. Those can be very meaningful interactions, especially if it's not just like a one-to-many dialogue,

53:48 but actually find ways to actually get to know one another. To totally name drop, Ben and Moji are both members over here. There we go. It's building that community in different layers. At the

53:60 next is we love to direct our founders and CEOs to support every layer of the community system. Right, right. So my colleague and now chairman of TechSee calls it see it to be it, which I love

54:12 that phrase. And so we're constantly thinking inside of those terms for those startup folks. And if your startup colleagues are still in there maybe a graduate program or even an undergraduate

54:23 program, we invite them to join the TechSee community either by just joining our

54:33 newsletter and coming to our events. or by applying to the TechSee Fellowship, which is our concentrated programming. So we'd love people to get involved. And you mentioned industry supports.

54:45 Yeah. What function within industry? Who's the person you're pitching to support you? Yes, so it's different for different organizations, but in many groups it would be those folks focus in

54:58 talent management, which sometimes lives in the human resources area Sometimes it's dispersed in the engineering areas themselves of energy innovation, so it's wherever talent management happens,

55:12 which depends a lot on the size of the company as to what that's called. But we welcome very established groups to join us and support us with sponsorship, as well as younger growing organizations

55:25 in energy innovation, because oftentimes those groups are looking for sources of talent that we can be helpful to. We can also, of course, be helpful in terms of getting them integrated into the

55:39 Houston ecosystem. So in the same way as you do. It is interesting, 'cause in some ways, it's

55:47 so much harder to find talent now with like the way the job boards work and the way AI on both sides is like being a filter. Yes. And you almost have to lean into the human element and the human

55:57 judgment. And this is a great way to really identify those top performers Yeah, to quickly find talent that has self-selected to be the best in energy innovation. That is more than reading a bunch

56:09 of resumes or setting AI against LinkedIn, right? It's a very different kind of craft and output. So, yep. Yeah, but I mean, I have to say, after listening to you today, I'm just so happy and

56:22 excited to have you leading taxi and have you part of the ecosystem. And we look forward to figuring out how we could work together with you as energy tech nexus. Love that.

56:32 Yeah, so thank you. I couldn't be more excited to be here and let's see what we can do with this. Yeah, thanks. I