Standing out, finding the right investors, and the future of work | Roy Bahat (Bloomberg Beta)

Roy Bahat (0:00)

I became more interested in labor organizing because I saw that it was a way that people could participate more fully in our society. And I believe that working people were just going to want to do that in order to have more command over their own life. And I figured if that's happening, then we should understand it and try to support the good versions of it.

Eric Ries (0:17)

Welcome back to The Eric Ries Show.

My guest today is Roy Bahat, one of Venture Capital's most original thinkers about startups and the future of work.

Roy leads Bloomberg Beta, their early stage venture fund he launched 13 years ago, to back companies making work better for all of us. Its portfolio includes Replit, Flexport, LaunchDarkly, MasterClass, and Weights and Biases, and so many more. Before becoming an investor, Roy himself was a founder and CEO. He's taught at Berkeley for 15 years. More importantly, he's also built Bloomberg Beta around a radical idea to treat founders like customers, to see the venture capitalist as the vendor in the relationship, and to put nearly everything the firm believes out in public. In our conversation, Roy explains why founders should stop asking for permission. We talk about how to identify just those few unconventional decisions essential to how a company can win. We explore how employee ownership and worker organizing can improve performance, expose hidden talent, and create real power inside companies. And Roy shares his humanistic vision for the role of AI in the workplace. More generalists, people managing AI agents alongside human teams, and careers that adapt every three to six months. Please enjoy this conversation with Roy Bahat.

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Roy, always a pleasure to get a chance to hang out with you. Thank you for doing this.

Roy Bahat (2:46)

Of course. Let's do it.

Eric Ries (2:49)

All right. Let's jump right in. For those who don't know you, who don't know Bloomberg Beta, like just give us a little bit of the origin story of how you came to build. I think it's like a pretty unusual and different venture fund.

Roy Bahat (3:01)

All right. Well, I'm a startup investor. I'm a VC. It's been a little more than a dozen years, been 13 years.

Since we started doing this, we've done the same thing the entire time, which is somewhat unusual for a VC firm, because most VC firms when they succeed become much bigger. It's like there's some principle of what's the principle called in management if you get promoted until you're incompetent. Peter principle. So they got Peter principle for VCs, but we've resisted that. So every single fund has been $75 million as early as possible in the life of companies that make work better for people. So we were the first kind of future of work firm. And then the things that I think we do very differently, we try to be the most transparent VC firm. So for all you founders out there, instead of having to ask somebody, what do they like to fund?

Or what are they going to say to me in the meeting? You just go on our website, which is literally GitHub repository, where founders, when they want to list on our website after we invest, we put in a poll request. So transparency has been one big thing. A second, which is for others to validate, not me, but we try to take as religion that the founder is the customer, and always try to do, like I think of myself as running a business that sells money to founders in exchange for equity and trying to help raise the chances that those founders are going to be some of the most successful in the history of business. And then just to say how I came to it was I was a startup founder. It was very painful. I had very difficult relationships with many of my VCs. One strategic guide post for us was whatever I didn't like that other VCs did, we thought could we do 100% the opposite. And some of the stuff they do, by the way, now makes sense to me that didn't make sense to me before. So I was wrong in a lot of instances. We learned as we went and tried to take a lean startup iterative approach. And then before that, we first met when I was running, I was a CEO of a small, medium-sized media company, not small, but small in the scheme of things these days.