204. Embracing Failure, Capitalizing on Crisis & Building Resilience (Minnie Ingersoll)

204. Embracing Failure, Capitalizing on Crisis & Building Resilience (Minnie Ingersoll)
Nick Moran Angel List

Minnie Ingersoll of TenOneTen Ventures joins Nick to discuss Embracing Failure, Capitalizing on Crisis & Building Resilience. In this episode, we cover:

  • Backstory/path to Venture
  • You co-founded Shift, which you scaled to $100M. What was the most unexpected/surprising aspect of leading and scaling a venture-backed startup?
  • Where did you spend most of your time (and mindshare) at A vs. B vs. C/D?
  • What was it like building a venture-backed startup as a woman?
  • Tell us a bit about the thesis at TenOneTen.
  • I was recently speaking with M.G. Siegler about the societal impacts of tech… all of which are not positive.  I know you’re a mother, so this probably takes on new meaning for you… but how to you consider social and societal responsibility in your role as a tech investor?
  • You’ve experienced early struggles in your life that have informed your approach as an investor and founder.  Can you talk about what you’ve been through, the impact and the perspective you’ve gained from it?
  • Is failure acceptable?  As an investor failure makes me really uneasy and I’ve not had to deal with this yet with a portfolio company but I’m sure it’s just a matter of time.  What’s your stance on failure and how to speak with founders about it?
  • You’ve spoken about the importance of founder resilience… Is it something you select for in investments or something you work on with existing portco founders… trying to help them build resilience?
  • How are the challenges for women similar different as a founder vs. investor?
  • Favorite Podcast guest?
  • Best/favorite low profile investor in LA?

Guest Links:

Key Takeaways:

  1. For Minnie, the most unexpected aspect of scaling a venture-backed startup was the realization that it’s all about people. Not only hiring, but managing, communicating and building a culture, among other elements. 
  2. Shift’s Series A was primarily about experimentation, with regards to their pricing model as well as partnerships. During the Series B timeframe, they focused more on measurement and instrumentation of the business.
  3. One of the difficulties Minnie experienced building a venture-backed startup as a woman was carving out time for maternity leave and dealing with the judgment that came as a result of her wanting to go back to work immediately. 
  4. Minnie believes her social and societal responsibility as a tech investor is to pursue what will ultimately serve the people, rather than just thinking of maximizing shareholder value or returns for LPs.
  5. Through her struggles, Minnie realized the importance of asking for help and allowing herself to receive help on what was challenging her. By having honest discussions about the difficulties she was experiencing and pushing through the tough things, it made everything else seem easier. 
  6. When times are tough, Minnie uses the phrase “chop wood, carry water,” which she defines as showing up, telling the truth and hoping for the best, even if you don’t enjoy what you’re doing. 
  7. With regards to founders, failure has to be acceptable and talked about. As a VC, allowing the topic of failure to be accessible, encourages founders to feel comfortable communicating what’s really going on ahead of time.
  8. One of the things Minnie looks for when evaluating founders is distance traveled. She appreciates hearing a founder’s personal stories about what they’ve done in their life and what they’ve accomplished, because it makes a huge impact on a lot of their characteristics, including their level of resilience
  9. One place Minnie often see’s resilience come from is founder market fit; when a founder has dedicated their life to the problem their startup is solving and they truly believe this is what they are meant to be doing, they will continue to do it with fierce resilience. 
  10. A key characteristic that successful founders possess is the ability to learn fast, because if you surround them with the right mentors, keep asking the right questions and continue to support them, the possibilities will be endless within shorter timeframes.

Transcribed with AI:

welcome to the podcast about investing in startups, where existing investors can learn how to get the best deal possible. And those that have never before invested in startups can learn the keys to success from the venture experts. Your host is Nick Moran, and this is the full ratchet

Welcome back to TFR today Minnie Ingersoll joins us Mini is a partner at 10 110 Ventures which invests in early stage startups that applied data and technology to disrupt existing industries. In today’s interview, we discuss her beginnings as a product manager at Google the story behind co founding shift and how she scaled her idea to a series D company overcoming challenges as a woman in venture the social and societal responsibilities as an investor. And finally we discuss embracing failure, capitalizing on crisis and building resilience. Here’s the interview with the great and very resilient mini Ingersoll of 10 110 Ventures.

Mini Ingersoll joins us today from LA Minnie is a partner at 10 110 Ventures an LA based early stage venture firm with investments in build ops Stradic, health tensor, emotive particle and wish among others. Many is also the host of the LA venture podcast and co founder of shift an online marketplace for used cars that she scaled to 100 million prior to 10 110. Many started her career as an early product manager at Google, where she founded the access team, a cross functional product policy and engineering team that spun off Google Fiber. Many Welcome to the program.

Thanks, Nick. Glad to be here.

So tell us your story. In your words, I you know, I do these quick summaries, but I’d love to hear kind of, you know, you talk about your own path to where you’re at. Now, I know

you gave a pretty good summary. So so there you go. That’s it. No, I grew up in LA and then I grew up in LA and then I went to Stanford and study computer science in the 90s. And I think that actually really got me on this trajectory of being in Silicon Valley. If nothing else I was I was there for over two decades. And the first company I joined as a product manager was LivePerson. We IP owed in 2000. Then I went to business school. And then after business school, I was looking for a small startup to join, I really wanted to get back into tech and innovation in Silicon Valley. And Google was the largest place I was looking at, and it was 500 people. And I was like, Oh, it’s so big.

But that was only crazy. Yeah.

Yeah. Yeah. And it was I mean, looking back, I just someone sent me a picture of our APM class, which was the Associate Product Manager class. And I mean, it’s just, it’s a, it’s an amazing team of people that Google assembled early. And I just felt very lucky to get to, you know, rub elbows a bit.

Awesome. So tell us more about that. So you joined when there were 500 folks at Google? And, you know, how big was it when you left? And what was that ride? Like?

Yeah, I mean, it was, it was fantastic. Obviously, I stayed for when I left, I’d been there a third of my life, I’d been there 12 years, I was 36. So as so obviously, I thought it was great and worth worth staying for. You know, it was when when I started, we were doubling in size every six months. So there was just a lot of people trying to figure out how to do that and do that well. And I learned a lot about the amount of time you have to spend on hiring. And kind of you know, me, I learned many lessons from Google. But it’s fairly similar to VC in some ways. So there’s something about Google needed to remain innovative. And yet every innovative idea that Google wanted to invest in had to be something that was a $5 billion ideas. So Sergey used to say like, I don’t want to hear your idea if it’s not a $5 billion idea. Because you know, once you’re at the scale that Google got to be, you know, what is your model for still being able to reinvent yourself? And how do you remain innovative when you’re when I left, it was probably 60,000 People give or take, wow. And you know, how do you avoid bureaucracy? And how do you, you know, how do you kind of keep that spirit going? And I think that one of the lessons I learned was actually, from Patrick Pichette, who was the CFO at the time. And he liked to say, I mean, he was a, he’s a wonderful person. He’s now a VC. He likes to say he tried to find a way to get to yes. Because in a company of 60,000, people, it’s easy to find a way to get to know and I think I’ve taken some of that with me into into the VC world. When I look at opportunities. And I, you know, it’s always easy to find reasons why things couldn’t work. And I try to think about how do you how do you listen to the people who are on the front lines, who are like really deep in their industry and understand what they’re saying and then find a way to empower them? So, I mean, Google had all sorts of crazy stories, but obviously I drink the Kool Aid I mean, I drink it by the gallons and then left in 2013. So sort of, I think, haven’t gone through. I mean, I haven’t gone through the past five or six years that have been, I think, more challenging, at least from the outside.

For Love it, love it. It harkens back to an interview I did with Charles Hudson a number of years ago, but he had gotten to a place in his evolution as an investor, where, you know, for the first however many years, it was all about finding a reason to say no. And he talked about how he’s evolved to a place where he now looks for, you know, these billion dollar plus ideas, but he looks for a really compelling reason to say yes, which is really interesting. But, you know, I’d love your take, you know, experiences in that kind of growth. I mean, us as a small venture fund, we’ve done a lot of hiring, because we bring on interns on a frequent basis. So I think we’ve, we’ve done over 20, maybe 30, at this point. And so a huge part of that is the selection, right? You got to get the selection, right, it has to be a fit on both sides. But we’ve also realized, you know, challenges and maybe failures on our part in onboarding, and getting people sort of ramped up, you know, understanding the culture and the processes and the systems. You know, what, what were your takeaways? Or what were your thoughts on sort of onboarding and getting people into the program at Google and excelling?

Lots of different thoughts on it. So I kind of think it’s a whole, I think that all of what you talked about the both the selection, as well as the onboarding and everything else is a continuum of, you need to spend a lot of time upfront on identifying what does success in this role look like? 18 months from now, what does success look like for the first three months? And actually doing that, before you even have kicked off? The hiring process? will then I think, you know, helps lead to how do you easily onboard someone? Well, if you really identified what you’re looking for upfront, and where those milestones might be, I call it 18 months, because I think it’s hard to plan, especially if you’re at any place that you know, touches startup life, then planning beyond that starts to be hard to do. But But yeah, I always think like sort of the secret of of hiring Well, I think is spending all the time upfront to plan and understand what you’re hiring for. Love

it. So can you talk about your transition out of Google? And did you immediately go in and found shift or was there you know, time in between,

there wasn’t time between I think I’m a little guilty, but not that guilty, because I spent 12 years at Google and worked hard there. But a shift was a little bit incubated while I was on maternity leave. Sure. There’s a little bit of that that may have happened. But, you know, like I was saying about, like finding this way of still being innovative while you’re at a 60,000 person company. I started working on shift and became completely hooked on the piece of work at a startup and just like everything around startup life. And so the story there is I was a fairly opportunistic angel investor, which is that I wasn’t extremely strategic about it, but tended to invest when I had amazing friends who were starting companies. As I said, I’d sort of been in Silicon Valley for a long time. And so George, who’s my co founder at shift was one of those people. And I write wrote him an angel check when it was just George and the PowerPoint. Then when I went on maternity leave, he’d been talking to me about shifting his ideas for a while and he said, Why don’t you help me get it started? Getting that going involves me showing up at his apartment every day at 10am. I have new babies. So I’d been awake for like four hours at that point five hours, and just helping him. I mean, yeah. So what

were you thinking? That’s, that’s not, I’m amazed?

Well, you know, that was I mean, I get crazier and crazier, because I had more kids and more kids. But showing up at George’s house every day at 10am, and just getting shipped going. And I just got hooked on the fact that I could like sketch out a wireframe on a piece of paper. And then we had developers in Thailand who could get it going, and I’d have a new website in four weeks. And you know, that sort of thing wasn’t possible at Google anymore. And then we start to have users and they got passionate, and we started, you know, actually having things we you know, had to take care of, because we had users and things were working and people were appreciating the service. So, you know, that was, that was how we started was, you know, with endorses living room. Wow,

amazing. And so tell us a little bit about the experience, you know, scaling shift to 100 million. And what did you find to be maybe the most unexpected or surprising aspect of, of leading such a fast growing tech company?

The thing that I the good thing that I found surprising, there are many things that were surprising. But one of the great things was, I feel like I grew a ton as a person, by virtue of all the people aspects, and I think that scaling a company I had underestimated how much it was about people. And it’s not just about hiring people, but managing people building a culture, communicating with people figuring out how to give feedback. Well Well, how to avoid burnout, all of those things helped me sort of grow myself as a communicator. And it’s one of the things, maybe I think you get a little less of to some degree in venture, because you’re not really figuring out, you know, you don’t have as big a team to manage. And it’s not just about managing a team that just learning about your own personal communication styles. So all of that was really useful for me, I think it made me a better person.

Amazing. And we do talk a lot on this program about different requirements to raise an A, or raise a, b. And a lot of it is from the investor perspective. But I’d be curious to hear, you know, where do you spend most of your time your effort your mind share? And how did that change as you progress from series A to Series B to, you know, C and beyond?

Yeah, well, if being a good communicator, and helping people find the right roles and set up the right organization structure was was kind of the constant through all of those, sort of the oversimplification, I would say is that, sort of in our seed and series A rounds, there was a lot of experimentation. So we didn’t really know, we have a lot of things that didn’t work. So we were buying and selling used cars in a peer to peer manner. So we were, we weren’t really buying them, we’re facilitating a peer to peer sale. At first, we had sort of a consignment model, if you will, we were telling people, we will sell your car, we will guarantee a minimum price. And then anything we make above that we will split 5050 with you. And some of that was because actually pricing a car was really hard. And so we experimented a lot with our pricing model, and you know, sort of even like our partnerships, so we had a partnership with Tesla, but that that led us to having very high end cars, we then had a partnership with hertz, which were more of the standard Corollas. So all of that stuff. And I actually wish we’d done one of my lessons, I wish we’d done more experimentation earlier. And so what happens is, once you’ve raised your series A or Series B, or Series C, you’re just a bigger organization. And it’s harder to experiment. And you have investors who are expecting certain pace of growth, and you’re just not as nimble. And so you know, if our Series A was a lot about experimenting, I’d say the series B sort of timeframe was a lot about measurement and instrumentation of our business. So figuring out not just measuring everything, but what should be measured. And then what should we be looking at at a daily, weekly, monthly quarterly basis. And being fairly quantitative people, I think of anything to some degree, we ended up looking at things on a daily or weekly basis that really should have been more like monthly or quarterly basis. Because they’re things you just don’t want to, you know, you don’t want to worry about day to day, you kind of want the bigger picture. But setting up the right sort of cadences for review, and then sort of the instrumentation so that we knew what the levers were that we could pull to affect those metrics. That happened later, once we were more set on what the business model actually was. You know, maybe throughout this, we were very software engineering led business. But one of my sort of philosophies was I don’t want to build things in software, if I can do them manually, because I think the engineer time is always the finite resource building any business. And for us, you know, if we dedicate engineering time to some process, before we really know what the process is, then you potentially are wasting the engineers time. So, you know, as we scaled, it was really taking everything that we were doing with let’s say, we had a dispatcher, who was a person who had figured out, you know, who should go where, you know, we started by building like tech enabled tools for that person, and then we, you know, progressed into really software driven business. So really getting the, the manual pieces out of that. And that’s a simplification of some of our journey. No,

I like it. But it’s, I mean, it’s a progression toward automating things, but you don’t want to automate things before, you know if they’re gonna work. Right. Yeah. Interesting. So did it stay a p2p marketplace? Or how did it change?

It changed in different ways. One piece was most of our engineering was actually built on pricing cars. And I actually think there’s a fascinating you could build a whole company that’s just on pricing cars, Kelley Blue Book, for instance. I mean, it’s got a book in its name, you know, if your car should be worth $12,000, but the person your next door neighbor is selling a similar blue Corolla for $11,000, then guess what? Your car’s not worth $12,000. So, so there’s a lot that you need to know in terms of data. So you need to have really massive data sets in terms of you know, not just what’s up on Craigslist, but you know, how are cars selling at auction, that sort of thing. And so increasingly, we got comfortable just buying cars outright, as opposed to sort of the more consignment contingency sort of model.

Got it and do invest now in in March. Could places? And if so, do you coach and guide founders and or suggest, you know, alternatives to just setting up maybe a p2p marketplace? From the start? I know that it’s highly dependent on category and type of business. But I’m kind of curious how that’s impacted you as an investor?

Yeah, yes, I do still look at marketplaces. And I think I probably get more sort of top of the funnel marketplace deal flow, because because I built a marketplace. And in fact, I get tons of used car stuff. And sometimes I’m like, Oh, my gosh, see any more scars? I just saw marketplace for motorcycles. It was very interesting. Oh, cool. Yeah, I mean, I think it is very, it depends what you might coach for a marketplace, depending on the business that someone is in. So one of the things we talked a lot about it shift was how centralized versus decentralized you want your marketplace to be. And I think with a very centralized marketplace, where you’re controlling the customer experience, you’re controlling the pricing. So in our case, the sellers didn’t choose their price, we would price cars for the seller. But you know, the downside of that is it’s a much more intensive business to build if you’re doing all of that yourself and a centralized marketplace. So you know, I think a lot about that, I think about sort of SAS versus marketplace. And, you know, is the business that someone is building? Are they really building something that resembles more of a, you know, a SAS, you know, small business sale, or the building marketplace, and which one is better, you know, I think you can make the argument either way on which one is better, because, you know, there’s something about the SAS that has a lot of lock in, if you’re the people who are using your marketplace, your supply usually gets locked in with some sort of SaaS solution, in addition to, you know, playing participating in in the marketplace. So, yeah, so I guess it depends, but, you know, big picture. I think marketplaces are interesting. And I haven’t, you know, written a blog post or so I’m not extremely articulate on this, but sort of the way that they are changing our economy, broadly, is a fairly fascinating sort of macro trend that I don’t think is going to stop, you know,

you bring up an interesting point. So I’m engaged with two different startups right now and have been for many months that are building marketplaces, so to speak. And one is in the kind of the packaging procurement space, the others in the inventory, closeout space, but as we got to know each other and explore the business further and further, I realized that or collectively, as a group, we kind of with each of these entrepreneurs, we realize that it’s actually more of a SaaS business. And it’s more of a workflow tool at the outset, than it is a marketplace. You know, I think both of these entrepreneurs, see, you know, there’s two sides, there’s supply and demand and connecting buyers and sellers. But these industries are just so archaic, and so slow moving, that, you know, things are done on email, and things are done on spreadsheets, and just actually bringing some sanity to the workflow and insight and vision on the process itself. Instead of having everything scattered in a million places, is kind of step one. And then the marketplace is almost like a feature, or maybe not a feature, but you know, version two, or version three of the business in the future. Do you ever do you ever see anything like that?

Yeah, and I think I mean, the only challenge there is that if it were only one side, then you could just figured out that one side and and I think it builds a lot of lock in, if you’re providing the SAS tools there, the problem is, or the both what provides sort of the network effect is then you also have to figure out the supply side of things. You know, one of the nice things for shift was, we were able to sort of have jerry rigged, what’s the right word there, but hack our way into having the demand as well, which is once we had the supply, we could fulfill that supply as and sell a car, even if we didn’t have the demand. So even if no one was coming to shift.com, which was true in the early days, we could still if we had a good car, at a good price, we could sell that car back on Craigslist, we could sell it on auto trader cars.com, CarGurus, etc. So there were a variety of other listing site. So the challenge there is having just a great SAS solution, you also need to figure out how you’re going to get the demand in a way that you don’t end up selling like a SAS subscription without driving any customers to you know, if they’re if they’re actually looking at this partly as value as like lead gen, then you need to also be doing the lead gen piece of it. Right.

Right. Yeah, I think both of these instances, the demand sizes kind of captive so they have their their standard set of buyers, although, you know, could expand far beyond that. So maybe transition a little bit what what was your experience, you know, building a venture backed company, as a woman, I know that this, this topic comes up a lot. And this is an unfriendly industry in a lot of ways across multiple dimensions, but curious to hear your experience and if you feel like there were challenges that were unique because you’re a woman. Sure.

Well, I mean challenges that were unique. I was pregnant for five years. So I mean, I wasn’t actually pregnant for five years. But approximately, I ended up having three kids under the age of four. Wow, while doing this, which was, you know, that was just sort of silly under any circumstances. A woman? Well, you know, it’s, I had a wonderful, I have a wonderful partner who is a stay at home husband. And so definitely, I feel like I get to work on Monday and on Monday, I love this. That’s awesome. So but I mean, definitely, like, men don’t get pregnant at work. So there’s that. But you know, to some degree, so I have thoughts on all that. I mean, one was, not only was I pregnant, but I was also crafting maternity leaves and thinking about like, what did our maternity leave? And what example am I going to set and that was actually pretty hard. And I ended up deciding for myself, like, the maternity leave that I would have most liked to see everywhere and for myself was sort of like a noncommittal maternity leave, like, I just wasn’t sure with any of my babies, whether I wanted to go right back to work or wanted to have four months off, I didn’t know whether I wanted people to keep me in the loop, or just stop emailing me all together. And so I ended up sort of making materials, but it was like, you don’t need to tell us what you’re going to do, like, go have a baby, and then, you know, call us when you’re ready to come back to work kind of thing.

It’s not logical, yeah, much more emotional. It was

emotional, and you don’t know ahead of time. And, you know, I also it was actually kind of hard, I felt, I felt really bad. And Marissa Mayer at Yahoo was, I mean, she is a friend of mine, she went to Stanford with me, I watched her get really judged when she went right back to work at Yahoo. And I really wanted to go right back to work with my second child. And I felt very judged for wanting to go back to work. So that was, you know, I just the people were like, look, look at the example you’re setting you’re making people feel like they should get back to work. But at the same time, like I have this great picture of me, like nursing in the boardroom. And Emily Melton from DFJ was our series, A investor, and she had two babies or two children of her own. And so she’s like burping the baby in the boardroom anyway. So some of that was great, because I had a very supportive team there. But, you know, the other piece of it was, you know, a sort of, I fundamentally think a lot of people sort of have the same job as and we all send emails and go to meetings and like, write PowerPoint presentations or something. But pitching is one thing. That’s, you know, we do it as VCs, and I had to do it as a founder, obviously, I spent five years sort of pitching and asking raising money. And it’s not something that particularly plays to my strengths. And so you know, I don’t know that that’s exactly because I’m a woman, but I don’t feel like my strength is to come in with confidence and sell you on my five year financials. Because if you like poke a hole, and like want to scrape into like my three year projection, and like, what does it say about 2024? I’ll be like, I don’t know, I just made it. Confidence in that, like, you’re I just like, I copied and pasted, like the cells or something like d two D three, D three, right? Yes. Yeah. Thanks. Exactly, exactly. So pitching I think is one of those things that I have given some thought to both raising money from venture, you know, walking into Sand Hill Road, any of the offices on Sand Hill Road, partly as a woman, but partly just as someone who’s knows they’re not great at pitching or thinks they’re not great at pitching and also doesn’t like pitching. And, you know, you’re, you’re asking for money, which felt to me a little like asking for a favor, you’re asking for something. And it wasn’t dissimilar actually, to how decisions got made at Google, which is, you go to Google product strategy, this is in the early days, you went to GPS, and you pitch your product and ask for more engineering resources. And so, you know, finding ways of making sure that that process doesn’t, you know, exclude people who say are not quick on their feet are, you know, are not speaking with great confidence. And, you know, if you sort of look at my journey, I went to Harvard Business School and you know, I’m extremely white, and, you know, in the Stanford like, I wear hoodies, and went to Stanford, you know, all of that stuff. And still walking into, you know, sequoias offices. I felt intimidated. And so, you know, I give some thought to how to make sure that we don’t, you know, get people who are actually starting the conversation from a position of like feeling intimidated by just sort of the role that they’re in. And the nice thing about being a VC is actually, you know, the, well I just didn’t, generally less intimidated by other VCs now that I am one.

Yeah. So in light of the fact that you’re a mother, you know, I was I was recently speaking to mg Siegler on the show about societal impacts of tech, all of which are not positive, of course. So I’m sure with you being a mother, you know, this probably takes on some meaning for you. You know, how do you consider maybe social societal responsibilities in your role as As a tech investor,

yeah, that’s a big question. And and I don’t think it’s really, I don’t know that it’s changed that much for me with with parenthood, but it has, I think it has has become more just forefront of what I think about and you know, I sometimes my weakness and and strength is that I’m super entrepreneurial and ready to go, like, jump in with both feet and to end run up a mountain and, you know, sort of get into the race or something. And I worry sometimes that I don’t think enough about like, what race Am I running? Or what am I competing on? Sure. And I think that’s, that is also what I think about with with VC and with entrepreneurship, and with tech, is making sure that we really know what are we trying to win here. And, you know, I thought about this at Google, which is, you know, I don’t know that I’m really a capitalist, which maybe makes me sort of, maybe I’m in the wrong role here. But I don’t really believe I, I can’t quite wrap my head around how Google or Facebook or any of these, you know, really important companies, they can’t be all about maximizing shareholder value. Like that can’t be our end goal that can’t be like, that doesn’t that’s not motivating. To me, that doesn’t seem right. And I think the thing that I think the most about is sort of the fact that we don’t have a society that is serving everyone and the sort of the bottom half and the top half of society are getting further apart. And we can’t just continue on that trajectory. And I think, obviously, I drink the Kool Aid at Google, as I remember, we were trying to launch something during the Arab Spring, actually. And we went to Patrick Pichette and said, Look, this isn’t gonna make any money, but it’s gonna cost a lot of, it’s gonna cost a lot of money, but not make any money. And he said, I want you to think about Google as half public company and half movement. And I liked that, because he was our CFO, and it stuck with me, which is, we can’t just be thinking about ourselves anymore as as maximizing shareholder value. And yet, you know, the thing I hear a lot from VCs is, well, you know, I’m making this investment in XYZ. And it might not be something that is exactly a improving society sort of investment. But I’m making this investment because I have LPs, and I’m a fiduciary, and I have fiduciary duty. And my LPs are, you know, endowments and children’s hospitals? And so I’m making them money. But I don’t, I don’t really buy into that. And I haven’t been a VC long enough, but I’m not I don’t everyone says it. And yet, I don’t understand. It doesn’t make sense to me exactly that, like, I feel like it’s just passing the buck kind of thing to say like, oh, I can invest in jewel even though, you know, it’s helping children on nicotine. And so and so I think really making sure that we’re not just sort of passing the is it passing the buck? Is that the expression, whatever that is? You know, that’s, that’s not what I want to be doing. And I think everyone needs to be. I mean, one of my lessons of life is you have to think for yourself about, you know, should I be doing this, and I think just maximizing shareholder value, or maximize returns for LPS is not the game that I want to be in? Well,

it’s not super popular to say, right, but I kind of view, the shareholder returns or LP returns as an outcome, right, of doing the right things, and pursuing the right goals. Right. And if if you get too hung up on just the metrics all the time, I feel like it narrows your view, and it makes you a more of a short term thinker. And you’re gonna miss the big, more important things. So, you know, the comment you got from the CFO at Google about, you know, the movement? I mean, that’s what motivates people and gets them to think I think, you know, think big. And think about the right questions, instead of just optimizing everything for quarterlies. Right? Yeah.

And actually, I mean, I, that is also how I justify it, essentially, which is, when I sat at Google, like one of the number one lessons, which sounds cliched, but is Google asked over and over what’s best for the user. And that was, you know, it wasn’t in 2002, when I joined as a product manager, Product Manager meant was a newer discipline. And it wasn’t as ingrained that that is what you always should be asking as a product manager. But I think that that’s kind of in line with what you said, which is building a company like Google becomes a, you know, trillion dollar company, in part because it is always thinking long term about what is best for the user. And if you’re, you know, you know, famously, if you’re, you know, cluttering the Google homepage with ads, that’s can be maximizing sort of the the short term with losing sight of the long term. So yeah, so I’m, I’m agreeing with you.

Yeah, it’s kind of funny, but I I got some laughs from team members recently, when we were talking about kind of what to look for and founders and what to look for in startups and I referred to revenue and some traction metrics as lagging indicators. And I got kind of an uproarious laugh, but I see them as very much lagging indicators of you know, the true traction and kind of the thought process and the insights and you know, what’s being built to create those metrics and the traction, but nevertheless, I don’t want to go down too far of a rabbit hole. So, you know, many I know that you’ve experienced struggles throughout your life. And that’s informed your approach as an investor as a founder. Can you talk about maybe some of the struggles that you’ve been through and, and maybe the impact and perspective you gain from them?

Gosh, I can talk for hours. Great therapy session we like. I mean, yeah, like today’s struggles. But you know, I talk, I talk publicly about dropping out of Stanford, I actually dropped out of Harvard business school too. But I just, I think it has informed who I am a great amount. And yet, you know, my mother likes to say I look good on paper, which is to say, I dropped out of Stanford, and I just, I was really struggling, I was horribly depressed. And some of that came because I was having eating disorders. But I like I had lost 30 pounds, I gained 60 pounds, and people didn’t recognize me. And I didn’t want anyone to see me, I didn’t want to go to class. And I felt horrible. And I really got horribly depressed and dropped out of school. And thought, Well, I’m not going to graduate from college, like, just didn’t, and I didn’t want to go outside ever. And anyways, I got nursed back to health by my mother, and then went back to Stanford and graduated on time. And, you know, no, one’s none the wiser. none the wiser, like, you know, I still, you know, have, you know, Stanford graduate in four years. Great. And I think, you know, I’ve had a variety of experiences like that, where, you know, it’s not on the same magnitude, but at shift, like, we were up into the right, like a, you know, crazy roller coaster, right, like up into the right and upside down at times. And at one point, we had to do a round of layoffs. And that was causing me a huge amount of stress. And I and it wasn’t really, it was the layoffs, but it was the business wasn’t working. And there was a piece of it that really needed to change that involves having we had hired some of the wrong people. You know, my lesson from I’ll take both of those kind of have the same lesson for me, which, which is, I got through it all, partly in huge part from the help of others. But in order to have the help of others, I had to be able to sort of ask for help and admit what was going on. So I think that’s one of my big lessons is, I think I’ve gotten much better about, I’ve always been fairly transparent, but being able to ask for help, and then actually receive help on whatever is challenging me. And, you know, in the case of shift, once we really started having honest discussions with ourselves and with our board, you know, to some degree, the board, like I remember, some of our early discussions were, you know, I was really hesitant to even admit what was going on. And to some degree, our board who were VCs who’d seen this before, we’re like, yeah, this happens, like, you’re gonna have to march in there and fire people. And you’re gonna have to do it, you’re not gonna have to like it. But I think for me, sort of the series of doing things that I haven’t wanted to do and have been really hard, to some degree has made other things seem easier.

I bet. I bet. I mean, were there times where you didn’t think you were gonna go back to school? I mean, what motivated you to go back and finish Stanford in four years? Or go back to HBS?

I think, you know, for Stanford, it was, I got back on the right path. I mean, for for me at Stanford, I got on antidepressants, which actually helped me see the world not as so blacked, I was really seeing everything is so black. But it was, you know, I think some of it is a little bit of lesson of like, there are many times where one expression I like is chopping wood carry water, which, you know, I take to mean sort of a you have to show up, tell the truth, hope for the best, but you don’t have to enjoy it. There have been many times now I’m extremely happy. Now I have a very rich life. And you know, very glad that I did kind of keep going. But there were times I was like, I don’t want to keep going with this. Like I want to quit whatever it was, I want to quit Stanford, there weren’t many times at Google, where people would ask me, like, Isn’t Google the greatest place to work? You know, in the early days of Google, people said that all the time, like you have a free food and you have a massage and all of that. And I was like, Yeah, but I’m still stressed out. Like, there were times my product was three months behind schedule, and my tech lead, and I didn’t agree and my manager was upset. And like I was stressed out and we were like, It’s great, isn’t it? I be like, no, like, and yet. No, it wasn’t great at that moment. And yet, I’m really glad I stayed through it, obviously, like Google is a great place. But you know, I think there are many times in life where you have to do stressful things, and you don’t have to enjoy it. But you have to show up and you have to tell the truth. And you have to just sort of hope for the best. And so I tried to remember that which is yeah, there’s hard times and yet, often there are good times that follow. So to remind myself of that. It’s

not like Pollyanna about everything. I mean, it’s it’s ups and downs. I mean you highlighted firing people and how I mean that that’s like, my worst. That’s like my worst place when I have to go through that and so I kind of am avoidant about that in a lot of ways, which I should probably get better at. But yeah, it’s it’s not all sunshine and rainbows.

firing people was really hard actually I won’t say it wasn’t, but it allowed us this was I think we fired people. Gosh was it before Series B I mean, it was a while ago. But it allowed us then to get a new lease on life. And our business model got much better, essentially, we, we needed to start selling more complicated products, including financing and warranties, and that actually allowed our business to be much more profitable. And so you know, we had to do that. And then things became better. So there’s a bit of just getting through the tough times that I’m a big believer in.

Sure. What’s your stance on? I don’t know, accepting failure, I guess, you know, we hear these kind of a lot of stupid cliches out there, like, you know, move fast and break things and fail fast and win win at all costs. And you know, there’s, there’s different viewpoints on this. And I think the Greater Bay Area’s, except in probably LA is accepting of a certain degree of failure with founders. But it makes me very uncomfortable, right? We have not had a portfolio company that’s failed. And I’m sure it’s just a matter of time in this industry. But what’s what’s your stance on failure? And, you know, how do you speak with founders and work through that with founders?

Yeah, it’s tough. I mean, luckily, I haven’t, like you, I haven’t been an investor long enough to go through a lot of failure. But I definitely have seen a lot of my friends starting companies and different things. And a lot of it is dependent on the founder. So you can’t really tell someone that they should give up, nor can you tell them to keep going. Right. And so I’ve, I’ve had friends and founders who have decided to take out a loan on their house and go into some serious personal debt, and that has scared me on their behalf. And when I might have said, it’s okay to fail, but you know, if they’ve still got it in them, and they believe, then by all means, like, you know, it’s only so much you can do as the VC you’re there to sort of support them on their journey, I think. And, you know, to go way back to like, what have I learned sort of as growing shift, like, the communication is everything. And so, for me, a lot of it is just learning when to ask the right questions to understand, you know, where someone is on their journey, what they want to do. And, you know, I think failure has to be acceptable and out there. Because if you as like a VC don’t have a stance that failure is to some degree acceptable, then there’s no chance that that founders will feel comfortable telling you what’s really going on. And what you really want is to know ahead of time, so that you can work out something like like shift went through a rift, as I said, probably before our series B. And because we didn’t keep that to ourselves, we actually were able to work out ahead of time, a path that allowed us to do a riff to get back on a good track, to then build the business, but we could have actually sort of kept that more to ourselves and not, you know, sort of burying our heads in the sand more. And so I think, you know, the openness to failure allows people to survive sometimes, if you will. And you know, one of the things I look for when I’m evaluating founder, although this is a tough thing, but it’s something I appreciate in not just in founders, but in people is is distance traveled, you know, to some degree, well, you went to Stanford great. And then you went to Harvard, like, Woohoo, but what is the distance that you’ve traveled, like, you know, your first generation to go to college as a way more, you know, it’s interesting for me to hear how people have, you know, gone through life. And so I do look for people’s personal stories of what they’ve done in their life and what they’ve accomplished.

Well in that has huge impact on a lot of the characteristics of these founders, including, like their level of resilience, right, and tenacity. Is that something you look for in the investments you’re selecting? Is that something that you coach and work on with portfolio company founders, you know, trying to help them build more resilience?

Yeah, I think, well, resilience. You know, it’s interesting, I don’t, it’s hard to say, Where does resilience come from? Right, right. But you know, one place I think resilience comes from, which I think a lot of VCs do look for is founder market fit, right. And so one of the founders that we recently invested in, he’s got his PhD in bioinformatics and rare genetic diseases, and he is building a company to, to help diagnose and treat rare genetic diseases. And if he weren’t building this company to treat and to diagnose and treat rare genetic diseases, he just be building a company to try to diagnose and treat rare genetic diseases because that is, I mean, that is what he has spent his whole life doing that is what he cares about. That is what his PhD is in. It’s not like he’s gonna do this and then do HR tech, right? Like it’s, and so and so some of the resilience I think comes from, well, this is what I meant to be doing and there For I’m going to continue doing it. And you know, I don’t know exactly how I coach people on it so much as you know, I’m pretty open about, I’m pretty open about everything, but I’m pretty open about, you know, different things that I’ve gone through. And I hope that then founders feel comfortable talking to me about what’s really going on with them, and then we can help them work through those challenges.

Yeah, I love the point about sort of the the founder market fit and finding that, you know, authentic thing people should be working on. And I see a lot of founders that, you know, they built one business in one area, and then they’re building another business. And it sounds almost like a carbon copy of the first one, but it is a little different. And it’s just nice seeing that true authenticity, when you find, you know, a founder that’s got revision, and is working on what they’re supposed to be working on.

I think there’s gradations of that, which I think is interesting. Like, I’ll meet someone who says, Look, I have children at this day here, I speak with a woman who runs a daycare and I see that she doesn’t really have a good, you know, system for, you know, attracting new parents or a CRM or a, you know, she doesn’t have any software that’s really serving her needs. And I feel really compelled to build this, versus I talked to someone who has been running 10 daycares for the past 20 years, and she on the side, has been building up her own software solution for her 10 businesses or for her business. And like, there’s just different levels of passion and fit that you can hear when you get to know founders. So I think that helps people sort of continue on their journey.

Agreed. And, you know, sometimes I read about all these comments that founders or sorry, investors rather make about timing, and like, failed investments. So it was a timing issue, like the market wasn’t there yet, or the technology wasn’t there yet. And it was just a timing issue. But often, when I’m thinking about timing, I’m actually thinking about people timing and founder timing. Like, I’ll have a lot of young founders coming to me with an idea and they’re working on it, and they’re hustling, and they’re tenacious about it. But they’re not really ready to build the right business. And they’re not focused in the right direction. They just don’t have maybe the experience yet, or the clarity of thought, or the authenticity to kind of go after what they should be going after. And so I don’t know, there’s there’s a lot of folks that have been mentoring or advising for years that I feel like they’re going to do something great and transformational, but maybe they’re not quite there yet. And so it’s more related to the founder timing, and where they’re at, in kind of their trajectory, as opposed to, you know, just talking about, you know, a product market timing or tech timing.

That’s interesting. I hadn’t really heard that. But I like it, it sort of goes with this distance traveled aspects, which is, to some degree, what you need, if you’re going to be a founder, who really scales is that ability to learn fast, you know, hopefully, you meet one of these founders who’s not there yet, but you surround them with the right mentors, and you keep, you know, asking the right questions and helping them. And in six months, they are ready. And so staying close to those founders because, you know, you look at the Mark Zuckerberg of the world, which I mean, okay, there aren’t, there isn’t a world. That’s a silly statement about like, you know, to be a good person running a 50 person organization, a 500 to 5000 person organization is very different. And so you need people who are extremely fast learners. And so, you know, hopefully, you can meet young founders who get up that learning curve quickly. Right. Right.

So you know, you host a podcast, of course,

I love I love it. Yeah,

probably a lot better at this than I am. But who’s been one of your favorite guests. Oh,

they’re all my favorites. You know, favorite today, of course. You know, for me, my I host a podcast called The LA venture where I interview all the top VCs in LA. And you know, a lot of it is like I started it because I wanted, I wanted to be a resource to entrepreneurs, so they could listen to the VCs and sort of feel like you get to know someone a little bit better when they’re in your, you know, in your head. Yeah. And it’s like a little less intimidating to approach someone when you sort of heard them chatter with me on a podcast or that was my theory. But actually, it turns out that I am actually my own audience for my own podcast and that I just love learning from all my guests. So Kieran nortman who’s essentially really one of the people leading the charge and upfront, which is one of the larger funds in LA, Dana settle who is founder of gray craft. She’s amazing. Mark Mullen, I’ll just give like a couple of sites. One more shout out like Mark Mullen is a VC who he came from banking. He’s incredible. When I first moved to LA, I found him kind of intimidating or sort of gruff. And then I had him on my podcast and asked him like Mark I find you kind of intimidating. He’s like, Oh, I don’t want to be and he was like such a warm teddy bear. Maybe not a teddy bear. That’s going too far but like, but you know, for me, it’s been a great chance to get to know the other investors in LA and I think the LA’s just an exciting ecosystem to get to know so they’ve been sort of cheating by having a podcast where I get to do that.

Oh, I hear you is like one of The best networking hacks out there for sure. It’s been huge for us. But, you know, maybe you’ve already named them but who is maybe the best or one of your favorite investors in LA? That is under the radar or, or low profile?

Right? Well, I won’t name my partner, I have a partner who’s very low profile. But you know, I do kind of like them all. I recently I’ve been John Waller, I guess, John Waller is someone who has been sending me lots of great deals lately. He’s very under the radar, but he’s at Okapi ventures. Before that. He was a founder of resume.com and 24/7. Media. And so he’s got all this founder DNA, which I really appreciate, which is, you know, I resonate with people who’ve been founders have been a founder and an operator much longer than I’ve been a VC. And then he was at Idealab. Anyways, he’s a great fellow. And you know, when people send you a lot of deals, that are the sorts of deals that you’re interested in, they become closer friends, I guess.

Totally, totally. Maybe what resource you know, could be a book, blog, video and article, is there a resource that you found particularly valuable, and that you’d recommend to listeners?

Oh, I mean, I listen to podcasts. I listen to your podcasts like the reason I’m here is because I listen to your podcast. Appreciate that. It’s for reals I listened I so now I live in LA and I spend a lot of my time on the freeway and you know, as I said, I have three children so I’m always like, Oh, my car is so peaceful and I get to that’s how I get up to speed on stuff. You know, I listened to Kara Swisher I listen to pivot because pivot is like Kara Swisher at her best is Scott Galloway. I listened to you know, the ones you’d expect 20 minute VC, all the how I built this stuff? Oh, those are I wish I could tell stories that well. So all those podcasts and then you know, hopefully doing my small part with the LA venture scene.

Many What do you know that you need to get better at?

Oh, I mean, I so many things. I am sort of entrepreneurial, in that I love to just jump in and start doing things. But I will jump in start doing things and run up the wrong mountain over and over, I will do it. And then I will motivate a team to come run up the wrong mountain with me. And so getting better at really thinking about like, Am I in the right race? Am I running up the right mountain? For me it shift a bit of that was actually getting better at using my board. And I think that boards can be used really well to like if I need to think about a strategic problem. Let me schedule that for my board meeting in three months. And then I will attack that problem because I know it’s like it’s like a deliverable in three months to think about the strategic issues. Otherwise, I’ll just get caught up in all these sort of more tactical day to day operational stuff.

Got it? And then finally, what’s the best way for listeners to connect with you?

Listen to my podcasts. LinkedIn is still probably easy if people want to like send me a LinkedIn request. And I respond to a lot of those when they’re, you know, thoughtful approaches to like, what someone is doing and why they want to connect. I love that actually.

Well, great. Well, you know, I’m so glad that we connected this is super refreshing conversation. I would encourage everyone in the audience, check out the LA venture podcast, especially if you’re in the Southern California region. I just got back from a week in Santa Barbara and met with a bunch of VCs there and would love to you know, listen to more of your episodes but but thanks so much for taking the time today and look forward to continuing the conversation.

Thanks Nick love it.

That will wrap up today’s episode. Thanks for joining us here on the show. And if you’d like to get involved further, you can join our investment group for free on AngelList. Head over to angel.co and search for new stack ventures. There you can back the syndicate to see our deal flow. See how we choose startups to invest in and read our thesis on investment in each startup we choose. As always show notes and links for the interview are at full ratchet.net And until next time, remember to over prepare, choose carefully and invest confidently thanks for joining us