In this episode I speak to Matt Clifford about talent investing, how big long term projects can start small, and financial innovations.

Matt is the CEO and co-founder of Entrepreneur First. Entrepreneur First, abbreviated as EF, is a fascinating system. It starts with cohorts of around fifty to a hundred ambitious, talented people who want to start companies but might not even have an idea to build around.

1. The mental model of predictable vs. unpredictable value.
2. The idea that hypothesis testing speed predicts success even in projects where you won't see real results any time soon.
3. The idea of money as a commodity that fuels innovations

Background on EF (context for some of the podcast)

EF then helps cohort members pair up into teams and get companies off the ground. Matt and Alice Bentinck started EF in 2011 and the history is kind of a crazy story: it started as a non-profit and now has raised a massive fund from LPs. One of the highlights in the story that really put EF on the map was a company named Magic Pony that sold to Twitter for an unconfirmed 150 million dollars eighteen months after starting at EF. There are links to Matt talking more about both the structure of EF and EF's history in the show notes. EF is a fascinating innovation system because it challenges many ideas that have basically become gospel in the startup world - everything from "if someone isn't willing to start a company in a garage with no income they don't have what it takes" to "only founding teams with a long working relationship can succeed."

Matt on Twitter (@matthewclifford)

Matt's weekly newsletter

EF on Wikipedia

Magic Pony exit referenced in podcast

Matt speaking at Startup Grind about how EF works

Ideas

Capital as a resource like any other

Adverse selection

The best CEO of a deep tech business often doesn't know the best CTO of that business

Predictable value vs Unpredictable value

Predictable market does not necessarily mean existing markets

Basically logic-able innovations

Job as founder is to lay out 18 month roadmaps

Think of VC as a financial product

Providing optionality to the founder

Income sharing, with optionality

The power of finance innovations 

Misalignment of incentive between VCs and entrepreneurs because VCs have a portfolio