Alex Robinson is the co-founder and CEO of Juniper Square which operates an investment management platform for commercial real estate. The company has raised over $100 million from investors such as Redpoint, Felicis Ventures, Precursor Ventures, Ribbit Capital, Red Swan Ventures, LeFrak, Maiden Lane Ventures, OVO Fund, and Zigg Capital to name a few.
In this episode you will learn:
- Navigating big external risks
- Choosing cofounders
- Saying no to nine figure M&A offers
- Strategizing the takeover of big industries
- The only one thing that really matters when building a company
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About Alex Robinson:
Alex Robinson is the cofounder and CEO of Juniper Square. Founded in 2014, Juniper Square is transforming the private funds industry with easy-to-use software that streamlines fundraising, investment administration, and investor reporting. Designed specifically for the real estate industry, Juniper Square helps more than 500 investment sponsors manage more than 100,000 investors and $800B in real estate assets. By using Juniper Square, clients such as Beacon Capital, Cortland Partners, and Stockbridge improve investor satisfaction, boost fundraising productivity, and save time and money on the back office. Juniper Square is based in San Francisco, CA and Austin, TX, and has quickly become the leader in real estate investment management software.
Connect with Alex Robinson:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a pretty interesting founder, and I think that we’re going to learn quite a bit on building and scaling. He’s done it several times, and I don’t want to wait any longer, so without further ado, let’s welcome our guest today, Alex Robinson. Welcome to the show.
Alex Robinson: Thank you, Alejandro. It’s great to be here.
Alejandro: You grew up near Seattle in a small town. How was life growing up?
Alex Robinson: Yeah. If anybody has been to Seattle, you see these ferryboats coming and going from downtown Seattle. You get on one of those ferryboats and head west out to a peninsula called the Kitsap Peninsula, and I grew up in a small town out there. It was great. We were 1.5 to 2 hours from Seattle, but I think maybe I went once a year or maybe something like that to the big city. So it was very much a small-town experience, which was great.
Alejandro: This exposure to business and entrepreneurship, is there anyone in your family that was building and scaling companies, or how did you develop this love for it?
Alex Robinson: Yeah. You know, it’s funny. My whole family is in the medical profession in one way or another. My father is a dentist; my sister is a dentist; my sister married a dentist. The dental field tends to run in the family for anybody that’s been exposed to it. But the other interesting thing about dentists is they often are very interested in real estate. You see a lot of dentists who own their own building, and then they start buying other buildings, apartment buildings, retail, etc. So, my father was a dentist, but he worked nearly equal parts on a real estate business, which is how I initially got exposed to the real estate industry, which was helping him with every aspect of managing and owning real estate from 12 years old or whenever he would kick me out of bed at 7:00 am on Saturday mornings.
Alejandro: That’s amazing. I know that, also, who you are, and perhaps your personality was shaped a bit by your travels to Spain, to my beloved Spain.
Alex Robinson: Yeah. Even though I was from this small town – this was back before the internet. We had a globe at home, and we had an Atlas, and I became very deeply interested in Spain. In my junior year of high school, I lived outside of Barcelona on the coast of Brava, Spain, just northeast of Barcelona. Then I returned my junior year of college and lived in Seville and was there for the Feria and Semana Santa and a lot of really great and very fun Spanish celebrations.
Alejandro: I know that you also studied business administration right after getting your degree, and especially when you were coming back from Spain. You started to see all these colleagues and classmates going into consulting and different things, and here you are all of a sudden landing on Microsoft. How did this happen? Tell us about this.
Alex Robinson: I still think of entrepreneurship in this way – I’ve never been one to manage or think too deeply about my career. As I said, I come from this family of people in the medical profession. My grandfather was a surgeon. So the world I knew was medicine, and I knew I wasn’t interested in medicine. I knew nothing about business but knew that I didn’t want to do medicine. I liked building stuff, and I was interested in business topics. When I returned from Spain, I had spent the year having a nice time in Spain and studied language and traveling. I got back, and all of my classmates had had these internships at very serious-sounding places like Arthur Andersen, and these names that I had never heard of. It occurred to me that if I was going to get a fulltime job when I graduated from college, I probably needed to get this thing called an internship, which I had never conceived of. It turned out that I missed the summer window between your junior and seniors years, but Microsoft, who was in our backyard in Redmond was experimenting with what they called this co-op, which was the idea that you would take six months off at school, you’d come to work fulltime at the company in the finance role, and the folks who did well in this program would be invited back to join the company fulltime. I landed on Microsoft because I had missed the summer internship window, and this was one of the only internships left. I spent six months at the company and actually found that I really enjoyed it. I enjoyed technology; I loved technology businesses. It was incredible to see how a company like that was run, and I ultimately came back after I graduated from college. Then I spent six years there after graduating.
Alejandro: And this was back in the early 2000s, so you were able to experience the crazy growth that Microsoft was experiencing at that time. Is that right?
Alex Robinson: Yeah. When I did this co-op at the company was actually right when Gates was passing the reigns to Ballmer. I think this was around 2000. I can remember being at the Town Hall that they had organized to explain the leadership change. From the time that I joined the company, I think my employee badge was #21000 or something like that. When I left the company in 2007 to go to business school, there were almost 100,000 people at the company. So I was there from that growth from 20,000 to 100,000 people during Ballmer’s tenure. Initially, I was in the finance team, and I learned that I was interested in and wanted to be closer to product. I was more interested in the strategic aspects of the business and moved over to an internal corporate strategy team. I did that for a couple of years and then moved over into product roles initially for a product called OneNote, which is a notetaking application in the Office Suite. Then, I worked on what became Office 365. A lot of people don’t know that Microsoft’s response to Google Docs and Spreadsheets went back to ‘06/’07. That’s when we first started working on figuring out how you take Office, which people used to install on their computers and deliver it online and still make money. That was the final problem in the company that I worked on before going to business school.
Alejandro: And before jumping into business school, because you went to Stanford, and that definitely brought a whole different shift and a whole different flavor, as well, to your professional career. What were the three key lessons that you learned from these five years at Microsoft?
Alex Robinson: The first one that comes to mind, for some reason, is, when you become a manager at Microsoft, they teach you how to do this – I don’t know if they still do this, but back in the day, they tell you how to do this thing called Precision Questioning. It was a technique that Gates and Ballmer deployed very famous or infamously, depending on your perspective. You’d prepare for months to be in the room with these folks delivering the status update on your project or your portion of the business, and I used to be involved as an analyst helping to prepare for these types of meetings. They would very famously deploy this technique called Precision Questioning. The idea is to ask as many questions and as many layers deep on a subject as you can until you find the person’s weakness and their understanding at the top. It’s actually a valuable technique. It is a more generic way of applying this is asking the five Whys or multiple layers of questioning as a way for penetrating through. Companies can get really good at presenting all of this corporate-speak and all these numbers and everything else. I learned how these leaders would very quickly cut through all of that to try to see how quickly they could get to the heart of the matter with whoever was presenting. I found that to be a really valuable technique in interviews and trying to come up to speed on subjects anytime you’re learning and interacting with people. That was one. I think just pricing and packaging was something I learned a lot about from Microsoft. They’re very, very good at it, and a lot of the story of the success of the Office Product Suite being Outlook, Word, and Excel is how they were able to bring together these individual productivity tools and capture all these asymmetries of the demand curve for into a suite that was much greater than the sum of its parts. We think a lot about packaging today at our company, and a lot of those roots get traced by to what I learned from Microsoft during those days. If I’m being honest, there are some parts of my experience at Microsoft that I’ve learned that I’ve tried to unlearn as well. Microsoft had a culture; it was an incredible place to learn, but it had a very confrontational culture. It was a culture where – there were a lot of good reasons for it: you wanted to test someone’s thinking; you wanted to try to have the organization perform at its peak protentional. But meetings could be quite adversarial where you were trying to prove that the other person was an idiot or find a flaw in their thinking and expose it. I tried hard to be thoughtful about the culture that we’ve built a Juniper Square and to identify some of those lessons that I learned early in my career that I want to unlearn as we’re intentional about building the culture at our company.
Alejandro: Got it. After five years at Microsoft, you go to business school, to Stanford, and on your second year is when entrepreneurship comes knocking at your door. Tell us about this.
Alex Robinson: When you go to business school, depending on the school, the SA questions are different, but they’re always asking you some variant of the question of why do you want to go to business school, and why now? Why is this the right moment for you to go and pursue this degree? I wrote my essay, my response to that question was that I wanted to come to Stanford because I stumbled into this job at Microsoft, and I learned a ton, and it was incredible, but I wasn’t intentional about my career choices, and I wanted to be intentional. If I was going to be intentional, I wanted to be building stuff. That’s what I was passionate about, so I wanted the entrepreneurship. Then if I could pick the industry, I wanted to be working on the problem of climate change. So, I wanted to do entrepreneurship in, at the time, we called it alternative energy. That’s what I wrote my essay about, and that really was the truth. When I got to Stanford, that’s what I focused on. I enrolled in all these classes on energy systems and tried to learn more about how solar PV systems work and how wind technologies work. That’s what I focused my time at Stanford on, in addition to supporting the business curriculum. The problem I had was that I didn’t fully understand it at the time, but I had come to deeply love software businesses. For a long time, I tried to figure out how I could blend this interest I had in the software layer of technology versus the physical layer of technology and most of the innovation that was going on at Stanford during this time. I was there ’07 to ’09. I was there when the Great Recession happened, and Lehman collapsed. I was there when the Stimulus Act was passed in early ’09. Most of the attention of the venture capital community and a lot of entrepreneurs, at that point in time, was focused on clean energy. John Doerr gave the famous speech at TED on the topic. So, the buzz around Stanford at that time was very focused on how do you solve the climate change problem. Most of the solutions that you would see would be new types of ways of getting energy from the sun or the wind or the natural elements. I realized that I had so little to add to those types of businesses, and what I knew was software. Eventually, I determined that the place where software could really play a role in helping to facilitate a transition to a cleaner energy economy was in the financial value chain because that’s where you can improve workflows and improve how information is shared among parties in the market and software is good at those things. So I gravitated to how are solar and wind and all these different systems financed? I started my first company, called GreenDoor, my second year at business school. It was a software company to help counties, and municipal lenders take advantage of a subsidy that existed at the time called PACE. It went out like a rocket; it was a great start. I built a small team, signed up our early customers, and then in the course of that first year of operating the business after I graduated, there was a great lesson for me in market risks, exogenous risks in that we got to the end of the first year after starting the company, and the subsidy that we were working with, PACE concept, essentially became regulated away. So, overnight, and that’s not an exaggeration to say – I went home from the office one day, and everything was normal. I woke up the next day to essentially our business completely disappearing, or the business opportunity completely disappearing. That was a lesson I knew; it was a risk that I knew existed, but internalizing it and going through that experience of failure was an incredible learning experience.
Alejandro: In terms of failure, because everyone is always talking about their success and how successful they are and all of that, but I find that on success, you don’t really learn. On failure is really where you get the good lessons. From this experience, what did you learn about failure?
Alex Robinson: I think there are maybe a few things that come to mind. One is that none of these causal reasons for the failure were a surprise to me. They were all fully known. If you had sat down with me at the time and said, “If this doesn’t work out, what do you think is going to be the most likely reason?” I would have literally answered this exact reason. I have found that to be the case throughout my career, and throughout building businesses is you usually know what is likely to be the root cause of failure. So the problem isn’t one of discovery; the problem is one of internalization. It’s one thing to know it in your head, and it’s another thing to internalize it in your gut. In this case, I would say, “Oh, yeah. It’s got this great potential, and PACE could take over the world.” The idea was to use the property tax mechanism as a way of getting a senior lead on a high-quality asset and lower the cost of capital, and there was a virtuous cycle that you could get in your mind of thinking how this could revolutionize how solar and HVAC upgrades are financed across the economy. Then, I would say, “But I recognize that this is dependent on this regulatory government exposure angel here.” Then I would stop there. I wouldn’t deeply internalize it to say, “What does that mean? What would it mean for failure to look like?” So what I have learned to do anytime I’m facing difficult situations is to try to deeply think about the worst that can happen and uncover it and not run from it, but face it. Then to walk back from having learned that and say, “Okay. How is that going to change the way that I approach the problem in the here and now?” That’s something that I’ve had to learn the hard way. I had to get kicked in the gut with it a couple of times before learning that technique.
Alejandro: Yeah, but this ended up being a nice segue because the company was packaged and acquired that ended up leading to the next company where you were a founder, or in this case, a founding VP and doing development business stuff, which was New Energy Risk. What were you guys doing at New Energy Risk?
Alex Robinson: The story here was, the company was founded by a mentor of mine. This was a very experienced entrepreneur. He had been a CEO of public companies, very experienced in the insurance and reinsurance industries. The idea was to bring a lot of modern statistical techniques and advanced mathematics and a modern technology approach to evaluating risks in and around renewable energy. So we took some of the team that I built at GreenDoor and were Acqui-hired before this term was popularized. My role was to be the righthand person to the true founder, who was the CEO, and it was a really great experience because it was building this business from the ground up in an esoteric market that I knew very little about prior to joining, but where there is tremendous leverage that you can get with insurance, as it turns out. It was a fascinating market to come to spend time in. And it was a great experience to work alongside a more seasoned founder who had built businesses successfully before. That business sold to our major financial partner called XL Kaplan, a big reinsurance company. That then freed me up to say, “Okay. I had this stint at Microsoft, where I wasn’t super-intentional about my career. I went to business school. I tried to be extremely intentional about what I wanted to do and build businesses in renewable energy. What I learned was, I love building businesses. I learned that I loved software businesses, and I also learned that cleantech and renewable energy was a tough market. There was a lot of trying to catalyze change in the industry that an entrepreneur had to do in addition to handling all the tough aspects of building a business from scratch. I realized I loved building businesses, I loved technology, but I want to do it in a different market. I didn’t mean that I was any less interested in solving the problem of climate change, but I was going to take an effective altruism approach to it of being successful in other endeavors and using those proceeds to help with the problem. There was this other market that I understood well very intimately, which was real estate, and it’s a huge market. People don’t know this, but real estate is the largest asset class globally. It’s the second-largest asset class in the U.S. behind public markets, so total market cap of public markets is something on the order of 30 trillion dollars, like rough order of magnitude; total market cap of commercial real estate in the U.S. is on the order of 15-20 trillion dollars. It’s half to two-thirds the size of the largest asset class in the U.S., and the largest asset class in the U.S. functions so effectively digitally that people locate their offices inches closer to a data center to try to get some trading advantage. And it’s not an exaggeration to say that in our marketing commercial real estate, people are FedExing stacks of paper back and forth to get transactions done. That’s ultimately what got me excited about the potential is I had spent, by that point, like five or six years hacking away at building software in and around the financial value chain in cleantech in a market that didn’t exist yet. Then, in this market that exited and was absolutely enormous in commercial real estate, this same pattern of problems in the financial value chain existed – same opportunity for software, and that’s what led us to start Juniper Square.
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Alejandro: Let’s talk about getting the band together at Juniper Square. How did you guys get that founding team in place?
Alex Robinson: This was hugely determinative of our successes is just getting two incredible co-founders in addition to myself interested in this problem is certainly the most important ingredient to us being reasonably successful in what we had been doing here. I did understand that from having started GreenDoor without a co-founder. I knew I wanted a co-founder, but I didn’t know how to get one. I would do these awkward things. I’d go to these founder meet-ups, people at Stanford who were interested in starting businesses. It’s as awkward as you imagined it. It’s like being a social mixer where instead of trying to find your future spouse, you’re trying to find a co-founder. I recognized the importance of it, and the experience of building GreenDoor without having that partner made me realize – and then seeing what it was like to have someone at my second company at New Energy Risk made me realize that there was no way I was going to start any business of any kind without finding the right co-founders. I had been introduced to Adam Ginsburg, who is our Head of Product, and one of the three co-founders through a mutual friend who knew us both. Adam had co-founded a company called NextDoor, like a Facebook for neighborhoods, basically. He was getting ready to move on from NextDoor. His company had grown to be many hundreds of people, and he was ready to start his next challenge. We started meeting for coffee talking about ideas – businesses we were interested in, what made us tick. I realized, with hindsight, that this was really important. Adam and I, and then Adam introduced Yonas into the mix. Yonas Fisseha is the Head of Engineering and third co-founder. Adam and Yonas had worked together going all the way back to the first internet boom with a company called Epinions, which became shopping.com, and that was bought by eBay. Somebody should do a podcast in a series on the Epinions Mafia. There’s an Epinions Mafia, just like there is a PayPal Mafia, as it turns out. They worked together. What I realized with hindsight was that even though Adam and Yonus and I were all very different and we brought a lot of different skills to the table, we had a deep shared understanding of the values that mattered to us of the way that we wanted to build the company, about the way that we wanted to develop the organization and the culture. That has been hugely important. We’re now on our Series C. That’s our fourth round of financing. You’ll often get asked questions from investors like, “Tell me about a time that you and your co-founders disagreed.” I genuinely have a hard time coming up with any answers to that questions because we fight all the time, and we may take differing issues, but we have a shared sense of how we solve problems, how we approach decision-making. So if we get a shared sense of the facts and a shared set of goals, we’re going to come to the same conclusions. We really have, for the entire history of the company going to receiving our first M&A offers and that sort of thing. That part has been truly a real joy and something that I only learned how much I value it with some experience going through the trials and tribulations of building a company together.
Alejandro: That’s awesome. Just for the people that are listening to understand it, what ended up being the business model of Juniper Square.
Alex Robinson: The genesis for the company was – I was so struck by the difference in public and private markets in terms of digitization. As I said, public markets going and buying a share of Microsoft on the Nasdaq, as an example, had embraced digitization and had become fully digital to the point where any person on the street with $100 in their pocket could go open up an account on E-Trade of Charles Schwab or anywhere for free. They could go traverse the entire market system of offerings. They could transact online. They could purchase that share of stock and connect their bank account and move the money and all the information that they needed in order to make a determination on whether they thought Microsoft was fairly valued from its account’s receivables balance, last quarter, to its forecast. All of that information was organized in the market system, available to the investor. Then there was liquidity. You could immediately decide that you didn’t want to own the share of Microsoft stoke and sell it five minutes later. The entire system had become digital. As you’d expect, just like you can go shop for a pair of shoes on Amazon, or Zappos, or whatever. But what struck me was that here you had this market system in commercial real estate that was two-thirds the size. It was the next biggest market and no digitization at all. No liquidity, no transparency, no ability of the idea of transacting online – it’s like preposterous. You’re going out to dinners and building relationships in person. The genesis of the company was to say, “How can you digitize?” Then, eventually, fractionalize the ownership of commercial real estate buildings to the point where the future we’re working toward is one that it’s easier, and hopefully, will be as easy to buy and sell a share of a building as it is to buy and sell a share of stock. That was the genesis of the company. That’s what we were working toward. If you go back and look at our seed fundraising deck, we outlined a long path, but a path to digitizing this huge market system, and ultimately enabling a much more functional, efficient, transparent, and liquid capital market around it. The way to do that is, you’ve got to build the tools for the people who own and manage these buildings, the general partners who form investment funds to go buy one in California or Rockefeller Plaza or whatever. You’ve got to be that tool that becomes the record of their ownership. When you do enough of that – and to give you a sense of our scale, we have about 700 GPs, General Partners who are paying customers of Juniper Square. Collectively, they’re managing about a trillion dollars’ worth of real estate using our tools. Then we have a second line of business that’s focused on the Limited Partner, the LP, and these would be large pension funds, university endowments, very sophisticated and large investors in real estate. With that product, we have another 200-300 GPs who are customers of our customers. So, collectively, we have more than 1,000 GPS, so we’re a pretty significant scale. I don’t think there’s anybody operating a bigger scale in commercial real estate than we are. The ultimate goal is how do we connect these market participants seamlessly around a common record of ownership. It’s been a business that we’ve had to put together brick by brick.
Alejandro: That’ pretty cool. You were mentioning that you guys have done up to a Series C round. How much capital have you guys raised to date?
Alex Robinson: Just over 100 million.
Alejandro: I believe that when you guys were right before the Series A, there was an interesting point in time when you receive a couple of acquisition offers, and you say no. Maybe at that point, you thought it was nuts. Now, looking back, thank God you didn’t accept those because perhaps it was a little bit early in the process, but can you walk us through that thought process and how you ended up saying no?
Alex Robinson: Yeah. It was a strange summer. In this one summer, we received two different unsolicited, inbound offers to sell the company, and they were very hard offers to dismiss. They were very big offers for us at the time. This was about three years into our journey. I think it’s important to recognize that the way that we’ve had to build the product, it is the core financial ERP around the ownership of these really big, important assets. To build the MVP, to build the minimum viable product, you have to write a lot of code, and the thing has to do a lot. So, we spent about 18 months, just the three co-founders and about a dozen of our founding customers building out the MVP of what is today, Juniper Square. Then, in the subsequent 18 months, we had raised a seed round of capital. We raised 2 million bucks from some friends of ours who were active, early-stage investors, a few industry strategics. We had a couple of million dollars of capital into the company, but really very little pref to satisfy. At this point, we had just started building the team, so I think we had maybe ten employees or a dozen employees, maybe even fewer than ten. Along comes this offer after we had spent two years, quite literally, at our customers’ sites, but down below decks in the engine room, building out the ship from the engine room outward. None of the fun aspects of the job – looking back with hindsight, those were some of the most rewarding periods, but at the time, we felt like we were just getting started. We had just built this product, and we were just bringing it to market, and we really did believe that it had, and we had as a company, the potential to transform this hugely important industry for the world. Yet, along come these two strategics with these offers, one of which the total consideration, to give you a sense of scale, was close to nine figures. It was an extremely difficult decision to make because it basically boiled down to us deciding as a founding team, why are we doing this? If you had asked us at the start of the company to describe the most ridiculous offer that we could reasonably expect to get, this was it. Yet, we said no to it. It ultimately came down to us really trying to unpack and be very authentic about what motivated us, what made us tick, what was going to bring us satisfaction over the course of a life, and realizing it wasn’t just about money. If we sold the company, yeah, we’d have more money, but we would just be tortured for the rest of our lives with the question of what if or what could have become? So, we rolled the dice and said no to both of these offers and went out and raised our Series A, and we haven’t looked back since. But life would be very different if we had chosen the other path.
Alejandro: That’s incredible. One of the questions that I typically ask the guests that come on the show, Alex, is – what a remarkable journey – where you’re coming from, and now where you’re at with Juniper Square. If you had the chance to speak with your younger self, with that younger Alex that was still in Stanford, thinking about what’s going to be this next business that I’m going to launch, and you had a chance to sit down and give that younger self one piece of advice before launching a business, what would that be and why knowing what you know now?
Alex Robinson: I think it would be this idea of not wasting any time at playing “startup.” I don’t know who popularized this term. It might have been Paul Graham. It certainly wasn’t me. But the basic idea is that there’s only one thing that matters in building a company, and that’s building something that people want. That’s it’s not just a little bit better than their status quo, but it’s really significantly better because that’s what it takes to motivate change. It’s easy when building a company to focus on what your name is going to be, and where your office is going to be, and what exactly should be in your seed fundraising deck. These are all things – this all falls into playing startup. It’s not the thing that matters, which is spending time on building something people want. When I reflect on how differently the early days of my first company, GreenDoor, were from how we approached building Juniper Square, I spent a ton of time on these kinds of playing startup topics at GreenDoor, and we spent exactly zero time on it at Juniper Square. For the first 18 months of the company’s life, we didn’t have a website, we didn’t have a company name, because we had founding customers, we had the ability to build product. So the only thing that mattered was building something that people wanted. This is something that I’ve had to learn over time across three startups, but I think if I could go back and drop something into my head to internalize in that younger version of myself, it would be that. It would be this ability to shut out everything else and focus only on something that people want. And if you get there, then the fundraising is easy, and everything else is easy. If you don’t get it, then it doesn’t matter how good a fundraiser you are. That’s how I’d answer that question.
Alejandro: Very profound. For the folks that are listening, Alex, what is the best way for them to reach out and say hi?
Alex Robinson: I maintain a fairly limited presence on Twitter that our marketing team would tell you they’re quite embarrassed by. You can certainly reach me on Twitter, but unfortunately, I’m one of these people that is so heads-down on building our business that I don’t invest a lot of time, personally, in public persona or spend a lot of time – so you can get me on LinkedIn and Twitter, those two places.
Alejandro: Amazing. Well, Alex, thank you so much for being on the DealMakers show today.
Alex Robinson: My pleasure, Alejandro. Thank you for having me.
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