Petersen has become famous for making beautiful bikes, using materials and components that his industry has mostly abandoned, and for promoting a vision of cycling that is low-key, functional, anti-car, and anti-corporate. He has polarizing opinions and an outsized influence.
A fun piece about making, commerce, lifestyles and contradictions.
During a code-yellow, a leader can escalate a project/situation to a war room situation, pulling people out of their day-to-day work to focus entirely on the problem at hand. It is alluring because it allows for existing plans to be deprioritized, removes any/all ambiguity around what is most important at the moment, and strongly encourages the team to sacrifice the ‘L’ and ‘B’ from Work-Life-Balance.
My personal belief is that the ‘correct’ frequency for Code-Yellows is not frequently but also not never.
Duct Tape [Molly Graham/Glue Club] – Molly’s a great operating exec who makes frequent appearances in my link blogs. This one is about ‘duct tape,’ interim org decisions that won’t hold forever, but can sustain itself long enough to focus on other urgent needs first.
Examples of duct tape include:
– a super talented learner leader paired with an outside advisor (make sure you set clear expectations up front that you’ll eventually layer the learner leader)
– an external fractional leader (someone who has done the job before at bigger scale so they can easily do your role with 1/2 or less of their time)
– bundling two orgs together under one leader that you will eventually split apart (eg, your eng leader can run product or vice versa, your marketing leader can run sales or vice versa, etc)
Using AI to be more present and effective in your meetings thanks to Granola [Alex Rainert] – I too have found myself less distracted during meetings as a result of AI notetakers like Granola. Sometimes my hands don’t even touch the keyboard and I just rely upon the AI to produce a summary of key points. I’ll verbalize a specific thought or expand on a question just to get it ‘heard’ by the bot, in order to ‘mark’ a place in the summary that’s important to me, so it does lightly start to shape the meeting in a way, not just a passive collector. We’ve definitely hit a tipping point and you should now go into every video meeting assuming you’re being recorded. That might feel icky but it’s the new normal.
The Observer [a great free Substack about strangeness, UFOs, things that go bump in the night, etc] – If something titled “Killer Kodaks and Soul-Snatching Shutterbugs” (about horror films and myhts involving the idea a camera can have mystical properties) increases your heart rate then this email newsletter might be for you.
For startups, a good Board is better than no Board, but a bad Board is worse than anything. One component of a good Board is a high value add Independent Board Member, which in my experience, often doesn’t get added early enough (for a variety of reasons). But sometimes the CEO takes the initiative to recruit an absolute gem and that was the case with ResQ, a software startup servicing the hospitality owners and service/repair vendors. It was serving on that Board where I first met Nilam Ganenthiran, back while he was an executive at Instacart. He brought relevant operating experience and a great perspective into the room, representing not the CEO, not the investors, but *the company,* which is exactly what you want from an Independent. We developed a friendship as part of our Board service and a recent blog post of his made me think I wanted to learn a bit more about his Instacart experience. So what follows are Five Question with Nilam.
Hunter Walk:You started at Instacart in 2013, just a year after it was founded, which obviously turned out to be an epic decision. Was it a case where you already knew folks there and had confidence in them, or some other aspect which gave you reason to join?
Nilam Ganenthiran: The story of me joining Instacart in 2013, is actually rooted in an epic bad decision. I was introduced to Apoorva, the founder of Instacart, in the spring of 2013 by my close friend/business school neighbor Rafael Corrales. Rafa runs Background Capital, and is one of the best partners for early company builders I know. Apoorva was ideating on his next project and was delving deep into the grocery sector. I was a consultant who had spent my career, starting at the age of 16 and working as a cashier in a grocery store, in and around the grocery industry. We started ideating on the concept of Instacart, which originally was going to be an e-commerce first grocery service with small micro-fulfillment centers in dense urban centers (think of the original concept as being similar to the quick-commerce industry which would emerge 5-6 years later). Apoorva was looking to bring on a non-technical co-founder as he entered YC, and my epic bad decision was not to jump at the opportunity to join Instacart at that moment. My wife and I were thinking about starting a family, we were happily living in Toronto, and I did not have the risk appetite to leave a secure job to join a startup.
About 10 months later, I was about to go on extended paternity leave with the birth of our daughter Sita, and was at my going away party. I got a text from Apoorva asking if we could reconnect. I coincidentally had been doing a project for a large grocer focused on e-commerce and had more confidence that this was a service that needed to exist for consumers, and that grocers would not be able to solve this problem sufficiently themselves. I flew to San Francisco to meet with Apoorva, Brandon and Max – who were working out of a house in South Park – and after the first week of ‘helping out’ as an advisor around the office I fell in love with the team, energy, and infectious ‘just get it done’ spirit. I knew I wanted to help build it from the ground up. I called my wife from SFO before boarding a red-eye flight back home to Toronto and told her that we needed to talk when I got home, as I wanted to quit my job and join Instacart. We talked about it and it honestly was not a controversial decision. In the conversation I remember us circling on this idea – “I don’t think this will work, but if it does, Sita (who was three weeks old) may never do her groceries in a real store”.
In retrospect, it was not a very well thought out decision. We made it based on a gut feeling, a desire to be part of something that had a chance to make a big difference, and trusting the team building Instacart.
HW:The whole ‘get on rocketships without worrying about seats” – you ended up moving through Instacart in a variety of business and strategy roles before assuming the President role. Were “what’s best for Instacart” and “what’s best for Nilam” aligned the whole time, or did you encounter moments where you needed to raise your hands to advocate for yourself? What advice do you have for people in fast-growing companies about being a team-player but also taking advantage of the unique opportunity it provides?
NG: This is a hard one as I think I struggled with the conflict for a long time. This is likely cynical, but as companies get bigger the ratio of decisions based on “what is right for the company” vs. “what is right for the decision maker” skew towards the later. The good news is, this is not necessarily a bad thing since there is usually alignment between what is best for the decision maker and company. The best companies and cultures seem to have figured out this balance over time despite scale – but it is hard.
I had the privilege of being an exec at Instacart for 8-years. There were year’s where I felt that I was sacrificing my own growth and career development for what was best for the company. There were other year’s where I felt the company was making bets on me to figure out problems which I had no experience to solve. Looking back, the encouraging thing is that over a multi-year period I never felt like I was getting the short end of the stick. It definitely required patience (and often self control), but the sheer volume of problems to be solved in startups allows for lots of opportunities to grow and take on stuff which is not in your direct domain. Over time, if you prove yourself as being able to consistently solve those problems, you will earn the right to take on more and more scope.
HW: I loved a recent blog post of yours on “Code Yellows,” basically a call-to-arms sprint where a leader can focus as many resources as they need on solving an existential challenge. Did you ever encounter internal resistance – either from other leaders or ICs – to the Code Yellows and how did you handle? Seek to explain and enroll, or basically tell them if they don’t want to work on Saturday then they don’t need to work on Monday either?
NG: Thank you – I have gotten a lot of feedback on the post (both from people who agree with the premise and those that don’t) – and I am glad it struck a chord.
We absolutely encountered significant resistance, typically internally and from functional leaders, to code yellows. The push back usually boiled down to some version of: “We have this great plan that we spent a number of weeks documenting, socializing, and cascading through the organization. You are now asking me to do away with this plan, MY plan, and go tell the team to do something else. I am going to look stupid. Or worse, you are going to think I am stupid because at the end of the year I would not have hit the goals we set out together at the beginning of the year.” Of course, another aspect of the push back which usually was left unsaid, was “this will burn out the team”.
There are a few tactics that worked for me in seeking enrollment when we needed to pivot work in a sharp way and increase intensity – like during a Code Yellow:
Explain why again and again: A big part of a leader’s job during a code yellow is explaining why a code-yellow is necessary, and what the consequences (to customers, users, the company, etc) would be in not focusing on this and getting it done. It can be draining but I have found that if people don’t buy into the need for a code yellow, results will be slower than if you had buy-in. We had code yellow’s fail, and a commonality with those was that the teams involved likely did not agree with leadership that it was actually that important.
Have clear exit criteria: Given you are asking the team to work outside of normal operating hours and push themselves to make meaningful progress, it is critical that you define and stick to a clear exit criteria. Code yellows cannot be a ‘hack’ to drive more productivity from the team. You will lose engagement (and eventually lose people) if they feel that goal posts of what you are seeking to achieve move.
Celebrate incremental progress: Code yellows are tough. They are all consuming. In the middle of this intensity teams can forget basic niceties and view positive feedback as being unnecessary. I have found the opposite to be true. Positive affirmation of progress on the journey out of a code yellow, and quickly acknowledging/celebrating small wins is critical to keeping motivation and boosting morale.
HW:You’ve had the chance to serve on a number of Boards – in fact that’s how we met, working on behalf of ResQ. What advice would you give a startup CEO about how to shape an effective Board and use them wisely? Are there consistent mistakes you seem first time CEOs making with their Boards?
NG: Board work, especially working with younger startups, has been one of the most rewarding things I have gotten to do in my career. Not only has it allowed me a way to share what I have had the benefit of learning during the journey building Instacart, but it has allowed me to keep learning myself – from new situations faced by these companies, and from my fellow board members. For example, I feel like I have learned so much from you Hunter, as I have watched you advise the ResQ team over the past 5+ years.
Board construction is really challenging, especially in a startup. You may not always have a choice regarding who is designated to serve on your board from an investor. The energy and excitement with which your board engages with you may wax and wane with their views on how the company is performing, or worse still – based on how their own careers are progressing within their investment firms.
There are two big mistakes, which hopefully I won’t fall into myself at Beacon, that I see CEOs making with regards to their Boards:
Treating the board meeting as a chore: I have found that prepping for board meetings is a gift. It is a forcing function to get everyone internally on the same page on progress-to-date, it is a driver of accountability, and it forces thinking regarding go-forward plans. You should start thinking about your next board meeting just after finishing your previous board meeting (assuming you run quarterly meetings). I typically have a Google Doc going where I have some quick bullet points of an outline and key points I want to show at the next meeting. I find this helps me now during the quarter how things are going, and it makes the actual creation of board materials so much easier/less of a scramble.
Treating the board as a customer to sell: Yes – board members are important stakeholders, especially since they have the power to fire you (or not give you more money to fuel the business). However, I think viewing your board as an audience to be ‘sold’ to instead of a partner in your journey will orient your board to be less trusting and collaborative. People who serve on boards are usually smart. They know when they are getting a hyper polished version of the facts. Treating your board in this way will have them have their guard up looking for inconsistencies and the “gotcha’s”. I have found it is easier just to explain your thinking, being relatively transparent, and seeking engagement from your board members on problem solving – vs. pretending you have it all figured out.
HW: Explain Beacon Software to me and you think the time is right for an entity like this?
NG:Beacon Software is a new company that my co-founder Divya and I started earlier this year. We are a forever holding company for exceptional software businesses that serve niche or specific customer bases. We believe there are multiple ways to deliver great software to users. While building software companies from scratch is great, Beacon was formed to take advantage of this unique moment where the cost of development is rapidly falling, thanks to the proliferation of co-pilot tools and software engineering agents. We aim to acquire outstanding businesses run by owner-operator entrepreneurs and integrate them into our centralized technology, business process, and GTM stack to re-accelerate growth and margins. At its core, Beacon exists to expand the scale of the ambitions of the great entrepreneurs we partner with and to continue delighting the Main Street businesses for whom these companies have built software.
“What’s one thing you stress to new VCs now that wasn’t as important, say, 10 years ago?” That was the question put to me last week by a senior leader at a large university endowment during Screendoor’s yearly Convening [part annual meeting for our LPs, part community event, part strategy session]. My answer was something like,
“That knowing when, and how, to sell out of a company is now not just opportunistic, but part of your job.”
It used to be as a seed investor that you’d largely just hold on and wait until the company exited via acquisition or the public markets. While this might still be the default posture for most of a portfolio, if its your only mechanism for liquidity you’re not thinking strategically. Here’s why:
It used to be that all venture investors had largely the same goals and incentives, up until maybe the growth round pre-IPO. Now even the Series A investor is often playing a different game than the seed VCs. Most seed shops are smaller AUM firms, where the partners own/share the economics. They are likely to own the most of the company with their first check, and take substantial dilution pre-exit. Most multistage firms have multiple levels of partners, with many needing to prove themselves to get momentum within a fund cycle. While of course the outcomes ultimately will be final word on their performance, 3, 5, 8 years of ‘hot deals’ and buzz, is what makes many careers. Combine this with early and multistage firms who are now routinely $1b+ in size, and you’ve got a recipe for *very* different incentives. We used to talk about outside led rounds as being ‘the market’ setting a fair price by independently minded firms. Now we have more and more consensus auctions where the price is an outcome of a VC’s ballooned business model and FOMO. These leads to both higher valuations earlier -AND- different underwriting targets for the larger fund (that is, $1b AUM fund is trying to get to 3x net, $60m seed fund is trying to get to 5x net). So ‘playing the game on the field’ means considering selling portions of your stake to other investors earlier than ever in order to lock in some gains and recycle capital.
It used to be that companies would get acquired or go public in “7 to 10 years,” but now many are staying private longer. Either because the founders don’t want to go public (or believe they need to get further before doing so) or because acquisitions have dried up as a combination of valuation mismatches and regulatory pressure, everything is taking longer. Whether it’s the multibillion dollar AUM VCs being able to go deeper and later into their companies, or new sources of capital (sovereign wealth, crossover funds, etc), the financings or tender offers relieve the pressure previous startups faced, and which the public markets could uniquely solve. (More companies should go public earlier but that’s a different post). So seed folks, often first in from a preferred share standpoint, are sitting there for a longer period of time, buried under a larger preference stack, and taking more dilution. Repeating from above, ‘playing the game on the field’ means considering selling portions of your stake.
It used to be more challenging to find secondary buyers. Now there are many more folks on startup cap tables with access to incremental capital to purchase slugs of stock, plus many fund LPs are looking for direct investment access. There are also an increase in market makers/secondary shops, although it’s still very much YMMV – there are folks we’ve worked with on both sides of transactions who we trust, and there are other stories we’ve heard that didn’t go as well.
Besides these three factors you have other more specific situations, such as the liquidity of tokens/crypto currencies, that might impact specific seed VCs. At the end of the day, if you’ve backed great companies, ‘hold and wait’ is certainly a reasonable strategy but it’s not clear it’s still the optimal one.
Ben Braverman and I went to a women’s college. Not at the same time (I’m older), and after it went coed. But Vassar itself is a small school, so that plus its liberal arts focus means you don’t find many of us in Bay Area tech. Ben and I started to hang out because of the Vassar connection and then even more so because he was just so darn helpful. His experience at Flexport; his pay-it-forward nature; and his friendly user interface, made his a desirable angel/advisor for startups. So I wasn’t totally surprised when he shared moving from operating to venture capital. And I was glad to hear it was at a new firm of his own co-creation. Saga says they’re a ‘return to tradition’ and the trio of founding Managing Partners are committed to the craft and to one another. Excited to share more about Ben via Five Questions.
Hunter Walk: Flexport was a life-changing experience which of course in hindsight seems like a ‘no brainer’ job to take but I know at the start of things, it’s not always so clear. How did you originally get introduced to the startup and do you recall how you thought about the ‘pros and cons’ at the time?
Ben Braverman: There were no cons! I met Ryan at Duboce Park (we both had giant dogs). The few times in life when you meet an n of 1 person obsessed with a worthy quest, it’s genuinely obvious what you’re supposed to do. You’re supposed to join the mission and I did exactly that. Side note: really smart people get obsessed with the wrong quests all the time (see model trains or social discovery apps).
HW: As Flexport grew and created a leadership team, how did you decide about promoting from within versus hiring from the outside? Was it case by case for each individual role? Or was there a different framework/circumstances which influenced how you made the decision? And in the event you hired from outside, did existing high performers chafe at being ‘topped?’
BB: We built flexport during a somewhat dogmatic period and the new ‘founder mode’ trend is a reaction to that time in history. Lots of clever people told us there were fixed rules for span of control (aka number of direct reports/manager) – Jensen and his 60 direct reports hadn’t conquered the world yet. With lots of managers, you feel pressure to bring in ‘managers of managers’ from the outside.
Outside leadership is a series of paradoxes. The existing team always accepts them if the new leader is world class and the company is thriving. And yet, you’re also almost always better off just promoting someone from within – context and speed trump experience in most cases, for most startups. The second paradox though, is that we had a number of exceptional people leave the company too early because they were leveled too high, too fast. This was actually much more common than someone leaving because they were leveled (unless their new boss was an idiot). Balance in all things, I suppose.
HW: Did you ‘stay longer than you imagined you would’ or ‘leave before you were necessarily ready’ (even if it ended up being the right decision)?’ What was it like giving up your email address, so to speak? It can be very intoxicating to be at a high profile startup knowing that your identity kinda gets the rub of success along with the company.
BB: I actually thought I’d stay at Flexport my entire career. It’s an endless market (I’m a sales guy at the end of the day, remember) and you’re fixed squarely at the center of global commerce. You can’t imagine a more interesting window into global politics than leading a global transportation business. Unions, tariffs, geopolitics, the world’s largest ships and aircraft supplying the world with every conceivable good. It doesn’t get much better. Even the hurricanes in the American south are potentially related to global shipping – the poorly designed new sulfur regulations are likely increasing global warming and fueling hurricanes because we’re allowing the fleet to pump sulfur into the oceans instead of into the air in the name of progress.
Giving up the email address has tactically been quite a pain in the ass. I was so proud of Flexport that I used the email address to sign up for everything. Recently had to cancel HBO MAX as a result. There was no reason to use my corporate email address to watch the Sopranos other than that I just liked seeing it every day.
HW: I know from experiences within the Homebrew portfolio that you were doing some angel investing already, as well being very generous with your time as a formal/informal advisor to founders. Were you intentionally road testing whether you wanted to try venture capital before forming Saga, or was it more casual than that?
BB: My first angel investment ever was the Flexport seed. I also got advisory shares. This is the equivalent of going on a 7 figure run on your first trip to Las Vegas. I had a completely unrealistic expectation of my picking ability and assumed I’d be able to 100x my money in a few years. It hasn’t quite worked out that way but I did learn that I don’t get tired of meeting founders. My late Uncle Richard used to buy lottery tickets next door to a convent in Boston. He’d see the same nun buying tickets every week. He asked her, ‘you don’t seem particularly financially motivated – why do you play the lottery?’. She said ‘I’m here, talking to you. Look at all the fun I’m having for a dollar!’ That’s sort of how I feel about investing in startups at this point, except that I very much also do care about the outcomes.
HW: Saga has three GPs, essentially three cofounders. What you feel like you needed to be 100% sure of about these relationships before formalizing the commitment, versus things that you might not be absolutely sure about until you’re actually in business together (but you figured would work themselves out). Maybe put differently, is choosing cofounders for a venture fund more or less similar to choosing cofounders for a startup?
BB: Vibes. Max is the common thread – he and I and he and Thomson were friends for years. When he brought the 3 of us together, it just felt right. It was fun from the jump and never felt like work, even in the midst of doing hard things together. If you want a more objective answer for why the partnership works so well, we’re extremely different from each other and bring totally different skills to the partnership. There’s never a moment where it’s unclear who is supposed to do what to move the ball forward for Saga and our partners. In that way, very similar to a great CEO/CTO partnership in a startup. The big difference is that an investment firm makes a lot more sense to run as a partnership whereas the great startups often look at lot more like benevolent dictatorships.
This short clip is pretty self explanatory. I’ll never be on the Forbes Midas List (one of the annual ‘rankings’ of venture capital performance). Why?
Satya and I have always believed that it’s not consistent with our firm’s culture to do deal attribution (who gets credit for what), or to submit private company data from our portfolio to a 3rd party outside of what we share with our firm’s investors.
We’re no longer eligible since we are primarily using our own capital. But the snippet above has a brief, funny story about how we learned we were now disqualified.
I’m a Sanzo drinker. I’m also a Sanzo angel investor. The order is important because I fell in love with the product before I even knew about the company, and the hustle of its founder/CEO Sandro Roco. Over the last few years he’s been a diligent company-builder, brand steward, and community leader. Watching the boom/bust cycle of DTC brands that were running on just the sugar high of venture dollars has given me even more appreciation for those who, yes, require investment capital along the way, but are playing the long game. Here are Five Questions with Sandro.
Hunter Walk: Backstory time! Tell us a bit about Sanzo and how it was founded?
Sandro Roco: I had the idea for Sanzo in 2018. I was working at a venture-backed apparel startup for 4 years and saw the power of building digitally-native brands through Facebook and Instagram (TikTok was still nascent).
Living in New York City and finding pockets of other Asian Americans, I grew to appreciate my own identity as an Asian American. Crazy Rich Asians became the No. 1 film at the box office that year. BTS, the K-pop group, was going on a nationwide tour where they were literally selling out football stadiums.
At the same time, 2018 was the summer of LaCroix and other flavored sparkling water brands across a larger $45 billion carbonated soft drink category that has been in decline in the U.S. as consumers reduce their sugary soda intake. The big thing I noticed, though, was that across all brands it would just be the same lemon, lime, grapefruit and mixed berry flavors and so I felt like there was room.
That said, I knew nothing about this industry. A lot of consumer goods entrepreneurs either worked at Procter & Gamble or Coca-Cola or Unilever. So getting into the industry was a bit of a process. I would go into specialty and natural food stores in New York City and look at the other independently owned and smaller brands and just cold-Instagram DM or cold-LinkedIn message the founders. Oftentimes the people behind the Instagram accounts were literally the founders.
Through this process, I was able to piece together bits of information, like where to manufacture products and which distributors to work with. Over the course of 18 months, I built up an initial knowledge set as I was developing the underlying thesis for the brand. It was very much a gradual process of getting 1% better each day.
HW: What’s something you believed about the beverage business, or consumers, when you started which turned out to be completely wrong. How/when did you realize it?
SR: So many to choose from! With my previous experience in DTC, there is/was an underlying assumption that growth resembles a “hockey stick”. In tech, there are many reasons why this dynamic exists, but the world of physical goods is not quite as exponential/logarithmic.
In truth, if it’s going well, the curve is more like a step function because a lot of the growth comes from gains in retail distribution (think launching in Whole Foods or Target, which only happens 1x-2x / year).
It may seem academic, but living it means building a business much differently. It has required a balance of aggressiveness and patience, managing cash flow, building fundraising processes around these distribution gains and many more things that I’ve had to get better at over time.
HW: Sanzo was founded, and thrived, through a time where traditional venture capital firms got excited about – and then became more disillusioned – with DTC brands. What was it like seeing some folks raise tens of millions of dollars, and where has your financing mostly come from?
SR: One of the things I loved about beverage was that because it was more retail distribution focused, it was not as subject to Meta’s algorithmic whims as other categories. And how in many ways, once you reached scale, you could build a brand and business for the long-term (think Coca-Cola as the ultimate example).
From a financing perspective, to borrow from Peter Thiel I believe there is now more clarity between those who invest in and operate in the “bits” space vs. the “atoms” space.
One is not necessarily “better” or “worse” than the other, but I think the era where founders and investors blurred these lines created unrealistic expectations and in some cases, incentivized bad behavior. So in many ways, I think it’s healthier for everyone that the lines have been re-drawn.
As for Sanzo, we’ve been fortunate to have the support early on of incredible angel investors (like Hunter Walk!) who believe in our mission of bridging cultures. And more recently, we’ve attracted strategic capital that has either 1) experience building the brands in this space or 2) the ability to help us accelerate distribution and revenue gains.
To the former, Convivialite Ventures, the venture arm of Pernod-Ricard, the 2nd largest wine and spirits seller in the world, has invested in multiple rounds. To the latter, the venture arms of DJ Steve Aoki and actor Simu Liu co-led our most recent round and both Steve and Simu have been extremely helpful behind the scenes as we build more distribution.
HW: You’ve done some collaborations – for example, comarketing with Disney, and a Jeremy Lin limited edition flavor. How do you evaluate whether these can help Sanzo or just become distractions? Are there common asks from brands, influencers or celebrities which you say ‘no’ to right away?
SR: It may seem counterintuitive, but each partnership for better or worse has really been bespoke. But among all collaborations, we have a couple specific guidelines:
First and foremost, the partnership has to authentically fit the brand and pass the “eye test”. If it doesn’t pass the eye test, consumers generally can cut through the BS and any numbers you’ve run just won’t end up netting out.
We don’t “pay to play”. We’ve found the types of prospective partners who mandate this tend to propose very cookie-cutter types of partnerships, which just end up becoming ineffective.
There has to be a strategic value either in the way of bringing in a new audience or being additive to our retail distribution strategy.
HW: Sanzo prides itself on ‘Asian-inspired flavors’ – when you’re drawing from your own heritage and celebrating other regional fruits, how do you navigate marketing to consumers from those cultures versus trying to reach and educate non-Asian people? Especially staying away from stereotypes that perhaps the average American expects to see when they hear “Asian-inspired?”
SR: Honestly, it’s a process that requires intentionality and constant conversation across our entire team that ultimately shows up everywhere in our company from our retail distribution strategy (we are merchandised in the sparkling beverage aisle vs. the international goods aisle) to social media, PR and partnerships.
As people and culture evolves, so does Sanzo’s place in it. But if we do it correctly, I think it’s the secret sauce of the capital B “Brand”, and it’s ultimately what I love about building a brand. And I’m proud that our team, especially our marketing team, indexes highly in cultural dexterity to deliver on that brand.
That said, perhaps the best way we benchmark our progress is through our first and third-party studies which have found that in just the last month, 70% of Sanzo consumers are not Asian or Asian American Pacific Islander (AAPI).
While we want to pay proper homage to our heritage and authentic background as an Asian-owned brand (I am FIlipino American), Sanzo is at its best when we serve as a bridge across cultures for both AAPI and non-AAPI.
Thanks Sandro! You can find Sanzo at many local supermarkets, corner stores or order directly.
Why Is the Loneliness Epidemic So Hard to Cure [Matthew Shaer/New York Times] – The Loneliness Epidemic as a cultural trend stared pre-COVID but the pandemic mirrored the effects of a weightlifter shooting HGH – immediate and noticeable difference in mass. Put me in the camp that believes many societal issues including drug abuse, mental illness, and political radicalism are being fueled by isolation. Physical, spiritual and economic loneliness.
The Future of Autonomous Agents [Yohei Nakajima/Untapped Capital] – Agentic tech is one of my favorite discussions within AI right now, so I’ll lap up any interesting POVs.
The failure tiger stalked me for many years. The beast’s ferocity was intensified by my sense it was inevitable I’d be caught. Unescapable because merely the act of *aging* was going to make me vulnerable. To not being as current or ‘native’ on whatever new technology platform or trend was being adopted. To the networks being formed by the millennials, Gen Zers, and each successive generational cohort. To the increasing number of people flocking to the technology industry. How could I possibly maintain my position of influence in the food chain? And without that, there was no safety net under me. It was a straight fall to the bottom.
Grim right? But instead of turning to therapy (which I now do), I turned to Twitter. A sociable introvert IRL but extrovert behind the keyboard, I could use my favorite medium (words) to reach others. To make myself tangible and accessible. While trying to *not* give myself over to the incentives of social media influence. My followers and reach were an anti-tiger force field.
But then a funny thing happened around 2012 once I left Google, had a child, partnered with Satya to do something new – I started to cherish getting older (at least professionally), instead of fearing it. Being someone who has relationships with peers, colleagues, industry friends, that are now 10, 20+ years in length. Being someone who knows a few tricks and is good to have on your side. Not needing to be everything to everyone but picking my spots.
Reminds me of the narration to a tv show I loved as a kid: “If you have a problem, If no one else can help and if you can find them. Maybe you can hire, The A-Team.” The failure tiger has been defanged and is now my house cat.
(Well, you don’t hire me per se. In fact I give *you* the money. But for founders (https://homebrew.co/) and for new VC firms (https://www.screendoor.co/) who are raising capital, you can find us.)
I asked some investor friends to share, as the title suggests, one thing they wished people better understood about venture capital. There were no ground rules other than to specify that ‘people’ could be founders, politicians, LPs, etc and that it would be default attributed but anonymous if they desired. Reporting out in batches of five. Here’s Part V:
VC is a profession! That sounds obvious but the perception continues to be pervasive that the job can be done as a side hustle without full-time focus and years of learning the trade. It takes time (as in decades, not years) to learn the art of opportunity identification and hone one’s individual style for engaging founders. Also, because the feedback loop is very long, the advice we give founders – to move fast and iterate – is hard to put into practice as a venture investor. This leads to the second non-obvious thing about the profession: one has to have long-term faith in our ideas and approach to the market way in advance of real success. The interim measures that get celebrated (winning deals, having one’s deals marked up quickly) are more often than not uncorrelated with ultimate success and the best measures of early progress are more emotion than science. Patience, optimism, and a little bit of blind faith are required to be good at the craft. [Ethan Kurzweil/early stage investor, new firm TBA]
[hunter: When Ethan first joined his previous firm Bessemer Partners, he told me it would just be a few year stint before a startup. Obviously it was longer 🙂 and I’m excited for him to take a different type of entrepreneurial journey building his own firm with some industry friends. As to the “it takes a long time” advice. Yes, although I believe there are ways to ‘learn faster’ – which includes great mentorship, experiencing business cycles, and actually working to service investments not just make them. ]
One thing I wish people better understood is that venture not only requires conviction in founders, businesses, and markets, but it also requires conviction in a point of view in firm-building.
There are many ways to make (and lose) money in this asset class, to construct a portfolio, to source and win investments, and to help (or not) founders build companies. There are now enough data points to show that any of these models can work and not work. And trying to copy someone else’s playbook won’t work because this venture market is now saturated enough and competitive enough – you have to have a point of view on your edge, and how that edge will deliver outsized returns, repeatedly.
That leads to my second thing I wish people understood – that this business is hard. 😉
As a side note, another thing I wish people (especially women and other underrepresented talent) understood is that while venture is a money-management and investment business, it doesn’t require a deep finance background to do it (at early stages). I talk to a lot of great women (particularly deeply seasoned operators) who disqualify themselves from pursuing venture because they think they don’t have the finance background for it. That part can be learned! [Lily Lyman/Underscore VC]
[Hunter: 100% regarding run your own playbook. It’s an essentially aspect of the firms we back via Screendoor – are you understanding the fundamentals and physics of this business while somehow developing a strategy that is different enough to matter. The world doesn’t need more of the same VCs.]
To the outside, all VC firms pitch founders on essentially the same product—there’s a range of check and fund sizes, wrapped in some kind of marketing. But when you look under the hood, the variation in how investors approach this job is staggering. There’s no go-to playbook for building a successful venture firm—you can be brilliant or mediocre with any number of strategies. As someone who is newer to investing and firm-building, it’s been fascinating to learn from peers who have total conviction in their portfolio construction, sourcing edge, decision-making process, value-add, etc…and at the end of the day, that conviction is probably more important than the approach itself. True feedback loops are incredibly long in venture; for emerging managers, you’ll raise subsequent funds well before you have the luxury of knowing where that first fund will land. Finding the approach that works for the partners—and can sustain you through all the ups and downs—is what matters.
And for founders: having curiosity about how potential investors approach their job can be a real edge. How do they make decisions, what have they learned from their most successful bets, what math are they doing for any one investment? Not only will they likely enjoy talking about this, but it will give you a useful glimpse into their worldview and incentives. [Ashley Mayer/Coalition Operators]
[Hunter: I sometimes ask founders to think of their cap table early on as a recipe where investors are ingredients. The best dishes have mix of components in proportions which make sense. Where we can, we try to help a founder understand what they might want to add and examples of individuals or firms that spike in that area. For example, Ashley’s background in marketing and comms (across B2B and B2C) differentiates her from many other emerging managers.]
Your portfolio is your brand. Even if you don’t have as large a following on socials as Hunter (!), if you have a clear investment framework and partner with founders consistent with that thesis you can quickly build a reputation. Having a strong POV also helps with finding…
LP/GP fit. Despite talk of industry consolidation in venture (which wouldn’t be a good thing for founders or the ecosystem), there seems to be an increasing appetite for smaller funds from institutional LPs, in recognition of the fact that they outperform. You just have to find LP/GP fit, or the folks who are in the market for your particular POV. Unfortunately, LP investment theses are rarely shared the same way VC ones are; you can ferret them out by talking to other GPs, for which there is luckily an amazing…
GP founder community! Just like founders constantly swap notes and pay it forward, there are many supportive communities of founding GPs who graciously open their rolodexes to one another and share guidance on new firm development. New managers should actively seek them out. [Leshika Samarasinghe/Twine Ventures]
[Hunter: Portfolio is your brand!!! My slight variation is “Your portfolio page is your thesis” but we’re getting at the same thing. Your job is to invest. And all the punditry, market maps, and so on doesn’t matter if you’re not in great companies which match your articulated focus areas.]
I asked some investor friends to share, as the title suggests, one thing they wished people better understood about venture capital. There were no ground rules other than to specify that ‘people’ could be founders, politicians, LPs, etc and that it would be default attributed but anonymous if they desired. Reporting out in batches of five. Here’s Part IV:
Here’s something I only realized about VC once I joined Matrix: more or less everything we do as investors is implicitly an invitation to reach out. To trace the line of thought to its source: I can only invest in a founder I meet, and I can only meet a founder I know about, so I spend a lot of my time reaching out to founders and probable future founders—but that still only scratches the surface. So whenever I have a spare minute, I try to post something to the world wide web that might possibly entice an unknown founder or future founder to track down my email address and send me a note. It’s a lossy approach, but it’s also the only way I know to cast a wide enough net.
In my previous life as a PM at startups, I squinted at the vast volume of VC internet activity from a distance and assumed it was a mix of self-expression and broad “brand-building.” What I can say now from personal experience is that all the frenetic posting is actually getting at something much more specific: it’s us angling for a “same here!” or “I was thinking more about what you posted…” or “funny you should mention that, we just started building” note from out of the blue—especially from people who are too conscientious to “impose” without a timely premise. (By the way, it’s never an imposition when you reach out; keeping an open inbox and an open mind is a lot of the job in VC.) So the next time you see one of us post, just know that we’re waiting for you. [Diana Kimball Berlin/Matrix]
[Hunter: So I agree with Diana – of course it’s prospecting, and for most investors, it’s genuine interest and curiosity driving their efforts in this area (besides the fact it’s essentially our job). BUT I’m also a believer that most founders shouldn’t waste time with extensive investor conversations unless they’re getting ready to raise capital within the next 3-6 months -or- you believe an investor can help you in some specific way separate from/ahead of a funding.]
I wish more people understood that venture is a people business first and foremost. Building anything of value, whether a company or a fund, takes a village. At BTV, we believe the most important thing is having the right people around you, and the right relationships, to build each other up and push each other forward. Relationships between VCs and founders, as well as between VCs and their LPs, last a long time. And the best relationships follow you through your entire career.
So the transactional behavior that shows up in our industry – founders creating FOMO to force investors to make decisions within days, VCs being cheerleaders when things are good but disappearing when things hit a snag, etc, are all counterproductive. If you take the time to build the right relationships with the right partners, we’re all here to lift each other up. [Jake Gibson/Better Tomorrow Ventures]
[Hunter: It’s a relationship business that’s built on transactions – isn’t that the ironic rub? It smarts when an investor or founder with whom you think you’ve built a great relationship doesn’t include you in something. While it’s often not personal, and each opportunity has its own context, it does mean that you didn’t do you job.]
One key point I’d like to highlight is that venture scale doesn’t always mean technology startup. There’s a saying, “the riches are in the niches,” and I believe this holds true — especially outside of pure technology plays. A common misconception is that building a tech company automatically warrants venture capital, and vice versa. Over the years, these ideas have merged, but in reality, we’re often looking for deals on the edge—those outliers with big upsides. These businesses might not make immediate sense on the surface.
We tend to invest in unconventional people, ideas, and markets. While this is generally true, the core is about companies that can take a small amount of capital, grow exponentially, and ultimately create significant value, potentially returning a fund multiple times over. Find an investor who believes in *you*, as a founder, building this outcome and you’ve found a fit. [Jesse Middleton/Flybridge]
[Hunter: One thing I’ve been talking about with Satya is some days I feel like there are cohorts of 2024 founders who are (a) ‘better’ than 2019 founders [in terms of experience, know how,] but (b) solving less valuable problems than 2019 founders [because in certain categories we might be in-between innovation/value creation cycles]. Do you bet those founders can figure it out (and that we’re wrong about the ‘value’ of the problem), or does market always beat founder?]
Early stage rounds today are, in many ways, more a function of capital supply dynamics than actual company value creation
There are, in any vintage of startups, finite opportunities that can create the outcomes required for institutional venture capital—it is an asset class with meaningfully diminishing returns as it scales. While some of the euphoria of 2021 is gone, we’re still in a moment where oversupply of capital is perverting some early stage market dynamics. At the moment, funds are deploying historically large war chests at this finite group of opportunities with hopes to be part of these few large outcomes. This dynamic gets exacerbated as you get earlier in company life cycles where the quantum of capital for the large allocators becomes less meaningful and before actual metrics and multiples converge to larger (e..g. public) markets.
For now, this has created a binary moment of haves and have nots. There are “hot” consensus companies that have significant demand for their rounds (much of which is preemptive vs. normal milestones) and meanwhile the unspoken truth is that the vast majority of the ecosystem is manufacturing rounds or struggling to raise. In a world where GPs are experiencing similar binary dynamics, with many funds being culled in the process of LPs potentially rotating out of the asset class, cost of capital will rise and the “have nots” in the early stage market may signal a new normal. [Adam Nelson/FirstMark Capital]
[Hunter: Oh my goodness, yes. I’ve got a blog post teed up mentally about why seed rounds are what they are. Maybe I’ll still write it but I agree with Adam here.]
We all know that VC is a Power Law business. A single exceptional investment can return multiples of a fund, make up for every other investment being a loss, and render modest returns (e.g. 2-5X multiples on investment) quite meaningless.
But not every VC firm and individual VC is primarily incentivized by the Power Law. Firms with very large funds make a lot of money for themselves in management fees before realizing returns. Individuals get promoted for successfully out-competing other investors and winning over founders long before knowing whether those were great investments to make. Those incentives are often misaligned with the interests of founders and limited partners.
So next time you’re assessing a VC as a potential investor in your company, or considering investing in their fund, do your diligence on their structure and incentives. It will govern their behavior as you determine whether or not to partner, and for the years to come thereafter. [Nikhil Basu Trivedi/Footwork]
[Hunter: Power Laws was mentioned twice in Part III of this series – you can see how fundamental they are to our business! Here NBT does make a note that it matters (a) how big the outcome needs to be based on fund size and (b) what the dynamics of a GP’s incentives are in how they think about what ‘success’ looks like.]
