Category
- Band stories
Written by
Son Yang (Director)
Date
Empty
A variety of Generative AI services are pouring out from big tech and startups regardless of vertical. BASS Ventures has been interested in this field from the beginning, and has been monitoring various technology trends and players, and recently made its first investment in the Gen AI field in 'Team Runners' .
'Team Runners' is a startup led by CEO Jeong Seung-jin, who made an impactful appearance in the viral 'Super Dots' job posting and 'Unusual Challenge' that covered Toss's growth story last year . It is a team that is creating an AI-based content platform of an unprecedented type with a global target , and the 13 members repeat the 'hypothesis-experiment' cycle day and night, and just like the company name, it is a place where they learn and grow a lot every day.
Normally, we introduce our investment thesis from the perspectives of the team, market, and product through our post-investment posts, but today, I would like to tell you in the form of a retrospective of the conversations I've had with Team Runners over the past six months. That's the only way I can explain why Team Runners is creating an AI content platform, why each person takes care of their KPI puppy doll, and why they believe there are no unsolvable problems in the world . And what kind of mindset BASS Ventures has and how it works with early-stage startups .
(KPI puppy given as a gift to team members by CEO Jeong Seung-jin.
(It contains the intention to take good care of KPIs like a puppy.)
(It contains the intention to take good care of KPIs like a puppy.)
Runner's Company, July 8, 2022
The first time I learned about CEO Jeong Seung-jin was through an acquaintance of mine at Toss. While chatting over coffee after a long time, I asked him out of habit, “Is there anyone who recently started a business?” He told me that someone who had recently worked as a PO at Toss Vietnam had started a business after leaving the company.
A few days later, I learned through LinkedIn and Facebook that CEO Seungjin Jeong was conducting various experiments under the corporation called 'Runner's Company', and after finalizing some of the items he was reviewing at the time, I contacted him for the first time through the Runner's Company open chat on August 11th. That was the beginning.
(First cold talk with Runner's Company.
The reply was faster than I expected, and they knew I was a bassist.)
The reply was faster than I expected, and they knew I was a bassist.)
First meeting, August 17, 2022
On a hot summer day, I heard that three people were living together in an officetel in Gangnam Station, so I bought four cups of iced Americano and went to visit for the first time. When I arrived, CEO Jeong Seung-jin, Cheon Myeong-seung, and Maeng Ju-seong welcomed me, and since there was no separate space for the meeting, we gathered in the middle of the officetel room and talked.
I heard that CEO Jeong Seung-jin established a corporation right after leaving Toss. He traveled around the world for six months to find an answer to the question , "Is starting a business really the most fun thing in life?" and eventually concluded that "solving problems is the most fun thing in life, and starting a business is a good way to do that for the rest of your life ." After reaching that conclusion, he started looking for an item in earnest. And luckily, I was the first evaluator that Runner's Company contacted him after his return. While telling this story, the CEO said, "I'm used to drinking in one shot, haha" while taking a shot of a grande-size iced Americano.
Let me explain our company, BASS Ventures, in detail and ask what they want to do in the future. The team said they were thinking of two things. The first is 'solving the most difficult problems of mankind, such as aging and disease', and the second is 'creating a service that solves users' everyday problems by utilizing Toss's growth equation .' I thought the latter would be obvious, but when I first heard the former, I was a bit dumbfounded and couldn't react well. When I asked, "Can an early-stage startup do that?" the team responded with, "Can't we find a way to make it work?" I think I intuitively felt that listing the reasons why it wouldn't work on the spot would be completely meaningless.
We talked for about an hour at our first meeting. The CEO said he didn't have any immediate funding needs, but it was a time that left a strange aftertaste. I still don't know if it was because of the team's energy, the look in their eyes, or their awareness of the problem, but before the aftertaste faded, I shared that there was a team like this inside and decided to visit again with Karl Shin (CEO) in two weeks.
Superdots, September 1, 2022
At the end of August, before our second meeting with Runners Company, there was a job posting that went viral in the startup community. It was a company called 'Superdots'. Superdots was the subject of an experiment on the 'Toss-style items' that Runners Company had mentioned in our last meeting. The fact that the job posting, which contained quite an exciting story, went viral also meant that, from the perspective of the evaluator, there was no longer any information arbitrage, and from then on, it was a game of 'how to win the team's heart' . Since the company had no short-term funding needs, it was going to be a long-term battle.
Karl Shin (CEO) shared this background information in advance and visited the Gangnam Station Officetel again. Since the Superdots announcement had gone viral, the team had met a lot of VCs in the meantime, and naturally, they had a lot of questions about BASS Ventures (even more than before). However, these questions were not only about understanding the house called BASS Ventures, but also about the essence we pursue , and Karl Shin (CEO) quite enjoyed talking about these questions themselves.
That's how we ended our second meeting. At that time, Runner's Company didn't have a specific item yet, and there were only four people who wanted to solve the earthly mission of mankind, and there was nothing specific about funding or corporate structure. Nevertheless, I think Karl Shin (CEO) and I had a strong desire to see what direction this team would take and how it would move forward.
Product Factory, October 6, 2022
After finishing the second meeting, I told him that I would meet him at my office a month later. The original date was September 29th, but CEO Jeong Seung-jin contacted me the day before and said, “I would like to postpone the schedule because I have two products to launch tomorrow.”
There was absolutely no problem with postponing the schedule, but I was so curious about what was going on that a product suddenly came out when there was nothing a month ago... but I decided to endure it and meet again two weeks later.
But I couldn't help it because I was so curious. Less than a week later, I contacted them again to ask what they were making, and by then, they had already released 19 services, not just 2. Dating, tarot, news, diaries, quotes, mental care, and even the Quran across apps and the web. Another surprising thing was that they had 10 full-time employees working on Superdots since their announcement a month ago. I could clearly see how they were making products as they came up, seeing initial user reactions, and growing the ones that came up. We called this a product factory among ourselves.
Glass Wall and Refrigerator, October 18, 2022
In the course of a long investment review, this day seems to be the most memorable.
Originally, we had planned to meet at our office that day, but when he said, “ I’m sorry, but we made a promise among the team not to step out of the office until we make a sale,” I stuck out my tongue and went to the office in Yeoksam-dong to see him. I was thinking, “What on earth are you doing?”
It was my first time visiting the office in Yeoksam-dong that I had moved to, and when I arrived, there were actually more than 10 people there, and when we arrived, all the members sat down together and took turns introducing themselves. It was my first time experiencing this setting and experience, so it was very awkward (even the Runners Company members were awkward with each other because some of them were new to work that day), but it was quite impressive and a moment of sense of belonging because I was able to formally introduce all the members of the very early team .
After introducing myself, I asked him about it and he said that he was currently working on narrowing it down to 3~4 services to generate sales. I still didn't really understand why he was doing that, but then some outside workers came to visit. When I asked the team about the situation, they said that they had called him to break down the glass wall between the office rooms . He said that this wall was interfering with the team's communication and that it was a critical issue that directly affected the team's survival .
And so, the glass wall shattered before our eyes. To Runners Company, this glass wall was a 'problem' that had to be solved, and it was a day when we could once again feel that it was the DNA of this team to quickly and without hesitation solve any problem that was right in front of us .
(Ah, he was a good glass wall..)
The atmosphere was a bit chaotic, so I stood up and asked, "Do you need any help?" I expected a request related to investment or business, but a monk nearby said in passing , "There are more people, but the beverage refrigerator is too small." I laughed and left.
In order to share my thoughts with Karl Shin (CEO), I had a beer nearby and shared my opinions on what I saw and heard that day, and we came to the conclusion that even though the item was still unknown, the team had a lot of problems (in a positive way), so let's invite him to the IR somehow. So, after drinking the remaining beer, I visited him again at the office. CEO Jeong Seung-jin seemed a little surprised to see me again, but I asked him, "We want to invest, so please come and pitch." He said he would think about it and give me an answer. (A few days later, he shared his conclusion that he would not receive investment until he found PMF.)
That day also lingered for quite a while, and on the way home, the story about the refrigerator that the master had mentioned as he passed by kept coming to mind. I had a feeling that the story was some kind of test to check my problem-solving method or will . (VCs are mostly delusional.) So without much thought, I searched Naver for 'commercial beverage refrigerator' and ordered it to be delivered to Runner's Company. I guess it was because I wanted to leave something, even if it was small, for a great company that would last a long time .
(The monk who said he needed a refrigerator and the beverage refrigerator for the business in question)
Winning Team, November 21, 2022
At the end of October, Toss co-founder Taeyang Lee joined BASS Ventures as a growth partner, and for the November meeting, I brought Taeyang Lee, who was a close friend of CEO Seungjin Jeong. The idea was to say, "I brought my own kind, so disarm yourself." However, as soon as I got there, CEO Seungjin Jeong tried to lure Taeyang Lee, who had been with our team for less than a month, to the team, and I vowed to keep him well hidden from now on.
At this point, the team had grown to 13 members, and they were running with the goal of achieving BEP by the end of the year for two services: 'Tarot Sister' and 'H Class.' And on this day, for the first time, I was able to hear more in detail and empathize with why Runner's Company was doing this project.
This cycle (experiment) that Runner's Company is conducting is to foster a team with a winning mentality and skills . It is a method of fostering a team that is not just S-class with titles/history from the so-called Nekaraku Cup, but also solves 'problems' 'together' and creates 'results' .
Rather than gathering together based on the mission of the 'business' (e.g. to revolutionize finance), if a team is formed with people who gathered based on the 'quality of the team', 'work style', and 'work culture' that they work with, and if this team initially solves 'small problems' and creates results, a winning mentality is shared internally, and as a result, 'bigger problems' can be solved . The 'small problems' mentioned here are matching the BEP with tarot and dating at the time, and the 'big problems' are issues like aging and disease that you mentioned when we first met. Of course, it would be difficult to do that all at once, but if you have a team of people who constantly establish hypotheses, experiment, learn, and grow, the point is that there is no problem that cannot be solved.
In other words, product experiments were just a means, and what CEO Jeong Seung-jin was actually doing was an experiment on the organization that creates a 'winning team'. Only then did I start to see again why this team had a developer who was a former national ice hockey player, a data engineer who was a lawyer, and so on, and I felt like I understood many of the things I had done so far. There was a romanticism like a team in a comic book, but I couldn't help but be fascinated by the team that was fiercely experimenting to achieve that romanticism.
But even this is a hypothesis and an experiment, and the team said that if they don't achieve BEP by the end of the year, they will start all over again from the beginning. Of course, there was no answer at all as to what to do after achieving BEP, but even so, I think we just hoped that the team would achieve its goal and grow even bigger.
An extraordinary challenge, December 2022
I didn't want to take away any more resources from the team that was running with the determination to disband if it didn't reach its goal, so I didn't contact them directly for a while. Instead, at that time, the book 'Unusual Challenge', which covered Toss's growth period, was very popular, and I was able to meet the team again, albeit indirectly, through it.
As those who have seen the extraordinary challenge know, CEO Jeong Seung-jin appears with quite an impact. He was the main character who overcame Toss's stagnant growth, but there were various evaluations (not only in the book but also in reality) about the way he worked.
However, the CEO I have seen so far is someone who is purely obsessed with growth, impact, and problem solving . I also felt that he was someone who fit quite well with keywords such as consideration, coexistence, and teamwork. And most importantly, from the perspective of 'problem solving', I was convinced that he was the kind of person who would solve even the cases where his own tendencies were a big obstacle .
(Additional: CEO Seungjin Jeong, who caused a stir by throwing away food delivery containers in the trash can during an unusual challenge, is currently using a service that solves this problem.)
I think it's time, January 6, 2023
I contacted you to say hello and ask about your recent situation as it was the new year, and I decided to visit you again. I arrived with exactly half the expectation that you would have achieved your goal on the way there, and half the worry that you would not have achieved your goal and that there would be no one left in the office, but I think I felt quite relieved to see that everyone was still working hard.
The team successfully achieved BEP in December, and immediately after that, they said they were looking for an area to minimize the resources of existing services and solve a new problem: Generative AI .
It was right after ChatGPT, Midjourney, etc. started to become well-known, and the story was 'We are creating a B2C AI product that can succeed globally in a completely new form .' There was no specificity at all about what kind of service or platform it would be, but the plan was to find out through experiments.
Having built a team that shared the winning mentality and grown, and having found a new, big and fun problem to solve, CEO Seungjin Jeong finally said, “I think it’s time for us to receive investment .” He looked quite cheerful, and it was a moment where I could feel the excitement.
IR, January 18, 2023
After the team decided to fund, the job of the judge was to help convey their vision and story in the best possible way within the house. However, at the time, the team had little concept or preparation for IR, and wanted to invest minimal resources. (ㅠㅠ)
So, we prepared together from the very beginning, and I told them that it could be in the form of a short story so that the team could tell the story well, rather than in the form of a typical deck. After that, we worked together with the team to establish the framework of the story through Workflowly. It took about 5 days in total, from establishing the framework to refining the detailed storyline. This was possible because I knew what the Runner's Company team had been talking about and doing since August . In the process, I learned more about the methods this team had been experimenting with and about running, which helped me realize better that 'this is what it means for a startup to be good at verifying product hypotheses.'
After the deck was completed, what I said was, “There will be almost no questions after the IR, and there will only be evaluations such as good or bad.” This is because what the team had been doing for the past few months had already faded out, and the core message was that ‘we are the team that can best experiment and solve problems in the field of AI .’ Since Runner’s Company had not yet decided what it would do specifically, I thought it was important to only show the team’s vision, capabilities, and working methods.
On January 18th, CEO Jeong Seung-jin, Myung Seung, and Joo Sung came to our office for the first time, and in the presence of all the partners, judges, and advisors of BASS Ventures, they explained what Runners Company had been doing for the past four months and what they were planning to do in the future. As expected, there weren’t many questions, and exactly one week after the IR, the investment was unanimously approved in the investment review. This was also the result of the entire house called BASS Ventures having watched Runners Company closely as a team for a long time .
(Team Runners' AI-created influencer)
Talent Reward Pool, February 2023
The investment review of BASS Ventures will be conducted exactly one week after the IR, according to the set schedule. In order to conduct the review, precise investment conditions must be set, but even at the time of the IR, the exact conditions had not been set.
However, when I visited to discuss investment conditions during the Lunar New Year holiday between IR and Investor Relations, the team made a request. It was that when operating the company in the future, they wanted to 'take the team members' compensation pool to 40-50% .' In the experience of CEO Seungjin Jeong, the 10% stock option pool that is generally operated in the industry is very small, and in order to continuously secure and retain excellent talent, there was a need to operate a compensation pool that could motivate the team more in terms of quantity or vesting conditions .
However, it was difficult to realistically accept this because operating it only as a stock option pool would require excessive dilution of investors' stake, but CEO Seungjin Jeong wanted to implement it even if it was in the form of mixing it with RSU or donations of shares to the CEO .
Typically, the CEO's stake is managed very conservatively to align the interests of the company and the CEO, but CEO Jeong Seung-jin believed that if the company grows infinitely, even if his stake decreases, he can have a large upside , and that having a large compensation pool is essential for the company to grow. And this was also the problem-solving method he needed.
We also agreed on the methodology as a means for the company to grow, and through discussions with several legal and accounting firms, we came up with a plan for how to operate it realistically. As a result, we were able to set up a 40% compensation pool in a very unusual way where the interests of investors, the company, and the CEO were significantly aligned.
As a co-founder, February 20, 2023
The first investment journey with Runners Company was concluded on February 20th after six months of discussions. After the investment, the company established a new corporation called 'Team Runners' and met with several additional VCs, but thankfully, BASS Ventures was accepted as the lead investor.
I am looking forward to going on this journey with a team that answers questions like “What do you do when you encounter a problem that is too difficult?” and “During the four months you have been with Runner’s Company, have you encountered any difficult problems that you have not thought of?” as if it were a given, by saying, “It doesn’t matter if the problem is difficult, you can solve it. ”
There were always nervous moments during the long and complicated process, but I think it was because the process was long that I had the good fortune to watch how the team experiments and grows up close . There were many milestones such as the Gangnam Station officetel, the first product, team setting, incorporation, IR, and investment contract stamping, but I always considered the best for the team as the top priority with the mind of a co-founder , and all the members of BASS Ventures, as well as myself as the evaluator in charge of this process, worked together as one . Please look forward to Team Runners and BASS Ventures as we grow together day by day.
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