NEW PODCAST! PRODUCTIZED TECHNICAL DILIGENCE, BUILDING STANDARD OPERATING

https://www.vernehq.com/post/productized-technical-diligence-building-standard-operating-procedures-defi-issues

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[00:00:00] Colin Keeley: Hello. And welcome back. This is Colin Keeley here,

[00:00:04] Brent Sanders: I'm Brent Sanders.

[00:00:05] Colin Keeley: and we are two guys buying and building wonderful internet companies.

[00:00:09] Brent Sanders: Yeah. And, also making families. I had a baby or my wife had a baby, last week, so we haven't recorded an episode, but a little late with that, it took some time. But we've been chugging along and you've been keeping things rolling with me. I don't know, I, this is week two and I'm back to getting back to work a little bit, but I'm happy to say everything went smoothly and we expecting the worst.

The baby was upside down a week before. And went to the hospital and they were going to maybe have to figure out a way to get the baby heads down, but they did an exam and she was already heads down and ready to go. And then everything went really smooth and she sleeps well. It's been nice to take some time off.

It was like, it kinda made me realize I haven't really taken like a real time off in quite a long time. Even when I have take some time off, I didn't go on a hiking trip. That was. But that was more like over the weekend, but just having some kind of downtime with family felt really good.

[00:01:09] Colin Keeley: How much of it was like downtime versus, busy with the newborn.

[00:01:13] Brent Sanders: Like waiting at the hospital. So we have, I have a two year old at home. Who's the way we're dividing and conquer. It's I'm taking the lead there, but we also have childcare, There wasn't a lot. I shouldn't call it downtime. I should really just call it away from work time away from email away from slack, away from, working on projects, which feels like, to let go of that stuff is difficult.

But, after a couple of days it was, it was feeling a little bit more natural. It's it takes a few days kinda ease into it, but, we all knew this was coming so I put some people in place to help out. We basically I've launched every business that, everything I'm working on the month before, we got everything completed.

So like the blink cell launch, all the other various projects, I was doing a retrospect of the third quarter and it's like, everything got done and launch before it was before the baby would come. So now we're here and I'm enjoying the fruits of the.

[00:02:06] Colin Keeley: Yeah, it was good. And so I like we had live deals and I was like, I should send Brett the message, I did it. So everything, smoothly without you, we've got the.

people in place to do stuff.

[00:02:17] Brent Sanders: Yeah. So I don't know, I got a little bored at the, waiting for the baby to show up. Cause we, like I said, we have childcare and I'm just sitting there. So I think I was probably pinging you more than. Definitely more than you were pinging me. I was being like, Hey, what's going on?

What's happening. And now two weeks later, I'm, I'm ready to go back to work. I'm ready to, that being said, I've been working from home a bunch and I've been realizing, like breaking my day up and being around the house a little bit. It is nice. My, my son who's two. If he sees us in the house, he like wants, he like gloms onto us and doesn't want us to leave.

So it's a little difficult when he's around, but with the newborn. Pop in hold her for 30 minutes, have lunch with my wife. It's been really nice, just like a delightful last two weeks. So I think I'm going to stop. Try to work from home a bit more and just stay around and stay present to help out whenever I can.

But part of, some people knows, I'm not sure if I've talked about it much in the podcast, we actually moved closer to family during COVID and we have so much more support than when we had our first child, which was basically just us. And my parents were like an hour away. And it was all on us and we didn't know what we were doing and now we know what we're doing.

And we have help and cousins and all sorts of people can stop in and just contribute. You drop a meal off. It's been, we felt very loved. So it's been awesome. Honestly, I don't know why we waited so long to have kids. I'm almost 40 and my wife is too. And so we're having kids. Older. We've, we prioritize our careers and traveling and whatever else, but, I don't know if I'd wish I did it earlier.

I feel like it's the right time when it's the right time. But, I was nervous about this as part of like, how do you balance these two things? And so I just, my, my takeaway is just taking time off. Never feels like you should, but it always is worth it. And it's just great to get that like calm and perspective.

[00:04:14] Colin Keeley: That's great to hear. So with all your downtime, did you, you got into defy your, they believe you now.

[00:04:21] Brent Sanders: Yeah. I did spend some time before the baby was here, from our prior conversation, there were a couple takeaways. One was to check out, some of these, I don't know, how would we categorize like retail, yields. Services, I dunno, like Haru invest or donut. I'm looking into like how swapping and pooling kind of works, but also, just seeing how would you log in to.

How do you use the blockchain to authenticate, like how the internet is going to work in the future and in tinkering with some of the code tools that are out there. So that was a lot of fun. The thing that I'm so happy about is that it's similar to what happened in AI in the last couple of years, it's like more and more libraries are showing up and it's getting easier.

You don't need to know the math, it's I'm the type of developer that like, I understand what's going on. Database, but I don't want to write all my SQL and I know steeple, you, you get these layers of abstraction and layers of abstraction and layers of abstraction built upon one another where like the implementation of, which, algorithm, you don't have to know the math, you just need to know what the algorithm is and what it does.

And then you can use it as a tool.

So I've, got my wallets set up. We were talking about this before, but it was like, how do you, with some of these yield services, like donut is pretty lame is, was my feedback. It's super easy on ramp. You put cash into it. It's not really, I think they keep the crypto side of this kind of obfuscated.

It feels my. We're interested in it. So I put a little bit of money and I showed it to them. It was like, it just adds money. And you're generating some amount of, yield. And the thing that you aren't effected by as as right now, Ethereum is going up, Bitcoin's going up.

So you're not really enjoying any of the appreciation there. So you're getting like this small APY. So it isn't from a, Like a yield perspective, not that interesting, but it was super easy to just get started connected to my bank account through plaid, did an ACH transfer, gave me the money right away to start earning on.

So I don't know if folks like your folks or older people that are less sophisticated and don't want to get a wallet set up. It's definitely an option. I guess it can go down. It's an FDA, it's not an FDAC insured account. It's like a brokerage account. Which has come to the question on all of these that we're talking about.

It's even with a Haru, it's like these things all can go down and it's hard to know, to do the diligence on these things. Like, how exactly are you doing it? And you were like, your opinion was like, you have to just evaluate the teams that are working on these products.

And that's what you're essentially betting.

[00:06:53] Colin Keeley: That's my biggest thing by far. So I guess going through some of these Haru, I put a little money in it. It freaks me out. It's very opaque. My understanding is that it's like a south Korean hedge fund that day trades with your money and gives you like a piece of their return basically. And so you.

You're nice yield, but it's, if it disappeared tomorrow, it'd be like, oh yeah, that makes sense. I understand how that one just disappeared on you.

[00:07:19] Brent Sanders: I know there is an element to all of these services that you just go to the website tomorrow and it's gone. It just reminds you that south park where it's like, Stan goes to put, I think it's standing, he goes to put his money in the market at the bank and they, and it's gone and it's just yeah.

Okay. The money's gone. So it still feels very.

[00:07:39] Colin Keeley: For sure. So donut I think is very legit. So it is basically a beautiful, easy on-ramp, backed by, a 16 Z and like legit founders, legit venture capital firm. And it's built on top of yearn, which. One of the most trusted places for defy yield. So it's giving you some exposure to like a DFI savings account and making like all the difficulty of setting up a wallet, connecting a wallet, all that stuff, and just like hiding that away from you.

So donut, I would say is a very safe, if it were to go down, it'd be like some contract risk. It's not really like a rug pole. No, one's trying to cheat you, but there's a potential that there's some flaw in the car. Which I think is less likely here than at basically anywhere else. And then some of the others are more and more dangerous.

I would say I'm like a slow mover. I move when I see that the team's really good and like hundreds of millions of dollars have moved into it. And like my little amount of money is inconsequential and not a huge risk at that point.

[00:08:41] Brent Sanders: So I experienced a part of last week. I was just. No, this is now. Yeah. Last week. Just mess around. I bought my name on a, the Ethereum registrar, just something to play with. It's like you immediately run the main critique of I would call the main critique of Ethereum right now, which is gas fees, which is oh, I'm going to spend.

$20 worth of Ethereum, but then I have to pay $150. Or we've talked about this before is it's a variable amount, but it's generally more than, the transaction. It's not proportional necessarily to the transaction. Or at least the floor of it is high enough that it's wow, this doesn't seem like a good, value for a currency.

So I. Stuck on one of my wallets. Like I can't do anything cause I'm out of a theorem. That's not here. That's like liquid, I need to actually throw money into my wallet in order to liquidate or, swap, stuff out of, different currencies.

[00:09:39] Colin Keeley: Yeah, that's happened to me a bunch. You run out of gas, basically on the highway and you like want to do anything and you can't do anything. So there's ways where you can do it quickly, where $200, put it on a credit card. Maybe there's like a 10% fee, but at least you could move money.

If you have to move money. I have this weird thing where I started messing around with it and I would get $50 in yields in some weird coin. And I'd go to transfer that back to a theory room or something useful. And it's $60 in gas fees. I like, I don't, I guess who's ever going to go low enough that I could touch that money or it's just going to sit there forever and it's like a meaningless yield, but I can't use, I don't know.

[00:10:16] Brent Sanders: That is that's the state I'm in on two different kind of, currencies that I'm wondering, I'm just a new, so I just figured this would happen and it's not a consequential amount of money where it's man, I'm really in generally the bet is all this stuff's going to go up and I'm thinking like a ten-year timescale.

All of this money is like stuff that I would just sprinkle and expect it like an IRA or, ideally it goes up and it's a very small amount, so it's nothing to be super concerned about, but it's been fun. It's been really fun to you do definitely get the, that feeling like the first time, seeing Napster, the first time going on a webpage the first time, using some of these services where it just, it opens a door and you're like, oh, okay.

This is how it's going to work. I get it. So everybody is trying to figure these tools out. And I think the identity solution is, so far my favorite, right? the wallet, getting away from, Facebook, Google, these corporations that. If they own an identity that's a little scary.

So it's cool to see that kind of heading back in the direction of people that being said, I'm sure, companies are going to be needed. These are, I was trying to show my folks came in town to, to meet their granddaughter. And, I was trying to explain to my dad and he's pretty savvy. He's 80 something years old, but still, he knows how to use his phone really well.

He uses computer pretty well. He's always been. Pretty up-to-date and S but just getting somebody like that to understand a wallet or even cryptocurrency in general, it's difficult, but going to Coinbase helps going to use some of these more of of easy on-ramp tools. And that's where I think all there's going to be a corporation, like a Facebook where I'm sure Facebook would love it to be them that, easily lets you set up a wallet and it almost doesn't feel like a wallet and it doesn't feel like a complicated.

Tech platform. So we'll be curious to see who or what form that takes and what company ends up doing that the best.

[00:12:07] Colin Keeley: That's the clear like angle of attack to me is like my mom, my parents didn't ever going to have a 24 secret word pass phrase that they're going to know how to handle like that whole wallet set up is just wild

And I think you just need some super simple. That's like in a browser that just automatically logs you into everything.

Like the number of times when parents have forgotten a password and asked me a password of things is like, unbelievable. And if you could just have the browser, it's your wallet, but you don't know any of this stuff or terminology and need just auto logged in everything. And it follows you around, like that's such a clear endpoint.

[00:12:42] Brent Sanders: Yeah, absolutely. yeah. And that's been the crypto update. The obviously prices are going up it's Q4. So moving it around into different things, but generally it feels like everything's floating up and then I'll, I would expect in Q1 things to crash back down and then, start the cycle over again.

But generally it it's going in one direction, which is generally up.

[00:13:02] Colin Keeley: Oh, for sure. October, they call Q4 every year. It seems to go up.

The one piece of advice I give to people that we maybe haven't talked about on here is unless you're messing around with like tens of thousands of dollars, Ethereum just doesn't make any sense. Like the gas fees are going to be so high.

It's going to offset any of your yield that you're really going to get. So if you go to Solana, it's like fractions of a penny to do transactions, and there's this really nice wallet over there called Phantom. So if you set up Phantom wallet and just mess around, you can do defy stuff with like a hundred dollars and do a bunch of transactions.

And that is by far the best way to learn and get your reps in, then like doing Ethereum and making one trade and immediately losing like half of your stack of chips over there.

[00:13:44] Brent Sanders: Yeah, so to buy salon, do you have to, you can buy it directly. You can like the best way to convert it from cash is how.

[00:13:54] Colin Keeley: I generally buy it in like Coinbase and then I send it to my Phantom wallet. I, you could probably buy it in the Phantom wallet. I just had never done that.

[00:14:02] Brent Sanders: Okay.

Yeah.

[00:14:04] Colin Keeley: Yeah.

it's like anyone that is used to Ethereum moves over to Selana it's oh my God, this is so nice. So the big knock on salon is that it's not as decentralized as a theorem is, but I don't know if the average person cares that much.

[00:14:18] Brent Sanders: Cool. I that's the latest, it's been fun to continue down this bathroom, it'll be fun to continue to sing. I'm sure the rate of change is gonna continue getting faster. Each week you're going to see new things pop up.

[00:14:33] Colin Keeley: Oh, yeah, it's insane. So like I giving people advice. Stick to like the standard stuff, Bitcoin, Ethereum, Solanas by the third, if you're messing around with these like minor coins, that stuff changes like every single day and new projects are popping up.

It's just kinda dangerous unless you're really well-read and really up-to-date on everything.

But so the other idea, you want to talk about is, Brent as a service. So would you think of this

[00:14:59] Brent Sanders: Oh, yeah, yeah. Yeah. You sent this over as an idea. It's Hey, could you just do productized tech due diligence or right. And it was just due diligence.

[00:15:11] Colin Keeley: Yeah, So I'm in a bunch of communities and I know a bunch of folks from like other MBA programs and they have a background similar to me, maybe they're somewhat tech savvy. Maybe they work for a tech company. But they don't have that tech partner and things. So they're trying to buy these companies and they don't have a great way to diligence them.

And people listen to the podcast and they're like, this came up where someone said, now Colin has a partner or a brand that does this stuff. And I do think there's an opportunity to like, help out all these MBAs looking to buy a business and do a Brent as a service.

[00:15:41] Brent Sanders: Yeah, I'd love to do do it. Due diligence is it is very, I don't call it easy, but it's a, it's not easy, the process is pretty straightforward and, coming up with a really clear rubric, people have been working on this for a long time. And so there's a bunch of standards already out there.

And yeah, if you could productize it, which to me product. Makes it very clean because what has historically happened? I've done this for a long time. My whole career generally, just being a tech partner, you get hired to do diligence, and then it naturally turns into you doing work on that project.

And then it naturally leads you into, putting a team together for that project. And it's like a very long tail thing, but if you could cut it off and just say, Hey, you're just buying this and this, or, create more products. Offerings where it's you're signing up just for the diligence.

You're going to give us the, upload your documents. Here's my get hub had access to it and point me in and hit go. And then that's it. I returned a report and the deal is done. That'd be brilliant because I'd love to do that work too. And I think there's a lot of people that are good at that.

That can point concrete things of code concrete, like analysis, just pure technology. Look at the servers, look at the roadmap, look the team, do interviews, interview the CTO interview, or if there is one or an interview, the development team, try to understand it's like a.

Almost like hiring a lawyer and having them go through when you buy a house or buy a condo, you need to go through all the condo notes. And pour through stuff and see, since you have the experience of what's going to be a problem versus what's not. So I would love to do that. So maybe we need to set that up, as an offshoot of Avara and get your due diligence.

But yeah, I would imagine though, if you don't have someone to do your diligence, who's going to. How are we going to hire somebody? So that, that was something that I did for a long time as an agency is we would get startups as clients and part of the deals, we would sell them in our developer time, but then my time to, help with recruiting and they would, essentially we would replace ourselves and it was a little bit like people would be like, why would you that you're eating your own lunch, but it actually.

Eating your own lunch, you're cannibalizing your business because down the line, they're going to build their own team. And I think what we found is like that actually created a longer tail clients. Like we would work with people for years and sure. We might not work with them for.

It would be a 12 week project. And then we come back the year after 2, 3, 4, and then when the developers leave, we've got to do it again. And so it was, it teed up a better relationship and it was a good way of working, it's you're aligning yourself correctly.

[00:18:14] Colin Keeley: I do think that, it's like a super interesting entry point. And I think a lot of people listen to this podcast would be like intrigued by that offering. So if you're interested, reach out to Brent or I, and maybe we get started that way, but once you do that first step, you're involved in like the earliest stages and then they probably need like an operator, or like a product person. And maybe you could do like operators as a service and provide them with that value or. They want like SEO stuff written. They want cotton content written and you could do like growth as a service where there's a lot of these growth agencies. Maybe you get paid a couple thousand a month to write some number for it, some number of articles.

And it could be like a nice recurring revenue, like growth business there. ,

[00:18:51] Brent Sanders: That would be hard,

[00:18:52] Colin Keeley: stuff we're doing already.

[00:18:53] Brent Sanders: Yeah. It's all the stuff we're doing already. And so it's basically like trying to create more siloed agencies and put them on a recurring, which, it would make everybody a little bit easier, but it's also hard to. To cut off product in like very clear silos because sometimes it's just, every product is snowflake and that's where I struggle with this.

And it's funny, we had incubated a company. Actually it was a, I think I've talked about this company before through, through Ronan. It was, the company was based out of Chicago called matches and it was a Stella and Tim, I forget. Last names, but they had put this business together. It was great. I was actually, one of the developers I had in my agency on their platform.

And that's actually how I met, Paul and like the, the Ronin team essentially, as they were doing diligence on matches and they wanted to talk to some of the top developers. So I started talking to them. Quickly turned into a whole other conversation where we decided to combine forces and do this whole thing.

But, they were basically a matching service for agencies and people that need. Or developers and people that needed development work done, and they try to add some structure. And I think they had payments as part of the system is, they could escrow a payment or a down payment for you.

And at the time there was another company that just raised, they had raised a ton of money. I forget what it was called GS, but it was, you could go on there and, just put your tech projects. And now we see this with low code technologies where, Hey, you can get this done for a hundred bucks in there.

They'll slap together some low-code tools and you're off to the races. You have an app or your MVP of your product or something. But, one of the things we struggled with that business in trying to operate, it was just how gooey tech projects are. It's like the requirements are, you have to be really diligent around requirements gathering, and that means.

Putting a lot of time in, in clients generally don't want to, they just want to pay someone to get it done. It's It's Hey, I want to add for blink cell. We just want to do a new design. And at ACH and ed cryptocurrency payments, it's okay, but there's like a good Jillian questions. How you do it, what does it look like?

And who's. Responsible or accountable for those design decisions is, it's like hiring using, I always use a house analogy with tech. It's like hiring a, an architect and a builder and saying Hey, Hey, go build my house. And then you show up to move in. And you're like, why is this door here?

It's you have to, clients have to be, in pretty involved and the less involved you are, the more you're going to pay. So it's tricky. I don't know, I haven't found a good, a good solution for that. But diligence, I think is I like that because it's like very clear deliverable. What's the outcome.

Boom. It's not like a nebulous ongoing service. That's going to require maintenance every month. Know shipping a custom software project would.

[00:21:47] Colin Keeley: Yeah, that's a good point.

[00:21:49] Brent Sanders: Yeah, I look at I'm curious, my top tail doesn't get in this. 'cause they do a lot of vetting and supposedly have a superior talent base, which I think I shared on this podcast, I tried them out. I didn't really find that to be necessarily true, but it was, they're definitely, I know they do the work to verify these developers, that they put them through code challenges.

But yeah, I like the diligence, which makes me think we need to do a better job. You know our own scorecards, whereas I do tech diligence. Now I look at the deal and I just go through the steps I know to take, but I think we need to put together like a better formalized scorecard.

[00:22:31] Colin Keeley: Yeah. that was the takeaway from ESW of like scorecards and like processes for every. And we've been maybe a little too Willy nilly on everything, wherever we like, we definitely have perspectives and this is a positive and this is a negative, but it's all more qualitative than it should be. It could easily be moved to be more quantitative.

[00:22:51] Brent Sanders: Yeah. So what are the tools out there? Is anybody like building a, you could totally use like Nosha and a Rome. You could probably hack a tool to be your playbook, but I feel like there are some tools out there that, That are probably geared exactly to this.

[00:23:06] Colin Keeley: Do you have any ideas? What do You want out of the tool?

[00:23:08] Brent Sanders: We had somebody on the formulated podcast. I'm going to look him up. Yeah. Adam Schweiker this guy was telling me about, a tool set that he, it was like business process. Management software in a sense, it was part that, but also part just like just capture the process, capture the step by step and like the decision trees.

But it's almost like something that you can quickly compose a process or also, create a rubric and have that be, something where you could almost go to a webpage and fill out a form and okay. I've just done the tech due diligence form and that form has captured the quantitative.

Metrics of the due diligence process, I'm going through and giving ratings for, one to 10 for code base or whatever it is. And it seems like that would be a great way to, to do it. It's like you could do it in Google docs. You could do it in a spreadsheet. Things like lucid chart. I think what he was talking, it was called process street.

I'm looking it up online right now because we had this whole conversation with him and it's a pretty new software. Yeah. It's simple process and workflow management. This is neat. It's for recurring checklists and procedures. I'm not a user of it. He talked about how great it was and how he's become an expert in it.

But this might be something we check out, which is running a structured process and at least just capturing what are the steps we take? That's one of my main exercises, what I call like a, it's a loaded term, but it's not really a process diagram as much as just just it's, I call it value chain, but it's not, value.

I know that has like business school kind of Haitian, like value chain mapping, but just like, how do you get your raw materials out there? And like, where do things start and just map it all out from step to stuff. And so I do that in pen and paper, but then it's a femoral. It gets thrown out.

I have terrible organization with my paper. It just, I'm doing it on a legal pad. And it's I'm constantly moving the notes back onto the legal pad and on the main page and just ripping pages out. So I like this idea of trying process street.

[00:25:07] Colin Keeley: Yeah, I've never seen this. It's worth poking around And I'd say the individuals that do it well, like the creators that started building up a team of VAs or like assistance is they'll when they realize they're doing stuff multiple times, they'll record a loom and then they'll send it to their VA.

And then the VA write it out of this is step by step. And then they have like their standard operating procedures in notion generally. And that's like a central database that, future VA's or future team members. That's where they go to, to see how to do everything. But that only works I dunno, a team of five, a team of 10.

Once you scale up, maybe it is something like process street that I just said never seen before.

[00:25:44] Brent Sanders: Yeah, I'm going to, I'm going to try that. That's my takeaway for this next week is I'm gonna give it a try. I guess we should have probably done this before, mentioning it on the podcast so we could endorse it if it's a terrible piece of software, but Hey, we'll review it live.

Let's see how it goes. I think the, if nothing else between you and I just writing. What's the process for, taking a support request. And so we have an easier time onboarding folks like David who's been taken on our blinks of sport. It's like the more we can support people like that, the more you can leverage.

I think that's the key takeaway. So that's my, I'm going to check into process street. See if it does it.

[00:26:25] Colin Keeley: Cool. And, Yeah, so this episode is all over the place. More of a catch-up like for the people listening, I'd love to hear feedback on what you'd like to talk about. Do you like these SketchUp episodes? I know that we could take this in all different types of directions.

[00:26:38] Brent Sanders: Yeah, swaddling tips, whatever you guys want to do.

[00:26:42] Colin Keeley: Tons of swaddling depths. Yeah, It could be a baby episode,

[00:26:45] Brent Sanders: Yeah, I've got, I've gotten a fair. I actually just found a Binky in my pocket. So I'm sitting on my desk here with me. I'm in full on dad mode, which, it has been wonderful though. I, make a lot of comments about, as it relates to business and work and my mission, w what am I doing in my life, but that there is nothing, that I've enjoyed more than being a dad in the last two years.

It's been super fun and it's just fills your cup, man. It's like totally a, a, Itch that it scratches then, you just don't even really know it's there. And I'm somebody who was like, I'm never going to have kids. I, we, my wife and I were like, we're not having kids fuck that. It seems too hard and whatever else.

So it, it can be for anybody,

[00:27:22] Colin Keeley: super cool. That's been like pretty consistent feedback. I've heard from a number of people that have had kids. So that's good to hear.

[00:27:29] Brent Sanders: Yeah, it feels like the, I know this it's, it feels like something that you're actually creating that's way better than you would ever create from like a professional perspective. You're creating like a living breathing person. But meanwhile, my oldest is two. They don't really talk back just yet. He, he does, but it's complicated. So I'm high on it. Went with a newborn into your role. It's very simple, right? They still like me.

Thanks for listening everybody.

[00:27:55] Colin Keeley: Yeah, take care, everyone. Bye-bye.

[00:27:56] Brent Sanders: Bye-bye.



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