The Exchanges

Q Can I ask, were there any realizations in terms of, kind of, exits and investments and thinking about, kind of, how an exit moves the needle, so to speak?

A It does, right? I think one realization coming since joining Canvas a few years ago is a small exit, like, Easily moves the needle for a fund like Canvas, whereas we used to joke when you don't have an exit more than eight hundred million, you know, it doesn't move the needle at NEA, and it's like, get back to work, it's just people barely notice it, and that, in some ways, has provided so much operating freedom in terms of chasing ideas, you know, you, a lot of the big ideas look like small ideas, big companies that look like small ideas early on, you still want to chase those, but when you quote-unquote run, and they have One fifty, three hundred million exit is still really meaningful. That's a very different degree of operating freedom.

AI assessment note: “one realization coming since joining Canvas a few years ago is a small exit”

Q That's a very good start. You know how to buzz me up, but I'd love to start today with a little on you and how you made your foray into what I always call the wonderful world of venture capital. So what was your start?

A So I was a biomedical engineer by education and started my career at a medical device company called Medtronic. But I always wanted to build my own company and had the fortune to co-found a network security company called Mazoo Networks with a really a software-defined routing technology that was the thesis work of Eddie Kohler while he was a graduate student at MIT. And it was just so much fun. You know, I had three very smart, humble co-founders. They were also my best friends. We maxed out our credit cards initially, put my McKinsey scholarship to work. Um, we knew that wasn't going to scale. So luckily we raised venture capital from both Greylock and Benchmark Capital. And, you know, we got going, did a few things right, learned many lessons from my mistakes. When Mazda was later acquired by Riverbed Networks, I was hooked, but I really wanted to learn how others truly build these large businesses. So I thought the best way to learn was Was to be on the capital side for a few years, and this way I can watch the best in the business, how they do it, and emulate them. So thanks to Kauffman Foundation, they were worrying there weren't enough interest in venture capital at that time, and structured a mentorship program, so they created a fellowship program called Kauffman Fellows Program. I was matched with Scott Sandell at NEA as my mentor, and that's how I got into venture. K…

AI assessment note: “and that's how I got into venture.”

Q That's a very good start. You know how to buzz me up, but I'd love to start today with a little on you and how you made your foray into what I always call the wonderful world of venture capital. So what was your start?

A So I was a biomedical engineer by education and started my career at a medical device company called Medtronic. But I always wanted to build my own company and had the fortune to co-found a network security company called Mazoo Networks with a really a software-defined routing technology that was the thesis work of Eddie Kohler while he was a graduate student at MIT. And it was just so much fun. You know, I had three very smart, humble co-founders. They were also my best friends. We maxed out our credit cards initially, put my McKinsey scholarship to work. Um, we knew that wasn't going to scale. So luckily we raised venture capital from both Greylock and Benchmark Capital. And, you know, we got going, did a few things right, learned many lessons from my mistakes. When Mazda was later acquired by Riverbed Networks, I was hooked, but I really wanted to learn how others truly build these large businesses. So I thought the best way to learn was Was to be on the capital side for a few years, and this way I can watch the best in the business, how they do it, and emulate them. So thanks to Kauffman Foundation, they were worrying there weren't enough interest in venture capital at that time, and structured a mentorship program, so they created a fellowship program called Kauffman Fellows Program. I was matched with Scott Sandell at NEA as my mentor, and that's how I got into venture. K…

AI assessment note: “Kauffman Fellows Program. I was matched with Scott Sandell at NEA... that's how I got into venture.”

Q Can I ask, were there any realizations in terms of, kind of, exits and investments and thinking about, kind of, how an exit moves the needle, so to speak?

A It does, right? I think one realization coming since joining Canvas a few years ago is a small exit, like, Easily moves the needle for a fund like Canvas, whereas we used to joke when you don't have an exit more than eight hundred million, you know, it doesn't move the needle at NEA, and it's like, get back to work, it's just people barely notice it, and that, in some ways, has provided so much operating freedom in terms of chasing ideas, you know, you, a lot of the big ideas look like small ideas, big companies that look like small ideas early on, you still want to chase those, but when you quote-unquote run, and they have One fifty, three hundred million exit is still really meaningful. That's a very different degree of operating freedom.

AI assessment note: “one realization coming since joining Canvas a few years ago is a small exit”

Q time with NEA, And with Canvas and your ability to pick the best marketplaces, and you've done it with Hows to Lending Club to Elance, and now I know that you're currently writing a how-to guide, having spoken to some of the best in the industry. What are some of the counterintuitive lessons that you've maybe picked up over the years in helping build these mega marketplaces, so to speak?

A Yeah, thanks, Harry, for the question here. You know, I define marketplace broadly is whenever the company can attract and aggregate buy and sell side together. They are very valuable and long-endearing enterprises. I mean, just look at Amazon, Facebook, Tencent, and Alibaba, but they are very difficult to build because it's hard to solve the chicken and egg problem. Entrepreneurs often ask, do I focus on supply first or demand first? The easy answer is both, but that's not a very satisfactory answer. So we went about sort of thinking about, okay, so our own journeys and interviewing other successful, what are the lessons? And there are roughly five One is winning a very differentiated supply first. Always go deep and have a thick network in one specific cluster versus broad and horizontal. And we're just finding that equivalent of power sellers in your target market is really critical. They have volume, they're more organized. We see more entrepreneurs target the long tail, and that turned out to be less successful. So that's one. And two, when generating early demand, one of the more counterintuitive learnings Is that early marketplace demands are dependent on an existing distribution and offline activities. Like for house, for example, you mentioned early health on Tulia was invaluable. And I think that was true for Google leveraging Yahoo. We really just see a common mistak…

AI assessment note: “One is winning a very differentiated supply first... And two, when generating early demand”

Q time with NEA, And with Canvas and your ability to pick the best marketplaces, and you've done it with Hows to Lending Club to Elance, and now I know that you're currently writing a how-to guide, having spoken to some of the best in the industry. What are some of the counterintuitive lessons that you've maybe picked up over the years in helping build these mega marketplaces, so to speak?

A Yeah, thanks, Harry, for the question here. You know, I define marketplace broadly is whenever the company can attract and aggregate buy and sell side together. They are very valuable and long-endearing enterprises. I mean, just look at Amazon, Facebook, Tencent, and Alibaba, but they are very difficult to build because it's hard to solve the chicken and egg problem. Entrepreneurs often ask, do I focus on supply first or demand first? The easy answer is both, but that's not a very satisfactory answer. So we went about sort of thinking about, okay, so our own journeys and interviewing other successful, what are the lessons? And there are roughly five One is winning a very differentiated supply first. Always go deep and have a thick network in one specific cluster versus broad and horizontal. And we're just finding that equivalent of power sellers in your target market is really critical. They have volume, they're more organized. We see more entrepreneurs target the long tail, and that turned out to be less successful. So that's one. And two, when generating early demand, one of the more counterintuitive learnings Is that early marketplace demands are dependent on an existing distribution and offline activities. Like for house, for example, you mentioned early health on Tulia was invaluable. And I think that was true for Google leveraging Yahoo. We really just see a common mistak…

AI assessment note: “one of the more counterintuitive learnings Is that early marketplace demands are dependent on an existing distribution”

Q Can I jump on the patience element now and just ask when, when analyzing marketplaces, how do you analyze and assess between patience of a founder and their vision for the roadmap versus maybe a stubbornness when something's not working? How do you balance between the two?

A Yeah, it's a great question, Harry. I think the stubbornness in marketplace helps a lot. We see so many people give up. I think Brian Chesky at Airbnb talked A lot about how they relaunched Airbnb many, many times because people just didn't notice them, and so we value that, and that is something we do recommend. I think when you know you should give up is when your supply is not differentiated. When the users can actually find your supply at a lot of different places, you have to question whether what you do is truly making your supply size business better. Is it transformational? Are you making the idle asset more productive, et cetera, et cetera? Those are important Qualitative measures to look at.

AI assessment note: “when you know you should give up is when your supply is not differentiated.”

Q Can I jump on the patience element now and just ask when, when analyzing marketplaces, how do you analyze and assess between patience of a founder and their vision for the roadmap versus maybe a stubbornness when something's not working? How do you balance between the two?

A Yeah, it's a great question, Harry. I think the stubbornness in marketplace helps a lot. We see so many people give up. I think Brian Chesky at Airbnb talked A lot about how they relaunched Airbnb many, many times because people just didn't notice them, and so we value that, and that is something we do recommend. I think when you know you should give up is when your supply is not differentiated. When the users can actually find your supply at a lot of different places, you have to question whether what you do is truly making your supply size business better. Is it transformational? Are you making the idle asset more productive, et cetera, et cetera? Those are important Qualitative measures to look at.

AI assessment note: “when you know you should give up is when your supply is not differentiated”