Seth Levine, is a long-time venture capitalist, entrepreneur, and nationally bestselling author. Seth is a co-founder and partner at Foundry, a Boulder-based venture capital firm with nearly $4 billion in assets under management. He’s also the co-founder and Chief Strategy Officer of GoodBread, a small business lending platform, and a deeply committed advocate for entrepreneurs building companies outside the traditional spotlight. Seth is also the co-author of The New Builders and Capital Evolution.
Seth joined host Robert Glazer on the Elevate Podcast to discuss his journey as a venture capitalist, entrepreneur, and nationally bestselling author.
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Seth Levine On The New Builders: Redefining Success Beyond Hypergrowth
Our quote for this episode is from Howard Stevenson, “It’s not about ideas. It’s about making ideas happen.” Our guest today, Seth Levine, is a longtime venture capitalist, entrepreneur, and nationally bestselling author. Seth is a Co-founder and Partner at Foundry, a Boulder-based venture capital firm with nearly $4 billion in assets under management.
He’s also the Co-founder and Chief Strategy Officer of GoodBread, a small business lending platform, and a deeply committed advocate for entrepreneurs building companies outside the traditional spotlight. Seth is also the co-author of The New Builders and Capital Evolution. Seth, welcome. It’s great to have you on the show.
Robert, thanks for having me. Happy 2026.
Entrepreneurial Beginnings
I always like to start with the beginning. I find it interesting. Growing up, did you have a passion for entrepreneurship or building? Were you selling homework after class or cookies or whatever?
I don’t know if I was smart enough to sell homework but absolutely. Actually, I created a SaaS business before that was the thing. The first S was shoveling, Shoveling as a Service. I made money two different ways when I was growing up as a little kid before I could work. I used to buy candy in bulk. I would sell it out of my backpack like, I think, a lot of kids did.
I had a reselling business that my grandmother shut down. It was, “Either shut it down or I’m telling your mom.” I resonate with that.
I love that. You understand this is a little bit on the sly, making sure that no teachers are around, that kind of thing. The more interesting thing I did is I grew up in Boston. As some kids did, I would go neighbor to neighbor and offer to shovel your driveway and your walk for $5 whatever it was at the time. After doing that for a couple of years, I was maybe 12 or 13 at this point. I was like, “Why don’t I start selling people a monthly plan, essentially?”
I would go around the beginning of the winter and basically say, “Hey, for $20 a month, I will shovel unlimited amounts whenever it snows over three or five inches.” Whatever it was. I signed up a bunch of people to do that. Maybe it was the second year that I did that that I had enough people signed up. I actually paid some of my friends when it would snow.
You learned leverage early.
I was trying to arbitrage a little bit. I hadn’t thought about it as a SaaS business, but I was telling this story and they said, “Shoveling-as-a-Service.” I was like, “Yeah, that’s right.” I was the original SaaS.
Where did you grow up outside of Boston?
First, Arlington and then Newton.
I grew up in Brookline, so similar. I had a candy business. I did some shoveling. My kids aren’t as entrepreneurial. I have a snowblower and an electric thing. If I was them, I would take that and go. Take the money and not even have to do the manual work.
Absolutely. My kids did a little bit of that. We live out in the country near Boulder, Colorado. There’s a lot of cyclists out here. When my kids were little, they would go out with their lemonade stuff. They would sell lemonade to the cyclists who were passing by which was a pretty good business. They somehow convinced us to buy all of their lemonade stuff so their cost of goods was zero. It was all incremental profit for them, other than maybe some markers and some paper that they had to use up for their signs.
Education & Career Pivot To Investment Banking
Did you have some real jobs in between or did you go right to entrepreneurship? What did you study in school?
I did have a bunch of real jobs. I was a Psychology major and then an accidental Econ major. The theoretical side of economics, not the practical side. No finance classes, anything like that. My first adult job was as an investment banker, sadly.
What do you mean? That’s every kid’s dream these days. They all want to be investment bankers. They don’t even know what it means. It’s fascinating to me.
Not only that, Robert. When I was a junior, all these people were running around. I went to the small liberal arts college in Minnesota. We didn’t send a lot of people to New York to do banking at the time. There were a bunch of people running around being like, “I’m looking into iBanking. Are you looking at iBanking?” I was like, “I don’t even know what that means. I don’t even know what the ‘I’ stands for.” Eventually, I figured it out. It’s a long story.
I got a little disillusioned. I thought I was going to get a PhD in Psychology, which would have been a very different life. I got a little disillusioned with that. I was like, “All right.” I ended up getting an internship at an insurance company. I made, probably, $3,000 the summer between my junior and senior years. It was like a fortune to me at the time. I was like, “Maybe this business thing’s not such a bad idea.” I ended up applying to iBanking. By then, I’d figured out it was investment banking. It was an interesting experience. It’s a hard job but I learned a ton as a kid who was not a finance major.
Consulting or banking, irrespective of the money, they’re great learning experiences.
Unbelievable. Where’d you go to college?
The Psychology Of Business & Venture Capital Role
I went to Penn. My kids are both in college though. Everyone starts by sophomore year, “Oh, consulting.” You wouldn’t think there are any other jobs. It’s amazing. To me, there’s no better thing you could study in business than Psychology, particularly if you’re going to do any sort of services business.
I think about “What is my job?” It’s way more Psych than it is Econ, right? Because we invest in early stage companies and other funds. I barely make any decisions in my world. I’m an influencer as a venture capitalist. I am not a decision maker for the most part. All I do is try to influence people. I’m on a bunch of Boards. I help companies, whatever, do all the things that they do. Ultimately, the CEOs, the management teams make all those decisions.
I don’t make any of those decisions. So, I have to work with them. I have to be influential if I want the things that I think are the right things for those companies to do. Eventually, I guess, the Board could fire the CEO but right up until that point, the CEO gets to make all the decisions. The Psych background comes in really handy.
I just say, “I have twenty years of running a professional service business. I’m one online degree away from being a Psychology major.”
Easily. You’re probably five online degrees already past it.
We’ve never had a product break or six. It’s people, whether they were clients, partners, employees, or otherwise. What was your eventual break into entrepreneurialism?
I left investment banking. I had this interesting experience with iBanking. I loved it and I hated it. The tasks were menial tasks but I learned a ton. I had a great network. I didn’t have a huge network coming out of college. I went to a college that was much more academic-focused. It wasn’t super practicum-focused. It’s now a little bit more extensive on that side of the world. I do have that for my school
Really, Morgan Stanley was my business network, which was super helpful. They actually made me an offer to stay, skip business school, and just become an associate. I was so close to doing it, Robert. It was an honor. I was in an analyst class of, I don’t know, 120 kids and I think maybe five of us got asked to stay. It was great. The acceleration of pay was really high. I was like, “This is really interesting.”
What happened was one of the analysts in the bullpen next to ours, the workspace next to ours, had a heart attack at 22 years old. He just worked too much basically. I was like, “What am I doing? This is not what I want to do with my life.” My dad grew up in Colorado. I had spent all my summers here. I was like, “I think I want to move to Colorado.”
We happened to have banked a company in Colorado. I called the CEO and said, “Hey, I want to move to Colorado. Do you think I could get a job?” He said, “100%. Someone’s going to call you in five minutes.” Five minutes later, this guy called me and was like, “Shelby told me you’re going to work for me. Let’s talk about what that’s going to be.” Whatever it was, three months later, I moved out to Colorado. That was around 1996.
Transition From Industry To Founding Foundry Venture Capital
When did you start with Foundry? When was Foundry started?
I worked a couple of industry jobs. The first one was in telecom in the big telecom days in the mid to late 90s. Then, I jumped over to the internet.
I was in telecom consulting. We could trade acronyms. My first two weeks at the time, I’m like, “What is this POTS thing everyone’s talking about?”
There were so many. I was a year into investment banking and I sat down, I was in telecom banking. I sat down with one of the associates that I never worked with. We were going through some stuff. I guess I asked him a couple of “What is this acronym? What is this?” I’d been there for a year. He looked at me and he said, “You know surprisingly little for having been here an entire year.”
POTS is plain old telephone service. I think back then, everything was about 3G, right? That 3G was going to change the world. Maybe it was 2G, I can’t even remember.
My day was even before that. We were talking about DSL and DSLAMs.
SLAS. I just remember I just started throwing out acronyms and people just treated you better. It was an interesting time.
My favorite, you’ll appreciate this. We would go do due diligence when I was a banker. We’d go to data centers, network operations centers, and things like that. We would look at each other and be like, “I see the RBLs and GBLs are in place.” Then, we’d walk somewhere. What we meant was in the data center, red blinking lights and green blinking lights, right? It made us sound better because it sounds smarter, all the acronyms.
It made you sound like you knew what you’re talking about.
Eventually, I worked for a data comms company, which was super interesting, like an internet company. We actually took that public. I was the corporate finance half of the CFO role. We had a Head of Accounting and we had me. We took that company public in 2000. I did all the work on the IPO. I negotiated side by side agreements with Microsoft, Lucent, SAIC. We actually had Enron as an investor. Jeff Skilling and I sat across the table and negotiated dark fiber agreements before he went to jail, obviously. Interesting times.
In 2001, the stock market crashed. Texas Pacific Group was one of our big investors. They had hired McKinsey to do this big study on what we should do. They said, “You should go focus on this data center business.” The whole company was going to go do that. They actually put the entirety of the rest of the business. It was about 250 people, $55 million in revenue, and three different business lines. They put it under me. I ran it for essentially a year. I guess this is in late 2000. I ran it for a year and then sold it off in pieces. They made me an offer to stay, but I didn’t want to stay.
I thought, “I had some friends at Morgan Stanley who had gone into venture capital.” I thought this seemed interesting. I networked around. Eventually, I met Brad Feld who was at Softbank Venture Capital at the time. It turned out they were hiring for an associate which is a bit of a step back from where I was. But I was like, “I want to try it.” Someone had actually said to me, “You need to work for someone amazing.” Everything I heard, and of course it was true, that Brad was an amazing person to work for.
I started working for SoftBank Venture Capital on September 7th, 2001. Obviously, the world changed four days later. Actually, it was hard for a lot of reasons, but it particularly was hard because we were this outpost in Colorado. SoftBank Venture Capital was based out of Palo Alto. Maybe there were 80 people working at SoftBank at the time. There were six of us in Colorado and 74 in Palo Alto. We couldn’t go out there. I literally didn’t get on a plane for three or four months, which actually might’ve been better than when we just started traveling.
It’s like COVID. That must’ve been an amazing experience.
People were like, “How do you learn how to be a venture capitalist?” I’m like, “I’m the last guy to ask.” I trailed around certainly one of the best venture capitalists of our generation for four or five years learning how to be a VC, which was amazing. Eventually, we decided we would split out and do our own thing. That was 2006. We hooked up with two other partners from Mobius who moved out to Colorado in the summer of 2006. We started working on what became Foundry and then we launched Foundry. Started fundraising at the end of January in 2007, looked like it was totally going to fail by May. Eventually, it actually worked out and the rest is history. We’ve raised $4 billion so far.
Patterns Leading To Writing The New Builders & Broadening Entrepreneurship Definition
That’s amazing. You’ve spent decades sitting across the table from founders. I’m curious about some of the patterns that you started noticing that led you to write The New Builders.
The big pattern was there’s definitely an archetype founder in venture. It’s not necessarily reflective of entrepreneurship writ large. There are all sorts of challenges in venture like, “Why don’t we do a better job of funding different types of people?” I had a friend of mine, Elizabeth McBride, who’s co-written two books with me. We were starting to trade some stories about interesting entrepreneurs. They weren’t necessarily from the backgrounds that you would typically hear in Silicon Valley. We thought it’d be fun to write a light, almost like a coffeetable-style book about entrepreneurship like these overlooked entrepreneurs.
There’s definitely a venture-backed founder archetype, but it doesn’t reflect entrepreneurship as a whole. Venture still struggles to fund a broader range of founders and perspectives.
When we started doing the research, it turned out entrepreneurship in the United States at the time was actually falling. We were declining in our entrepreneurial dynamism. The vast majority of people that were starting businesses actually didn’t look like white men. They weren’t white men, and didn’t look like the typical founder in Silicon Valley.
We realized there was a bigger story to be told there especially because we started sharing some of these ideas with people. They were like, “No, that’s not true.” We realized we need to highlight this and tell these stories. So, we decided to write it up. That was great. It was an interesting process. I’d had some exposure to book writing just because Brad has written a few books. I’d seen what that was like.
This was a bit of a different style book. This was not asking other people to write chapters or based on our own experiences. It was a year of research, interviews, and things like that. Then, COVID hit and all of a sudden, these businesses run by women, people of color, etc. were disproportionately affected by COVID. We’re trying to write it really quickly and get it out there.
The ideas, I think, really resonated. We know a bunch of people on Capitol Hill read that book. It actually changed not the first wave of COVID relief funding. The second wave was changed pretty significantly based on the handful of the right people, I guess, reading our book, which makes me feel good. I think that’s a good thing for the world. I think that was positive.
How would you describe the new builders in terms of what makes them different from the traditional founders that people think about? You just talked about some of the characteristics. Is it mindset? Is that because it’s outside the Valley where there’s a lot of group think?
I think my main takeaway of writing The New Builders is that we should be celebrating entrepreneurship writ large. Whether that’s the 1% of companies that get funded by VC or the 99 % of companies that look somewhat different. We actually tell the story in The New Builders. What happened was we started to narrow the definition of entrepreneurship primarily. Because Ronald Reagan was using tech entrepreneurship and capitalism specifically as it related to tech entrepreneurship as a contrast to Soviet-style communism. He was very effective at that. Part of the way that he did that was he really celebrated, of course, he’d been governor of California, the Silicon Valley style of entrepreneur. People stopped identifying themselves as entrepreneurs if they weren’t working on a high tech business.
One of my favorite speeches, I don’t know if you’ve seen this in 2008, he’s also one of my favorite people. David Heinemeier Hansson gave this speech at startup business school about making fun of Silicon Valley, making fun of non-hyper-growth as lifestyle businesses, and that charging for things was a good thing. He had product and profit. It was like, “What’s missing in the middle?” He was like, “A price. We had a decade where no one charged for anything.”
I think the zero interest rate decade is probably not repeatable. It’s probably more of an aberration than the norm that people thought it was. The venture investors in Silicon Valley started to treat every business and industry like it was an Uber, Marketplace, eBay. Winner-take-all characteristic where it was just about being fast and earliest and pouring money in. That was like a false premise, I think. Just dumped money into businesses that didn’t have that winner-take-all advantage. Then, they all ended up killing each other by too much capital sloshing around.
I think we need to remember what works in Silicon Valley or for tech entrepreneurship more broadly. What works there doesn’t work in 99% of businesses. It used to frustrate me how this group mentality happens in tech entrepreneurship. I witnessed it in the telecom bubble. We built a lot of fiber back in the early to mid 90s. We saw it again in the internet bubble. People are asking, of course, are we seeing an AI bubble? I’ve stopped seeing it as negative. I think that’s just how that part of our innovation ecosystem works. From that, a lot of money gets wasted.
I was going to say you have to realize that working could be 95% fail and 5% have 10x return. Private equity people would be horrified at those numbers, right?
That’s the bet that people take when they’re investing in a venture fund. Maybe that’s okay. There’s some interesting businesses that come out of that. Obviously, we have multi-trillion-dollar businesses that were generated from this. That’s okay but we shouldn’t try to replicate that with the rest of our economy. To your point, you can’t make up for negative gross margin with volume. You need to actually charge a price.
Venture can work with 95% failures and 5% 10x returns—but that model shouldn’t be replicated across the rest of the economy. You can’t make up for negative margins with volume.
I love the famous quote from GM, “What we lose on every car, we make up in volume.”
Exactly.
How do you approach your venture firm? A lot of times they’re like, “Look, if I don’t see a way for this to be a billion-dollar business, I’m not touching it because I need the upside.” Do you have a different viewpoint on sustainability and risk reward? Obviously, there’s basic economics of a venture investment. It can’t be a great $10 million business or else the model doesn’t work. Do you have a view on loss versus exponential growth?
Yeah. Let me frame it a couple different ways and see if this is responsive to you. First of all, I think that we at Foundry tend to index more than other firms on unit economics and from an earlier point in time. It’s very possible that that means we have some companies that we probably throttled a little bit because we were very focused on making sure that the unit economics actually worked.
That doesn’t mean we haven’t had companies that have raised a lot of money. For example, I will say that in a number of industries where there were two dominant players, one raised a ton of money and one raised not nearly as much money. We have tended to be the investor in the one that raised not nearly as much money. We’ve had some success doing that.
Scarcity is a powerful teacher in terms of customer acquisition.
One of the best things about a CEO who did raise a decent amount of money, he had a successful business, went public, and is still public actually. I was with him from not quite the beginning, but close to the beginning. We raised a relatively large series, whatever D. Let’s say something like $80 million, $100 million. We were clearly on a path to go public.
I said something to him like, “Hey, let’s be careful not to spend this too quickly.” He said, “Right after you raise is the best time to start an austerity program.” I love that about him. Right. He was like, “Look, we’re not going to just waste this money. We don’t have to spend it. Divide the amount of money you raised by 18 and that’s your monthly burn. That’s a very bad idea.” I appreciate that.
I’ve always found it interesting, culturally, all of the celebration around raising money. If you think about equity versus debt, you don’t see people celebrating the huge mezzanine debt or loan or revolver they got. It’s like, “What are you going to do with it?” There is a cultural thing where we’ve celebrated getting the money, which almost then gives permission for people to be irresponsible with it.
I completely agree. It’s somewhere in the Internet archives. I wrote one of my favorite blog posts, “I’m getting sick of the BS.” It talked about exactly this. I think I wrote it in 2011 or 2012, something like that. It talked about “Why are we celebrating these?” Raising money is not a critical milestone for your business that you should have a huge press release. It’s important because you need money in order to do it. But celebrate the customer wins, the partnerships, getting to the revenue threshold. I think part of what happens when people get it in the mindset of like, “Hey, how much did you succeed?”
Raising money isn’t a critical milestone for your business. It matters because you need capital, but the real things to celebrate are customer wins, partnerships, and hitting revenue milestones.
That you’ve succeeded, “I already succeeded.”
Also, that becomes the goal. No, my goal should be to raise as little money as possible. I totally believe that that’s the case. I have a startup. I co-founded this fintech company, GoodBread. One of our goals is not to raise a crazy amount of equity money. We don’t think that that’s actually the right way to build a large and sustainable business that we still control.
It is interesting how that’s evolved. I noticed another paradox that you talk about. You said it before, entrepreneurship is actually declining but founders feel busier than ever. They have more to do than ever. What is the stat? How do we define declining? That would be the first question. And then, why the disconnect?
Fortunately, it appears that that trend is reversed. We looked at it on an economy-wide basis. You basically take business bursts, less business deaths. Every year, a lot of businesses go out of business. But also every year, a bunch of people start businesses. Truly. If you track it from the end of World War II until essentially the GFC, the Great Financial Crisis, you find that every year there’s more and more businesses in the US. Then, it started to decline and decline for a bunch of years.
COVID seems to have reversed that. I think maybe it’s because we were in ZIRP. It was because the government started giving out a bunch of money, etc. People started using funds to start businesses. Maybe some of that is, they couldn’t do their job anymore. That was COVID-ed out of business. They had no other choice but to start a business. Americans are very entrepreneurial.
It’s not a scale, right? It’s just start and stop. It doesn’t count for $1 billion versus a $10,000 business. It’s just the number of businesses.
Number of actual businesses because there’s a little bit of a Law of Large Numbers here. Again, Silicon Valley is important. I’m using that as a euphemism for all tech entrepreneurship. I probably need to find a better word for it but that stuff’s important. It’s 1% of all companies. It’s obviously highly impactful and it punches above its weight. The truth is small businesses, as defined by the SBA, are 50% of employment in the United States and 40% of GDP.
By the way, over 100% of job growth is generated by companies in their first and second year in business. Which is to say basically that older established businesses tend to shed jobs en masse in total. It’s really the new companies that are eating up employment in the United States. This is important for the US economy. Again, because 99% of those businesses are not venture-funded businesses, that part of the economy is really important. Supported by all these great tech companies that have been built to help them be more successful. We can’t forget the engine of the economy that exists in that side of our business world.
Small businesses, as defined by the SBA, account for 50% of employment in the United States and 40% of GDP. And over 100% of job growth is generated by companies in their first and second year in business.
Challenges Facing Small Businesses
I was going to ask you that. Through GoodBread and your advisory work, I know you stayed close to obviously a lot of small businesses. What are the challenges that you’re seeing by these actual small businesses versus West Coast venture-funded businesses? Because that’s a very different definition of small business.
It’s 1) Capital, and 2) Support networks, essentially. By capital, it’s worth mentioning that 85% of businesses don’t take bank loans or money from VC. They’ve got to fund it through customers, through home equity lines, things like that. One of the things that we’re trying to do at GoodBread is find a better way to attach capital to small businesses. These aren’t startup businesses. The companies that we finance are in business for at least a year.
One of the challenges in the banking market is that historically, you’ve had to take a bank loan of at least a couple hundred thousand dollars. The process of underwriting a bank loan is just too manual. The question we asked at GoodBread is like, “Can we do a better job of this? Can we automate that and make it so that you can take the loan?”
Because most small businesses need somewhere between say $10,000 and $100,000, right? They’re buying. They’re doubling down on inventory. They’re doing a bit more marketing. They’re maybe opening another location, something like that. These are not huge expenditures. They don’t qualify for a $200,000 bank loan, because guess what? They shouldn’t qualify for a $200,000 bank loan.
They don’t need that much.
They need a grant and they can totally pay that. That’s what we’re trying to do with GoodBread and say, “Can we change the paradigm here? Can we change the operations here, simplify the process, and automate the process so that you can actually afford to make loans at a smaller dollar value?” That’s what we’ve been successful so far. We’ve got the real money we need to raise at GoodBread. We need more loan capital, right? The operations of the business actually aren’t that expensive. We built the product and all of that’s going. We got a loan. We make 5%. We got to loan a lot of money in order to drop money down to both our top line and bottom line.
I’m curious, you’re around a lot of business and starters. Your LinkedIn feed probably looks like mine with AI this and AI that. “You can find this thing and find the business to run. Start this business. Just make money and not work.” I love those. I was like, “If that really worked, you’d be not telling me about this and doing more of it, not selling me your formula to do it.”
Passion is important in it. I think because a lot of facets of starting a business are easier, you can start a business you’re detached from unemotionally. It’s always going to be hard or difficult or something at some point. What gets you through it is that you care about it. What do you think about AI making a lot of this stuff easier? Does it make people think that they can just be academic entrepreneurs and not really care about what they’re doing? Because it seems to me that it’s hard to get through the bumps if you have no emotional attachment to what you’re doing.
I don’t think AI replaces people coming up with ideas and starting this. I should start by saying I say this as someone who uses AI every day a lot. I still think a lot of AI, for most people reading, is still in the emperor’s new clothes phase. We all talk about it like, “Oh yeah, you use an AI? Yeah, Robert, I use AI all the time. It’s amazing. Love it.”
I think it’s helping people incrementally, but there are relatively few people that have really figured out how to use the instrument, what they’re doing, truly. I don’t really like the term vibe code, but you code using cloud code or whatever. I actually don’t think a lot of people are using it yet in the way that we sometimes describe it.
I like to start with that because I feel like when I sit down with people and we really talk about how people are using AI, we’re just scratching the surface of it. I think a lot of people feel like “I’m using it wrong” because I hear all these stories. I have to pretend like I’m really using it in this way that’s completely transformational. I don’t know, I really haven’t.
If you use it totally correctly, it strips out meaning, right? My AI could reach out to you about being on the podcast. My avatar could interview you. It could sound like you, it could sound like me. And then, what are we both going to do with the rest of our day? I’ve seen some people with these, “I’ve just automated everything. It’s this box and run. I don’t have to do anything.” I’m like, “What are you going to do?” It is an important question.
For starters, I think actually people want to work. Work gives meaning. Like what Kahlil Gibran said, “Work is love made visible.” People express themselves through their work. That doesn’t mean everyone loves every aspect of their job. I just mean that it gives you purpose and meaning. I’m sure you’ve done this before as well as I have. I sometimes like to use AI to draft things or summarize things, things like that. It gives you the most of the Nella version, right? You revert to the meaning. I don’t know about you. I don’t want to be average. That’s not my goal. AI didn’t write any of my books. When I do have AI write something, I fully have to edit it because I want it to sound like me.
We’re still just scratching the surface of how people use AI. Many feel like they’re doing it wrong because they hear transformational stories—but most are still figuring it out.
I have it as an editor, not a writer. I like it more as an editor than a writer because it’s just too much work to fix what it’s writing.
I guess it depends a little bit. When we’re marketing the new book, we’ve been asked to write a couple of articles that weren’t excerpts of the book, but the description.
You’re having it adapt something.
It’s a really good first drafter. “Okay, I want to write it based on this. Here’s the manuscript.”
It knows exactly what it’s doing, right?
Yeah, and I still have to re-edit the whole thing.
You’re adapting something. It’s interesting.
Maybe I spent fifteen hours on something that would have taken me 40 hours to write from scratch. It gives me a good head start. I think it’s good at that. I think you’re absolutely right to point out that it takes the soul out of everything at the moment. I think we should just be careful. I’ve got college age kids. We talk a lot about things like, “Hey, I want you to be actually using AI. It’s totally fine to use it, but here’s how to use it and use it properly. It’s not a substitute for doing the work. Let it do the tedious stuff that you don’t want to have to do but you still have to do all that.”
That is the problem. There’s value in, at some point in your life, learning to do the tedious stuff. If you don’t know how to do the tedious stuff, you lose some muscle building too. What do you think about these AI venture funds that I’m hearing about? Just making a totally AI-oriented business.
Am I going to lose my venture card if I say anything other than it’s a terrible idea? There have been algorithmic approaches to venture for a long time. Especially at the earliest stages, they tend not to work because there’s not enough data. By the way, I think it perpetuates some existing challenges that we already have in the venture ecosystem in terms of who gets in front of a VC and who gets funded. I think our job as VCs is actually to see patterns that don’t even exist yet. Have a hypothesis about new areas before they actually become a thing. As soon as they’re a thing and an AI could recognize it, then everyone can recognize it and then you’re seeking beta, not alpha.
Here’s a good example, because I think about this a lot. Some of these things were just data and crunching. Think about the NFL draft. These teams would have bought supercomputers years ago, right? Modeling and whatever. Every year, there are 50% surprises and 50% disappointments. It’s so interesting because if there was ever a case where there was an ROI for big data and unlimited money. If it was a problem to be solved, it would be the NFL draft.
All the scientists come out every year and they go, “A draft pick this year is worth a draft pick next year.” Someone trades three draft picks this year for one draft pick next year. Why? Because that GM is going to lose his job if the team doesn’t get better. If those things were fully solvable, there’s no place I can think of that would be not deploying this as rapidly as it could. Even if it went back, took all the data over past drafts, and said crunch everything you knew about the person going into there and who was going to be a superstar. I’m sure people have actually done it.
I have to believe that. First of all, I love it because I’m a huge NFL fan. I actually have thought about this, because Richard Thaler, who’s a famous behavioral psychologist, has been talking about this. He’s re-released one of his books.
They’re totally irrational in the draft every year. Everyone’s irrational.
I’ve been thinking about it because I listened to some podcasts a couple of months ago where he’s talking about, “Why isn’t this solved yet?” The reason is there’s variables that we just don’t even understand that AI is not going to pick up on. I like that analogy, Robert, because I think that that’s how I would, again, to keep my VC card, respond. I don’t think VC is going to totally get taken over.
When the NFL draft is done by AI, then I’m going to start to worry. That’s probably your answer.
There you go, absolutely.
It will be interesting. I would not be surprised though for someone, professor or something, to run a concurrent draft model this year and then come back and see what would have, purely AI. That’s interesting. I bet someone is doing that or would publicize that. I’ll try to look around the draft this year.
By the way, the other thing that that misses, and I really believe this is true. There are some exceptional coaches in the league, right? Not just head coaches. I’m thinking about like an O-line coach or something, either a D-line coach in particular.
They can get more out of someone.
Where they can get more out of someone. Also, they need a certain set of skills in order to implement the thing that they’re trying to implement, right? You see this all the time where you see someone who maybe was a high draft pick. They were on one team and they didn’t do so well. Sam Darnold, right? Or Baker Mayfield for that matter.
Basically, if the Jets draft a quarterback and get rid of them, then they will be excellent three years later.
Absolutely, exactly. Daniel Jones, right? Not the Jets, the Giants. It’s not uncommon where someone has a lot of talent, but they’re in the wrong system for that talent. I think that’s the other thing that makes the NFL draft. There’s not a right draft order per se, because it depends on which teams are drafting and what talents they have.
The Patriots are a pretty interesting example of that because they had a horrible draft the last couple of years. Eliott Wolf is their GM. Mike Vrabel comes in, brings in his number two. They keep the GM, but they say, “These are our guys. This is the profile we want. This is the look we want. These are the type of people that we want for our system.” They give that playbook to the guy who basically made these horrible drafts and they had one of the best drafts last year. Five starters for their system, as you were saying.
Back to the coach point, coaching was important there. You’re saying exactly how I was thinking about it. You got to match the players to the system. There is not a right draft point. There’s no like, “This person has to be the third pick.” It really depends on who has that pick.
Systemic Fear Of Failure & Perfectionist Culture
Remember the number two can’t-miss pick, the Giants guy, has a lot of attitude problems. They’ve had a lot of problems not showing up to practice. I’m not sure that any AI, maybe it could have scoured that or whisper news, but it’ll be interesting. People will run a comparison. One other thing I’ve seen come up in your writing a lot, actually tied to my Friday for this week which was interesting, is failure. Not just individual failure, but systemic fear of failure. How do you think our relationship with failure has changed society? What is the systemic solution? I think this is a real problem among youth. The perfectionist culture that they have grown up in is unhealthy.
Some scientists have actually studied attitudes towards failure. It used to set the United States very much apart from Western Europe and Asia. We were very accepting of failure. It used to be. I remember when I got an adventure, the stories around failure, the adage used to be “You have to fail before you can be successful.” People almost didn’t even believe that you could be successful at your first venture.
It used to be that you had to fail before you could succeed. People hardly believed you could be successful on your first venture—but that idea has largely disappeared.
Now, that’s completely gone away. By the way, if you look at it systemically, the US view towards failure is actually quite similar to the view in Europe. Not to a lesser extent, not quite true yet, Asia where they don’t accept failure nearly as much. It’s because we’re absolutely training people not only not to fail, but not even to try things that we are afraid will fail.
If you get a B-plus, your dreams of the Ivy League are gone, which is the craziest concept to me. You think about the kid who’s scientifically brilliant, probably maybe then not great at philosophy, takes philosophy class, gets a B, and is like, “You know what? I didn’t really love that. It didn’t do anything for me.” Goes back into his science and gets A pluses. When they apply to college, they’re not applying for philosophy, they’re applying for science. If you didn’t do well in the thing that you want to do, to me that’s one thing. This 1-B-plus-destroys-your-life thing is just creating anxiety. It’s ridiculous.
I hate it. I think it is discouraging people from trying different things. One of the great things about going to a liberal arts college, I thought, was trying some other things. My favorite course was a philosophy course. It wouldn’t have been the end of the world if I hadn’t done well in it. It was okay. I think that’s a real problem. Because of this, we’ve also, I think, stopped grading kids on their actual work. I think teachers are actually afraid to give lower grades.
Have you seen these articles coming out where UCSB and Harvard where they’re adding remedial math? Harvard or UCSB is not that easy to get remedial math because 30% of the kids can’t do it. Those 30% of the kids had 4.0s. What are you teaching people?
They’re getting a pass at all of this stuff. So funny, I was actually at my own college graduation. I’m sorry to call it out but it’s so true. I worked really hard in college. I was really proud. In my year, there’s 500 students. There were eleven of us that were summa cum laude, which was 3.9 or higher.
Which used to mean something. By the way, 3.9 was probably 5% top of the class, right?
It was less than that. It was eleven kids out of 500.
Where was the Mendoza line? At maybe 3.5, 3.4, or something.
Maybe even below that. I looked in the last program for commencement. I’m not going to get the number exactly right. It was 175 kids, give or take, out of 500 were summa cum laude. I’m like, “What happened?” There’s no way. I remember how hard it was.
This is the problem. These kids show up at our companies, at my company, in your company. Life doesn’t give A’s to everyone. When this first difficult performance review comes or the first thing that you don’t get an A equivalent on, it’s just like melting in a puddle.
How do you adjust or do you adjust giving feedback to these newer generations, if you will? Because I agree. I think it’s actually really helpful to how I told that funny story about that associate being like, “Hey, you seem to know very few of these acronyms.” I went and studied them. I wasn’t like, “Oh my God, my career is over. What am I going to do?” I was like, “Okay, I’ve got some work to do. This is a complicated industry and I need to understand this stuff better.” How do you give feedback to people that work for you knowing that they’re so sensitive about this stuff?
The good news is that not a lot of people work for me anymore. They don’t let me touch operations. I think you have to normalize and screen for that before you hire into the company. This is why people actually talk to employers. They’re more interested in going and finding the top 5% people at the state schools that were on scholarship, that actually had some hardship, and did it themselves.
Because at that point, the problem is trying to add resilience to 20 year olds where it was not given to them by their parents or their educators or their systems. It’s a really hard uphill climb. I’m not sure it’s a solvable problem. I posted something about this related to “There’s a mental health crisis at work.” An HR person responded. They were like, “Well, we want to be a good employer. But we also have people who just can’t cope and have to take two weeks off after not a great review. How do we deal with this?” I was like, “I’m not sure you do.”
Maybe they shouldn’t work there.
I think you needed to change your interview process probably. It’s not your job to fix these people.
Have you read Adam Grant’s Hidden Potential? It talks exactly about what you’re describing, which is that the journey matters. I didn’t realize I was doing this for this reason. The first question I always ask people when they come to pitch me is “Give me the background on how you came up with this idea.” I want the backstory because I want to hear about the journey. Not because it has to be a hard journey, but I care about the background. I think that we should, as employers.
By the way, to your point, I tried, at Morgan Stanley, really hard to push this point. I’m sure it’s still the same way. There were a specific number of analyst slots for each of the recruited schools. Harvard got ten, Yale got nine, whatever it was. And then, there were eight for every other school in the country. They were fixed. If you had eight and you found another guy that you thought was great, you’re not going to hire him. There was not a ninth slot. I was trying to argue like, “Hey, I feel like you should have more in this jump ball pool. I promise you the best student from Grinnell is better than not just the tenth best student but the tenth best student that you can hire that accepted the job at Harvard.”
I think employers are looking in this direction. I’m curious. What do you think? Is there a systemic solution? I actually think you got to start weeding out and finding the kids to have it. I’m not sure it’s our job or mandate to parent people in their 20s who don’t want that. If they want it like, “Can you help me be more resilient? What are the things I want to do?” I don’t think they’re asking for it. What they’re asking for is, “I need four weeks off.”
I want you to tell me how amazing I was.
Which, by the way, is not backed by any data. It’s amazing. There’s this whole mental health UK thing going on in TikTok and everything. It’s not backed by data. Obviously, if you have an acute mental health crisis, yes. The notion of withdrawal as a solution is not backed by any study or anything that anyone can find. It’s become a cultural TikTok thing of take-time-off withdrawal. I wrote an article on this. What you’re doing with your withdrawal, if you took that off, got healthy, and exercised. If you sit in bed and look at the screen all day long, do you think that’s actually improving your mental health?
I think you’re right. I’m glad I’m not a manager either because I don’t have tolerance for this kind of stuff. I think I just simply wouldn’t hire. I would try not to hire people that fell into those categories because it’s not our jobs as bosses to coddle people along. I understand that it’s also not our job to haze them into being tough and resilient.
It’s not our job as bosses to coddle people. But it’s also not our job to haze them into being tough and resilient.
That’s not even on the table. That’s a generation ago. Where this shows up is my friends, they’re all training medical students now. The stories they’re telling me are scary. I have a friend who’s the nicest guy in the world. I’m sure he got screamed at and yelled at in his residency. Got told he was a moron and an idiot and whatever. He was just doing a surgery with a fellow and was telling this person they weren’t doing the surgery correctly. They went off crying and told on him. This is someone who’s going to be released into doing surgeries soon.
Not even a resident. A fellow.
You know what they say to me? This is the reality. People don’t want to address reality. They worked 100-hour weeks. Whether that was right or wrong or it had its downside, the current class works 50-hour weeks. That adds up over three years of training. Maybe you need five years of training and not three years of training if it’s 50-hour weeks and not 100-hour weeks.
I think we need to acknowledge that kind of stuff. I certainly did not train to be a medical doctor. I went through a version of that in investment banking and worked 100-hour weeks. It sucked but I did learn a lot more by doing it. Everyone feels like they need to have that experience.
The 20s are your time to do that. That’s the other thing.
Of course, not everything is fun. Sometimes you just have to work hard.
If you’re going to do 100-hour weeks, you have the stamina physically and your lifestyle to do that in your 20s. Like I said, I’m not a workaholic for workaholic’s sake. You were doing that because you were learning extensively, right? To be more valuable.
By the way, knowing that that’s part of the process, weed some people out who are like, “Maybe I’m not dedicated enough to do this.” That’s not such a bad thing, right? Maybe it’s okay for people to be self-selecting. Those people who don’t want to put that time in are like, “That’s not the right job for me.” What’s happened is that in that profession and lots of others, we’ve been like, “No, we need to make this available for everyone. We just need to make sure that it’s not too hard.”Maybe being hard is part of what we’re trying to accomplish.
I think it is. I think you want it to be harder earlier. You get through that and you learn what hard looks like. I continually see that that is the problem. I think of this failure thing, people growing up in this system where they’ve never been wrong. They’ve never gotten an A minus. The real world just doesn’t offer that. There are winners and losers and feedback. Even feedback isn’t like “You got it all wrong.” It’s that “Here’s how you get it better next time.”
There’s a saying in the Navy SEALs, “The standard is the standard.” I really like that. The expectation is the expectation. You either meet it or you don’t meet it. If we’re training to the standard, then we’ve trained to the standard. We don’t lower the standard because 70% of the people in this, whatever SEAL class, or whatever the analogy is, didn’t meet the standard. The standard is the standard.
There’s a saying in the Navy SEALs that goes ‘The standard is the standard.’ There’s no need to lower it.
To your thing before, there’s no adjusting of the summa cum laude. If no one passes, no one passes. Someone explained to me before, there’s actually no rule against women not being in the SEALs. They’ve gone through BUD/S and no one has passed yet. They’re pretty sure that someone will. One of the hardest things is that you have to be able to, I think it’s a 250-pound body, you have to be able to carry a certain distance. That’s one of the things. That’s been one of the hardest things to overcome. They’re like, “Look, based on the job that we do, we can’t lower that standard.”
The standard is the standard. I totally agree. Look, I would love to have played in the NFL, but I’m 5’8″, 145 pounds. It’s just not going to happen for me, right? I don’t think there’s enough steroids in the world to make me an NFL body. It is what it is. Do you know what I mean? If I don’t hit that standard, I’m not going to do it.
I find myself telling my kids a lot. “It is what it is. We are where we are. What are we going to do about it?” That’s my version of stoicism. “This happened, that happened. We are where we are. What are the best choices we can make going forward?”
If there’s anything that gives me a little bit of hope, it’s that we think that each generation builds upon the last. Really, each generation is a reaction to the last.
An overreaction.
An incredible book called The Fourth Turning, which describes this. I hope it continues. There’s a series. It goes through these four turning, four archetypes. They just keep coming. They bounce back and forth. In every, essentially, 100 years, it repeats itself. I’m hoping that that’s what ends up happening. As much as we all mess up the generation after us and then they’d mess up the generation after them. We keep reacting to it but in slightly predictable ways. My hope is that it doesn’t just spiral out of control.
Someone told me by the math, we’re actually at the end of the current fourth turning, which I was happy to hear.
Which is true, by the way, if you read the book. I kept looking. It was written in 2000 and it absolutely predicted the rise of Trump, or someone like Trump. I was like, “There’s no way. This must be revision. They must have rewritten the note.” This is what they wrote in 2000.
Morgan Housel wrote a book called Same As Ever, who wrote The Psychology of Money. Basically, the premise was that no matter how many things change, human emotion reactions are almost as well as psychology. Beginnings are almost always the same throughout the history of the time. If you’re going to bank on anything, bank on. Again, we’ve never not taken something, whether it was railroads or internet or AI or data center, and if it was hot, not dramatically overbuilt it. We’ve just never not done it.
That’s human nature. By the way, there’s a half a million years of human evolution and biology that hopefully will be a bolster against, again, our messing up the future of next generations.
We think each generation builds upon the last, but in reality, each generation is often a reaction to the one before.
The Role Of Business Founders In Shaping Society
I know in Capital Evolution, you talked about the growing power of business and society. The government’s not going to solve our problems. I think a lot of us have come to that conclusion at this point. What do you think is the key way the business founders can help shape society for the better?
This is the new book, Capital Evolution. We talk about the future of capitalism. It’s a little bit of a defensive capitalism. When we started writing it, that wasn’t top of mind. Obviously, it turns out in 2026 with a socialist just having been sworn in as mayor of the largest city in New York. This is not a political commentary.
It turns out maybe we do need to talk about why capitalism actually does work and why it’s important that we acknowledge that. Also, acknowledge ways in which it might need to change a little bit. The book really goes through both the history of capitalism, especially the last 50 years, neoliberal, shareholder-first style capitalism. Also, it talks about ways in which capitalism needs to change.
There’s a couple of things that we talk about. One you already touched on, which is there’s a role for government but it’s a limited role. Let’s be balanced about that. We talk a lot about taking a longer-term view rather than this quarter-by-quarter view that the neoliberal style capitalism incented in people. We talk in particular about empowering an ownership economy. I think that’s something that every entrepreneur reading can be thinking about. We do a pretty good job of that in tech entrepreneurship. We need to broaden that across society.
Lastly, which is one pillar we added at the very end, because it felt like we kind of needed it. We do need to have a set of rules, respect for the rule of law. That’s actually important as well. We’re not going to summarize it here in a couple of minutes. The book does a really interesting job of talking about the rise of the power of business, the decrease in trust in and power of both governments.
Maybe government’s more powerful in some respects, but trust in government and trust in media, fragmentation of media, and how these things have come together. We’re asking a lot of our businesses if we’re asking them to chime in on every social issue of the day. We talk about why that’s probably not what we really want.
We do it through talking about the research, talking about the history. We interviewed probably 100 people, including folks like Jamie Dimon from JP Morgan, Dan Schulman, who’s the CEO of Verizon and was the CEO of PayPal when we talked to him, Lisa Green Hall, who basically invented Impact Investing, a bunch of people like that. We tell their stories.
The book itself is super accessible. One of our observations was that many books on the future of capitalism were very dense and very academic. We wanted to write something that was more from a practical perspective and more accessible. It talks about “What does the future economy look like?” I can tell you, having sat down in a number of large groups and done some book talks. People are really interested in this subject. Either because they have questions about capitalism or their kids have questions about capitalism. Or, they recognize that something needs to change but they don’t know what exactly it is. I think everyone experiences this in some visual way, which is why it resonated. It became a best seller. It’s all positive.
There’s an interesting narrative. I think there’s some people who believe that pure capitalism is just unbridled greed and profit. There’s another viewpoint that some of the problems with capitalism have been that it hasn’t been pure in the last ten or fifteen years. We’ve bailed out people and let them get away. They’re supposed to lose their money, go away, and make bad choices. I think people miss that side of the story, which sounds weird. Like, “Oh, we need more capitalism. But the government has interfered with private businesses in a way that has, I think, artificially propped up winners and losers.
First, we wrote a chapter that says, “Is capitalism exploitative by nature?” We hit that head on. That’s Chapter 3 so we hit it early on. We also write an entire chapter about government and the government has the opportunity to pervert capitalism. And it has, right? Too big to fail. Things like that. I think one of the reasons we’re in this populist moment in the United States is that we actually perverted capitalism so much in the way you’re describing, Robert. There were no consequences to people, especially the businesses, that took the risk. There were consequences to people. People lost their houses because they took a mortgage that they couldn’t pay back. On the flip side, there were no consequences.
One guy went to jail or two guys went to jail.
It was crazy. If you ask me where this current populist movement came from, that’s clearly where it came from.
People don’t talk about this as much, and again, not to get political, but COVID happened. You needed quick solutions but we wheelbarrowed money around. There was a ton of fraud and a ton of people that took it that didn’t need it. If someone finished the audit on that, my guess is, it was a tremendous waste of money. I get it. At the time, you’re panicked and you’re trying to get money out to people. But the mob’s all hired McKinsey. We’re faster than the average consumer on taking advantage of some of these things.
We exacerbated by not pulling back to pre-COVID levels of spending, right? The problem is that this became the new baseline. This is why we were running a $2 trillion a year deficit, which is unheard of. Like Jimmy Carter, a long time ago, he proposed a budget that had a $20 billion deficit, the equivalent of a couple hundred billion dollars today. He was eviscerated. People were apoplectic about it. The latest budget is a $2 trillion deficit. It makes absolutely no sense. More than I care about Democrats or Republicans or whatever.
They’re equally to blame if you look at the charts. Neither side is a monopoly on the deficit problem.
All politicians seem to like spending money. The number one problem facing the United States is spiraling debt. I truly believe that. We just passed a trillion dollars debt service. At some point, it’s just going to eat up so much of the budget.
If anyone has been in business would tell you that, again, I’m very independent, but you have to solve this with revenue growth and cost cutting. Neither of those alone will solve a problem this big.
That’s absolutely true.
Saying that will get neither of us elected, so we’ll stick to our day jobs.
People ask me all the time. I do a lot of political things. People are like, “Are you going to run for office?” I’m like, “Are you kidding me? Absolutely not.” First of all, I’m totally unelectable because I’m way too middle-of-the-road. Also, no, that sounds terrible.
Right. All the middle-of-the-road people don’t want to spend two years saying things they don’t believe to get out of the primary to then have a shot in the general election. That is the problem.
That’s exactly true. What you just said, I just want to underscore, is completely right. We need to deal with cost and we need to deal with growth. Meaning, we need to grow faster.
Seth, we could go on for hours but we got to let you go here. Where can people learn about you, your work, the books, and Foundry? What’s the best place to chase all that stuff down?
You can find out more about the book at TheCapitalEvolution.com. There’s a bunch of stuff there, including a bunch of links for places to order it from, including Amazon, but your local bookstores, etc. You can find out more about me at SethLevine.com and more about my firm Foundry at Foundry.vc. While we’re doing it, you can also poke around at GoodBread.net and see what I’m trying to do there on small business funding.
Seth, thanks for joining us. Your work reminds us that building something does not fit a single mold. There are a lot of different ways to build a business.
Robert, this was super fun. Thanks for having me on.
You can learn more about Seth and his work on the episode page at RobertGlazer.com. If you enjoyed this episode of The Elevate Podcast in general, I have a very small favor to ask. Would you mind just taking a minute to share this conversation with someone who you think would appreciate it? Thanks again for your support. Until next time, keep elevating.
Important Links
- Seth Levine
- Foundry
- GoodBread
- The New Builders
- Capital Evolution
- Hidden Potential
- The Fourth Turning
- Same As Ever
- The Psychology of Money
- Robert Glazer
