The conversation begins with Joshua sharing his thoughts on new trends that he is starting to see emerge and his philosophy regarding investing. One of his key investment traits is the emotional deal in which he invests based on his gut and intuition.
Out of the two-hundred plus companies [that I have invested in] this has probably happened 6,7,8 times, but 5 of those have IPOed. – Joshua Schachter
Investing in tech start-ups is based on patterns and that is what Joshua looks for when he is making an investment.
By the time people have identified trends, it’s a little lagging. – Joshua Schachter
While fintech is hot now, it’s an area that Joshua is currently not investing in, despite his experience on Wall Street. Joshua spent a decade on Wall Street working for Morgan Stanley.
Before fintech became an identified trend, Joshua’s long-standing relationship with Jack Dorsey led to an early investment in Square. This conversation evolves into a discussion about reputation and it’s importance in investing.
I will absolutely take it on the chin to make sure that a founder is not screwed over. – Joshua Schachter
With a great reputation, one can build life-long relationships. To learn a new industry, one must invest. This is one of the main reasons why Joshua created Self Racing Cars. He wanted to develop relationships in a sector where he did not have any connections.
Joshua goes onto explain what Self Racing Cars is and how his love of racing inspired the event. Grayson asks Joshua about how he is planning to maintain the homebrew club feel of the event as it scales and becomes more popular.
This conversation evolves into the current state of markets. With a red-hot IPO market and stocks of electric vehicle companies soaring, Grayson asks Joshua to share his thoughts on the current state of the private market.
It’s a much more slowly moving system. I think venture goes throw waves of contraction and relaxation. – Joshua Schachter
As a seed-stage investor, Joshua looks for companies that have a market value of $10 – $12 million. Investing at this stage is risky and takes years to realize returns.
With the current global pandemic, Grayson asks Joshua what new opportunities might be bubbling up for investors in the private market. Additionally, why investors are following the herd mentality by investing large sums into loss-making electric vehicle startups.
Expanding upon his thoughts, Joshua explains the difference between enabling and enabled companies. An electric vehicle start-up (excluding Tesla) is an enabled company as the companies depend on battery technology to create and deliver their product.
There are still a lot of enabling technologies that have yet to be unlocked. In the future, new technologies will be invented which completely change the current state of the electric vehicle market.
New technologies (such as autonomous vehicles) will become mainstream one day. But before they get there, there will be a massive round of consolidation in the industry. Grayson and Joshua have a lively discussion around investments in autonomous vehicle companies and the current state of the market.
The shape of organizations will change as consolidation begins. Joshua explains the impact that this will have on the teams that are working on the technology. With Uber ATG being in the news (and eventually sold to Aurora), Grayson and Joshua discuss the program and why it was not in Uber’s best interest to start the program.
Looking at programs and acquisitions, Grayson shares his thoughts on Zoox and why Amazon made a brilliant purchase. With Amazon being the “Everything Store”, Grayson and Joshua discuss why the Amazon Prime Mobility tier might one day become a reality.
Looking at the competitive advantages that certain companies have as they look to enter the autonomous vehicle sector, Grayson discusses why the Apple Store will be one of Apple’s competitive advantages. Joshua goes onto explain Voyage‘s competitive advantage with master-planned communities. The master-planned community strategy was one of the main reasons why Joshua invested in Voyage.
Closing out the conversation, Grayson and Joshua discuss the current state of the autonomous vehicle market and who will ultimately be the winners.