“First, the attitude of the organization toward change is established by the tone set at the top. For me, that means a continued statement, restatement, communication, and validation of the company’s mission and values, which includes reinforcing its culture. This is the CEO’s first and most important job and a clear requirement of leadership. As leaders, we must not only determine the appropriate strategic course but also define how we, as individuals and as an organization, will conduct ourselves. Second, and most obvious, leaders must ensure the development and execution of a clear, well-communicated, and appropriately measured operating plan. Third, effective leaders ensure that the right team, with the right values, is in place to execute the plan and can pivot appropriately when factors change. Fourth, effective leaders show an intellectual flexibility that recognizes there are different ways to achieve goals and objectives within different environments. To me, it is important that environmental and market changes do not modify the company’s, or the executive’s, basic values. And finally, I think a good leader is a problem solver. How an organization deals with problems, failures, and missed opportunities clearly defines an important aspect of its culture”—
[Saw this on Twitter with no source. Republishing here because it is hilarious. Oh yeah, publishing this is not meant to represent any particular personal political view]
I recently asked my friends’ little girl what she wanted to be when she grows up. She said she wanted to be President of the United States. Both her parents, liberal democrats, were standing there. So I asked her, “if you were President, what you be the first thing you do?” She replied, “I’d give food and houses to all the homeless people.” Her parents beamed.
"Wow…what a worthy goal," I told her. "But you don’t have to wait until you’re President to do that. You can come over to my house and mow the lawn, pull weeds, and sweep my driveway, and I’ll pay you $50. Then I’ll take you over to the grocery store where the homeless guy hangs out, and you can give him the $50 to use toward food and a new house."
She thought that over for a few seconds, then she looked me straight in the eye and asked, “Why doesn’t the homeless guy come over and do the work, and you can just pay him the $50?” I said, “Welcome to the Republican Party.”
I met Roger Ehrenberg in December 2008 while still a student at Columbia Business School. I had discovered Roger through his blog and met him while serving as president of Columbia’s PEVC club at our annual conference. At the time Roger was a prolific angel investor with nearly 40 portfolio companies. Back in 2008 ‘super angels’ behaved much like today’s seed stage venture capitalists - leading deals, structuring syndicates, taking board seats.
After a few months and numerous annoying emails, Roger agreed to meet me for a lunch at which I proposed how I could bring support and organization to his angel investing as well as serve as an operational and business resource to his portfolio (as I had done previously during an internship with one of his angel investments). Our lunch catalyzed more discussions, eventually leading to contract work where I split my time heading up operations and finance for a company we were incubating as well as helping Roger with his angel investing. I moved to the investment side of the business full time when we launched IA Ventures in early 2010.
When I joined Roger in mid-2009, I could only dream of my month-to-month contract employment turning into a full time venture capital role. At the time, nothing seemed more exciting or appealing in the world. Four and a half years later, I’d be lying if I said the job of venture capitalist is anything but extraordinarily interesting and fun.
And yet, after four and a half life changing years, I’ve decided it is time to move on to my next adventure.
My wife recently gave birth to our second child and first son, Leo Henry. The birth of a child puts things into perspective and offers a unique opportunity to introspect and think about what is important. During my wife’s pregnancy I spent lots of time thinking about the long arc of my career. Since my days as a child, my parents always encouraged me to take the long-term perspective; to make decisions as if they were investments in my future. I’ve tried to live my life this way. My career is a marathon, not a sprint. Each step along the way provides new opportunities to amass skills and capacities; tools in a tool kit to do increasingly more productive and meaningful things.
After long deliberation, and in consultation with my partners, I’ve decided it is time for me to make a move. I’ll be leaving IA at the end of the month and taking some time to spend with my family and newborn son before starting my next opportunity. I am leaving on good terms and will be working closely with my colleagues over the next few weeks to ensure a smooth and seamless transition.
The decision to leave IA, while extremely difficult, came down to my strong desire to gain more line experience as an operator - experience I know I will enjoy immensely and will make me a stronger professional in the long-term. One of the hardest parts of being a VC is knowing that you influence and enable, but you don’t execute and build. I hope to spend the next few years executing and building.
My time at IA has been nothing short of remarkable. I’ve had the opportunity to participate in raising two venture funds, made over 35 initial investments, dozens of follow-on investments, and have served on the boards of nine companies (six as board representative, three as observer) which have raised tens of millions of dollars and employ hundreds of people working towards their goals of changing the world for the better.
I’m forever thankful to Roger, Brad and the entire IA family for giving me the opportunity of a lifetime to learn and grow as a person and professional in profound ways. I am also so incredibly thankful to the amazing entrepreneurs, colleagues and friends with whom I’ve had the privilege to work with over the past four and a half years. Words cannot describe the impact you have had, the lessons you have taught, and the happy moments you have inspired. It has truly been an honor and a pleasure.
And now I look to the future with a little bit of trepidation and a whole lot of excitement…
Why is it ok hate on VCs? Why is it ok to generalize about our motivations, behaviors, and capabilities? Why is it ok to call us dumb?
I am a VC. I love being a VC and am proud to be one.
For some reason, it has become accepted practice in our industry to regularly and voiciforously disparage those of us who have dedicated our lives to supporting entrepreneurship as VCs. I am still new to this industry, but in my short experience I have found the vast majority of my venture colleagues to be some of the smartest, hardest working, most passionate people I’ve ever known. None of them do this because it is the easiest and most efficient way to make the most money. They do it because they are inspired by the work and are dedicated to the mission.
Maybe I’m just fortunate to be a part of a new generation of venture investors. Maybe it’s because I am outside the echo chamber of Sand Hill Road. Or maybe it’s because the experience that I’ve had actually represents the rule, while the exception is the lazy asshole VC who gives us all a bad name. I really don’t know.
What I do know is that I find it incredibly offensive to read vitriolic rhetoric such as that found in Andy Dunn’s post endearingly entitled “Dear Dumb VC”. Sadly, VC hating is en vogue; those who espouse it are sometimes revered as heroes, and VCs who vocally object are sometimes vilified as ignorant, out of touch or worse.
But I do object!
Not to content of the criticisms - many of which are legitimate (see Mark Suster’s comprehensive response) - but to the tone with which it is conveyed and to the simplistic use of generalization that causally disregards the individuals involved.
Being a VC is a great job. I wake up every day and am blessed with the responsibility to interact with brilliant and creative innovators who desperately want to impact the world. I have the opportunity to work with and watch companies grow from nothing more than a dream to a tangible reality. I have a front row seat from which to view the bleeding edge of innovation.
But please, don’t hate me because I my love job.
Succeeding as a VC is incredibly difficult. Any way you slice the data, the fact is that the majority of venture firms underperform. Success in our industry requires a combination of intellect, experience and a boatload of luck. It’s not good enough to invest in a bunch ‘good’ companies; the structural dynamics of the venture business demand that I invest in ‘home runs’ (think half-billion $+ outcomes) in order to generate the 3x+ return on capital that will make make our fund top quartile and provide us with the opportunity to raise new funds and continue as a going concern. With only a few opportunities to invest in companies that have the potential to go from zero to gargantuan, the odds are incredibly stacked against me. This is not a challenge or responsibility easily taken for granted.
Confronting these odds, I work extremely hard, working very closely with eight companies and putting in tremendous effort trying to find the next eight. This is not a part time gig nor does it begin and end with daylight office hours. I do not own a boat nor do I take the month of August off.
So please, don’t hate me as the rich and lazy entitled VC.
I am also self aware of my place in the value chain. I am not the entrepreneur. I am not the innovator and am not the operator. I do not create nor do I build. Therefore, I do not deserve the credit for a company’s success. I am not the hero and world changer; that title belongs to the entrepreneur.
But I am also not useless. I enable with a check book; assist with my own sweat, intellect, experience and relationships; support with extreme honesty and empathy. I do whatever I can, to the best of my ability, to help our companies. Sometimes I succeed in being more helpful than hurtful and sometimes I fail, but I always try my best.
So please, don’t hate me for stealing your credit.
I do what I do because I am obsessed with technology entrepreneurship and have chosen to spend my life to working with people who are building companies that change the world. My lot is tied to these people. I have no reason to apologize for contributing to this effort from my vantage point as a VC because I love what I do, work my ass off, understand my role and appreciate its limitations.
My grandmother used to always remind me that there is always room for improvement. Venture investors both individually and collectively are not immune to this sage truism. Despite our imperfections, it saddens me to have to write a post like this - defending my professional existence against those who view me as dumb and worthless. I hope that collectively we can move beyond such petty slander and engage in respectful discourse.
We hold ourselves to a higher standard in our industry, the world of early stage entrepreneurship. We come to work every day with unbridled passion and profound sense of purpose - we are changing the world for the better…The entrepreneurship eco-system is blessed with incredibly vibrant and transparent discourse. We are all entitled to strong, well reasoned and experience-informed positions, but let’s focus on making the conversation positive by respectfully expressing opinions, engaging in open-minded dialogue and injecting humility into our interactions.
The world of healthcare is undergoing massive transformation. Powerful mobile devices provide us immediate access to our personal health information as well as the ability to interact directly with our health service providers. An emerging suite of connected hardware is empowering a wave of new ‘smart’ health products that interact with the broader connected network. And data captured from these ‘smart’ devices is being leveraged to enrich user experiences and optimize health outcomes.
With these concepts in mind, I am extremely excited to announce our lead investment in Kinsa. Kinsa sits at the epicenter of the mobile health, connected device and big data megatrends. Kinsa’s overarching mission is to create a real-time map of human health in order to track the spread of communicable disease in real-time and enable interventions to stop it. The Company’s first product is a re-invention of the world’s most widely used medical device: the thermometer.
The Kinsa Smart Thermometer qualitatively changes the way taking your temperature impacts your understanding of your health condition. There are three principal benefits:
Enriched experience - in addition to the Smart Thermometer, Kinsa is releasing an accompanying mobile app that allows you to input additional symptom information which helps users better identify their ailment and the most effective treatment options.
Comprehensive data - instead of a static and silod data point (the temperature reading), the Smart Thermometer gathers all sorts of ancillary data directly from sensors built into the mobile device as well as data inputed by users themselves (symptoms). This data provides users and medical practitioners with a more complete picture of your health condition to optimize treatment.
Global view - by connecting to the broader connected network, Kinsa anonymously aggregates macro health environment information to build a real-time map of human health that can be used at the local level or more broadly.
Taken together, Kinsa is providing individuals an enriched view of their own health condition as well as the macro health environment with which they interact. In doing so it unlocks a new paradigm for real-time health monitoring with far reaching implications for personal and public health.
Kinsa is presenting at the Mobile DEMO conference today and is launching an IndeiGoGo fundraising campaign to spread awareness and find early adopters interested in being at the forefront of this exciting new paradigm. Please check out their page and support their effort to do well by doing good.
“Good entrepreneurship is like having a delicate recipe cooked by an expert chef with ingredients added in the right amounts at the right time. The recipe for startup success is tough to intuit on your own without the help of good advisors. Those advisors don’t make decisions for management. Their only role is to assist entrepreneurs by giving honest advice, even when it’s uncomfortable to hear. They’re not there for governance, making decisions or casting votes. They’re there to listen, argue, debate and guide, but leave the final decision to the team that’s going to have to execute it.”—Vinod Khosla: "Venture Assistance" - A Philosophical View Of What Boards Should And Should Not Do
Under the leadership of our awesome community manager intern, Adrian Grant, we are happy to launch our (alpha) startup resource portal. Adrian wrote a nice post describing its intention and vision over on our blog at iaventures.com. I’ve reposted the text here:
Despite the lowered playing field – thanks Moore’s Law, blogs, and open source hard/software - there’s still a gap between freely available tools and what industry professionals utilize. This variance – or arbitrage opportunity if you will – was the impetus behind us spending the last few months creating a Resource portal. In true lean fashion, we’re launching with some basic best practice materials in hopes of expanding and iterating based on your feedback.
But why launch with templates? Well there have been some great discussions around board packages and investor updates. As early-stage investors we too often find ourselves having to do the delicate dance of extracting data from startups without impeding their momentum. In some ways board meetings and investor updates are analogous to a pit stop in racing. Startups are moving hundreds of miles per hour, yet we (investors) ask them to stop once in awhile to refuel and discuss strategy.
While not as exciting as the actual race, entrepreneurs and investors tend to agree that these touch points are a crucial part of performing well. However, issues often arise when investors have entrepreneurs spinning their wheels doing deep dives into their businesses to unearth superfluous reports that don’t have a productive purpose and causes entrepreneurs to lose focus on what’s really important.
So we’ve pieced together some frameworks that we feel represents a nice balance of conveying meaningful information for stakeholders (investors or otherwise) while being simple enough for entrepreneurs to quickly compile. Please note that these are guides, meant to be modified, with items added/removed as needed.
Access to materials is just one side of the coin however, as nothing-quite substitutes for hands-on experience or learning from experienced people. In the past, like most VC’s, we’ve internally shared great articles to enable our portfolio to learn from others in the trenches. These articles have remained siloed, until now. That’s why in addition to best practice materials, the Resource portal also contains a Library of curated articles we think are must-reads for startups aiming to get a leg up on competitors/incumbents.
You can download these resources, along with browsing our curated library of interesting reads at http://resources.iaventures.com/. This is by and for the startup community so we’d love to hear your thoughts. Please send them to email@example.com or tweet @iaventures.
One of the purported benefits of raising capital from seed focused investors (angels and seed stage VCs) is the implicit flexibility to achieve good outcomes for all constituents with smaller exits (i.e. low-mid 10s of millions of dollars). A consequence of this (intended or otherwise) is that many ‘good’ companies with reasonable pathways to low- to mid- double digit million dollar outcomes were funded over the past few years. I describe these companies as ‘good’ because they generally have smart, thoughtful teams that are solving legitimate pain points for real markets of customers.
The challenge is that while starting a company is less capital intensive than ever, scaling a company still requires lots of coin. As a result, even companies targeting lower range outcomes generally need to raise more than just seed capital to achieve their goals.
And therein lies the structural capitalization problem for many companies recently funded with seed capital. Many of these companies took capital from seed focused investors that lack the capacity to finance the requisite 5-10mm+ of Series A/B capital necessary to bring a product to market and build a company of substantive value. At the same time, these companies that were reasonably attractive to seed investors who were comfortable with lower range outcomes fail to meet the massive market opportunity thresholds that are required by more traditional VC investors.
Unfortunately, structural market realities force many of these companies into a bad situation between a rock and a hard place - they’ve raised capital and have achieved some early product or market traction, but still require more capital to create real value and are boxed out from raising it because of the structural requirements of the traditional venture market.
Does this catch-22 represent an opportunity for new types of liquidity to enter the market and provide critical follow-on financing for companies targeting lower range opportunities?
Maybe. But I’m skeptical that this market dynamic will lead to new pools of capital. There are two major challenges that I see:
Smaller exit opportunities does not necessarily translate into less risky ventures. There are many markets in which risk and reward are directly and inversely proportional; but in the world of early stage startups, reward is often directly and proportionately linked to the specific size of the target market and does not necessarily imply more or less risk. Series A companies are still fraught with tremendous product, market and execution risk, and as a rule of thumb, investors prefer to accept these risks when the reward for success is massive. When the potential upside is perceived as limited, accepting these prevalent risks becomes a less attractive trade.
Despite the highly publicized evolution of the venture business (shift to seed, venture platforms, etc), what has not changed is the fundamentals of venture math: many companies will fail, some percentage will return a marginal amount, and the vast majority of portfolio gains will derive from a tiny proportion of home runs. Rarely is it clear at the Series A stage which companies will represent the big winners, and as a result, VCs need to make sure that all of their Series A checks, at very least, have reasonable home run potential.
The fact of the matter is that investing sizable capital beyond the Seed stage requires a fund of scale (for shits and giggles, let’s say $50mm on the low end, though more realistically it is probably multiples of that #), meaning that these funds need to raise capital from traditional venture LPs. Given the challenges I note above, I have a difficult time imagining experienced LPs allocating capital to new strategies that target lower range market opportunities - the risk/reward and venture math just don’t seem to add up.
So what does this all mean?
Well, I’m not really sure…but I have a few pieces of advice to offer companies in this zone:
If you are raising follow-on capital right now, do everything in your power to tell a realistic and convincing story that the market opportunity you are pursuing is massive.
If you are receiving push back on your story, extend runway as far as possible and become laser focused on generating cash flow to organically grow the business. Fight your ass off to become cash flow positive, and in doing so, earn the right to control your own destiny.
If it is clear that you need more capital, seriously consider a seed-extension or small Series A at a marginal bump up in value (or even a down-round). Yes, you will likely be further along than most seed stage companies. Yes, you will have built a functional product with early market traction - generally milestones meriting normal Series A consideration. And yes, this approach will be meaningfully dilutive. But if you keep pricing down enough you may be able to attract good venture capital by offering an attractive risk/reward balance. And even if you are able to raise capital successfully, revert to #2 above for your game plan once you have the money safely in your bank account.
Our Brave New World: mobile connectivity and the Internet of Things
My colleague Jesse introduced me to a very cool new company called Silvercar (read more about it here). Silvercar, is building a fleet of ‘smart’ rental cars. It uses your mobile device to identify the renter and unlock the door, personalize the in-car preferences (radio, mapping calender itinerary info to GPS, etc.), streamline the pickup and drop-off process (no waiting in line at stupid rental counter), and automatically make payments (including responsible gas refill charges).
Silvercar is a great example of a wave of emerging innovation that we are seeing penetrating all sorts of old markets with mobile-centric, stream-lined and hyper functional ‘uber-like’ experiences. This wave leverages the hyper-connectivity of physical things and affords a simple, efficient and intelligent user experience through the mobile device (as well as through the desktop, though less interestingly and probably less functionally important).
What I love about this type of innovation is how it transcends the purely digital world and literally touches our physical lives - we rent cars, we monitor the health of our body, we adjust the temperature in our homes. This trend lies at the intersection of extreme mobile connectivity and the promise of “Internet of Things”; a world in which our physical objects are “smart” - not only capturing, analyzing and responding to data, but also connecting to one another accepting input from other connected objects and transmitting output back to the connected network.
Incredibly enough, this is no longer the future, but the world we now live in today.
Quick poll -
What everyday physical, real-world experiences would like to see improved w/uber-like simplicity and efficiency leveraging our mobile devices?
Deploying capital is easy; getting it back is hard
Often times in our line of work (or any investment area for that matter), there is a sense that making investments is what our business is all about. Investments are sexy. Investments receive lots of attention. Investments make the participants feel good. Investments are entered into with the naive optimism of the possible. We think about what could be, the bright future, the lives we impact, the industries transformed. We think about building a big company with tons of employees and legions of adoring customers. We think about making boat loads of money. We think about changing the world.
And then reality sinks in. Tech is hard to build. Team takes longer to hire than anticipated. Partners aren’t living up to expectation. Operational challenges are hindering execution. Product release gets a lukewarm response. Competition is heating up. The economy sucks. Cash is running a bit too tight for comfort. Internal tensions surface.
It’s during these trying times while experiencing the real shit that inevitably goes down along the journey that I’ve come to internalize that our business is not about making investments, it’s about building companies; and if there is anything that I’ve learned to appreciate over the last three years it’s that building companies from a standing start of nothing is damn damn hard. In our business, making the investment is the easy part. Building something productive and of tangible value is the hard part. Not a single day goes by that I don’t think about the sage words my father-in-law once shared with me: “deploying capital is really easy; it’s getting it back that’s hard.”
That is why today I am so excited for my friend, former roommate, and portfolio CEO Eli Portnoy and his co-founder and partner John Hinnegen who announced that their company Thinknear has been bought by Telenav. Eli and John are exemplary entrepreneurs, having started the Company two years ago with one idea, recognizing an unforeseen pain through their own early experience, pivoting into a completely new model based upon that experience, and nailing execution so much so that they became invaluable to their strategic partner who felt compelled to buy the Company outright. It was not an easy ride by any stretch, but it was always purposeful, educational, exciting and fun. I am blessed to have had a front row seat as a board member watching Eli, John and team build a truly impactful company that will drive value creation for years to come.
While I imagine every exit feels pretty good, this one will always hold a special place in my heart. First and foremost, it is our first exit at IA Ventures representing a major milestone in the life of our young fund. Second, it is the first exit that I have been a part of, the experience of which has been incredibly valuable to my growth as a young VC. And finally, it is incredibly special that this milestone transaction was made possible by someone whom I’ve known as a close friend since my first day of college more than 12 years ago when I walked into the dorm room that Eli and I shared for the next year and a half.
Congrats to Eli, John and the entire Thinknear team on a job incredibly well done. As us Hebrews like to say; may you go from strength to strength!
We’re excited to announce that we are hiring a General Manager.
Since launching IA Ventures nearly three years ago, we have lived by the ethos that we are a start-up investing in start-ups. Like the companies we invest in, we constantly look internally at what we’re doing well and where we can improve to enhance the product that we put forth in market. As part of this effort, we believe there is an important opportunity to build out and improve the platform of products and services we offer our portfolio companies and the broader startup and data communities at large.
What you’ll do: The GM will own the platform, products, and services for our customer — the startups we invest in. This includes creating reusable best practice resources, fostering connections between functional disciplines (marketing, sales, finance, etc) across the portfolio, and organizing events like our annual Founders meetup. Ultimately though, it is up to the GM to identify and implement those solutions that best serve the needs of our portfolio. The value the GM creates for the companies is the primary measure of success.
Since it is critical that the GM deeply understand our companies and their needs, the GM will actively participate in investment team meetings and be expected to contribute to the conversation about potential investments and existing portfolio companies. While the principal focus of this position will be working directly with the existing portfolio, the GM will also be charged with a secondary responsibility of facilitating support for and engagement with the broader tech community.
Who you are: While we have some broad ideas to kickstart the platform, the GM will think and act like an entrepreneur - experimenting with ideas, releasing early and often, learning from scoped tests, and iterating and improving the suite of products and services. The successful candidate will necessarily live and breathe startups with a deep understanding of the ecosystem, be an avid user of emerging products, and have substantive technical acumen with capacity to either directly build or manage the buildout of potential products.
How you’ll stand out:
A demonstrated passion for start-ups and tech. Start-up operating experience is a plus
Net native - you should be an active user of emerging technologies
Extremely creative and entrepreneurial
Exceptional organizational and execution skills
Strong interpersonal skills
Engineering skills are a plus. At a minimum, you must be demonstrably tech savvy
There are lots of reasons to go to business school -
broad education of business fundamentals
great network of future movers and shakers
piece of (expensive) paper that will help you land a good job down the road
opportunity to reset and/or pivot your career
break from the ‘real world’ to enjoy student life again
While the aforementioned are probably the most commonly sited reasons to go back to school, my personal experience highlighted something that was not immediately obvious when I entered Columbia in the fall of 2007. Business school was a sandbox to experiment with and explore different real world careers.
I had two transformational experiences as a student, both of which were internships, that shaped the path I’ve taken since graduating and expect to continue upon for the rest of my life.
My first internship between first and second year was at boutique investment bank called Allen and Company. Allen and Co. is a very unique place. While it is extremely well known and respected within the tech and media worlds (maybe you have heard of the Sun Valley Conference hosted by the firm each summer), it somehow remains extremely secretive and flies under the radar with the general public (they don’t even have a website!). As a merchant bank that offers top tier advisory work in tech and media AND principally invests in many of the most exciting tech startups, Allen was a great place to spend the summer given my background in finance and interest in early stage investing and tech startups. If there was ever a firm in ‘traditional finance’ that would fit me well, it would be Allen and Co. And yet, I walked away from that summer realizing more than ever that traditional finance would never fulfill my personal and professional aspirations. I didn’t particularly enjoy the work functions and still found myself feeling too far removed from impacting the outcome of the companies we worked with. This realization was not easy to accept - emotionally and psychologically - as it meant risking the opportunity to make boatloads of money and walking away from whatever it is that makes finance kinda sexy. At the end of the day, I was just not inspired by the work and came to grips with the personal implications of it over that summer.
Fortunately, I had the wonderful opportunity to meet Roger Ehrenberg early into my second year at school. I had actually stumbled upon Roger’s blog while interning at Allen and Co. (I believe it was this awesome post that hooked me) and while perusing Roger’s site noticed that he had amassed quite an impressive portfolio of angel investments. As head of the venture capital club at CBS, I invited Roger to participate on a venture panel on campus where I proceeded to meet Roger and attempt to pimp myself out as his personal intern. Roger, of course, summarily dismissed me, but not before making a critical introduction on my behalf that changed my life.
It just so happened that Roger was about to lead a seed round for a very interesting early stage company that had just moved to NYC. (Keep in mind 2008 was still a time when angel investors could generally lead seed round, price and structure deals, take board seats, etc. This is less common today as there is more institutional capital focused on the Seed stage). The company had a brilliant founder and a product in market with paying customers, but in reality there was no ‘company’ as at that point it was literally one man show (yes, no co-founders or employees) with no infrastructure that could possibly constitute a real company. Roger suggested I meet the founder and see if there was an opportunity to work together. The following week the founder and I met for coffee and hit it off, leading to my second transformational experience during business school. I spent the next five months interning for this company. I was tasked with everything from setting up the basic operational infrastructure to building the first usable financial model to crafting our first board deck to conducting competitive research to making early BD calls to thinking through our hiring and team buildout strategy. I was officially an intern and yet found myself actively participating in our first board meeting! I was the CEOs right hand man for those five months and it was awesome. I felt invigorated and excited. And I knew that I had found my calling.
[The rest of the story is that after insufferably nagging Roger for a meeting, we finally met for a lunch at which I proposed ways to bring some sanity and organization into his angel investing life as well as ways in which I could serve as an operational and business resource to his portfolio of early stage companies (as I had done during my internship). My proposal serendipitously coincided with Roger’s own contemplation of how he could formalize his efforts with more structure and possibly a fund down the road. Our lunch led to more discussions, which eventually led to contract work where I split my time heading up operations and finance for a company we were incubating as well as helping Roger with his angel investing. I moved onto the investment side full time when we launched IA Ventures in January of 2010.]
At the end of the day, business school afforded me the opportunity to pursue two awesome, but very different, real world experiences in a safe and scoped way. The first gave me conviction to move away from a path that I subconsciously struggled to abandon, while the second solidified my passion for building transformative tech companies and gave me the courage to pursue that path. While I’m also grateful for the other benefits of business school, it were these two particular experiences that fundamentally changed my life.
Let’s debunk one notion immediately: being a successful entrepreneur (or even a failed entrepreneur) is absolutely not a criterion for being a good VC. The data is extremely clear on this – there is little correlation between the best VCs and past entrepreneurial experience. That is not to say that entrepreneurial experience is not an excellent segway into VC, it’s just not a required segway.
There was some follow up to this statement in the comment section which prompted me to further expand on this issue.
Irrespective of the data (which speaks for itself), the rationale behind this statement is also important. Being an investor is quite different from being an operator. There are definitely overlapping skills between the two professions, but they don’t map one to one. In reality, many professions impart some of the skills necessary to be an investor, some more than others, but none give you the full exposure to it all.
Equally important, there are simply different types of investors out there who bring different value to the table. Some bring operational expertise, some deep technical and product understanding, and some are killer deal people who will help you land a major hire, close a big BD deal or raise your next round. There is no one-size-fits-all box that we can fit all good investors into.
I’ve been thinking about this comment a lot over the past few days while following two very interesting blog posts from my friend and colleague, Jerry Neumann. As is often the case, Jerry cuts straight to the heart of an important issue, this time regarding the issue of training young VCs. In his posts (see here and here), Jerry postulates that the venture industry does a piss poor job of training new VCs, arguing:
One of the odd things about venture is the lack of seriousness about what we do. Venture is the only professional services business which does not think training its employees is a good idea. Witness Brad Feld’s comment—ironically, in the textbook that Kauffman asks its Fellows to read—“We don’t intend to hire associates and train them; [when we retire] we are just going to shut shop and go home. Done!” This après moi le déluge attitude means that our industry continues to be half-staffed by people who half know the job. I am constantly amazed at the crazy things other angels do, usually sins of omission, and VCs I know express the same sentiment about other VCs. In no other profession do they expect people to just show up and do the job well. In our profession many show up and do the job poorly. We all suffer. If we care about innovation—not just making money—we should be training people how to invest in and manage investments in startups.
Both Brad Feld and Fred Wilson said they did not have junior VCs because they did not want to burden entrepreneurs with inexperienced VCs. This makes a ton of sense. But, then, where should experienced VCs come from? Andy Weissman comments that perhaps VCs are best trained by being entrepreneurs.
And finally, Jerry concludes:
So if specialized knowledge is needed, how to generate it? Kauffman has their Fellows program to train VCs. Andy thinks being an entrepreneur is the best training. I disagree with both. I think only doing the job teaches the job. And since no one wants anyone doing the job who doesn’t know the job, this means a long apprenticeship. But the best VCs seem to not be interested in having apprentices. So, then what?
In my opinion, if we want better trained VCs, then either the culture has to change so VCs feel an obligation to train the next generation, even though it costs them money, or the LPs need to start looking out for their future returns in addition to their present ones and compel VCs to have a bench.
As a young VC learning the business from the inside, this issue is front and center in my life.
There are a number of important questions embedded in this discussion:
What are the characteristics of a good VC?
Can these characteristics be trained?
If so, how should they be trained?
Before going further, I will broadly qualify that there are no right answers to these questions. If there is one thing I have learned over the past three years it is that there is rarely a right answer for anything in venture – the degrees of freedom in this business are too massive to isolate specific success variables in any meaningful way. There are simply many different ways of doing things, each with their own costs and benefits. And in case you don’t believe me, please tell me which of the following venture models is ‘right’?
SV Angel: seed, small checks, broad basket portfolio approach
With the qualifier above noted, let’s debunk one notion immediately: being a successful entrepreneur (or even a failed entrepreneur) is absolutely not a criterion for being a good VC. The data is extremely clear on this – there is little correlation between the best VCs and past entrepreneurial experience. That is not to say that entrepreneurial experience is not an excellent segway into VC, it’s just not a required segway.
So getting back to our three questions: what are the characteristics of a good VC? Can these be trained? And if so, how should they be trained?
My hypothesis is that there are certain innate characteristics that are not only table stakes to play the game, but represent the intangible factors that distinguish the good from the great. These characteristics include:
Honesty and integrity
Intuition about people, markets and products (in that order)
Intellect to problem solve and think critically about risk and opportunity
Empathy for all stakeholders
Personality to build enduring relationships
On the one hand, I don’t believe that it is possible to train these characteristics – you either have them or you don’t. Yet, on the other hand, I do believe that some of these – most specifically intuition, empathy and a strategic mind – can be refined and honed over time through life experience.
In addition to the innate characteristics, there is a second class of VC characteristics that are mostly acquired through traditional learning and on the job training. These include:
Domain and market expertise
Deal making skills
Network of relationships
There are many ways to acquire these characteristics – entrepreneurial experience, working in industry, learning on the job as a junior VC (although this won’t work for product), etc. It is tough to pinpoint a ‘best’ path, as each path teaches different and relevant skills. As Jerry notes:
The best—in fact almost all—VCs have historically come from one of five places: VC, banking, law, technology firm management, or journalism…Each of these paths teaches people some of the necessary skills to be a venture capitalist, but not all of them.
To be clear, while you can learn many of these acquired characteristics, I do not mean to imply that learning them will make you good or great at them. The degree to which you are good at something is generally a function of both your training and your natural born capacities. Different people have different natural strengths – some have natural product vision, others are killer deal people. No matter how much I train, I will never be as good at throwing a ball into a circular hoop as Michael Jordan. My point is not to diminish the importance of innate disposition, but rather to emphasize that these skills and characteristics more readily lend themselves to be improved through traditional learning methods in contrast to the uniquely innate characteristics described above.
Finally, I believe there are certain VC characteristics that are only acquired through direct life experience:
Cyclical market experience
In a blog post I wrote after meeting with Fred Wilson in November 2010, I commented:
While there are certain traits common to all successful investors - intellect, intuition and disposition - these are merely necessary, but insufficient, conditions to being great. Venture investing (like many investment professions) is heavily informed by pattern recognition, and for better or worse, pattern recognition is naturally derivative of experience.
The reality is that no amount of intellect, intuition or disposition can fully prepare a young VC to manage a dysfunctional board, bite the difficult bullet of a down round financing, push through painful but necessary management changes, or navigate macro economic cycles.
Given the framework laid out above, where does this all leave us with respect to the issue of training new VCs?
It is clear to me that there is a fundamental need to train young VCs by giving them access to the experiences necessary to grow into great venture investors. Part of that education can come through on the job training (both in and out of VC) and supplementary learning initiatives (e.g. individual learning, Kauffman Program, etc), but a massive part can only be acquired through the passage of time and living through various situations and scenarios. To me, the key to navigating learning through life experience is mentorship. As summarized in my Fred Wilson blog post:
In the absence of years of experience, there is one absolutely critical way to mitigate the risks of inexperience while young investors learn on the job - mentorship. As Fred has advocated time and again on his blog, the venture business is best learned through apprenticeship (at the very least this is true for those who are career VCs and not transplants from successful entrepreneurial careers). No training program in the world can prepare one to be a great VC precisely because experience is such a principal component. Having the opportunity to lean on and glean from the experience of those who have walked the walk is invaluable. It is not a ‘nice to have’, but rather a ‘need to have’.
While some firms have made the conscious decision not to train young VCs (I get it and respect the choice), many have thankfully chosen to mentor new entrants to our industry and provide them with the fertile learning ground upon which to grow into impactful venture investors.
It's sometimes hard not to be a d**k: the plight of denying meetings requests
At some point over the past two years I crossed some mythical chasm where I started receiving at least one or two emails each day that read something like this:
Dear Ben, I am a [student, developer, aspiring entrepreneur, agitated lawyer, recovering banker]. I recently came across your [blog, company website, long lost cousin] and would love to talk to you about [my new company, career trajectory, the supersonics]. Do you have any time in the next week to connect?
Unfortunately, the physical laws of nature have become an insurmountable barrier to accommodating all of these requests. 24 hours in a day is not nearly enough time to get through all that needs to be done, neither personally nor professionally. I simply no longer have enough open capacity in my calendar to take all of the meetings. As a result, I’ve found myself writing responses that read like this:
Dear [X], thanks so much for your note. Unfortunately, my calendar is jam packed so I won’t be able to fit in this meeting. I wish I could be more helpful, but I just don’t have the bandwidth right now.
These notes SUCK and I feel like a humungous schmuck every time I click send.
Truth be told, I am incredibly flattered every time someone reaches out seeking my input (why someone would ask for my input remains one of the great mysteries of the world) and I most definitely do not mean any disrespect by denying a request for such a meeting. It is just that, like many many many other people who work hard and have a family, I am very busy.
I’ve been thinking about how to better handle these requests and have come up with the following action plan:
Going forward I’ll try holding more regular office hours broken into 20 minute slots to accommodate more of these requests
I’m going to integrate the ‘productivity hack’ of scheduling more standard 30 minute meetings instead of hour meetings
I plan to include a link to this blog post every time I send a ‘rejection’ notice in hopes that people will understand that I don’t mean to be a huge schmuck but am just a busy guy
If you have other suggestions for how to better handle this I’d love to hear them in the comments.
————— Forwarded message ————— From: [XXXXXXX] <XXXX@XXXXX.com> Date: Wed, Mar 7, 2012 at 5:04 PM Subject: Early Stage Company Looking for Capital To: Ben Siscovick <firstname.lastname@example.org>
Good afternoon Ben,
My name is [JANE DOE]. I am [MORON BANKER]’s Secretary. [MORON BANKER] is a Merger & Acquisition Specialist in California. He is working on behalf of an early stage business in the mobile industry looking for growth capital. He asked me to try to arrange a call with you to make an introduction and discuss this deal. Please find attached a profile with information related to our client. Please let me know if your schedule would permit a call at the end of this week or early next.
I have the opportunity to see many companies doing fascinating things with data at my day job. One truism that needs to be recognized is that generating interesting data is not nearly enough, but rather entrepreneurs need to be laser focused on productizing data. I’ve seen many entrepreneurs miss this point, often times creating an interesting mousetrap for generating, collecting or aggregating data, but stopping there instead of going the distance by productizing the data.
So what does it mean to productize data?
Most generally, there are two types of data-related products:
Data-driven product. A standalone product that is informed and enhanced by data (ex. Amazon’s recommendation engine)
Data product. The product is data itself (ex. AP newsfeed)
Let’s look into each of these types of products more closely.
The concept of productizing data is quite intuitive with respect to data-driven products. In these cases a feedback loop is created where some standalone product improves by collecting and effectively utilizing data. Zynga exemplifies the power of data-driven productization by capturing, storing and analyzing almost every interaction users have with their games, and then uses this data to improve game play and optimize monetization. As described in a recent WSJ piece:
To understand why Zynga Inc. is among the tech industry’s hottest companies, consider how it gets people to buy a bunch of things that don’t exist. Last year, Zynga product managers for a videogame called “FishVille” discovered something intriguing while sifting data that Zynga collects when people play its online games. Players bought a translucent anglerfish at six times the rate of other sea creatures, using an imaginary currency people get by playing the game. The “FishVille” managers had artists whip up a set of similar imaginary sea creatures with translucent fins and other distinctive features, says Roger Dickey, a former Zynga general manager who left the San Francisco company recently. This time, they charged real money for the virtual fish, and players snapped them up at $3 to $4 each, says Mr. Dickey.
’We’re an analytics company masquerading as a games company,’ said Ken Rudin, a Zynga vice president in charge of its data-analysis team.
Companies that are able to leverage data to improve products benefit from what we at IA describe as Data Economies of Scale. You can think of Data Economies of Scale as a virtuous spiral in which strong products attract users who generate invaluable data through their usage. Insight gleaned from user generated data is then fed back into product development which helps evolve and improve the product, thus enabling it to attract more users who contribute more data which then feeds into further product improvements, more users and more data, etc. etc. etc.
Data Economies of Scale is an extremely powerful competitive barrier enabling a product to move further and further ahead of new competitive entrants who have yet to achieve enough scale to benefit from a data-driven product feedback loop.
In contrast to data-driven products, it is somewhat less intuitive to understand the concept of productizing data for a product that is essentially, in and of itself, pure data.
Before diving into productization strategies, let’s spend a moment first clarifying the concept of a company whose product is essentially data. Using an example to demonstrate the concept, let’s look at the New York Stock Exchange (NYSE). As the exchange through which stock transactions occur, the NYSE generates an extremely valuable proprietary data asset - market tick data. NYSE then sells this market tick data to banks, hedge funds and media outlets that use it in a variety of productive and profitable ways. Thought of in this light, NYSE is most fundamentally a mousetrap for generating and capturing data and its core salable product is data itself.
Contrary to what you might think at first blush, selling raw data is rarely a ‘product’. The problem with raw data is that it is difficult for end users to consume and it requires users to start from scratch trying to figure out what to do with it. (That said, sometimes users - particularly those who are highly technical and quantitative - want the exploratory flexibility that comes with having the unfettered raw data; but this is the exception, not the rule.)
Instead, data almost always require some sort of ‘packaging’ to become a product. Though I am sure there are more, here are three types of effective packaging for productizing data:
Structuring data for a particular use cases and ease of consumption, often in the form of an API. A great example of an API product company is The Echo Nest whose entire product suite is a set of highly structured developer APIs that provide powerful access to music data. Another good example of a structured data product is Yipit Data from our portfolio company Yipit. Yipit Data aggregates and structures all relevant daily deal data in an easily understandable and consumable manner specifically tailored for their primary target market of financial analysts.
Visualizing data in the form of a highly interactive, dynamic and insightful dashboard. Great analytic dashboards allow users to both explore data and be pushed actionable insight. Our portfolio company Next Big Sound does a killer job of taking raw social, event and transactional music data and turning it into easily understandable graphs, charts and visualizations enabling sophisticated exploration of the data and highlighting important actionable insight.
Creating an experience around data. Sometimes packaging is as straightforward as creating a nice interface and simple interaction tools. For example, Twitter’s product is most fundamentally data (tweets) wrapped in a clean interactive interface that allows users to create, consume and engage with the data. (Interestingly, Twitter initially allowed third parties to create competitive packaging but later strongly discouraged and eventually prevented third parties from creating their own experiences. This strategic move is very much in line with the spirit of the framework I have laid out here – Twitter recognized that a fundamental part of the Twitter ‘product’ is the packaged experience around the data, and as such, they felt it imperative not to outsource this critical element of productization.)
I had a chance to meet with an impressive entrepreneur last week who exemplifies the theme of productizing data. The entrepreneur’s fundamental asset is TV related social engagement data, but his products include 1) multiple well defined structured APIs, 2) an interactive analytics dashboard, and 3) stand-alone applications build on top of the data. It was awesome to see an entrepreneur with such strong product sensibility exemplifying the powerful offerings that emerge when you productize your data.
Like my good friend elsiguy, I’ve fallen in love with Spotify. Over the weekend I decided to take my relationship with it to the next level by upgrading to the premium service for $10/month. For the uninitiated, Spotify’s basic service is free, on-demand desktop music streaming supported by advertising. There are two premium offerings:
$5/month removes all ads
$10/month removes all ads, offers mobile access to the entire music library, and allows users to sync songs and playlists to devices for offline listening
Spotify is not the first music service to offer a vast music library, on-demand streaming and mobile access. So why has Spotify emerged as the leader of the pack in on-demand streaming when others (Rhapsody, Napster, etc.) have failed to gain serious market traction.
I believe the answer is rooted in Spotify’s implementation of the freemium business model.
Let’s step back for a moment. A freemium model is one in which some basic product or service is given away for free and premium features are offered at a price.
Freemium models need to satisfy two conditions to be viable:
the basic free service needs to be strong enough to attract lots of users
the premium offering needs to be compelling enough to incentivize some meaningful subsection of users to pay
Spotify nails freemium. Let’s take a closer look at some of the specific factors that make it so compelling.
Free basic service
Spotify’s free service is an awesome standalone offering. Some factors that contribute to its awesomeness:
Library. Spotify’s music library is vast with licensing deals with all major record labels. You won’t find everything (Metallica, The Beatles, Pink Floyd, Led Zeppelin - absent do to asinine and shortsighted thinking), but you’ll find almost everything.
On-demand. On-demand means the user has the flexibility to listen to any song at any time and in any order (and until recently, only music owned/locally stored afforded users this flexibility). Historically, free online music offerings have been constrained by the economics of music licensing and have been unable to combine ‘free’ with ‘on-demand’ (on-demand royalty payments are much higher than those for ‘radio’/non-on-demand streaming). And while the the jury is still out with respect to the economic viability of the Spotify model, the fact that there is a framework that allows free on-demand music streaming is HUGE. Together with mobile access and offline syncing, on-demand streaming is fundamental to move to a more attractive cloud-based streaming universe where there is no need to ever own and locally store music.
Social. A fundamental part of Spotify’s experience is the innate social integration. For most people the Facebok integration is not only a wonderful tool for music discovery, but also serves to create massive stickiness on the platform. The fact that I can share and benefit from shared playlists creates a strong incentive to be on the same platform as friends. In effect, Spotify is leveraging Facebook to bootstrap the creation of it’s own ‘music social graph’ and will benefit immensely from powerful network effects that emerge from owning it. (Note: Spotify is not the first to integrate social with music listening, but they do it relatively well and make it core to the fabric of the experience. I have a full blog post brewing on this topic…stay tuned.)
Ad supported. The fact that the free service is ad supported is important, but not all that interesting in and of itself. However, what is important and interesting is Spotify’s specific and unique implementation of ads within the service. First, Spotify does a great job walking the tight rope of making ads intrusive and annoying enough to incentivize users to seriously consider upgrading, but not so much so that it completely interferes with usage of the basic offering. Spotify uses some interesting tricks to walk this line, the most interesting to me is that they constantly rotate the ad unit interface - sometimes vertical, sometimes horizontal, sometimes audio, and sometimes there are no ads at all. Some find this annoying. I find that it actually makes the ads more effective (i.e. I notice them a lot more) and I’m satisfied knowing the ad will shortly move. Second, the quality of Spotify’s audio ad unit is quite impressive. Despite the fact that audio ads cut into the listening experience, Spotify seems to intelligently serve units that are contextually relevant to the user and their listening tastes - making the ads more bearable and less obnoxious. It also serves these ads in a relatively well integrated manner so the audio experience is not jarring to the ear.
The premium offering is sufficiently differentiated from the free service and offers clear and demonstrable value - a compelling mouse trap to attract users to upgrade and pay.
Mobile. A massive amount of music is consumed outside the home and on the go, and as noted above, offering mobile access is a key condition to evolve away from owned/locally stored music to cloud streaming. Having on-demand access to the entire Spotify music library at my fingertips at all times makes my local music collection seem puny and pathetic.
Offline. The world is moving towards ubiquitous connectivity, but until we get there offline sync is necessary to replace the owned music paradigm. With offline sync, I have unfettered offline access to all songs, albums and playlists that I have selected to sync locally to my devices. In fact, I’m benefiting from offline sync at this very moment listening to Bon Iver 30,000 feet above the ground while writing this blog post.
Ad free. Nuff said.
Spotify is not the only music streaming service making waves right now - Rdio has a very compelling differentiated service as well (similar to Spotify in many ways and even better in some). The emerging model for these new and hopefully viable music services is to create a killer freemium offering that attracts masses of free users while offering enough premium value to incentivize users to upgrade to the paid subscription. As a die-hard music fan, I’m rooting hard for these guys to make it work.
I recently had a fundraising discussion with the head of BD at company looking to raise capital. He is a good guy and the company is doing cool stuff. But a word to the wise - fundraising is not business development and your BD lead should not run your fundraising process. Fundraising is fundamentally the responsibility of the CEO and cannot be delegated to other members of the team.
I get the rationale for having the head of BD run the fundraising process; business development professionals are deal people - they are articulate, know how to sell and are skilled negotiators. Their job is to ‘do the deal.’
And this is where some companies get tripped up. Despite the fact that it looks like a duck, walks luck a duck and talks like a duck, your discussion with a VC is *not* a ‘deal’ in the traditional BD sense. It is not a temporal alignment of strategic interests.
Your engagement with a VC is a marriage. It is a fundamental, nearly irrevocable, company-life-long partnership.
From the investor’s perspective, the single most important determinant of whether or not to enter into the partnership is the people. Don’t get me wrong, everyone on the team is important, but there is no avoiding the reality that the CEO is the one driving the ship - the overall strategy, the product vision, the key sales initiatives, the hiring of lieutenants, and so much more. The CEO is the final decision maker and ultimately bears responsibility for the success of failure of the company. The buck stops at the CEO.
When the CEO is not leading the fundraising discussion, rightly or wrongly, that in and of itself sends a strong negative signal - is he incapable of describing the vision? Does he have a problem inspiring others to believe in the opportunity? Is he unable to sell? Will he be steam-rolled in a negotiation?
Conversely, having the CEO run the process puts the CEO’s capacities as a leader, visionary and salesperson on display to inspire investor confidence. Furthermore, it enables the irreplaceable opportunity for the CEO to develop a relationship the investor. Remember, a venture investment is more akin to a marriage than a ‘deal’, and it only works if there is a strong relationship built upon mutual trust and respect. The CEO is the primary point of contact between the company and the investor, and it is the CEO who needs to play point building that relationship on behalf of the company.
To be clear - the CEO is not the only important team member and is often times not even the smartest or most capable (the best CEOs hire people who are smarter and more capable than themselves!). All the team members are important. But for the reasons described above, fundraising is fundamentally a CEO-level responsibility and should not be delegated.
Amongst the many buzzy internet themes popular these days, one that particularly intrigues me is the theme of consumerization of enterprise. Broadly speaking consumerization of enterprise refers to the evolution of enterprise software. As anyone who has worked in a big corporation can attest, enterprise software is generally stogy, complex, bland and antiquated. In stark contrast, successful modern consumer applications are clean, simple, engaging and fresh.
Over the past year, my colleagues at IA Ventures and I have developed a simple framework for thinking about this theme. To us, consumerization of enterprise means three things:
UI/UX. Incorporating design and interaction best practices refined over the past decade in the consumer web for clean, simple and engaging user experience and user interface.
Social. Building social into the foundational fabric of the application either by enabling social interaction and connectivity through the application and/or leveraging graph data (social, interest, professional or other) to optimize the experience and performance of the software.
Mobile. Building applications with a mobile-centric design philosophy. In other words, building applications from the ground up optimized for usage on mobile phones and tablet devices.
We have made two investments at IA specifically around this theme - Banksimple and Coursekit. Both companies exist to disrupt massive incumbents (Banksimple :: online banking portals from traditional brick and mortar banks / Coursekit :: Blackboard learning management system) and both specifically replace antiquated enterprise offerings with applications designed from the ground up with UI/UX, Social and Mobile best practices incorporated.
The exciting thing is that the world of enterprise software is ginormous and industries across the board are ripe for disruption. The application of consumer web best practices will be one of the defining drivers of innovation and evolution in the world of enterprise software and we are just now beginning to see the promise of consumerization of enterprise become reality.
IA Ventures is growing :: come join our start-up family
As our young firm grows and matures, we are extremely excited to announce that we expanding our team and are recruiting one full time associate/community manager and one full time analyst. A direct link to the job posting can be found here.
When I started IA Ventures, it wasn’t with the intention of starting a fund, but creating a firm. A real business. A true start-up with an eye towards building a world-class team, a recognized and respected brand, a rich ecosystem of relationships, a sought-after product and, ultimately, top-flight performance for our key constituencies - LPs, founders and co-investors. We have sought to live close to our portfolio companies and to have them benefit from the empathy we have for start-ups since we face the same challenges, opportunities, stresses and victories as they do. We have been thoughtful about choosing our LPs, targeting partners with extensive experience, perspective and data to help us develop our start-up. It’s really no different than the advice we give our companies as they think through issues of syndicate construction and strategic advisers. We are, in essence, living the start-up life in parallel with our companies. When combined with our deep thematic focus and expertise, it has made IA Ventures a partner of choice for companies seeking to create competitive advantage through data. But we’re still very young, painfully humble about the challenges of building a successful venture investing business yet energized and excited about the opportunities that lay ahead and the progress we’ve made in our short lifetime.
IA Ventures currently has 20 portfolio companies, has led seed, Series A and Series B rounds and has codified its approach to portfolio construction and reserve management. We have sought to blend the art of investment selection with science of quantitative portfolio management. Our learning curve has been tremendous during our first 1.5 years, and continues to be pointing straight-up. I’m not convinced that it ever planes out in this business; there are simply too many variables at play, too many degrees of freedom, too many people-driven issues that don’t subject themselves to modeling but to experience. Lots of experience. Truth be told, this is why building this kind of a start-up is so much fun. Every time a new peak in learning is achieved, you need only look straight-ahead to see a higher peak that awaits.
Part of what I think makes IA Ventures so special is our culture. Given our organic and humble beginnings, we’ve come together to undertake what for us is a holy mission in the spirit of passion, intensity and extreme teamwork. We are a true team-managed fund. There are no individual “check writers.” We make decisions as a team. Our interns have gotten fully transparency into everything we do. Our portfolio companies know us to be hard-working, honest, supportive - and blunt. Just ask around. We bring multiple team members to bear for our companies, regardless of who takes a board seat. While other firms may do it differently and do so successfully, we are doing it our way and following our vision.
We are super excited to announce that we are looking to expand the IA Ventures team, and are specifically seeking an Associate and an Analyst to join us on a full-time basis. It is reflective of the anticipated growth of our portfolio and the desire to further build out the IA Ventures business and ecosystem. We’ve been huge supporters of organizations such as HackNY and TechStars, as well as sponsors of such esteemed gatherings such as the Data Drinking Group both in NYC and SF/Valley.
Between a growing portfolio, burgeoning deal flow and a desire to better manage our community efforts, we are excited to find two new members to join the IA Ventures family. A description of the positions and instructions for applying are below. I personally am excited about this process and can only imagine the terrific people we’re going to meet over the next several weeks. Thanks in advance for your interest.
IA Ventures is seeking one full-time associate / community manager and one full time analyst to join the investment team in our New York City office. —————- IA Ventures funds early-stage Big Data companies creating competitive advantage through data and we’re looking for two start-up junkies to join our team - one full-time associate / community manager and one full time analyst. Because there are only four of us (we’re a start-up ourselves, in fact), we’ll need you to help us investigate companies, learn about industries, develop investment theses, perform internal operations, organize community events, and work with portfolio companies—basically, you can take on as much responsibility as you can handle.
Our hope and expectation is that the successful candidates will spend a couple of years with us and then move on to a start up or pursue other exciting opportunities.
To learn more about who we are, what we value, and how we invest, check out:
—————- While specific responsibilities for each role will be dynamic, here is our high level thinking:
Associate / Community Manager
Active member of investment team
Assist senior investment professionals working with the portfolio
Community manager for portfolio and broader community initiatives
Position best suited for someone with more than two years work experience
Deal screening / investment team support
Manage internal dashboards and databases
Oversee fund operations
Position best suited for recent undergrad with less than two years work experience
How to stand out:
A demonstrated passion for start-ups and technology
Start-up operating experience is a major plus
CS, EE or related background is also a major plus. At a minimum, you must be demonstrably tech savvy with strong analytical and quantitative skills (including excellent Excel skills)
Strong verbal and writing skills (PowerPoint/Keynote too)
Exceptional organizational skills and a strong attention to detail
When applying, you’ll be asked to provide the following pieces of information:
Which role you are applying for
Online presence (blog, Twitter, LinkedIn)
Interesting technology trend you are following
Why you want to work at IA Ventures
**We have found the most effective introductions are those referred/endorsed by people we know and trust, and we strongly encourage you to seek out a personal introduction to help support your candidacy.**
Got all that? Great. Head on over to http://bit.ly/op3QIR and apply now! We’re looking forward to hearing from you.
Tristan Walker of Foursquare fame shares his dialogue with Dennis and Naveen leading to his employment. In it we see a young, smart and obnoxiously hungry person *will* himself into a killer opportunity.
If you are outside StartupLand looking to get in, read this then read it again - this is how it is done.
today marks two years since i sent my very first email to dennis and naveen (wow i was such a nerd! ha). naveen sent a reminder to team foursquare today and i thought i’d share it on my blog. Man, how times have changed:
Hey Dennis and Naveen
How’s it going? Hope all is well!
My name is Tristan Walker and Im a first year student (going into my second year) at Stanford Business School (originally from New York). Im a huge fan of what you both have built and excited about what you guys have planned for FourSquare. It is an awesome , awesome service.
I would love to chat with you guys at some point, if you’re available, about FourSquare. This year, I’m looking to help out and work extremely hard for a startup with guys I can learn a ton from. Dennis, with your experience at Google and the Dodgeball product, and Naveen, with your experience at Sun and engineering in general, I know I could learn a great deal from you both!
Before business school, I was an oil trader on Wall Street for about two years and hated it! Moved out to the Bay/Stanford to pursue my passion for entrepreneurship and the startup world. This past spring I had the opportunity to work for Twitter as an intern and learned a ton. Solidified my commitment to working at a startup that I’m passionate about, and FourSquare is one of those startups that I believe in.
I know you guys are probably getting inundated with internship-type requests, but thought it’d be worth a shot! I can assure you Im humble and Im hungry! Let me know if you’d be interested in chatting further. I definitely look forward to hearing from you.
Stay awesome! Tristan @tristanwalker
———————————————————————- tristan j. walker | mba class of 2010 stanford graduate school of business
A few things to note here:
i spelled foursquare “FourSquare”…capital F and capital S….TWICE! (so taboo these days) ha. Talk about green…and who says “stay awesome!” (hilarity!)
i sent this email after really thinking hard about this post from Jenn Van Grove at Mashable (thx jenn!). After reading, i IMMEDIATELY started to think about the potential for merchants and brands to start interacting with customers in ways that have never been done before. I read that post in May of that year I believe and signed up that same day
After my using foursquare everyday for about two months I knew i had to work for the company. On July 16th i scoured the internets, found Dennis and Naveen’s emails (#crazytristan) and shot them an email right away. This was before they even had @foursquare.com email addresses (and well before our series A round).
This is the first of 8 emails i sent Dennis/Naveen. They both must have thought I was crazy. On the 8th email Dennis replied
“you know what, i just may take you up on some of this, are you ever in nyc?”
You could tell he was a bit annoyed (sorry dennis! oh well…ha) I thought on it for a little bit, and replied back (something along the lines of…):
hey dennis, yeh I was planning on being in ny tomorrow [i was in LA at the time!…and no, i definitely had zero plans to be in NYC] how about we meet up live at your offices?
then i booked my flight that night, flew out the following morning, hung out with him and naveen for a week and one month later I was full time at good ol foursquare
which brings me to the last point. a lot of folks ask me how Ive been able to secure some pretty cool spots at awesome companies and my answer is always the same. “be so enamored with the product that you would work for the company even if they didnt hire you….more importantly find where the needs are within the organization and be willing to do whatever it takes to help them fill the need (work for free even!)…and MOST importantly make sure that youre filling a need that the organization doesnt have the resources to fill on its own. If a company is not willing to let a hungry, passionate, smart, unpaid advocate of the product help the organization to fill that need (when it doesnt have the resources to do it itself) then you probably shouldnt be working at the company anyway. They’re just being arrogant”…Dennis and Naveen made pretty clear that their passion was with product (and theyre the best in the world at it). I knew i could help them (without much guidance and hand holding) to think through the business opportunities / potential for foursquare. And i did it for free (for 30 days at least :)). I gained their trust, which was most important.
The past two years for me have been nothing short of amazing. Dennis/Naveen didnt have to but they gave me a shot and really did change my life. I owe those guys a ton and im truly appreciative of it all. Now, back to work…. :)
Don’t tell me we’ve learned our lesson. We haven’t.
Don’t tell me about “real companies”. Where there are real entrepreneurs, there are real companies, bubble or no.
Unless in the last 15 years we’ve managed to outgrow our humanity, there will be a tech bubble. Of course, it will be fueled by technological and economic factors (ubiquitous connectivity, low interest rates, foundational FOSS), but it will be motivated by human instinct. We will herd. We will follow. We will discount downside risk in favor of upside potential. We will focus on the positive and ignore the negative. We will see others grabbing cash or the promise thereof and we will run that way with ever increasing glee, all while repeating to ourselves the four most dangerous words in finance: this time is different. We will do these things because that’s what we’ve always done, each time shouting that some emerging dynamic will make it work this time around. The problem isn’t the technology or the economics—they likely are better, faster and stronger than last time—the problem is us. We don’t change, not even when the bubbles burst and we run away in panic. In time, we just reach down and invoke another instinct—resilience—and we do it all over again.
Resilience, optimism, herding, fear; that’s what makes a bubble. Everything else is details.
My colleague Andrew Cove and I gave a presentation today at General Assembly on the business of big data. This is something we think about daily at IA Ventures and rests squarely at the core of our investment thesis. The discussion covered:
What is Big Data?
The characteristics of a Big Data company
Creating competitive barriers in Big Data
The Big Data team
We had a packed house and the discussion was lively and interesting. If you didn’t have a chance to make this session, we’ll probably do a repeat at GA in a few months and maybe another one via Skillshare at some point. Until then, feel free to peruse the slides below (of course, they make much more sense when spoken to!). We’ll probably post the full hour+ video shortly as well.