Michael Vega-Sanz and his brother Matthew had a unique childhood in Miami.
A short distance but a whole world away from the flashiness of South Beach, Michael and Matthew grew up on a farm outside of the city together with his grandparents, parents, siblings, and aunts and uncles. Michael describes their childhood as unconventional but amazing, with parents who supported his ambition and pushed him to work hard and work for things that he wanted.
Fast-forward through one startup success (LULA) and a second taking flight (GAIL) and Michael is focused on leveling up ambition not just amongst the teams that he works with, but also with the Miami and Southeast startup community at large.
Michael’s interest in business biographies, economics, history, and his recall of quotes is incredible, and we’ll use quotes that he references (off the top of his head!) throughout the podcast to introduce this special episode of Taproots:
“Make yourself a big target for luck.” (Paul Graham)
While playing basketball in high school, Michael started to get exposed to people in the community that he’d never known before — people with big jobs and ambition.
He tells the story of an unlikely (or more likely, entirely likely) series of connections with a banana baron and a private equity executive that pointed him toward Babson College, where he had a goal to meet someone important every single week of college, and if he could do that, he’d graduate with 200+ connections.
Hundreds of cold emails were sent, with many deleted or falling into spam, but more than he expected did receive a reply. And once Michael made that initial contact, he made a point to stay in touch with updates and questions. And by the time LULA sold, his cap table included 15 billionaires, representing 2% of the total in the US.
“Excellence is the capacity to take pain.” (Isadore Sharp)
Michael’s first startup, LULA Rides, which he started with Matthew in his dorm room at Babson, was as he looks back “a crappy business” that ended up needing a big pivot to make money, regardless of how happy their customers were. For the first 18 months post-pivot, they got small signs of success, which started to add up to big ones as a new InsureTech platform hit $4 million in revenue per month within three years, earning investment from top venture firms like Founders Fund and Khosla Ventures.
But even as that business grew exponentially, Michael didn’t love their position in the market as an intermediary, and ultimately decided to exit and re-tool for the next one.
“Look for really large markets, extreme fragmentation, and low NPS scores.” (Keith Rabois)
As Michael and Matthew charted their next company, they decided to stick with the insurance industry. “What are the similarities between open heart survey, a mortgage, and buying a car?” Michael asks. (Spoiler: You can’t get them without insurance and it is the largest industry in the world by revenue!)
The co-founders had nailed down their working dynamic, with Michael focused on building great products with extreme detail, and Matthew pushing to go-go-go and take action with an impact mentality. Conflict became a necessary part of their journey together in order to ensure that they could get to the best answers.
“He or she who manipulates the models better is going to be the winner.” (Alex Karp)
Michael acknowledges but quickly moves beyond concerns about AI in general, and also questions about how moats can be built at the application layer of AI as the system layer jockeys for parity and is quickly being controlled by just a handful of big players. He equates this setup to a meal that you are deciding to have. “Could I buy the ingredients at Whole Foods and cook myself a chef-grade dinner? Probably, maybe. But often I just want to go to a great restaurant and have a chef put it together for me.”
Michael instead believes GAIL’s moat (“secret sauce” — pun intended) and others at the application layer can be in the logic that answers questions or takes action most effectively through prompting and orchestration. As a product fanatic, he also sees great UI UX as a differentiator: “your customers actually don’t care about the model!”
“Everything around you, everything that’s been built, everything that you can touch has been built by somebody no smarter and not much different than you.” (Steve Jobs)
Michael describes this quote as one of the most impact things that he’s ever heard in his life. And in characterizing its impact, he moves quickly to ambition…
“You should be growing the collective level of ambition across your team or organization. It should be higher because of you. That is one of the greatest gifts that you can give the world.” (Michael Vega-Sanz)
Michael’s ambition for Miami and the Southeast is not about cars or watches or a penthouse, but about world changing technology, and one of his goals is to build a really big and important company in Miami, here in the Southeast, with product that’s going to raise the collective level of ambition across the community.
He looks out and sees a future where kids in the region are suddenly not thinking about buying Ferraris, but instead about getting rocket ships to Mars or creating synthetic neurons, like he sees kids talk about right now in Silicon Valley.
“There’s no reason that we shouldn’t be building groundbreaking technologies here,” Michael says. “We have the brainpower. It just needs to be directed in the right direction...
… and I think we can do it.”
CHAPTERS
00:00 Introduction to Taproots and Michael Vega-Sanz
02:53 Michael's Early Life and Background
05:37 Career Beginnings and Early Ambitions
11:25 The Importance of Networking and Building Relationships
17:09 Lessons from Biographies and Personal Growth
19:49 The Dynamic Between Michael and His Brother Matthew
25:40 Transition from LULA to GALE and Future Aspirations
26:27 The Birth of LULA Rides
28:16 The Role of Insurance in Business
29:35 Transitioning to an Insurance Platform
30:59 Challenges of Rapid Growth
34:33 The Future of AI and Technology
46:26 Building the Tech Ecosystem in Miami
51:47 New Chapter
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