Oso Trava, Cracks | Venture Capital Isn't the Only Path, What You Need to Start, and the Business Behind Cracks Podcast

The audio and video are in Spanish. These notes are a translation.

Today I have as a guest Oso Trava, host of Cracks, one of the most listened-to business podcasts in Latin America, with more than 25 million downloads.

But Cracks is no longer only a podcast, but a business ecosystem around its audience, which includes an education company, a community of business owners, and the Cracks Fund, an investment fund in startups.

Before Cracks, Oso was founder of Instafit, a fitness platform that raised close to 1 million dollars, but eventually he realized that it was not a business compatible with the venture capital model.

Today Oso and I talk:

About his decision to leave the venture capital path as an entrepreneur
About the risk of putting your whole identity in your company when the probability of failing is so high
About how to evaluate the potential and character of an entrepreneur, based on his more than 250 interviews
And about why he decided to raise a venture capital fund

Now, I leave you with this great conversation with Oso Trava of Cracks.

Youtube Timestamps*

[03:21] - Reflections on Instafit

Oso has talked a lot about the 3 stages of his life: the banker one, the startup entrepreneur one, and the current one where, among several things, he is a podcaster and an investor.

Talking about his second stage:

How did he arrive at the fascinating world of startups?

With Instafit he raised around 1M dollars with venture funds like Social Capital and VARIV Capital, but eventually he stopped pursuing the path of exponential growth that venture capital seeks:

What characteristics did the Instafit business have that did not make it compatible with the venture capital model, like the ones he seeks to invest in today from the Cracks Fund?

His stage at Instafit was personally difficult, and it took him 8 years to get out.

This is a quote from Federico Antoni of ALLVP (Nathan Lustig podcast) that could resonate with the stage lived at Instafit:

“After 2 years, founders should see reality, sit down with their investors, and close the company if it is not going anywhere. We see too many companies going too slowly through the process of recognizing failure and closing operations. We need more turnover” (2018)

On one hand, Oso has spoken multiple times about the risk of putting your identity in your venture when by nature it has a 90% probability of failing.

On the other hand, when you listen to great entrepreneurs like David Velez of Nubank or the ones from Rappi, it sounds like their companies are their life purpose.

And venture capital investors look for that, and sometimes they raise entrepreneurs to the level of heroes.

What is the balance between both perspectives?
When Oso says he wants to invest in an entrepreneur who starts a company for the right reasons, what are those right reasons?

[32:49] - Interviewing and Evaluating Entrepreneurs

Doing an interview and taking part in an investment pitch have many similarities.

In both, you are trying to understand in depth the story of the person in front of you and the potential of where they can get to.

When analyzing people, what exactly would Oso say he is better at than the average person?
What has he done to become a better judge of character?

Oso has said about his guests on Cracks:

“There are people who are exceptional, but they are not aware of their skills or methods. There are people who are naturals and cannot explain it.”

When an entrepreneur pitches him whose strength is their technical ability but not communication, how does he evaluate them?

After Stanford, he went into investment banking, while many of his classmates went to work or to start companies in Silicon Valley. In his words, he did not see the wave that was coming.

When he hears a business opportunity today, how does he avoid the wave passing him by? Inevitably, it is going to happen because he does not see the future, but what has he implemented in his decision process thanks to that experience to reduce the chance of not seeing it?

In his book “Haz lo que importa,” Oso talks about life design, habits, productivity, etc. All of them are qualities that increase an entrepreneur’s probabilities of success.

Does he evaluate this in the entrepreneurs he invests in? How does he find it out? What questions does he ask them?
How does he evaluate determination? Nobody goes into a pitch trying to be weak. Everyone tries to look strong and determined, which makes the job harder for investors.

With all the people Oso has studied and built close relationships with:

What has he learned about ambition? To double the level of ambition of entrepreneurs in Mexico and Latin America, what would need to be done?

[57:43] - Podcasting

After more than 250 interviews with brilliant minds in sports, academia, entrepreneurship, etc.

If he had to choose one thing that ties together all the stories of Cracks Podcast, what would it be? What is the common point that unites them all?

Oso has said that in Mexico there is a leadership vacuum between the big business elites and ordinary people, and that people do not connect with the ways in which those empires were built.

In the US, the great entrepreneurs are almost celebrities, and they celebrate their feats.

In Latin America, most keep a low profile.

Has it happened to Oso that guests prefer not to appear on the podcast in order to keep a low profile? How does he think this impacts how attainable entrepreneurship is, versus a sport of the few?

Talking about the business ecosystem he is creating around Cracks Podcast.

The fund he has raised is of less than 10 million dollars.

If we count the management of relationships with LPs and entrepreneurs, it does not seem to be a very profitable and scalable business.

Why raise a fund? Is it the best way to monetize Cracks, or what is his motivation?

Jorge Combe said that in the last year Oso has changed his opinion about how artificial intelligence is going to impact the podcast business, and that he was getting quotes so they would create an intelligent avatar and people could talk with a virtual Oso.

What does he believe the most significant impacts of artificial intelligence are going to be on podcasts and on the content creation industry more generally?

[01:13:03] - Rapid-Fire Questions

If Oso looks 10 years into the future and puts on the dreamer’s hat, what is the most extraordinary vision for Cracks?