Daniel Schreiber 

Hey, Mike. Great to see you this morning. Let me introduce myself. I'm Daniel Schreiber. I'm one of the founders and CEOs of Lemonade. And your friend of these 30-something years.

Michael Eisenberg 

Could you imagine? 

Daniel Schreiber 

What’s that?

Michael Eisenberg 

For a 25 year old guy like you, that's pretty amazing. 

Daniel Schreiber 

It's impressive. Yeah. Counterintuitive. The joke is you actually look 25. 

Michael Eisenberg 

Oh, that’s so kind of you. 

Daniel Schreiber 

I used to call it salt and pepper, but it's just salt. 

Michael Eisenberg 

Now it's wisdom. 

Daniel Schreiber 

Wisdom, that's right. 

Michael Eisenberg 

Wisdom. Erica is gonna want you to say what your core value is. Can you do that?

Daniel Schreiber   

Yeah, she prepared me that I have to introduce myself and talk about my core value. I like to think that I have some values and maybe some of them will come up during the course of our chat. But I don't feel comfortable presenting them in a Hallmark style, pithy, thingamajig. 

Michael Eisenberg 

That  won’t work for Erica, but it works for me. Well, great, I am so excited to welcome Daniel Shriver, co-founder and co-CEO of Lemonade on Aleph’s Invested podcast. Daniel Schreiber is the co-founder and co-CEO of Lemonade, the AI-powered insurance company, driven by social impact. It's actually driven by profits, and as a byproduct of an online business model, which we'll talk about, also delivers a lot of social impact. Lemonade is the fastest growing insurance company in the world right now and, full disclosure, as Daniel mentioned, Daniel and I have been friends for over 30 years, and Aleph was the first investor in Lemonade. I'll get to Dale's prior background in a second. But first, I want to share two amazing statistics about Lemonade. They hit 1 million paying customers faster than Netflix, Spotify, or Amazon. And, 5 to 10 times faster than the most formidable insurers in the United States: Allstate, GEICO, State Farm, USAA, and, at 150% compound annual growth rate, their top line accelerated faster in the first five years of operation than Facebook, Amazon, or Apple. Prior to co-founding Lemonade in 2015, Daniel served as President and a member of the Board of Directors of Powermat Technologies, a wireless charging solutions and technology company. Before that, he was at SanDisk. And Daniel is a serial entrepreneur whose first company, Alchemedia,out an internet security software company, which I was also fortunate to be an investor in, less fortunate than in Lemonade was acquired by FINRA software in 2002. Daniel is also a trained commercial lawyer, he holds a Bachelor of Laws and first class honors from King's College of London. You can find daniel at lemonade.com - I'm sorry, you can find Lemonade at lemonade.com. And you can find Daniel, on Twitter @dachreiber, d-a-s-c-h-r-e-i-b-e-r. Daniel, we're so happy to have you on the show with us. Let's get started. So the first question I have to ask just for our listeners is how do we know each other?

Daniel Schreiber    

So if memory serves, and it often doesn't, we -back in 1989 I want to say, were fellow students in Har Hatzion Yeshiva in Gush Etzion in  Israel. I came from the UK, you came from the US, and we met in Israel. 

Michael Eisenberg 

And somehow we still managed to communicate, despite the different accents and upbringings. Amazing, what when you get thrown in for two years together. You know in a place together - 

Daniel Schreiber    

Desperate times, desperate measures. 

Michael Eisenberg 

I still remember all of the British young people who came saying, Could you pass the serviettes and I said, What is a serviette?

Daniel Schreiber      

Lives and learns? 

Michael Eisenberg 

It's a napkin. So let's talk about- we'll start with Lemonade, which is the most recent endeavor of yours. I'd love to hear because I know how you connected with Shai in the early days, and what were those early days like because you didn't know each other before?

Daniel Schreiber      

Sure. Um, I was coming off of a stint at a company called Powermat, which you mentioned earlier, and I was on what they called gardening leave. I'd given him my notice, but they paid me to do nothing, which is a very privileged position to be in. And I started thinking about what I wanted to do next. And I stumbled upon insurance, it was actually at Singularity University. I was primed, I was looking proactively for, kind of, which industry I thought could be ripe for disruption. And I, actually, was pretty deep down a part in the medical space. And then listening to Peter Diamandis talk. He mentioned- I don't remember what the question was, I don't remember what the answer was, but he mentioned in passing, peer to peer insurance. And I was kind of all wound up to look for it and I latched on to that and started developing what, in due course, became Lemonade. And as it was morphing and taking shape, in my mind, I sought out just a handful of people, and you were one of them. And I met you for coffee in Jerusalem. And I said to you, hey- 

Michael Eisenberg 

At a cafe that's no longer there, but  Lemonade is.

Daniel Schreiber      

And I remember I kind of said to you, at least this is my recollection of the meeting, I said, you know, I'm thinking about this idea of peer to peer insurance. And I think you stopped me there. And you said, that has legs, you kind of pass the sniff test. And as you are want to do, you started rattling off action items for me. You listed, like, five people that I have to meet and Shai was one of them. And Shai and I met, just a few meters from here, at a coffee shop just down this very road in February of 2015. So actually, almost to the day, eight years ago. And one thing led to another and then we founded Lemonade, came back to see you, Aleph was not only the force that introduced us, but then first backer as well. The kind of a funny twist in the tale is that, once we started going with Lemonade, I reached out to Peter Diamandis, and we met for coffee in New York. And I said, Peter, I'm doing that thing that you spoke about him. And he said to me, no, no, I meant something totally different. He had some idea about genetic pooling for health insurance. So I like to think that Lemonade was one big misunderstanding. 

Michael Eisenberg 

Peter Diamandis, for those who don't know, is like the founder of the X Prize and involved in  Singularity, if I remember correctly, and a special person. So on this podcast, you're the first of the entrepreneurs on whose board I seen- I sit, and so I want to ask you a question. There's a lot in the Twittersphere these days about investors who do more harm than good. I'd like to ask you how I've harmed you. And you can be honest.

Daniel Schreiber      

I have license to be honest, okay. 

Michael Eisenberg 

We know each other long enough.

Daniel Schreiber      

Coming into Lemonade, I've been around the park a couple of times. And I share the perspective that investors tend to do more harm than good. I think that there are investors who truly add value, and they are a small minority. There's a bulk of investors who think they add value but don't, and they are the most dangerous. And then there's dumb money that knows it's dumb and is passive, and they're great as well. But the danger is really the bulk in the middle, people who are sure that they know better than entrepreneurs and they add a lot of value. And they just, they just don't. And coming into Lemonade, I kind of resigned myself that the chances of finding those outstanding investors was low enough that the safe bet would be to go to the other extreme and just find dumb money but knows it's dumb, at least it's self identifies in a clear way. And I was wrong. I've changed my perspective, because at Lemonade both you, and I have to say, all of our investors, fall into that far left end of that spectrum, where we've just been blessed by investors who are active in appropriate ways, trusting and passive in appropriate ways, And unrelentlessly or, relentlessly smart and additive. If I tried to answer your question and take it more seriously, my sanity- 

Michael Eisenberg 

You weren't serious about what you just said right now? 

Daniel Schreiber      

I'm going to try and highlight your shortcomings. I've had conversations with other founders who’ve asked me about you. And I say to them what I just said, but I add that your bark is worse than your bite. That sometimes you will say things with tremendous conviction, and it can be daunting for founders, particularly for younger ones. And they can feel like, if they don't do what you say, they'll be clashing with a key investor or you will think badly of them as a result of that. And that's just not the case, you'd like to talk about opinions that are loosely held. And I think that's true, but there's a stylistic thing that sometimes gets in the way. he kind of brash New Yorker in you, can intimidate founders who don't understand the style or the substance issue of that. 

Michael Eisenberg 

Thank you.

Daniel Schreiber      

Too much candor? 

Michael Eisenberg 

No, it's great. You know, one of the purposes of this podcast is to, you know, talk about not just values, but how we can provide more value to the community of CEOs and entrepreneurs and portfolios. And I think that's great feedback. So turning the tables, what did you get wrong in the early days of Lemonade that you think could have gone better? Like, what could you have done differently?

Daniel Schreiber        

I have to confess, I'm not very good at the reflective stuff. Honestly, I'm not. I was chatting to one of my colleagues, and- 

Michael Eisenberg 

Turns out, based on what you said about me, that I'm not either. 

Daniel Schreiber         

And she's a voracious consumer of feedback. And I just admire it so much, because she's constantly seeking it. And I said to her, you know, I've never asked you for feedback about me. She says, I give you feedback the whole time. I said, that's true, but it's unsolicited. So I confess, I tend to be kind of forward thinking, and I don't tend to be very reflective. So one thing is, I will make a lot of mistakes and miss them, and not dwell on them and kind of push on. And I'm also a little bit suspicious of the whole endeavor in these kinds of things because you don't get a clear AB test. So you make your decisions under conditions of uncertainty, in retrospect, is, Oh, that was a mistake, that was a mistake. But if the same circumstances repeated, would it be a mistake to make the same- to kind of roll the dice in the same fashion? So I'm a bit cautious about that. That said, there are things that we patently got wrong. I mentioned earlier, peer to peer insurance, and we branded the company that way, in the early days, and it was misbranding. It was- we were left footed, flat footed, whatever you want, going into a launch by describing ourselves in that fashion. In retrospect, because the whole peer to peer world got a bad reputation. And, at the time, peer to peer lending was a big thing, and that fell on its face. But also because we got dinged, both from all time insurance people that said, hey, all of insurance is peer to peer, this isn't differentiated, and others who said this isn't truly peer to peer, and it just created a distraction that was unwarranted. And we made umpteen such mistakes as you go along. But that's one that springs to mind. 

Michael Eisenberg 

So I'm really interested in the first thing you said, which is, how much you dwell on mistakes I've written my most recent book in Hebrew, which is about uncertainty. And all through Corona, COVID times, I was giving lectures, I probably gave a lecture 40 to 50 times, on the difference between risk management and uncertainty. And, unfortunately, most people get wrong what kind of circumstances they’re in, they’re in uncertainty moment or in a Risk Management moment. And when I hear you say, I don't dwell too much on mistakes, I just kind of go forward, so to speak, keep driving through making more bets, see which ones turn out. Feels like the right approach to uncertainty. And, so I want to double click. You're a founder, you're a CEO of a startup. Is there any moment of risk management in a startup where you kind of got to hedge your bets? Or is it all uncertainty- keep going forward, damn, the torpedoes, don't dwell too much on the mistakes, they don't matter. We just kind of kind of keep rolling forward and be optimistic that the next one will turn out better.

Daniel Schreiber         

I think there's, for every founder, every company, every manager, there's risk management dimensions to their job, there's no question. But so much more, in a company that is in the business of risk management/ Lemonade is an insurance company. So understanding risks, quantifying risks, managing risks is the very core of what our business is all about. I find maybe we'll come back to this in different contexts, but sometimes people confuse quantification of risk with a prescients. They think, oh, if I can use data science to figure out how likely a car is to crash, that's the same as knowing whether it will crash, and it isn't. I can tell you with certainty what the odds are, if you go into a roulette table and place everything on number 27. That doesn't mean I know whether 27 will come up, I just know the odds. And if you repeat that enough times, then I'll be able to predict the swarm of bees, but not the bee specifically. And I think the same is true in a lot of these events. So yes, risk management is a core part of what we're doing. It's not just about placing bets. We are- you mentioned COVID. And we took some corrective measures as soon as that stuck and the world changed in ways that were uncertain, but also presented risks that we felt we could navigate around or at least reduce our exposure to them. And that was true again, now, as the market took its downtown inflation started soaring. And we've taken corrective measures to adjust our risk profile in view of things that we can identify.  

Michael Eisenberg 

My partner benchmark boosting lLevy used to say that startups are something like this, if this goes right, and this goes right, and this goes right, and that goes right, then you've got a really big outcome. And so it's like, a stringing together of 27 on the roulette table. It's more than that, obviously, it's not luck. But, then you got to kind of - got a lot of very unlikely, but high impact things, right? That's obviously different from risk management. It's on some level prescients. How do you kind of keep getting those things right, when you're in this very uncertain environment?

Daniel Schreiber          

I think a bit differently to how your partner framed it. I once came across, I don't know if this is apocryphal or not, but this calculation that spoke about a pool table or snooker table. And, you hit one ball, you have some predictability about where it's gonna go. You try to do a fancy maneuver, hitting a ball into a ball, that's tough. A ball into a ball into a ball, you’d better be a world class expert. And the calculation was that, I think it was, by the time you get to eight balls, one hitting the other hitting another hitting another, you have to take into account the gravitational pull of like every atom in the universe, the sensitivity becomes so intense that- 

Michael Eisenberg 

Now I know why I was never able to hit eight balls into the pocket at a time. 

Daniel Schreiber          

That explains it. And I think that that's germane to your question, because, I actually don't think you can predict too many moves in advance. I read a fabulous book, I forget the name of the author, The Mission, The Man, And M -e The Mission, The Man and I- something like that. And it was about some Delta Force commando who had all these different operations. But he spoke about dealing with those kinds of uncertainties because he's sent to get Bin Laden. And he knows what resources he has. He's got his squad, and he's got his capabilities. But he doesn't know where the guy is, he doesn't know what he's going to encounter. Was it Mike Tyson, who said everyone has a plan until they get hit in the face?

Michael Eisenberg 

Punched. 

Daniel Schreiber          

Punched in the face. So this kind of idea that you can- it's true that when we present to VCs business plans, you see it neatly lined up. If this, then that, then this is that, this and that, and it's beautiful, and it all makes sense. And I understand why your partner would have said that. But I think, from my point of view, it's different. It's- we want to find a way to the West. And what we do is we've got a map, and we've got a team. And we don't actually know how we're going to get there. But what we believe is that the capabilities that we've gathered, will get us to the destination, will give us the tools to deal with the things as they come up, which is not quite the same as having it all planned out. 

Michael Eisenberg 

Yeah, I don't think Bruce intended that. It's all planned out. But, you know, all these strings of events need to happen along the way. But, you know, one of those events in the case of Lemonade was going public. So Lemonade went public in 2020. I love the picture of you and your co-founder and co-CEO, Shai, and your wives, all alone, ringing the bell of the New York Stock Exchange with masks on. That, I think, is a picture that will be seared in my memory forever. As a testament, both to fortitude, your fortitude, and the pandemic. But it was just five years after the founding of the company, which I think, at least today, is considered relatively fast for any company. And so, I want to hit a couple things. One, what led to the decision to go public? It feels like, in that kind of- this needs to go right, that needs to go right, certainly, in the time where now we have tougher public markets, that turns out to have been an incredibly prescient decision. Where the company built up its cash reserves to go through this period, continue growing and improving the business. And, so both prospectively and retrospectively, you know, to the extent you can, you know, why go public? What are the advantages of being public? How do you think about that in a competitive context right now?

Daniel Schreiber          

It's great. And you were really the moving force behind us going public. It wouldn't have happened if we didn't all follow your lead. But it was really your leadership that- 

Michael Eisenberg 

Thank God, that time, my bark wasn't worse than my bite.

Daniel Schreiber            

It was that brash, New York. We can do this. But it's true. You were the force that moved us there. I'm thrilled. I'm thrilled that we did it. We should talk a little bit about some of the things that are necessary in order to be thrilled, even when our stock is down. 90%, but, I'll come back to that in a second. But, you know, when we went public in 2015, it was- in 2020, it was off of the back of a year where there were some failed IPOs and some spectacular pull backs. We almost went public, and kind of crashed the whole market. We were preparing to go public ourselves, at that time, and the demise of that IPO rattled a lot of markets and really shut the window on IPOs for a good half a year or nine months. But, it was, to me- and Uber had gone public and done not very well, etc. And for me, it was a reminder that some of these companies have reached these huge dimensions. Uber was a stunningly large company by the time they went public. And that was something of a novelty. Companies that the best known tech companies, the Apples, the Amazons, the Microsofts, they went public much earlier. They went public when they're about $100 million of ARR or of revenue, which is the size that we were at in 2020. And they did it after four or five years, which was the age that we were at. And in 1999, I think the average age for going public was something like four years old, in 99. And in 2009, it was about 14 years old. And a big change, at least one of the forces that had changed, is that a lot of late stage money had to come in- famously the Softbank fund, but then that was mirrored by others. And suddenly, you could raise a billion dollars without having to go public. And, that hadn't happened before. And, I kind of asked myself whether that was a good thing. Whether those companies that stayed private for longer, of course, it's sheltered, you don't have the exposure, there's a lot of coziness to it. But, doesn't that just lead to a kind of late adolescence that these 30 year old kids who are still at home and never really learned how to survive on their own, never really took off? And I think that some of that was happening in the tech sector as well. You have such a sheltered upbringing that by the time you go public, you really haven't developed a resilience. And the- I think you taught me this, but the public markets resent you for it, because you haven't shared that growth with them. You heaved yourself onto the market after the exciting stuff was behind you, and then you get into a bad cycle with them as well. So, for all of those reasons, I think it was great that we went public, when we did. Certainly the volatility is going to be greater for any company in the public markets for a young company, so much more so. But, it's been spectacular for us. The one thing I was going to add was, I kind of swore to myself, and to my partner, and to everybody else, that I wasn't going to let the stock and the quarter manage the business. And my big relief and surprise is that I've managed to keep that promise. I didn't really believe it when I made that promise to myself. And I get people, the whole time, asking me if I'm okay. And I'm genuinely okay. I'm genuinely okay that the company is running, it is being run with a focus on customers, not on stock price, on the growth in the long term, rather than the short term, and what analysts are or not saying. And, it's a great relief to me. And, I think if you're not able to do that, you really do have to think twice and three times about being public, because I can see how it, particularly markets like these could send a founder into a dark place, I'm really pleased that that's not happened to us,

Michael Eisenberg 

It’s amazing you haven’t lost anywhere from your management team. Everyone is still there, and pulling and inspired. But, you mentioned, at the beginning of those last remarks, kind of 90% down to the stock price. I'm still a shareholder, a large one. It's still tough to manage through, right? You may not pay attention to the stock price, but other people do. And you know, there's posts about it and tweets about it. And I'm sure it's a discussion. What are some of the methods you use to kind of lead the management team and Lemonade employees through that?

Daniel Schreiber             

It's not as tough as your question implies, not for me. I, in a profound way, I don't care. Now, I care, but in a profound way, I don't care. I care in a superficial way. And the reason I really don't care, I think this is true of a lot of the topics that we're going to touch on. I think that time horizons matter a great deal. Whenever you think about values, time horizons matter, what's the right thing to do, the answer is always going to be dependent on the time horizon at which you look at things. And my time horizons are such that the volatility and vicissitudes of the short term, kind of pass me by. They intrigued me, I look at them almost with disinterest. Certainly with a degree of dispassion, that surprises me. Because, I'm really focused on what's going to be in five or 10 years, not what's gonna be in five or 10 days. And, if that's your perspective, then it's almost a topic of little interest. Now there are practical things, it becomes more expensive to raise money. So, absolutely, we have adjusted our spend to accommodate the fact that now money is more expensive. When things are more dear, you spend less of them. It's affected. compensation structures, because options that are deeply underwater are not attractive, and you have to compensate for them. So, it definitely raises practical issues with which you have to contend, but perhaps less emotional ones than you might expect. 

Michael Eisenberg 

So, you've said often that this is a business that's hundreds of years old, and most of the insurance companies are over 100 years old. You know, lovable names like GEICO, and Allstate, and State Farm, etc. It's a very competitive business, very competitive business. And you talked a second ago about long termism. And I remember something I heard from Jeff Bezos, 20 something years ago, in which he said, there's people who buy things all the time. A lot more people are gonna buy them online over the coming decades. Like, this is gonna be okay. How do you think about that in a Lemonade context, which is, theirs all this competition, they spent a ton of money to acquire customers, these legacy insurance companies. StateFarm even ran an ad poking fun at Lemonade’s bot. Which, to me, by the way meant we arrived.  TV ad with two NBA stars, making fun of bots. But still, the competition is fierce. What about the trend do you think is your friend? How do you think about competition in general? And why do you think you'll outrun them?

Daniel Schreiber              

The one word answer is technology. Technology is appending loads of businesses, Jeff Bezos, among others. But I think in insurance, it tends to transform the business in ways that not many industries are as vulnerable to it. And, by the way, not many industries have survived as long as they have without that kind of transformation. So, businesses that were founded, as all were, that you kind of mentioned, in the era of the horse drawn carriage, where there's nothing wrong with their longevity. But, I often say longevity is not the same as immortality. But, being old, just means that you were founded in a time that was optimal for the era in which you were founded, and the world has changed. Sometimes Lemonade is talked of as a disrupter, I don't love the moniker because I don't think we're causing the disruption, the disruption is the fact that the world has changed. And that insurance companies are not well structured for the world in which they find themselves. And changing DNA is a trick that no company has really figured out. So, you've got a DNA that's suitable for a bygone era in terms of your risk aversion, in terms of your business model, your agent base distribution, networks, etc, investor base. Everything is suited for a particular world, and then the world changes. That creates opportunities for companies that don't have all of that legacy. And that really is the thesis of Lemonade is that insurance can be done a lot better with technology. Now, every line in the p&l can be done better. If you replace brokers with bots, you cut out 15 to 20% of the cost structure, that's a pretty big deal. And, by the way, you delight consumers, because you pay claims in three seconds, rather than in three weeks. You get an NPS hit and a cost saving that's dramatic. And every line that goes through the p&l that's true of, you get a better experience for less cost, better experience for less cost. But it runs deeper in insurance, because in insurance, the ultimate product is probability theory. Right? We mentioned this earlier, insurance is the business of quantifying risk. And data allows you to do that in a way that nobody else, and nothing else can. So that bot is not only delighting consumers, it's generating something like 100 times more data points than the equivalent human broker. That is a structural advantage that will manifest ever more powerfully, over time. So it means that not only can we delight consumers for a lower cost, but we can quantify risk in a way that competitors cannot. And, I think that, even more powerfully, than the kind of feedback loop that Jeff Bezos spoke about, is foundational, because he you're changing not merely how people buy things, but the very thing that they buy. 

Michael Eisenberg 

There are other upstart competitors through this route. Metromile, who just acquired it. Hippo. Lemonade has ran past them. Quite candidly, I think it's fair to say. Why? There are other upstarts. What about Lemonade tackled this old structurally inefficient industry better than some of these other ones?

Daniel Schreiber                

So, candidly, I think there's a handful of things that I would point to in here. There is a bit of retrospective, whatever. 

Michael Eisenberg 

Finally.

Daniel Schreiber                

One that will sound perhaps odd, but is, we have Shai Wininger. My co-founder is a phenomenon. And, I've had the good fortune of meeting people like Jeff Bezos, and all different  other people that worked, for a bunch of years, in Silicon Valley and other places, and I wrote a blog post about this. And, I met Steve Jobs, if I had to choose between any of them and my co-founder Shai Wininger, I’d choose Shai time and again. And, the stuff that he did in the early days of Lemonade, the branding, the product work, the precision, is something that's just extraordinary. I think it's head and shoulders above anything that I've had the privilege to work with in the past. So, I think that's a powerful thing, particularly, particularly, particularly in the foundational stages as you're thinking about the business. Another thing that we did is we decided pretty early on that we were going to be multi product. It's striking to me that all of our inshore tech competitors have chosen a different path. So, Oscar is just doing health and   Root is just doing QA, and Metromile was just doing QA, and Hippo is really just doing property, etc. And, we genuinely wish them well because our success is not dependent on the failure of anybody else. This is a vast market. We're competing with incumbents, not with them. But, I do struggle to figure out how you’re ever gonna make it if you're not offering multiple products. So, we do, and I think that's an important differentiator. And, so, as I think about it, you know, differentiation from incumbents is technology. Differentiation from technology companies is multi product, more than anything else. 

Michael Eisenberg 

But GEICO is a single line company, right? Let’s do car.

Daniel Schreiber                 

They do and they don't. It's a- they have a hybrid model. If you go onto the website, they'll sell you home. They'll advertise home- 

Michael Eisenberg 

From other people. 

Daniel Schreiber                 

That's right. They'll resell either- from an insurance plumbing level, they’ll just do car. But from a consumer facing perspective, they'll sell you everything. 

Michael Eisenberg 

So, one of the unique things about Lemonade is what I would call business model alignment. I'll put it in my own words. Which is, legacy insurance companies make money when they make you more miserable. You're in your time of need. You had a flood, God forbid, fire, car accident, and they try everything possible to deny your claim, because they make their profit over the leftovers. You chose from the outset, and one thing that attracted me, a flat fee, more sassy business model, where you don't make any more money because the claims are denied. And then you said, whatever's left will give to the charity of the consumers’ choice. So congratulations, if you want to be a fraudulent consumer of this insurance company, you will have stolen money from the American Cancer Society, or something like that. And that aligns behavior. Is that a fair description of your business model choice? 

Daniel Schreiber                 

Sure. 

Michael Eisenberg 

Okay. Other companies get involved in, call it charitable or not-for-profit endeavors, as well. There's something called CSR, corporate social responsibility. Can you help me understand the difference between Lemonade’s business model and the business model, for argument's sake, of GEICO or State Farm, and their corporate social responsibility arm?

Daniel Schreiber                  

Yeah, I think at a foundational level, what we're trying to achieve is enlightened self interest. In other words, we're trying to solve a business problem through charitable giving. We've never apologized to our investors, or excused the donations that we've made. We're a young company, we've donated over $6 million to charity. And, the reason we never feel the need to excuse it, is because we think it's actually accretive to shareholder value. Now, that's counterintuitive. But insurance is plagued by dishonesty and fraud. And, it's an unusual kind of fraud. A lot of online businesses are plagued by fraud. And typically, it's some hackers from some foreign country who steal your credit cards. And that's what we associate with the name fraud, phishing campaigns, stuff like that. In insurance it’s different. In insurance, the people who are defrauding the insurance company are people like you and me, people who self-conceive as upstanding citizens. And, if you chart their behavior, it's generally good, good, good, good, good, until they make an insurance claim. And, then they let the devil out and then they go back to being good, good, good, good, good. And, that is a fascinating phenomenon. And, in the very early days of Lemonade, we sought out experts in game theory and in behavioral economics, and I hounded Professor Kahneman until he agreed to chat to me and Dan Ariely joined our founding team. And, it was really to try and understand that exact question. What is it about insurance that brings out the devil in us? And, at a mathematical level, insurance is about a community of people pooling their resources to help the weakest member in the hour of need. That is almost the definition of charity. That's the International Red Cross kind of thing, right? And yet, the perception of insurance couldn't be more removed from that, if you tried. And Shai and I were, as newcomers to the space, fascinated by that. And, Dan had recently completed a book called The Honest Truth About Dishonesty. And, after 10 years of researching this, he kind of concluded that if you set out to create a system to bring out the worst in humanity, it would look a lot like a modern insurance company. Everything that you ought not to do if you want honest  behavior, is manifested in insurance companies. The win-lose proposition that you just- a zero sum game that you just described, asymmetry of information. You have no idea what your policy says, I know what it says. Asymmetry of power, you've already given me the money, now you want to take it back. All these things make us feel entitled to embellish and lie, because we feel like the playing field isn't even. And, if the playing field isn't even, I've got to start high to get to where I deserve to get to. And, it's kind of that we took a run out, we wanted to see if there was a way to change the game, using game theory nomenclature, and change it from being a two-person conflicted game, to a three-person game. And, the charity is really that third person that changes the very nature of the game. So, for us, signaling that, hey, we're gonna cap our profits, we're going to cap them at 25%, gross margin, we're not going to exceed that. And if there's ever an opportunity to take more than that, we won't. We're going to tie our hands, and that money will go to charity. That's an important signal for us, it changes our incentives and puts that money that poisons the well, beyond our reach. But, it also invites you to change your mindset, to think about the nature of the interaction differently. And, rather than thinking about it as a conflicted relationship, where you have to defend yourself, you are suddenly thinking, hey, one second, that charity that I chose, it's that that will suffer the consequences of my actions. And, a victimless crime is suddenly no longer a victimless crime. So, for all of those reasons, when we give charity, we feel like we're adding shareholder value. We're resolving a business challenge, which is the deep fraud and dishonesty that plagues the industry. There are concentric circles beyond that. There's low loyalty, low brand affinity, high cost of acquisition, and all of these, to some extent, tie back to that same fundamental problem of distrust. 

Michael Eisenberg 

You know, Rabbi Samson Raphael Hirsch, who was the leader of the German Jewish community in the 19th century, has this line that he calls the third person among them, or the third among them. Your first two, after the first portion of Leviticus, he says that the broker of dishonesty and loans and partnership, is God, who he refers to as the third among them. You need a third party to kind of change the playing field, from an animal- spirits playing field, to one where there's what to lose in a different context. And that's what your description just reminded me of. But, it brings me to another question, which is, it feels like, the way you describe most insurance companies is that they think most people are bad, at least in their moment of need. They're not bad people, but they're bad. And it feels like you think most people are good. We just need to change the incentive system or the playing field. So, that ensures that they continue to be good, even in a moment of need. Is that fair? 

Daniel Schreiber                  

No. 

Michael Eisenberg 

No? Okay. No. Do you think most people are good?

Daniel Schreiber                   

I'm kind of naive that way, I do tend to tend to think that way. But, I think that the game matters more than the players. And, that's true on both sides of the equation. So, if my moral fiber is no way better than that of any other insurance executive. I believe that. I've met a lot of them. I think they're firstly impressive people and good moral people, 

Michael Eisenberg 

I was actually talking about to consumers-

Daniel Schreiber                    

But, they're kind of mirror images. So what happens is, if you put somebody in a position where the incentives are distorting, then they will behave in a way that's distorted. And, I think that's true for consumers as well. So, if you present them in a way where they feel like they're being screwed, and that they haven't got the power, asymmetry is disabling for them, and that they need to do something in order to recapture the power. We all behave in a way that, you and me, included. Whereas, if you signal to them that they're in a different kind of environment, then they will think differently about it. There's a wonderful book written in the 1970s, about blood donation. And, it was comparing the then commonplace practice about blood donation in the UK and in the US, and contrasting the two. And, in the UK, people donated blood and in the US, people donated blood. But in the US, in addition to whatever psychic gratification you got for being a good person in donating blood, they also gave you a few bucks. And, that was the contrast that people were studying. And strikingly, in classic economic theory, you'd say that whatever incentives exist in the UK, they're on steroids in the US because they exist, and then you get some dollars as well. Wow, everybody should be donating blood, but it doesn't work that way. What happened is that in the US, fewer people donated blood, and the quality of the blood was lower. Why is that? Because, as soon as you add the financial incentive, I change it in people's minds, it shifts from being a values driven activity. I feel good about myself because I went to give blood, and you've actually polluted that by making it transactional. You've reduced it by making it transactional. Those $5 that I get are not additive. They actually subtract from the nature of the commitment. And, suddenly I asked myself, Hey, I'm a busy guy. Do I really want to go and give blood for five bucks? Rather than thinking, Do I want to go and get blood to help people? And, my answer is no, I'm not going to do that for a few bucks. Who answers that, yes? A lot of the homeless people with various illnesses and stuff like that, they'll answer yes. So, the quality of the blood goes down, and they will lie on their forms because they're between the $5 or not anything else. And, so, the quality suffers. My point is, interactions can be cataloged in our minds in one of two ways. It's not entirely binary, but it has that feel to it, where I can think about, Am I doing something meaningful, or am I doing something transactional? And, insurance, the way it's structured today, forces us into the transactional mode. What we're trying to do is to allow more and more consumers to feel like their claim and the whole interaction has a values dimension to it. And as I say, I think that is ultimately self-serving and serving shareholder value as well.

Michael Eisenberg 

If you asked people, surveyed our customers at Lemonade, and said, Do you feel differently being a Lemonade customer versus your previous insurer?

Daniel Schreiber                   

I'm not sure that we've run that exact survey. We do monitor and things like net promoter score, which is evidence of how you feel. And that Lemonade is standout. I would just caution, because so much about the way you interact with Lemonade is different, that there's not a clean test, which isolates this one dimension. 

Michael Eisenberg 

Right. So, as you know, for me, I have this theory that values create economic value, create value. This would seem to be a clear indication of that, right? Fraud should go down. Over time, stickiness to the product should go up, customer happiness goes up, word of mouth goes up, some marketing costs go down. Can you see that, empirically yet, in the business?

Daniel Schreiber                   

I think we absolutely can. But again, I want to put an asterisk next to that, because there is no clear AB test here. So, when you change so many parameters, you know, we have a bot interacting with you instead of an agent. And it's all smiley and pink, rather than a grumpy agent and other things. And that's not about the values. So we've changed- our prices are more attractive. So many of the things, we've really reinvented a lot of the aspects. So, I do think we are seeing evidence of that, for example, we see, constantly, consumers returning money that they've received, because the item showed up. So- 

Michael Eisenberg 

That's amazing. 

Daniel Schreiber                   

Yeah, so we'll get somebody writing in, Hey, my girlfriend found my laptop or watch or whatever, it was under the couch. And, the old timers from insurance on our staff are amazed, because, it's just, they've done 30 years and traditional insurance companies and haven’t seen that. - 

Michael Eisenberg 

Do people, they say this kind of overtly, because I know the leftovers go to charity, or is it sometimes-

Daniel Schreiber                    

Yeah, sometimes. Yeah. So those things, I want to be careful not to read too much into that, because it's anecdotal. But we are seeing a lot of anecdotes. 

Michael Eisenberg 

So, you said before, and I know you're inspired by Churchill in this regard, that storytelling is really important. And how you speak about this is very important. Churchill said he spent an hour for every one minute of speech, I think I've heard you say it multiple times. Tell the entrepreneurs out there, why storytelling is so important and why they need to invest so many hours in telling the story of their company.

Daniel Schreiber                     

There's really nothing else, in the early stages of a company. And, I do find oftentimes, that it's underrated, but I think if you look at some of the great entrepreneurs, that we all know, that's really been central to how they created value. I don't think I'll say anything particularly novel or controversial, if I will say that the role of an entrepreneur, particularly in the early stages, was not just to envisage or envision a future that doesn't exist. Entrepreneurship is not about just repeating something that already exists. It's about in some form, or fashion, changing the world. That can sound grandiose, it doesn't have to be grandiose, but if there's no change involved, and it's really not entrepreneurship. So, you have to be able to take the present and describe a future that doesn't exist, and contrast the two. Then you have to explain how you're going to get from here to there. And then you have to convince, you know, with those snooker balls or whatever that is, then that, then that, then that. And, that's how I will create this new future. But, in the early days, it's about not envisaging that future, but being able to communicate it in a palpable way, such that you reduce your dependence on the imagination of the listener. In other words, you want the person who's listening to you to be able to see, in a textured, multi dimensional, rich way, the future and be able to sense it and believe in it. Such that they say, Yeah, wow, I can see it. I would love that future, and I will invest in creating that future. And that is the role of the entrepreneur, if you're down to excels and just showing how things could play out, but you're not helping- by the way, not just investors, but potential employees, potential customers, reporters- if you're not telling a story, then you're really missing out. Yeah.

Michael Eisenberg 

And your recent shareholder letters, apropos, that it just came back to my mind, now. You've been using the metaphor of the cost of gas and miles per gallon. I'm sure I'll do injustice to your metaphor. So, I’l let you tell it in a second. Talk about the metaphor for a second. And why are you using that to describe your insurance business?

Daniel Schreiber                      

Well, it ties back into your question earlier about the stock price. And, I said that the cost of money has risen. And, the way we articulated this in the letter is that we are on a journey, and we need gas to get there. And, gas is- money is the gas, cash is the gas. And, that, while gas is cheap, you really try and get there as quickly as you possibly can. And, what you're optimizing for is miles per hour. How quickly can I get to my destination? And then, when gas becomes more expensive, what we naturally do is we say, One second, I'm going to drive at 50, and optimize for the miles per gallon. If it takes me longer to get there, it takes me longer to get there. But, that will be my optimization. And that felt like a helpful metaphor, because we live that, we do that in our personal decision making, for the changes that we were making at Lemonade. So, you suddenly see Lemonade, which has been growing at a certain pace, reduce proactively, and tell you in advance, we are about to reduce our pace of growing. And then you say, Okay, that makes sense. It's because the cost of growth has gone up. And when that happens, you switch from miles per hour to miles per gallon.  

Michael Eisenberg 

We need more fuel efficiency and more capital efficiency, at the same time. So, in that regard, you get more fuel efficiency, you start to cut costs into business. But, you can't cut your way- in the case you're in for sure- but in many cases to profitability, you got to kind of continue growing the business. How do you balance that? Or do you not balance it?

Daniel Schreiber                       

I think you need, kind of, the wisdom of Solomon, to know how to split that, it's challenging. It really is-

Michael Eisenberg 

There’s another metaphor. 

Daniel Schreiber                       

It really is challenging. 

Michael Eisenberg 

By the way, the reference is to the story of Solomon and the two supposed mothers have a baby who come to him. And, each one says this baby is mine. In order to solve the case, he says, cut the baby in half, and then only the real mother turns up and starts crying and says no, no, save my son. And that's how we know who the real mother is. But go ahead.

Daniel Schreiber                         

Thank you, I'm gonna have to be careful with my biblical references. I don't know that there's a particularly right answer, and you're taking risks either way, I think that's a point I tried to highlight to myself and to the team and to you as a board member. Going too slow- by the way, this is true with the gas metaphor as well- going too slow doesn't optimize for efficiency, it actually becomes more costly-

Michael Eisenberg 

And you get honked at. 

Daniel Schreiber                         

It's less pleasant. Yeah. But, what we're trying to do is, we have quite a lot of money in the bank for reasons that we touched on earlier. And, we want to make that assumption  I think it's a harsh assumption, not necessarily the right one but work on the assumption that we're never going to be able to raise another dime again. Or, that the cost is such that we don't want to raise another dime again. And then think, okay, that's fine, we've got a full tank, there's just to choose our path in such a way that will optimize to get to that point, with money still in the bank, with gas, it's still in the tank. So you go too slow, you won't get there, you go too fast, you won't get there. And there's a range of reasonableness within that and we're trying to operate within that range. 

Michael Eisenberg 

I would ask you how it's gone so far. But, I know you haven't announced results yet this quarter. So I won't do that. I think most people who looked at Lemonade in the early days, and maybe even still today, ask themselves the following question. Is this a for profit corporation trying to maximize profits? Is this some sort of impact company with three bottom lines? Why is there a not-for-profit element here? Shouldn't these be separate? Like, you know, we have a notion in the world right now, in America we have a 501(c)(3) and in Israel we have a 46(a), which those are nonprofits, they can't actually make money. Those guys over there at Milton Friedman, have to maximize profits. Lemonade’s, a different path than both of those. How do you think about that criticism and where it comes from? And does it impact you at all? Do you think differently?

Daniel Schreiber                          

It's a great question, and maybe we can spend a few minutes on it. I'll start off with the fact that Lemonade is architected, at a legal level, slightly unusually. Not unique, but unusual. And that is, that we are a public benefit corporation. And, this is a new kind of legal entity. Where, we were formed in Delaware and Delaware was one of the first states to adopt it. But still even in Delaware, its-

Michael Eisenberg 

If I remember correctly , I think it was Virginia who was the first.

Daniel Schreiber                          

Could be.

Michael Eisenberg 

I was a signer on original B Corp documents somewhere.

Daniel Schreiber                            

Oh, but let me separate between public benefit corporation and B Corp. 

Michael Eisenberg 

100%. Yeah. 

Daniel Schreiber                            

So, I'll split the two. But, at a foundational level, we're a public benefit corporation rather than an Inc. Now, that doesn't mean- and it can be confusing- and I think the naming sounds almost like a charity, we are not. We are for profit. Unashamedly, proudly, we're about maximizing profit. Being a public benefit corporation adds a dimension, which says that you may- and understand- under certain circumstances, must consider issues beyond just bottom line. And, I think of this as more of a shield than anything else, because if you're CEO or board member of a company, and you don't want to do something, you don't want to invest in some regime that you think is unsavory, or in some products that you think are bad, or whatever you think the right thing to do is. You open yourself up to an activist shareholder will say, hey, Milton Friedman, that's not the right thing to do. If you're a public benefit corporation, you actually have legal protection to say no, I'm actually- I told you, it's in my founding documents that I will look at these other things. And at times, you may think that it's hurting the bottom line, but it's part of my responsibility. And, therefore, it's fair warning to investors that there may be such circumstances. 

Michael Eisenberg 

And, you think it's actually helping the bottom line, it should be said. 

Daniel Schreiber                            

I do. Yeah, I absolutely do. But, it does provide you with something of a shield against that kind of criticism, which I have to say, we've not really received. Then, on top of that, we've also become a B Corp, which is, they're not merely giving you license to do good, but somebody's actually auditing the degree to which you are doing that. But, maybe I'll take your question at a slightly broader level, and we'll get a little bit philosophical, and maybe even a little bit biblical, if you'll allow me.

Michael Eisenberg 

h, my god, I love that.

Daniel Schreiber                            

We're sitting here in Tel Aviv, Israel, and I think, and you're the scholar here, so you can keep me honest. But, the story that I tell myself, is that there is something of a difference, a historical difference, between traditional and ancient kind of Christian and Jewish ways about thinking about some of these topics. And, I think, and I'm no scholar of either religion, and at least of all of Christianity. But nevertheless, I think about the early teachings of St. Augustine and others, talking about the fall of man. And then, all the way through to Martin Luther and his thoughts about this. And, you get to a picture that is, you asked me before about do I trust in the goodness of man or not. It's a fairly bleak perspective about the natural state of humanity and the need of grace in order to redeem them, but left to their own devices, it's a pretty sorry state of affairs.  

Michael Eisenberg 

Doctrine of original sin. 

Daniel Schreiber                            

Yeah, that's right. And, while Judaism is based on similar biblical sources, it didn't- and you'll find echoes of that in Jewish teachings- that's not a central theme in Jewish thought. And, the central theme and Jewish thought is actually much more engaged with a lot of human nature and nature in general. And you see the differences that each religion took and its attitude towards sex or towards food or towards a lot of other ways of engaging in nature, and your basic attitude towards natural desires. And, I say that in this context, I'll try and bring it back in. But, I think the dichotomy that we have in the legal structure between for profit and not-for-profit, which is at the core of your question, comes back to this. It is actually rooted in a deep suspicion of greed and of any natural inclination. And, if I think your inclinations are inherently evil, then if you're pursuing them, you must be doing something bad. And, if you want to do something good, then you mustn't get anything for yourself out of it. It has to be selfless in the pristine way, and therefore I create two different legal structures, one for people who want to make money, one for people who don't want to make money. I don't know if that was ever true. It's certainly not in the teachings and the upbringing that I received, and I think increasingly, we're seeing opportunities to meld the two. And you spoke about Milton Friedman, but Adam Smith already pointed to this idea that the invisible hand they did at the baker can be pursuing something that serves him and his family, and yet is good for society. So, these ideas entered Western thought quite recently, and in other traditions that have been enmeshed in the thinking for a much, much longer period of time,

Michael Eisenberg 

When they're under God, that which is to God, and not to Caesar Rome, that which is to them is kind of ancient. You know, I've often thought about Adam Smith, that we've forgotten actually, what Adam Smith says. So, there's the invisible hand and the baker and the brewer, but Adam Smith grows up in and is active in Protestant Scotland. In which there is actually a community infrastructure that exists, by virtue of religion, Protestantism. And so, a lot of the assumptions that you make in the Lemonade model, in addition to the kinda more merged, maybe, Jewish bent on it, actually has a lot to do with Adam Smithism, as well, which is, he assumes this community infrastructure that holds people honest, in smaller communities, and then the brewer and the baker in improving their own lot, move the economy forward. And, by the way, move the people around them forward, as well. And raise the question in my mind, so Lemonade’s built, effectively, a community around this by rallying people around charities. You built a community that brings out better spirits. How important do you think it is for the positive, profitable financial growth of businesses, to actually build a community around these companies? It's not just love of the brand, but it's almost love of the other people who are customers of this company. Because, together we can accomplish something more. And then, you know what?  Maybe I had a second question on top of it- actually, go ahead. Just to add to it, people share, like, your give back dates like, crazy viral. I’m part of this group of good people doing good things, you know, it's lovable and friendly, and entertaining to the way you do it. But people share it, and they're proud to be a part of the group of people who gave to the Red Cross, the American Cancer Society, whatever the case may be.

Daniel Schreiber                            

Definitely. And, I think this taps into my- the reason for my optimism, and the reason why I think today, more than ever, your quip about values creating value, is true, and the arc of history is on its favor, and I'll explain. It ties back into kind of Maslow. So, at a time that we don't have the most basic housing, and, you know, calories are scarce, people are not going to have the space in their mind to think about some of these charity or other things, or, they may not. They really hunker down taking care of basics. But, technology has driven incredible abundance in the world, just incredible abundance. And, I think not coincidentally, younger generations who grew up with greater abundance are being more thoughtful, more engaged, more demanding on the ethical side, as well. Suddenly, if Nike is using a sweatshop, and they may have done that for God knows how many years before, and, but suddenly, it's absolutely unacceptable, and they're gonna get boycotted and exposed and terrible things are gonna happen. And, that repeats itself time and time and time again, businesses that are making money by doing something that their consumers perceive as being evil, is something that they may have once got away with, and they absolutely cannot get away with any more. 

Michael Eisenberg 

The world is more transparent in general. 

Daniel Schreiber                             

Absolutely. The world is more transparent. And I think, less forgiving in a good way. And what I mean by that is- I mean, also in a bad way. But, the good way that I wanted to touch on is that, I think this is part of climbing the Maslow's scale. I'm no longer just okay with having comfortable shorts. I want to know that those comfortable shorts are not at the expense of some kid in some distant land. And, that means that part of the value proposition, part of the brand promise, of any business, including insurance, has to be, I'm aligned with you on a values level. And if I'm not, then I'm not giving you the full product experience, the full brand experience. You will actually not want to engage with me, which is why over time values create value. 

Michael Eisenberg 

And interestingly, you know, there's a book written by Vivek (Ramaswamy)- blanking on his last name- called Woke Inc. Which, I haven't read yet, but it's on my night table. Which kind of slams I would call the wokeism or canceled culture that's coming out of these companies. When Ben and Jerry's decided to pull their products or their license from the Israeli distributor, I actually wrote that I thought it was a good thing. I actually wanted to know the product that I was buying and who the people behind it were. My sense is, people feel the same thing about Lemonade. Where do you land on this divide between this can kind of run itself amok to your point, you know, transparency can cause a lot of really negative things and canceling and work versus transparency can let me, you know, align with the products that I really care about.

Daniel Schreiber                              

One of the nice things about the old thing of “for profit” or “not-for-profit” was very clean. Yeah. And now we're entering murkier waters and, in many ways, unforgiving times, in a bad sense, and people who misstep get slammed in ways that are very harsh indeed. So, I definitely think that these are dangerous waters, and in that sense, dangerous times. At Lemonade, we've taken the approach, and in many ways, but this as well, that we'd rather generate strong emotions and love from a minority of people, then just peter out and be kind of average for everybody. And that, taking a stand on some issues will engender counter measures, or sometimes hate, or whatever. We took  a stand after a terrible massacre in Vegas a few years ago, we decided that as an insurance company that insures guns and ensures the liability of the gun holder as well, we can't be neutral on this topic, we have to come to a view. Passivity is, by implication, taking a position. So, we might as well be thoughtful about the position, and we put some constraints on the guns that we were going to ensure. We didn't want to insure assault rifles, and we said, We'll ensure up to $2,500 worth of guns, but if you go beyond that, and by the way, we're going to condition coverage on the gun being responsible, used and securely stored, none of which are done by any other insurance company, to the best of my knowledge.

Michael Eisenberg 

It shouldn't be that controversial, at the end of the day. 

Daniel Schreiber                              

But it was,and it included hate mail, saying, you know, I hope the next massacre isn't Lemonades officers and stuff like that. So, we knew that it would be a lightning rod for some negativity. But, I think, overall, that's the kind of stuff that a lot of people can get behind and respect, and you pay a price, but you also get a benefit. 

Michael Eisenberg 

I think the point you made, by the way, that passivity is also a stance, is poorly understood by most people. There's this notion, in many ways, that being conservative or something like that, or not taking a stand, protects you. I find it's exactly the opposite. That is actually a decision. And, you know, over the short term, sometimes it's safer. But, over the long time, it's a far more risky decision. And, I want to move to kind of a rapid fire round of questions now. So, I came back 10 days ago from an IPO of a company called Freddos, that happens to- the CEO name happens to be Schreiber, also. 

Daniel Schreiber                              

Yeah, we related by marriage- 

Michael Eisenberg 

It'syour brother, you share the same parents.

Daniel Schreiber                              

That's what I meant by marriage.

Michael Eisenberg 

Like, what did your parents do? Or, what did they feed you when you were young that there's two CEOs of public companies now?

Daniel Schreiber                               

This is a rapid fire question? 

Michael Eisenberg 

Well, I've met your parents, I love them. They're wonderful people. They were with us at the IPO at NASDAQ. I'm on the board of that company too, for full disclosure. So, I've made a winning bet. And your parents. What did they do? What was it like growing up?

Daniel Schreiber                                 

Gosh, I don't think that qualifies as a rapid fire question. That's kind of a sit on the couch and think for a minute on the couch, and talk for the next three years. But, the short answer, I think, has to be that we grew up in an environment, you know, grandparents were all immigrants. My grandfather, the Schreiber grandfather was very entrepreneurial, so was my other grandfather. They came as penniless refugees and orphans, to the UK, from other places in Europe, just ahead of the Nazi machine that really decimated all of their families. Three out of my four grandparents were orphaned and made penniless refugees. So, that, I am sure, if we had longer to explore, and you'd understand that, that kind of thing that instills in people. And then, at a very young age, we grew up in a home that was also entrepreneurial. My dad was a businessman. And, at age two, I moved from the UK to the US because he was going to Stanford and working in HP in the early 70s. And then, back, and I've moved around and moving countries and being a bit nomadic and being exposed to different things, forges a sense of risk, perspective, and perception, etc. So, I think we've always been encouraged to be creative and to think in entrepreneurial ways. And I'm sure that's part of a possible story.

Michael Eisenberg 

Now, you mentioned your grandparents. I just lost my grandmother, at almost 100 years old, three weeks ago. I know your grandfather lived a very, very long life as well. I don't know how old he was when he passed. How important is it for your kids to have had great grandparents around?

Daniel Schreiber                                 

Wow, what a wonderful question. My grandmother is alive and well at 99. She turns 100 in June. And she's a central feature in the lives of all of us. There's no question. And, it's striking because my kids have an unknown grandfather. And I know you've experienced this as well. But being able to see your grandmother hold your grandchild is just unbelievable, it’s  really powerful, powerful images and forces. And my grandmother, much as I know, I remember your grandmother, well, she was a powerful matriarch. And, mine is as well. And, we all look to her and draft off of her strength and the love and encouragement that she gives. She knows all of her descendants and there are numerous. She knows them all very well, and by name, and all of us are lulled into the sense that we have a particularly special relationship with her. There’s almost 200 of us, you know, but no, what I have is particularly unique. My kids feel that way. Absolutely. 

Michael Eisenberg 

How do you think it affects them?

Daniel Schreiber                                   

I'm not sure. You know, when our eldest had his son, it was really important for him to get on a plane and go and visit his great grandmother and show her her great great grandson.

Michael Eisenberg 

In London

Daniel Schreiber                                   

In London, yeah, and for her this was probably her 50th great, great grandson, and she was thrilled to see him. But for him, it was really important. And, he traveled with a newborn infant to London in order to show my grandmother. So, these are central themes in their lives, but I wouldn't care to characterize them, exactly. Yeah. 

Michael Eisenberg 

One of the last pictures we have of my grandmother's holding my youngest granddaughter. And  it's a meaningful picture. And it's- I feel like she achieved almost eternity through these kinds of generations that came after. All right, now moving on to rapid fire for real. So, what's the problem in the world that you most want to fix? You can't see. But he his eyes opened wide and deep breath, nd-

Daniel Schreiber                                   

Yeah, I exhaled into the mic. I guess, the one that I'm most focused on is poverty. It sounds, to me, a little ludicrous to say that that's a problem that I want to fix. But I want to play a part in fixing it, I guess, or reducing it. 

Michael Eisenberg 

What makes you human? Vulnerable?

Daniel Schreiber                                   

Wow. I think I'm very human and vulnerable. I tend to wear my feelings out on my sleeve. I think what you see is what you get. I cry in movies. I'm moved by my kids and my grandkids. I have- my family,  my wife of 30 years, Daniela, and my kids, are a focal point in my life in a way that's just becoming more and more powerful. So, I guess I would have to say that. 

Michael Eisenberg 

The first time I invested in you, was in Alchemedia, I want to come back to that one second in the rapid fire. We sold it for a little bit of money. It wasn't a success in a meaningful way. But you kept at this entrepreneurial thing. Why didn't you give up?

Daniel Schreiber                                    

You know, I took a long break. 

Michael Eisenberg 

I know, I had to wait all those years to invest again. 

Daniel Schreiber                                    

I came out of that experience. You know, it was- we founded that company in ‘97, I want to say, maybe 96, thereabouts. And it was a wonderful time in the sense that, if you had no experience, that was a necessary condition for getting invested in, in those crazy .com days, I qualified. And it gave me a-

Michael Eisenberg

It was true for  being an investor as well. 

Daniel Schreiber

We both benefited from that. Timing is everything. So, it was a school of hard knocks from which I graduated and learned so, so much. But I also came out bruised. In those early days, you know, I spoke now about being able to weather the stock market and all that kind of stuff, and see things coming and raising money ahead of time. But those were the schools of Hard Knocks that taught me that and when I came out of that I didn't keep going, I actually took a job in a traditional company and spent some time in intrapreneurship rather than entrepreneurship. It took me a while to find my sea legs again and get back out there. 

Michael Eisenberg 

How do you want to be remembered at the end of your life?

Daniel Schreiber

I don't have any illusions of grandeur. I don't expect to be remembered in the broad world in any meaningful way. I'm not structuring my lifestyle in order to achieve that. But, I do hope that my loved ones think of me fondly. I'd like them to, when they think of me, to bring a smile to their face and achieve that. I'll feel good about it. 

Michael Eisenberg 

In 100 years, to write a biography of Daniel Schreiber, somebody will. What should the title be?

Daniel Schreiber 

I deny the premise. I am not living a life that will warrant a biography and 100 years, by the way- 

Michael Eisenberg 

Whoever is writing biographies about their  parents and grandparents now-

Daniel Schreiber 

I see, I see. 

Michael Eisenberg 

What should the title-

Daniel Schreiber  

ChatGPT will-

Michael Eisenberg

Exactly

Daniel Schreiber

I'm gonna pass on that one. 

Michael Eisenberg 

Wow. Okay, so I'll bring you back. That's normally how we end, but now we can't end- so I’ll bring you back to something else. So, we met 30 something years ago, we were both 18 or 19 years old. I was 18. In an institution that you referred to as Har Hatzion, sometimes referred to as the Gsh. Those are formative years. What is something you took away from that time- I know what I took away from it- that those two or three years there, that you carry with you today?

Daniel Schreiber

That one I actually know the answer to. It'll sound odd, but I discovered that I'm smart. 

Michael Eisenberg 

Interesting. 

Daniel Schreiber

Yeah. You mentioned earlier, my older brother, whose IPO just happened a couple of weeks ago. And, I'm second, chronologically to him. We're six siblings. And there's only 18 or so months between us. So, I was kind of- we grew up pretty much together. And he is incredibly sharp. He is just incredibly sharp. We lived in Palo Alto as young kids, and he was being written about in the HP publications, because at age six, or five, or whatever were these computers, such as they were at the time. He was writing programs, he was just extraordinary. And, that can be kind of intimidating. And, my protection was to not try. And, I went through my schooling, being lovable and friendly. And people, you know, had good relationships. But academically, I never exerted myself and my mom would come back distraught from parent teacher conferences, because it was the old thing about, you know, the child is capable, but he isn't applying himself, kind of thing. And, I ended up getting just about good enough grades, exiting school to go to university, but it was touch-and-go, and it was a huge surprise and relief to my family that I got adequate grades, and they were by no means great grades. And when I left school and left the oversight, and kind of forged out on my own, and went to a different country into this college, and it's Yeshiva or a college of incredibly rigorous intellectual environment. I went to a top university afterwards. And, I think it's much more demanding, intellectually, than anything that I encountered at other ones. And, in that environment, for really, for the first time in my life, I discovered that I could go toe-to-toe with other people of substantial intellect, and I discovered my intellectual capabilities, such as they are, I discovered them then, I was kind of blind to them beforehand. 

Michael Eisenberg 

That's super interesting. We share that, something else in common. In the ninth grade, my father went to a parent-teacher conference with my rabbi, in the ninth grade, who told him, Your son is the biggest waste of potential I've seen. So, with that, if you enjoyed this podcast and my conversation with my, not old friend, but good friend of many years, Daniel Schreiber, please rate us five stars on Spotify, Apple Podcasts, Stitcher, or wherever else you listen to this podcast. Daniel, thank you for coming on this was a lot of fun. 

Daniel Schreiber

Wonderful, Thanks, Michael.

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