Terrain launches 'Free Agency' — a no-strings 90-day founder exploration program before you pick your idea

He's here to break it down for us. William, are you there? What is Terrain? Welcome to the show. Guys, what's going on? Look at this. Just popping in with the art. What do you got behind you? Yeah. Bring it down for yourself. This is actually a piece that my mother made. Oh, so I'll I'll put a plug out for her her work.

It's uh Katherine Vanlanker. Shout out to She's a painter. She's been a painter my whole life. Fantastic. Uh can you break us down uh what what is Terrain? Uh what are you working on and what are you announcing most recently? Yeah, absolutely. And uh thanks for having me here, guys.

It's great to Yeah, it's great to have you. Great to see you both. Uh, so Terrain is an early stage investment firm that I started last year with Eric Stroberg and we back founders who have specific and ambitious views of the future. We like to say these are people who call their shot.

These are folks like Zack Dell and Justin Lopez at base power. Uh, Alex Mather at Eternal. Oh yeah. Zack Abrams and Shawn Yu at Bridge.

And increasingly we think that this is just going to be very important to build a meaningful and lasting company whether you're attracting capital or building an audience or building a team that um being able to clearly articulate your vision of the future is just going to be the the things that separates uh the good from great.

Yeah, definite optimism. Uh I I want to know about like the whole call your shot your declare your free agency thing. It feels much earlier than, hey, show up on Sand Hill Road and raise a mango seed round in a weekend. Um, walk me through the different options that founders are facing these days.

They can go do YC, especially if they're if they have a good track record. They can even do EIR programs at Founders Fund or that's what I did. Like I wound up doing this slip, but but at VC funds, they have EIR programs that are like a little bit more flexible uh for folks. But but where where do you see slotting in?

Because it sounds like you're thinking pretty early stage. Yes. So, you know, first and foremost, we're an investment firm. We invest from that really early stage, which I'll talk about shortly, uh through to seed and series A.

So, we're very kind of flexible in kind of where we enter and um you know, work with you know, those companies that existed are you know, raising mango seeds or series A's or whatever you want to call it. Uh, this most recent program we launched is called free agency.

And what that is is a concentrated 90-day period before you have your idea to go through um a focus exploration to uncover your idea. And this stems from the belief that um it's kind of a missing thing in the market.

something that I saw while I was at Thrive Capital where we were partnering with people who had an edge or an interest area in a certain technology or a background but were not yet convicted behind what that is.

And you know the venture industrial complex tries to you know give you capital and you know quite frankly perhaps before you're ready and make those commitments and those decisions before you're ready. And so with free agency, what we're doing is we're unbundling that from selecting your idea and taking capital.

So there's no strings attached, there's no um cohorts, there's no demo day, there's no kind of deal that you have to take. It is really this period of open exploration. And our hope is that it results in more thoughtful and uh deeply convicted ideas from the founders we get to work with.

And on the other side of that, if it makes sense to partner with terrain, fantastic, we will be there and waiting.

But we believe that that is just something that is really needed and we're on the last day of applications today and uh quite frankly been really surprised uh and elated by how many people this seem to resonate with. Do you think most people can figure out if an idea is good or bad without spending money?

Because the typical accelerator is like come in, we're going to give you 200 to 500 grand, maybe a little bit more, and then you're just going to start spending money to like figure out if you if the sort of highlevel idea that you had is good.

Now, I think a lot of really brilliant entrepreneurs do all the work to sort of like make that idea concrete sometimes for years prior without ever spending sort of explicit dollars. But venture dollars are so available.

So as part of this program to basically say like all you need to do is invest time and energy into exploring your idea, you actually don't need money, but when the time comes to actually hit go, we'll, you know, we we'll be there. You know, other other funds in your network will be.

Um, so maybe maybe talk about that because like you at Thrive Capital leading incubations, you guys incubated a lot of companies. I'm sure you also explored potentially thousands of ideas, right?

And so maybe talk about kind of your process and I imagine a lot of free agency is like built built out of and your sort of process internally is like how do you evaluate ideas? How do you kind of build conviction without having to spend a lot of money? Yeah.

So uh one good feature of today's ecosystem is that we actually have access to a lot of resources that maybe didn't exist you know in decades prior. Um every person that participates in free agency gets access to over 350 grand in compute resources and service resources that sort of thing.

So there is some capital to deploy you know via technology. Um that is not you know dilutive or or anything in that regard.

um you know the the process and I'll kind of go back to to kind of you know zooming out for for for a second um each of these products EIR accelerator incubator um free agency they're products for founders right and so you have to meet the founder kind of with what they need in that moment free agency is not going to be for every single type of founder and it doesn't need to be you know if you're a young person and you're looking to get access to network and um you know enter entree into Silicon Valley accelerators are phenomenal for you.

But what we found with the people that we're engaging with is that we don't they don't want to be put onto that track. They don't want to be kind of put onto that timeline and make those decisions kind of too far upfront.

Instead, what they want is close partnership to dissect an idea, to dissect a market with the perspective of investors and with the perspective of someone who can be that thought partner through the journey.

And you know you guys have both started companies like you know that feeling of being close to something but not quite there. Like it is not the myth that is often told on stage where you know you're struck by lightning one day or like you know almighty comes down and just drops the idea into your head.

It is a process of iteration of staring into the abyss at times and we just think that there can be some structure placed on that and some shortcuts to uh you know strengthen the business model or strengthen their travel through the idea. It's what we saw time and time again at Thrive.

And the reason to not attach capital to it is one both for that point of commitment and restriction but the other is I think it makes you make decisions differently.

I think that you either if you have that stipen and you're hanging out in the offices and you're drinking the spa water in the VC office every day, I think you have a different mentality about the burning platform and the company that you need to go and build.

And so we think that you know actually creating a little bit of a pressure cooker during that time is really really important. Yeah, I completely agree. YC is I love spa water too.

I mean, yeah, but one of the best benefits of YC is just like the competition of like seeing everyone around you, the pressure and having a deadline. It's great.

I I I wanted to ask about like archetypes that you're seeing like there's so many different people that I could imagine going into this from the the repeat founder who really wants to make sure that they call their next shot and they take a big swing in it and they're ready to set up with a lot of capital when they're going versus the employee early stage employee at a growth stage company that wants to move on to something new, leverage something but wants to fully transition out of the previous company versus like the high school college dropout.

Uh is is is there a pattern or are you just widely open to everything? It's been it's been really open. So we've had hundreds of applicants already. Um you know these have been engineers and designers and companies like OpenAI and Data Brick, SpaceX, Ramp like you name it.

Um we have a Gen Z creator who has millions of followers and more research focused people like you know from Deep Mind.

um and then some successful repeat founders uh both in our network and kind of entering you know from uh from the application and I think what it illustrates is that there isn't something really like this and I and I feel you know kind of uh you know you're supposed to keep these things secret for a while but it really feels like we've hit on something to um to meet people in this moment at this stage.

I think with this first batch we're going to experiment and try to take on a real diversity of of people while keeping it focused. Um, but I imagine over time we'll start to see a kind of a consistency form.

Um, but you know, more than anything I think these are people who are not starting something because someone else told them to. They're starting something because they believe that this is the almost the last resort, right?

It's like I can't join a great company or I'm at a great company and I have this thing kind of burning in me to go build a company. Is talk when you're when you're calling your shot, you have a big sort of vision for the world. is talking to customers overrated.

Like the YC approach is like have a loose idea, iterate quickly, talk to a lot of customers and that clearly works.

But at the same time, we've seen some other like sort of major power law businesses where they clearly just had like a vision for how they imagine the world and yeah, you got to talk to customers along the way because you have to sell to them. Uh but but you know, it's the Henry Ford thing.

Like if I asked people, they would have said a faster horse. The ultimate like I didn't talk to customers guy is Henry Ford. Yeah.

Look, I think you know Henry Ford certainly talked to customers along the way, but I think that had the vision of what he wanted to create and that's the case that we see with you know with people like um you know Zack Dell at base.

It's like he wants this idea of um you know energy too cheap to meter it right and that's where the starting point is and let's work backwards from that because if we can achieve that view we know we can appeal to customers right or um you know Zach uh a lot of Zach's here Zack at Bridge uh you know started that company not during a time when uh cryptocurrencies and stable coins were all the rage right it was it was built on internal conviction over many many years and I think that in the environment today where software has eaten the world and you should assume that if you're on to something interesting there are two or three other competent well-funded you know good people going after it as well.

It has to be you know from that kind of internal conviction um not from you know I I pulled 500 people and they told me that you know dogs want this type of you know X right there was an era where I think that worked and I think we're out of that era.

Do you think founders get way too much validation of their ideas from investors?

Because I've fallen into this trap before where if people will invest in your comp, you know, if really smart people will invest in your company, sometimes you can think, well, I I must this must be a good idea, you know, because people were willing to bet on it.

Uh when usually from the investor's point of view, there's tons of scenarios where investors are like, I'm sort of so so on the idea, but this guy's just so great.

Um, so is that some kind of like, you know, I'm curious if like, you know, one of the like you should basically get validation in your idea by spending enough time with it, spending time talking with other intelligent people that aren't just incentivized to deploy capital, but actually want to help you find that, you know, help you get to the point where you can actually call your shot.

Totally. Look, I I think that maybe 15 or 20 years ago, um when CDVC and and early stage venture was more scarce, you could rely on that like you know, you could say, well, you know, there's someone who's willing to stake capital on this and thus I've passed through some barrier.

Now, that didn't mean that it was, you know, the next Google or Facebook, but uh there was some barrier that you passed through. I don't think that's the case. And I think that honestly the best founders are not solving for capital at the beginning.

They're um you know there's a there's more options available for them than ever. There's bootstrapping. There's you know coming in with past success. There's friends you have around the table.

And so what I think that means is that the moment you put up that flag and say I want to start something and you're, you know, a talented individual with great experience, those offers start rolling in.

And you have to have the internal fortitude and disposition to say, you know, I'm I I need to make sure this is the right thing because that investor or that angel investor is going to place who knows how many bets and you're going to place one during this period of time.

you are an investor of your time and that is one thing that you can do during this period and you have to take that really seriously. So I think that it's it's much more about finding that for yourself because you can't outsource conviction and you can't outsource that type of diligence.

Um especially when the incentives aren't necessarily fully aligned. I have a question. Go for it. You used LeBron James in your launch video. Where do you stand on the goat debate? Is he a better basketball player than Michael Jordan? uh as a kid of the 90s, I think it's got to go to uh it's got to go to MJ.

Um that that video, it pained me as a Celtics fan to uh to show him in a Lakers jersey winning uh winning championships. But look, he's someone that I think, you know, had doubters throughout his career, even does today. And now Bronnie, you know, after him.

So, and you got to tune it out, you know, and I think that if you're doing something right, then people will throw shade at you. And I think it's a great thing. It's still a great metaphor. Do you have a last question then we'll Yeah, last question.

Uh I'm sure you get hit up by people all the time that are starting venture studios, incubators, etc. You like ran incubations at Thrive. Now you're running a traditional venture fund.

I'm sure you could do an incubation, but uh do you think that that model is best done opportunistically versus, you know, systematically? what what's your takeaway from, you know, doing a bunch of these? Totally. Uh the, you know, going back to that kind of idea of products, I'm a product person.

Like, you have to be building a product for a great audience. And I think that you need to be honest with yourself about what value you provide to a founder. And um you know, incubation is a really appealing tool, right?

And I I think it's like, hey, we can get more ownership and we can kind of, you know, I have all these great ideas and I can create it. Um, but I see a lot of VCs piling into it, I think, for the wrong reasons and and are going to make some mistakes. I think there's a real alchemy that it takes to get it right.

Um, and you have to know, just like as a founder, I think you have to know where your edges. And when I was at Thrive, you know, my focus was on incubations and it was working really closely with founders right from the beginning.

But there was always a humility in the fact that the founders are going to build this company that we need to, you know, put the right environment together to help them, you know, find it. And also there's a lane of where we can incubate and where we can't. These are areas that thrive.

It was you know heavily regulated industries or really large markets that perhaps would take deep capital uh availability to succeed within.

Um and it wasn't everything and that I think was the beauty of being able to do both things of of do early stage investing and incubate allows you to have that flexibility and it's something that you know I believe we'll do really well at terrain too. Awesome. Well congratulations and good luck.

Yeah know you it's open for until the end of today maybe maybe can apply right now. Yeah, people can apply. It's been open uh for the last few months early. You got a great domain, too. terrain. com. terrain. com. terrain. com/free agency. Short application.

Hope to uh to see some people that site TVPN as the the source that they got it from. Thank you. Your next power law winner is coming from our audience. There we go. There we go. Thanks, guys. We'll see you soon. Talk soon. We'll see you. Thanks so much.

We got uh we got Jordan Schneider from uh China Talk coming on next. I'll let him give the pitch, but uh this is a f fantastic podcast. It's one of those podcasts that's completely a portal to another world where on most shows it shows up in your RSS feed.

You probably haven't heard of the guest, but you so he's doing he's doing not only the great work of putting together the show, but also curating the guests, bringing you information that you would just never find otherwise. and it's uh he's been a