ExpertDojo: Investing in Startups from LA to the World

Hi folks,

My name is Minh Do, and I’m helping out interviewing and writing articles about founders, investors, and builders in LA. If you want to be featured or know folks who want to be featured, feel free to contact me on LinkedIn. This week, we talked to Brian Mac Mahon from ExpertDojo. It’s a really fun interview, digging into Brian’s thinking and what ExpertDojo is up to. Keep an eye out on their newsletter for more updates coming from them soon!

🏃♀️ Quick hits

The Founder: Brian Mac Mahonis a well-traveled Irishman who has managed to find himself domiciled in Los Angeles. He is an experienced founder and investor as the self-titled head honcho of ExpertDojo.

The Company: ExpertDojo has invested in over 250 companies worldwide, mainly in pre-seed and seed. Most startups are minority and female founded technology companies but are opportunistic in terms of industry.

Tip: ExpertDojo regularly hosts events across a wide spectrum, so keep a look out. It also offers programs for young startups to get them to growth and revenue.

How did Brian Mac Mahon make it from Dublin, Ireland all the way to Los Angeles, California - building companies along the way, including one of the most vibrant startup ecosystems in ExpertDojo?

Brian comes off with a straightforward, opinionated, and spirited candor that is rare in soft-hearted California. His strong opinions hail from a lifetime of entrepreneurship that spans the globe and has observed the rise and fall of waves of companies. He’s lived in over 40 countries, including all over the United States.

It’s Brian’s perspective on Los Angeles, entrepreneurship, and innovation that are really telling about the kinds of startups he wants to see in the world and what he has an eye for, and ultimately, what kinds of startups he wants to see at ExpertDojo. When asked about what is unique about startups in Los Angeles, Brian got passionate:

“Right now, startup is moving back to its core, as it’s forced to with every recession. I think really great companies build phenomenal products based on a really good story, right? And so storyline without a good product is highly likely to fail, and a good product with a poor storyline may not fail but it's much harder to be successful. Now, a great product with a super story line, it's gonna do amazing things. And LA, without question, is the uncontested champion of the world when it comes to stories.”

And this, for Brian, is in contradiction to what we see in other tech-heavy cities.

“People go and stay in cities for different reasons and what that does is it crafts who they become and what they're able to create. People come to LA because they felt that they had the ability to be able to achieve the thing that they'd always imagined was unachievable or they had the ability to be on the screen. The stories here are glorious. They’re beautiful. They’re about human emotion. It’s very hard to do that outside of LA because VC’s outside LA are glorified accountants. And when have you heard a glorified accountant tell a good joke?”

For that reason, he thinks that LA has “the ability to be the center of entrepreneurship in America” and by contrast he thinks “the oversupply of capital in Silicon Valley is an abomination. It’s a cancer in America.”

At first, this sounds like a strong opinion, but Brian goes on to say that he isn’t “saying anything that everybody doesn’t know.” After all, we’ve seen the rise and fall of WeWork, Theranos, and more, right? The overheating of capital has led to oversubscribed hype rounds in companies that lacked a business model or failed to ultimately deliver on their promises to users while inflating their offerings to the demise of entire industries (we’re seeing that play out with the strike in the wake of the rise of streaming).

“It’s a cancer in America. But it’s not the people, okay. What's happened is: it's not that venture capital is bad. It’s what we’ve allowed to happen to it. Once you have multi-billion dollar funds, you have the ability for VCs to put a hundred million dollars in a Series A. Once that happens, terrible companies can temporarily win against great innovation. So what we've done is we have smothered all of the great entrepreneurs for 15 years. Look, anybody can raise seed, my mom can raise seed. Seed is irrelevant when the next round is a hundred million dollars. It's about A. So who’s raising A? Nobody. Only the unbelievably exceptional companies.”

This sentiment is very powerful. Seed startups are very crowded, but the real difficulty in raising is Series A, and you have to be a real legit business to raise A. This line of thinking gets precisely into Brian’s theses with ExpertDojo:

“Recessions are wonderful times. I dream of recessions like this. I mean, I have roughly 270 startups at ExpertDojo and when any one of my founders moans about a recession, I tell them to stop being a f***** idiot and just go out there and build a proper business.”

In sum, Brian’s thinking is that recessions force entrepreneurs to focus on the fundamentals of business. This is why Brian pushes his current cohort of entrepreneurs, it’s not about raising money or branding, etc. The most important factor is growth.

“The only thing founders should care about is growing. They just don't know it yet. They think what they care about is investment, but they should only care about growing, so you have to help them grow. And we can’t help them grow for only 12 weeks. It's too little time. We have to help them for at least a two-year period and preferably a four year period. So we have interaction every single week with them for years, much of it one-on-one, with a strong focus on go-to market, and the execution of sales and marketing tactics that will move the needle.”

Therefore this is a great time to build and see what the next generation of innovation will be. Part of this thinking is Brian’s interest in supporting the larger ecosystem of startups in Los Angeles and worldwide. ExpertDojo doesn’t only invest in Los Angeles, but in companies from all around the world, as long as they align with the thesis of growth.

On the back of this growth, Expert Dojo has decided to do what any good investor would do, further support those businesses with more capital to fuel continued growth. These successes have been the impetus for Expert Dojo to grow itself beyond their flagship accelerator, and are now in the process of raising a $50Million fund, part of which will be invested into the strongest of the accelerator's alumni.

Brian and his team continue to push the envelope and plant their unique VC flag in the Santa Monica soil. “At Expert Dojo we are a fund for the people and by the people. If any investor or founder wants to be involved with us, we welcome them to join as an LP or apply to be a portfolio company. After all, what good is it for a lad from Ireland to live the American Dream, if he can’t pay it forward to the future builders of this great nation.”

For those interested to learn more about Expert Dojo please contact Brandon@expertdojo.com