Sumi Das (CapitalG) - How to invest in consumer tech in both U.S. and emerging markets, when does the growth stage start, and the advantages of having a single LP structure

WEBVTT 1 00:00:12.439 --> 00:00:17.039 Hello and welcome to the consumer VC. I am your host, Michael but 2 00:00:17.120 --> 00:00:20.719 and. On this show we talked about the world of venture capital and innovation 3 00:00:20.879 --> 00:00:25.280 in both consumer technology and consumer products. If you're enjoying this content, you 4 00:00:25.280 --> 00:00:30.079 could subscribe to my news letter, the consumer VC DOT sub stackcom, to 5 00:00:30.079 --> 00:00:34.079 get each new episode and more consumer news delivered straight to your inbox. Our 6 00:00:34.159 --> 00:00:38.759 guest today is Subidas, who is a partner at capital G. Capitology is 7 00:00:38.840 --> 00:00:43.359 Alphabets, independent growth fun. Some of their investments include air BMB lift and 8 00:00:43.439 --> 00:00:47.920 dual lingo. We discuss capitalogies, relationship to google, Google ventures and the 9 00:00:47.960 --> 00:00:52.399 advantages of a single LP. Sue Me also spends a lot of time not 10 00:00:52.479 --> 00:00:56.799 only thinking about consumer opportunities North America, but also merging markets. So we 11 00:00:56.880 --> 00:01:00.600 focus on some of the differences between billing a consumer technology company and a valuate 12 00:01:00.600 --> 00:01:07.799 opportunities in different regions around the world and what makes technology transferable to other markets 13 00:01:07.799 --> 00:01:17.599 and also not transferable without further ado here, sum Zumi, thank you so 14 00:01:17.719 --> 00:01:21.200 much for joining me today. How are you? I am good, very 15 00:01:21.200 --> 00:01:23.359 excited to be with you, Mike. Thank you for having me on is 16 00:01:23.359 --> 00:01:26.760 it absolute pleasure. I really appreciate you taking a time, so let's start 17 00:01:26.799 --> 00:01:30.799 the very beginning. To me, what was your initial at action to technology? 18 00:01:30.879 --> 00:01:36.799 I'm probably an obvious VC and that I wasn't sort of attracted a technology 19 00:01:36.879 --> 00:01:38.400 naturally when I when I was young, you know, I was sort of 20 00:01:38.400 --> 00:01:42.000 more of a in high school, more of an arts person, really big 21 00:01:42.040 --> 00:01:47.319 theater Geek, and then when I went to college studied book economics and theater. 22 00:01:47.480 --> 00:01:52.239 So not necessarily sort of a technologist at heart. I was a somewhat 23 00:01:52.239 --> 00:01:56.599 of a Gamer and and took a couple of coding classes in school. So 24 00:01:56.879 --> 00:02:00.439 tangentially involved, but not not super kind of it wasn't sort of friends center 25 00:02:00.480 --> 00:02:04.680 in my life. What started to get me attracted to the space was actually 26 00:02:04.760 --> 00:02:08.000 a few career experiences right out the gate when I started my career. And 27 00:02:08.080 --> 00:02:14.879 so I I graduated in and around the financial crisis and became an investment banker 28 00:02:14.879 --> 00:02:17.680 in two thousand and ten and then worked in private equity for several years and 29 00:02:17.719 --> 00:02:22.639 I was kind of in the in the media and telecom space, which was 30 00:02:22.680 --> 00:02:25.080 exciting to me because I sort of had this theater background and wanted to be 31 00:02:25.120 --> 00:02:29.199 an involved sort of in the media industry and at the time. I spent 32 00:02:29.280 --> 00:02:34.439 a lot of time with with companies that will basically content companies and telecoms infrastructure 33 00:02:34.439 --> 00:02:40.400 companies, so things like, you know, data centers and spectrum companies were 34 00:02:40.439 --> 00:02:44.159 sort of buying and selling spectrum for a lot of the big tailcos and as 35 00:02:44.159 --> 00:02:46.719 we were digging into that whole space, what was sort of became clear to 36 00:02:46.759 --> 00:02:52.240 me was that all the value and growth of these companies was being driven by 37 00:02:52.240 --> 00:02:57.080 consumption of content and data on the web, which was sort of obvious at 38 00:02:57.080 --> 00:03:00.719 the time, but really on mobile, which was kind of the new back 39 00:03:00.719 --> 00:03:04.400 then, and so I got it early sense of like a bottoms up signal 40 00:03:04.479 --> 00:03:07.199 of like where the world was going and kind of the the impact that technology 41 00:03:07.199 --> 00:03:10.039 could have. And going back to my theater background, I sort of know 42 00:03:10.080 --> 00:03:14.000 how to tell a good story and so I was like here's a story that 43 00:03:14.120 --> 00:03:16.599 is interesting to me, and so that's really what started, would piqued my 44 00:03:16.639 --> 00:03:20.439 interest in technology, and I started to paying a lot more attention to the 45 00:03:20.439 --> 00:03:23.479 world of the Internet and was happening out here in the valley. Why? 46 00:03:23.479 --> 00:03:25.560 I like better capital, private equity, and how did you end up at 47 00:03:25.599 --> 00:03:30.319 capital g? So I was at this private equity firm and sort of a 48 00:03:30.439 --> 00:03:36.479 had this you know, Aha moment of the future is mobile and that's that's 49 00:03:36.479 --> 00:03:39.599 going to determine a lot of sort of our behavior patterns. But at the 50 00:03:39.639 --> 00:03:45.400 same time it was clear to me that this sort of private equity business model 51 00:03:45.439 --> 00:03:49.240 was not well built to invest in companies that we're going to sort of drive 52 00:03:49.360 --> 00:03:54.120 these innovations. You know, we were looking for cash positive businesses with leverage, 53 00:03:54.159 --> 00:04:00.319 etc. And we just didn't understand sort of hyperscale companies that were, 54 00:04:00.360 --> 00:04:02.879 you know, burning money and that was that was something that we struggled with 55 00:04:03.120 --> 00:04:09.439 and so as I became increasingly convinced about about the future, I started to 56 00:04:09.599 --> 00:04:15.560 think about where could I go to to start to learn about this space and 57 00:04:15.639 --> 00:04:18.439 kind of be more of a proactive participant. And frankly, Mike, I 58 00:04:18.439 --> 00:04:23.160 had no connection to the west coast or the valley. I didn't really even 59 00:04:23.199 --> 00:04:28.519 know much about the venture capital industry at all, and so it's funny to 60 00:04:28.519 --> 00:04:30.839 admit this, but I basically looked all the big technology companies and I was 61 00:04:30.879 --> 00:04:33.879 like, I'm going to go get a job at one of these places and 62 00:04:34.000 --> 00:04:40.040 I'll sort of figure it out, and sarendipitously Google at the time had just 63 00:04:40.120 --> 00:04:45.079 started a growth investment fund back in two thousand and thirteen and through a bunch 64 00:04:45.079 --> 00:04:48.560 of different connections, got connected to Jesse weather, one of my partners now 65 00:04:48.560 --> 00:04:54.680 at the fund. Started having a bunch of conversations and eventually did two interviews. 66 00:04:54.720 --> 00:04:58.199 Is a funny story. I interviewed as square back in two thousand and 67 00:04:58.240 --> 00:05:00.879 thirteen and I interviewed with capital G. Didn't get the job at square and 68 00:05:00.879 --> 00:05:04.519 so ended up at an ended up at capital g and really my thinking at 69 00:05:04.519 --> 00:05:09.000 the time was was not very sophisticated. I was like it don't really know 70 00:05:09.079 --> 00:05:13.360 what this is, but worst case I'll tell people I worked at Google for 71 00:05:13.399 --> 00:05:15.519 a couple of years, was close to kind of folks that are driving the 72 00:05:15.560 --> 00:05:19.279 space and and learn a bunch of stuff and then figure it out from there. 73 00:05:19.360 --> 00:05:23.279 So, you know, moved out to moved out to the West Coast 74 00:05:23.279 --> 00:05:26.040 back in two thousand and fifteen and then have been with with capital G. 75 00:05:26.199 --> 00:05:30.759 Sin's amazing. Would love to hear a little bit to about the origin of 76 00:05:30.759 --> 00:05:34.160 capital G as well and the relationship with Google, because I know that the 77 00:05:34.279 --> 00:05:39.639 Google it's a single LP structure of a firm and also kind of understand as 78 00:05:39.680 --> 00:05:45.399 well, because Google ventures obviously very wellknown early stagepenture capital fund. Why it 79 00:05:45.480 --> 00:05:48.920 also just kind of understand if there's a relationship or kind of how with with 80 00:05:49.040 --> 00:05:53.439 Google ventures and kind of just were you kind of see yourselves in the market. 81 00:05:53.480 --> 00:05:58.680 So first on capital G so we're alphabets independent growth fund and our mission 82 00:05:58.759 --> 00:06:01.920 is to invest in sort of of the leading technology companies in markets where we 83 00:06:01.959 --> 00:06:06.759 see significant opportunities for innovation. So we've invested in companies the likes of lift, 84 00:06:06.800 --> 00:06:11.160 Arapy and be Robin Hood, snap, credit, Carma and I atic. 85 00:06:11.319 --> 00:06:14.920 And then our strategy is is not only to support our portfolio companies with 86 00:06:14.920 --> 00:06:18.519 our own resources in network, but also to leverage Google and alphabets resources to 87 00:06:18.519 --> 00:06:23.639 help our companies scale and grow. And we're typically investing in companies sort of 88 00:06:23.680 --> 00:06:27.920 at the growth stage, which we define as post product market fit. Series 89 00:06:27.959 --> 00:06:30.480 Bethrough D is kind of the typical stage. As I mentioned, we got 90 00:06:30.560 --> 00:06:33.879 started in two thousand and thirteen and, you know, now invested in fifty 91 00:06:33.920 --> 00:06:38.839 plus portfolio companies. So that that's a little bit about us. And then, 92 00:06:38.920 --> 00:06:43.720 as far as the GV question is concerned, we are both independent funds 93 00:06:44.199 --> 00:06:48.480 backed by alphabet. They focus more on the early stage and we focus more 94 00:06:48.519 --> 00:06:53.920 on the growth stage and really we operate very, very independently. You know, 95 00:06:54.199 --> 00:06:57.240 folks off and ask if there's a relationship where they fund companies and then 96 00:06:57.279 --> 00:07:00.319 we back them. That's not the case. We're sort of very independent and 97 00:07:00.319 --> 00:07:05.839 operate kind of with our own mandates. What's your definition of growth past, 98 00:07:05.839 --> 00:07:09.360 you know, beenture Coppel? Where's that kind of line? I think that 99 00:07:09.399 --> 00:07:13.560 would be helpful for for listeners. So typically at the early stage of a 100 00:07:13.639 --> 00:07:18.160 company is is sort of a vision and a problem statement, a thesis about 101 00:07:18.199 --> 00:07:21.920 how to solve that problem and a team that's, you know, working to 102 00:07:21.959 --> 00:07:26.800 do that. And the early days of a company are really about trying to 103 00:07:26.839 --> 00:07:30.720 find product market fit, I. Find a way to deliver a solution to 104 00:07:30.879 --> 00:07:35.959 customers and provide value. In our view, the growth stage really begins after 105 00:07:36.000 --> 00:07:41.879 that point in a company's evolution. Right, you've sort of you've built a 106 00:07:41.879 --> 00:07:46.720 product and you've demonstrated that you're sort of providing valuable service to a set of 107 00:07:46.759 --> 00:07:51.319 customers, and now you're really in the second layer of your kind of development, 108 00:07:51.319 --> 00:07:55.279 which you have to sort of scale the business. And so, as 109 00:07:55.279 --> 00:08:00.519 growth stage investors, we ask very different questions than sort of early stage investors. 110 00:08:00.600 --> 00:08:03.240 Right so an early stage investor might ask, is this a big market? 111 00:08:03.279 --> 00:08:05.759 Is this the right team to back? Do I think they can get 112 00:08:05.800 --> 00:08:09.879 to product market fit? At the growth stage? Principally, the three questions 113 00:08:09.839 --> 00:08:13.360 that we're asking is, well, how big could this market actually be? 114 00:08:13.519 --> 00:08:18.879 Do I think that this company and this team can scale to a broader set 115 00:08:18.920 --> 00:08:22.800 of customers within that market opportunity? And there's a whole subset of questions that 116 00:08:22.839 --> 00:08:26.560 come out of that. And then the third is, is there a business 117 00:08:26.560 --> 00:08:33.080 model here that can drive value both to customers but also to the company in 118 00:08:33.200 --> 00:08:37.960 question itself? And so we spend a lot more time on those three questions 119 00:08:37.000 --> 00:08:41.559 and answering those as part of being growth stage investors as compared to kind of 120 00:08:41.720 --> 00:08:46.080 the early stage when your focus more on product market. That makes sense because 121 00:08:46.279 --> 00:08:50.399 I'd imagine when you're doing some a lot about, you know, market sizing 122 00:08:50.519 --> 00:08:54.960 and some is actually kind of a debate on the show depended on who you 123 00:08:54.039 --> 00:08:58.759 ask in terms of does it make sense to market size when you're so early, 124 00:08:58.000 --> 00:09:01.320 because it's pretty tough. Like I'm thinking, you know fit that came 125 00:09:01.360 --> 00:09:05.399 out the wearables was a super small market. So it's tough to really know 126 00:09:07.039 --> 00:09:11.080 how large that market could be when it was, you know, fairly new 127 00:09:11.120 --> 00:09:13.360 at the time and they and they of course did, you know, very 128 00:09:13.440 --> 00:09:20.000 very well capturing with their technology, a captrit that market, and I'd imagine 129 00:09:20.159 --> 00:09:24.600 that at the growth stage you can becoming a lot more accurate since the market, 130 00:09:24.639 --> 00:09:26.519 if it is, you know, a new market. We've also also 131 00:09:26.519 --> 00:09:30.879 had a debate on the show of if there are truly new markets. But 132 00:09:30.960 --> 00:09:33.840 if it is a new market, I'd imagine at the growth stage you can 133 00:09:33.840 --> 00:09:37.639 get a much more clear idea, like an estimation or statistic in terms of 134 00:09:37.720 --> 00:09:43.240 how how large that mark could be. It's a really good question and one 135 00:09:43.279 --> 00:09:46.480 that we think about a lot. So I think the answer is that it's 136 00:09:46.519 --> 00:09:52.240 it's not all together obvious even at the growth stage, and I think there's 137 00:09:52.240 --> 00:09:56.960 sort of two variants of this. You know, there's companies that are building 138 00:09:56.960 --> 00:10:05.320 in in markets that are pre existing and kind of replacing a precedent service because 139 00:10:05.360 --> 00:10:07.840 there's some new technology innovation. So as a result, you know, in 140 00:10:07.840 --> 00:10:11.360 the software world you sort of have a company that was built on Prem now 141 00:10:11.399 --> 00:10:16.360 the clouds around and you replicate that service on the cloud. There it's sort 142 00:10:16.399 --> 00:10:20.320 of easier to say, Hey, there's a specific market size and profit pool 143 00:10:20.399 --> 00:10:24.519 that exists and it's transitioning to to kind of, you know, this new 144 00:10:24.519 --> 00:10:28.919 form factor. Or there's some vertical niches where it's easier to tell a market 145 00:10:30.000 --> 00:10:33.279 size. Right. There's there's only so many restaurants in the US, and 146 00:10:33.279 --> 00:10:35.600 so if you're building restaurant software, you can kind of Tell Hey, this 147 00:10:35.679 --> 00:10:39.799 is probably going to be the size of my market. What's challenging specifically about 148 00:10:39.799 --> 00:10:46.200 consumer companies is they're very rarely kind of fit those two paradigms. Right. 149 00:10:46.240 --> 00:10:52.279 It's sort of it's sort of all about creating a new behavior pattern with consumers 150 00:10:52.320 --> 00:10:54.639 and sort of expanding the market. And so, to give you a tangible 151 00:10:54.679 --> 00:10:58.559 example for this in our own portfolio, you know, we invested in Robinhead 152 00:10:58.559 --> 00:11:03.679 at the series d round and it was very hard, even at that stage, 153 00:11:03.679 --> 00:11:07.679 when it was a fairly sizeable company, to no kind of how many 154 00:11:07.720 --> 00:11:11.759 accounts they would have long term. And I can say that we were off 155 00:11:11.799 --> 00:11:15.840 in that estimate by a fact, by a significant factor. And you know 156 00:11:15.919 --> 00:11:18.039 now that all that said and done, all that to say that I think 157 00:11:18.320 --> 00:11:22.960 you know, and this is why I love the growth stage as an investor, 158 00:11:22.080 --> 00:11:26.120 especially in coming from the private equity world, where it's got an analytical 159 00:11:26.159 --> 00:11:31.120 component. You do have more information as a basis to make decisions and make 160 00:11:31.159 --> 00:11:37.120 forecasts, but you still have to have that sort of mental pliability to say, 161 00:11:37.159 --> 00:11:41.440 Hey, this could be much bigger or smaller, change in ways that 162 00:11:41.480 --> 00:11:46.639 are hard to predict and you're still kind of basically making a venture back. 163 00:11:46.080 --> 00:11:50.399 Yeah, those are all, you know, really good points that I appreciate 164 00:11:50.480 --> 00:11:54.840 you saying. It's still tough, even though it sounds the companies that you're 165 00:11:54.840 --> 00:12:00.240 looking at our farther along than the ventures usually early stages. is so really 166 00:12:00.240 --> 00:12:03.320 hard to get a read and I imagine that in the case of Robin Hood 167 00:12:03.360 --> 00:12:05.159 that you said, it was a good thing that you were off in terms 168 00:12:05.159 --> 00:12:09.960 of what you're off by. So that's that's great. And also I know 169 00:12:09.080 --> 00:12:13.720 that you know, obviously we're talking. Before you invest in emerging markets, 170 00:12:13.759 --> 00:12:18.519 you also invest in companies that are built in the US, like like a 171 00:12:18.639 --> 00:12:22.200 Robin Hood. How do you think about invest not lumping into emerging markets all 172 00:12:22.200 --> 00:12:26.240 in the same kind of one category? But what are maybe some of the 173 00:12:26.320 --> 00:12:31.519 some of the things that you think about when looking at a company that's building 174 00:12:31.559 --> 00:12:35.120 maybe in emerging market verse the US pop what are some of the differences and 175 00:12:35.200 --> 00:12:39.000 some of considerations that you have to keep in mind? There's a few that 176 00:12:39.039 --> 00:12:43.120 are quite material over the years that have sort of that have sort of come 177 00:12:43.200 --> 00:12:46.480 up. One thing that folks offen thing when they're looking at companies in the 178 00:12:46.519 --> 00:12:50.840 emerging markets as they say, Oh, there's these are huge markets because they're 179 00:12:50.879 --> 00:12:54.000 sort of, you know, billions of users in these markets, and that's 180 00:12:54.039 --> 00:13:00.720 certainly true, but the sort of gdpeeper capita and and more specifically, the 181 00:13:00.759 --> 00:13:07.120 dispersion of wealth looks very different than in the US or or other developed markets. 182 00:13:07.159 --> 00:13:11.080 And so as an entrepreneur you have to think really hard about what customer 183 00:13:11.200 --> 00:13:16.440 segment you're going after kind of in an emerging market and being really crisp about 184 00:13:16.559 --> 00:13:20.799 that to make sure that there's sort of, you know, the potential to 185 00:13:20.799 --> 00:13:24.399 actually build a business around that customer in the long term. In the US, 186 00:13:24.480 --> 00:13:28.840 you know, you can get away with sort of being less clear about 187 00:13:28.879 --> 00:13:31.240 that at the beginning because, as you know, there's ways to kind of 188 00:13:31.279 --> 00:13:35.840 build a business model over time. So so that that's one big difference. 189 00:13:37.000 --> 00:13:39.480 I think that that you know, that comes up early. The second is, 190 00:13:39.519 --> 00:13:43.519 you know, the canonical advice for for startups, as you know, 191 00:13:43.600 --> 00:13:48.600 be extremely focused, be the best one thing, iterate quickly on that thing 192 00:13:48.679 --> 00:13:52.879 and provide a lot of value. And I find that that advice can be 193 00:13:52.919 --> 00:13:56.480 actually quite counterproductive in the emerging markets. Right there's it's often the case that 194 00:13:56.519 --> 00:14:01.399 you can't necessarily build a big business off of a single service, and so 195 00:14:01.480 --> 00:14:07.120 early in a company's evolution you have to start to think about building multiple products 196 00:14:07.159 --> 00:14:11.399 as a way to both hook and monetize customers, and that's a very different 197 00:14:11.639 --> 00:14:16.399 sort of way of building a business than sort of we've learned in the US. 198 00:14:16.440 --> 00:14:22.440 I think the the sort of technology companies in China have been much more 199 00:14:22.759 --> 00:14:26.159 have built in that way much better than sort of we have in this country, 200 00:14:26.200 --> 00:14:26.879 you know. So those are a couple of the main ones on the 201 00:14:28.159 --> 00:14:33.159 customer side. The third is more on the sort of infrastructure side. So 202 00:14:33.759 --> 00:14:37.799 the reality is you're you're starting to build companies with a lot less sort of 203 00:14:37.799 --> 00:14:43.960 precedent infrastructure in and around you, and so oftentimes you have to sort of 204 00:14:43.080 --> 00:14:48.039 vertically integrate and build that infrastructure yourself and I mentioned, I spent a lot 205 00:14:48.080 --> 00:14:50.519 of time in the fintext base as an example. If you're building a lending 206 00:14:50.559 --> 00:14:56.039 company in the emerging markets, it's not enough to find customers, underwrite them 207 00:14:56.080 --> 00:15:01.120 and give them money. You also have to find a way to bring capital 208 00:15:01.159 --> 00:15:05.639 into the market, because security securitization markets don't exist in the same way that 209 00:15:05.679 --> 00:15:09.840 they do in the US. And so you're in the very early days of 210 00:15:09.840 --> 00:15:13.639 a company. You're playing this balancing act of both trying to build a product 211 00:15:13.639 --> 00:15:18.519 for customers but also trying to manage a very different kind of institutional side of 212 00:15:18.519 --> 00:15:22.399 the business and and that's a different skill set and is a broad skill set 213 00:15:22.480 --> 00:15:26.240 required to build a company. And one more which I think is interesting is 214 00:15:26.279 --> 00:15:30.159 the education systems in a lot of these markets look very different. Tend to 215 00:15:30.159 --> 00:15:33.480 be much more specialized, and so when you hire folks, you often have 216 00:15:33.519 --> 00:15:39.080 to hire four very specialized skill sets, which means early in a company's journey 217 00:15:39.120 --> 00:15:41.600 you have a much bigger organization than you do in the US, and so 218 00:15:41.679 --> 00:15:48.840 founders have to transition quickly from being builders to becoming managers and finding ways to 219 00:15:48.840 --> 00:15:52.440 stay nimble at despite sort of having a large population. So those are some 220 00:15:52.480 --> 00:15:56.840 of the things that I think about, Mike that are sort of very different. 221 00:15:56.840 --> 00:16:00.559 And you know, all of that to say, I think it's incredibly 222 00:16:00.600 --> 00:16:04.679 difficult to build businesses in emerging markets but also, if you can get it 223 00:16:04.759 --> 00:16:12.360 right, extremely rewarding, because it's you build real competitive advantages over time and 224 00:16:12.399 --> 00:16:15.200 you earn the right to do a lot, and I think that's why you 225 00:16:15.240 --> 00:16:18.600 see this sort of you know, over the last decade we've started to see 226 00:16:18.639 --> 00:16:23.320 some really kind of amazing companies be built all over the world and I'm a 227 00:16:23.360 --> 00:16:26.480 strong believer that, you know, that's only going to continue over the next 228 00:16:26.480 --> 00:16:32.480 decade. There's another interesting trend actually, just sort of that's changing more recently, 229 00:16:32.519 --> 00:16:33.360 which is, you know, I think if you looked at the last 230 00:16:33.399 --> 00:16:37.080 decade in emerging markets, it was sort of, you know, the idea 231 00:16:37.279 --> 00:16:41.200 was copy the models that are worked in the West and and bring them to 232 00:16:41.240 --> 00:16:47.759 these markets, right, and that was a successful approach for many entrepreneurs. 233 00:16:47.759 --> 00:16:52.200 But the other really interesting trend, specially from a consumer standpoint, is that 234 00:16:53.000 --> 00:16:59.559 now you have an explosion of data and mobile available in these markets in a 235 00:16:59.600 --> 00:17:03.600 way that even it's hard to conceive of for us who are living in the 236 00:17:03.720 --> 00:17:08.160 US, and so you're starting to see completely new behavior paradigms and I think 237 00:17:08.200 --> 00:17:15.440 what's going to be really interesting over the next decade is actually the net migration 238 00:17:15.640 --> 00:17:22.400 back of learnings and business models from the emerging markets back to the develop markets, 239 00:17:22.440 --> 00:17:23.759 and I think that's going to be a really fascinating thing to watch. 240 00:17:23.839 --> 00:17:27.559 You you sort of saw that in China. Initially, would sort of the 241 00:17:27.640 --> 00:17:33.319 rise of social commerce, which was really a had no precedent kind of in 242 00:17:33.359 --> 00:17:37.000 the US, and now you're starting to see companies in the US that are 243 00:17:37.000 --> 00:17:41.720 starting to build live stream and social experiences and I think you're going to see 244 00:17:41.759 --> 00:17:47.039 a lot more of that and a much more sort of globalized technology world than 245 00:17:47.160 --> 00:17:51.440 we've experienced thus far. I also kind of wanted to know to when you 246 00:17:51.480 --> 00:17:56.039 started your career you understood how powerful blobile was. That was when the mobile 247 00:17:56.039 --> 00:17:57.599 revolution was happening. You know, two thousand and ten, two thousand and 248 00:17:57.640 --> 00:18:03.000 eleven. What do you think is the next cycle going to be? Is 249 00:18:03.039 --> 00:18:07.079 it a web three in Crypto? Is it the Meta verse? Is it 250 00:18:07.279 --> 00:18:10.880 something else? I mean, how do you, as an investment you think 251 00:18:10.880 --> 00:18:17.160 about these large macro becauseummer try like the mart large macro consumer platform which might 252 00:18:17.200 --> 00:18:19.400 come out, you know, once ten or fifteen years or so, and 253 00:18:19.440 --> 00:18:25.079 we're almost at that kind of spot. Well, we certainly aren't that spot. 254 00:18:25.119 --> 00:18:27.160 What do you think about what's next and like a macro level for the 255 00:18:27.200 --> 00:18:30.599 consumer? It's a great question and when that we're all thinking about all the 256 00:18:30.599 --> 00:18:37.960 time. You know, I certainly am a big believer web three, in 257 00:18:38.079 --> 00:18:44.519 crypto. I do think, and I think that the potential there to dwarf 258 00:18:44.839 --> 00:18:49.200 what we've seen with mobile is extremely, extremely large, because I think it's 259 00:18:49.240 --> 00:18:55.160 sort of has properties that are are very interesting and unique in that sort of 260 00:18:55.519 --> 00:19:02.240 enables creators, enables creativity, enables engagement in a whole different paradigm and it's 261 00:19:02.240 --> 00:19:04.599 sort of, you know, I think Christison's uses were it skew morphic. 262 00:19:04.680 --> 00:19:07.799 It's sort of it's hard to predict even kind of all the things that could 263 00:19:07.920 --> 00:19:11.400 come out of this. I'm bullish on that, but I think, to 264 00:19:11.440 --> 00:19:17.319 be fair, what's holding that ecosystem back is sort of the underlying infrastructure has 265 00:19:17.359 --> 00:19:21.279 not been figured out yet. And then and the costs are extremely high and 266 00:19:22.519 --> 00:19:26.440 scalability is an issue. But but I'm certainly very bullish on on that trend 267 00:19:26.599 --> 00:19:32.680 overall. The other one that I think we're not talking about as much but 268 00:19:32.960 --> 00:19:38.279 I think is going to be huge is digital health. I think the potential 269 00:19:38.319 --> 00:19:45.880 to track data, capture data, make recommendations based on that data, change 270 00:19:45.920 --> 00:19:51.039 the value chain of how medicine happens is a huge opportunity kind of in the 271 00:19:51.079 --> 00:19:53.920 next decade and a lot of that innovation right now, you know, sits 272 00:19:55.000 --> 00:19:59.920 in kind of the farmer world, but you're starting to see the first innings 273 00:19:59.960 --> 00:20:03.400 of that getting, you know, sort of becoming real consumer technologies and again 274 00:20:03.440 --> 00:20:07.319 I think that's sort of that's sort of, you know, a ten x 275 00:20:07.400 --> 00:20:10.119 sort of impact, but a hundred ex sort of impact on how we live 276 00:20:10.200 --> 00:20:12.119 our lives. And I spend some time in healthcare and when you're on the 277 00:20:12.160 --> 00:20:18.400 inside you're like there's so many barriers to this stuff working just from a reimbursement 278 00:20:18.440 --> 00:20:22.880 standpoint and kind of getting out to market. But the underlying technologies are evolving 279 00:20:22.920 --> 00:20:25.400 in a very rapid rde and I think there's there's a lot that's going to 280 00:20:25.440 --> 00:20:27.720 happen in that in that space. So those are the two that I you 281 00:20:27.759 --> 00:20:33.440 know, that I think about a lot and I get very excited about but 282 00:20:33.519 --> 00:20:36.880 you know, I think there's there's a bunch of things also that are subtrends 283 00:20:36.960 --> 00:20:40.279 right. I think if you if you think about just drones and that that 284 00:20:40.640 --> 00:20:45.079 potential to change the supply chain. What could that do the consumer experiences vre? 285 00:20:45.200 --> 00:20:49.440 Obviously we haven't talked about that sort of part of the metaverse and are 286 00:20:49.440 --> 00:20:56.400 and so I think there's a number of potential platform shifts, but the ones 287 00:20:56.440 --> 00:21:00.279 I get excited about are definitely the crypto and digital health trends. That are 288 00:21:00.279 --> 00:21:03.799 possible. We say time and time again on the show and maybe to throw 289 00:21:03.799 --> 00:21:06.240 away that that we should be saying. But you know, once you have 290 00:21:06.359 --> 00:21:08.720 product market fit, then you really is the beginning of the growth stage and 291 00:21:08.759 --> 00:21:15.160 you know all the scale and growth happens. How do you think about the 292 00:21:15.319 --> 00:21:21.000 term product market fit? When you're evaluating companies, for consumer companies in particular, 293 00:21:21.200 --> 00:21:26.720 we think a lot about the frequency of connection and the level of engagement 294 00:21:26.759 --> 00:21:30.519 of each interaction and I think if you're building, if you have aspirations to 295 00:21:30.519 --> 00:21:34.839 build sort of a, you know, very large scale consumer company, we're 296 00:21:34.920 --> 00:21:41.440 folks are reorganizing their lives to interact with you, typically you tend to have 297 00:21:41.519 --> 00:21:45.319 one or both of those things in spads, and so we think a lot 298 00:21:45.319 --> 00:21:47.640 about it, about that. And then, you know, the other thing 299 00:21:47.680 --> 00:21:52.240 that we look at to evaluate product market fit is does that intensity of connection 300 00:21:52.319 --> 00:21:57.359 drive, you know, referring behavior or sort of new customer acquisition and advantage 301 00:21:57.359 --> 00:22:00.839 and new sort of customer acquisition. So those are some of the we were 302 00:22:00.839 --> 00:22:06.319 talking earlier about how the growth stage things become more quantitative. That is definitely 303 00:22:06.400 --> 00:22:11.240 one thing. Testing product market fit can become a lot more quantitative at the 304 00:22:11.240 --> 00:22:15.119 growth stage because you can look at the behavior of the existing customers of a 305 00:22:15.160 --> 00:22:21.039 company and say, I can tell how how much these customers love this product 306 00:22:21.160 --> 00:22:23.079 or don't. So that's typically, you know, the way at the growth 307 00:22:23.079 --> 00:22:26.720 stage that we sort of evaluate that. That that kind of piece. What 308 00:22:26.759 --> 00:22:33.680 are some of the more unique customer activisition strategy you've seen from companies that they're 309 00:22:33.680 --> 00:22:38.440 actually able to scale with? I've been surprised by how little attention this gets. 310 00:22:38.519 --> 00:22:44.000 is as sort of companies scale. The prototypical company that consumer investors always 311 00:22:44.079 --> 00:22:47.160 when I invest in is, like you often heard here, the term poll 312 00:22:47.359 --> 00:22:51.279 versus push, right, so it's sort of we want to invest in pull 313 00:22:51.359 --> 00:22:53.960 companies where, yeah, there's a lot of organic momentum. There's a virality 314 00:22:55.440 --> 00:22:59.279 and what you were saying sort of the virality continues forever and we have huge 315 00:22:59.279 --> 00:23:03.160 companies and those companies are great and very rare and special. But I do 316 00:23:03.319 --> 00:23:11.319 think that the competencies around scaling marketing are critical for all companies, including those 317 00:23:11.359 --> 00:23:14.680 that sort of have that kind of level of virality. And you know, 318 00:23:14.720 --> 00:23:19.160 typically what I see there is that early on companies find product market fit, 319 00:23:19.240 --> 00:23:25.599 they find a channel that's working. You know, most part of your an 320 00:23:25.599 --> 00:23:29.640 APP based product. It's going to be it's going to be facebook, and 321 00:23:29.880 --> 00:23:33.599 you know there's there's a sense that you can kind of scale, but there's 322 00:23:33.640 --> 00:23:37.079 nothing Christmas around kind of how you build out a paid marketing organization over time. 323 00:23:37.319 --> 00:23:41.000 And some of the things that you know over the years that I've sort 324 00:23:41.000 --> 00:23:44.039 of started to think about is, you know, three or four factors that 325 00:23:44.079 --> 00:23:48.440 are pretty critical for paid marketing. So one is to really understand like in 326 00:23:48.480 --> 00:23:52.039 what context is your product really kind of sell? So are you best position 327 00:23:52.200 --> 00:23:56.720 to market on contextual channels like instagram or or kind of query based channels like 328 00:23:56.799 --> 00:24:00.880 Google, and to really think about what is the messaging and kind of what 329 00:24:02.119 --> 00:24:04.960 channel best suits your sort of growth needs. The second is sort of the 330 00:24:04.960 --> 00:24:08.839 depth of the channel. So I think companies, especially the early stage, 331 00:24:08.839 --> 00:24:14.519 often way over estimate how deep the channels are in any one given channel and 332 00:24:14.799 --> 00:24:18.240 don't diversify quickly enough. And then, you know, there's there's a lot 333 00:24:18.279 --> 00:24:22.319 around the quality of marketing executions. As an example, just a number of 334 00:24:22.359 --> 00:24:27.079 creative tests that you're running on facebook with different creatives and messaging can have a 335 00:24:27.160 --> 00:24:32.559 huge impact on your end state cost of acquisition and you know, we often 336 00:24:32.559 --> 00:24:37.039 see that folks don't invest enough in that kind of in those capabilities. And 337 00:24:37.079 --> 00:24:38.960 then the final is conversion funnel, right, and kind of playing around at 338 00:24:38.960 --> 00:24:44.279 that over time. So I know I'm just kind of roundabout way of answering 339 00:24:44.279 --> 00:24:47.200 your question, Mike, but sort of the way I sort of think about 340 00:24:47.200 --> 00:24:52.440 it is our companies building those core building blocks that allow them to scale across 341 00:24:52.440 --> 00:24:57.599 many channels and are they continuously testing new channels? Right? So I think 342 00:24:59.359 --> 00:25:03.880 that sort of core big platform pay channels are interesting, but now there's a 343 00:25:03.920 --> 00:25:10.720 ton of stuff you can do around influencers, affiliates, testing Ott and Youtube. 344 00:25:10.839 --> 00:25:15.319 It's not sort of that one magical thing sometimes, but it's sort of 345 00:25:15.720 --> 00:25:19.960 you know, the aggregation of all these tiny marginal gains across many different channels 346 00:25:21.000 --> 00:25:25.920 that can actually lead to like differential scaling versus your competitors, and I think 347 00:25:25.960 --> 00:25:29.720 those are those are skill sets that you know, they're sort of not at 348 00:25:30.000 --> 00:25:32.119 it. You talk about them less than a board meeting, because it's not 349 00:25:32.119 --> 00:25:34.759 the product and not the the you know, the core things that are interesting 350 00:25:34.799 --> 00:25:40.319 for to talk about as a company better critical to scaling and and something that, 351 00:25:40.519 --> 00:25:42.759 like you know, I I think the founder should be investing in early. 352 00:25:44.440 --> 00:25:47.640 I love the fact that you really pay a lot of attention in terms 353 00:25:47.640 --> 00:25:49.960 of the actual custom requisition and how they're able to actually acquire customers. What 354 00:25:51.119 --> 00:25:53.519 I think about this whole notion of like pulvers, push company, I think 355 00:25:53.559 --> 00:25:56.839 when I think a poll, I think about search, just primarily because there's 356 00:25:56.839 --> 00:26:00.720 that there's that customer intent. They're already thinking about how they can solve whatever 357 00:26:00.799 --> 00:26:04.160 problem that the company is solving, which that's great, because all, there's 358 00:26:04.160 --> 00:26:08.599 only be so many people that actually have that intent. And so as well, 359 00:26:08.599 --> 00:26:11.160 how can you actually convince people that maybe not be, you know, 360 00:26:11.319 --> 00:26:17.880 searching for the searching or thinking about that problem consciously? Right and, of 361 00:26:17.920 --> 00:26:22.960 course, obviously testing creative and you never really losing that as part of what 362 00:26:22.000 --> 00:26:26.519 you need to do in order to scale and make slight of sense in terms 363 00:26:26.519 --> 00:26:30.960 of how you actually think about about scale. And so what's one thing that 364 00:26:30.000 --> 00:26:37.640 you would change about venture capital? We still have a huge lack of representation 365 00:26:37.680 --> 00:26:44.359 in venture capital and I'm so bullish, post my experience in the industry about 366 00:26:44.440 --> 00:26:48.640 like the potential of technology to like frankly change the world and also be a 367 00:26:48.680 --> 00:26:53.039 positive force for sort of wealth creation for folks. But I'm also kind of 368 00:26:53.119 --> 00:26:56.599 stunned, you know, now, having been in it for six years, 369 00:26:56.640 --> 00:27:00.400 about how concentrated that is within this relatively small community. I think we as 370 00:27:00.400 --> 00:27:07.079 an industry have strides to make to start to expand the opportunity set and you 371 00:27:07.079 --> 00:27:08.599 know, we talked a lot about some of the work we're doing in emerging 372 00:27:08.640 --> 00:27:11.680 markets, which I see is, as you know, part of that effort, 373 00:27:11.720 --> 00:27:15.519 but also we have a lot of work to do kind of across demographic 374 00:27:15.559 --> 00:27:19.680 groups in the US itself, and so there's positive trends there, but the 375 00:27:21.000 --> 00:27:25.359 baselines were so low that we've got a long way to go to kind of 376 00:27:25.359 --> 00:27:29.880 expand that that opportunity set. What is what book the ASPARATY personally, one 377 00:27:29.880 --> 00:27:33.880 book that aspired you professionally. So the professional one is easy because I was 378 00:27:33.920 --> 00:27:37.240 given the one that I'm reading right now. I'm reading the the Sam Walton 379 00:27:37.319 --> 00:27:41.440 biography. It is just an incredible story, you know, sort of just 380 00:27:41.559 --> 00:27:47.039 like his love affair with with the business of retailing and the passion with which 381 00:27:47.039 --> 00:27:51.359 he built the company. It's very intoxicating and sort of like reaffirms, you 382 00:27:51.400 --> 00:27:55.039 know, kind of the business were in, of trying to build, trying 383 00:27:55.039 --> 00:27:59.559 to find founders, were building iconic company and you know, on the personal 384 00:27:59.599 --> 00:28:02.519 front, I'll say one for the home team. I I love the the 385 00:28:02.559 --> 00:28:07.440 Bagwad Gita, which is which is an Indian religious text but really kind of 386 00:28:07.480 --> 00:28:12.440 more of like a conversation between two people about like about the meaning of life 387 00:28:12.519 --> 00:28:18.720 and and very powerful and so I find myself going back and reading that often, 388 00:28:18.720 --> 00:28:21.440 never the full thing at one time, but just like passages of it, 389 00:28:21.519 --> 00:28:23.880 and I and it's very life affirming and coming. So that's probably the 390 00:28:23.880 --> 00:28:27.839 personal one. But I thought a question to use. What's the best piece 391 00:28:27.880 --> 00:28:32.480 of advice that you've sived? Back in my private equity days, I had 392 00:28:32.519 --> 00:28:36.519 a chance to interact with Richard Persons, who is actually the former chairman of 393 00:28:36.559 --> 00:28:38.799 city group in Time Warner. He was an advisor to the the fund that 394 00:28:38.839 --> 00:28:41.480 I worked for. We had lunch a couple of times and he said something 395 00:28:41.559 --> 00:28:45.079 that really stuck with me, which was, you know, in your career 396 00:28:45.160 --> 00:28:48.720 you want to be the person that other people root for, and I think 397 00:28:48.720 --> 00:28:53.480 about that like all the time, almost every week, and so we're trying 398 00:28:53.480 --> 00:28:57.839 to bring that ethos too. Two interactions that I have with pretty much everyone. 399 00:28:57.920 --> 00:29:02.799 That's some Sillian piece of advice that I've one of the more sailing piece 400 00:29:02.839 --> 00:29:04.519 of advices that I'm that I've gotten. So I love that. I love 401 00:29:04.559 --> 00:29:07.680 that. That's so true, so true. Soue me, thank you so 402 00:29:07.799 --> 00:29:11.640 much again for your time. This is so much fun, so much fun 403 00:29:11.680 --> 00:29:14.480 as well. Thank you for having me on. Big Fan of the podcast. 404 00:29:14.519 --> 00:29:17.160 And there you have it. It was terrific chatting with Suemy. I 405 00:29:17.160 --> 00:29:19.200 hope you all enjoyed it. If you enjoyed this episode, I love it 406 00:29:19.200 --> 00:29:22.440 if you'd write a review on the apple podcast. You're also welcome to follow 407 00:29:22.480 --> 00:29:26.720 me your host, Mike, on twitter at Mike Guelb, and also follow 408 00:29:26.799 --> 00:29:41.119 for episode announcements at Consumer VC. Thanks for listening. Everyone