The Exchanges

Q So were business stories part of your dinner table conversation?

A Absolutely. Absolutely. So the most interesting thing, now that I look back, I always make this joke. There are only two countries in the world that had hundred percent inflation, I think, 25 years in a row. One is Turkey, one is Brazil. As a result, if you look at all the finance and banking people, there are a lot of, like, Turks and Brazilians, because we can do this math, like, from when we're eight years old. Like, every night my dad is like, are we gonna put our money in German marks or whatever? And so that was really cool. The second thing that was really cool Is both my parents went to American high school and American university, and they were religious about not only reading, but we were very lucky that at that time, late seventies, early eighties, we used to get every issue of time and fortune and business week. And I used to read those magazines. I didn't have patience for books. And I looked at these CEOs and I'm like, oh my God, that looks so cool. I want to be like one of those people one day. And I daydream all the time about being an executive and also traveling around the world. My dream was to be a business executive version of Marco Polo. I always wanted to go around the world, meet people and learn cultures.

AI assessment note: “Absolutely. Absolutely. So the most interesting thing, now that I look back”

Q four years, usually you have to crystallize a strategy when you're explaining it to other people. What you just described is, well, what works is outliers and doing a little bit of this because you don't, it's power law distribution. As you distilled the lessons that you learned over those four years and from your prior experience, what was the strategy that you then articulated when you first launched Felicis?

A So it was very simple. I said, I want to have the highest concentration of iconic companies around the world, independent of sectors and stage. But I said, I'm going to be a market first investor, and I'm going to find all the markets that are growing the fastest that need critical solutions that can be satisfied by tech, but everything else, I'm not going to have any strings attached. It's still a pretty broad strategy in traditional venture strategy. When you explain it, the LPs like it because you're so specialized that it basically roughly translates to, I am so specialized that I'm going to be great at decision-making. But what nobody asked is, and I had the much broader strategy. I was on the exact opposite end of the spectrum, but people confused that just because it's broad, it means that the universe you can pick companies from is so much bigger that you are much more likely to have many more successes. Because imagine if I told you Ted, I'm gonna do eight sectors versus just one or two. I'm gonna do four stages versus just one. I'm gonna do 20, 40 geos instead of just one. Think about how much bigger the universe is, and everybody thought that only, like, can work if you spray and pray, and I said, no, it just means that the universe is much bigger, but I'm still gonna sharpshoot, find one company in a critical market. If the best company for this one area is in anoth…

AI assessment note: “I want to have the highest concentration of iconic companies around the world”

Q and wealth management firms moving to Ridgeline gain a decided advantage. That's why customers call it miraculous, game-changing, and an awakening. If that's not how you would describe your investment management tech, request a demo at ridgeline.ai. And now, back to the show. So once you're in a deal with one of your founders, what do you try to do with your team to help create value at the business?

A The most important thing that we do, honestly, is to always ask the founders what is the one thing that matters the most to them and what is the most critical. There are some things that we do that is across the board that involves recruiting or strategic help with next round or exits, planning, introducing them to customers. There is every now and then something that is very unique and special. I remember this was especially the case with Rovio and Shopify. Rovio was just about to launch. Their physical goods , they have these really cool goods, the Angry Birds, the plush toys. And they realized that a couple of weeks before Christmas that they had no experience building an online store and the time was running out. And that was right after we closed Shopify. So I went to Shopify and look, you have a lot of customers, but Rovio could be one of the biggest ones. And they put one of their best engineers. Just by connecting the two companies, both of them got something amazing out of it. I remember when we were talking to Adyen, they didn't have any notable customers in the U S But one of our biggest advisor was from Facebook and Facebook was their first major client. They were trying to close. And we got some unique insight that I think really helped them in that journey. And I remember even after Shopify went public, one executive, one day I get a text from Harley's like, look,…

AI assessment note: “The most important thing that we do, honestly, is to always ask the founders”

Q How does that translate to roughly the number of companies and then number of people on your team?

A Today we have about 26 people in our team. Roughly 10 of them are in the investment team. I do have to give a lot of credit to our founder success team. It's a very important aspect of our operation. So that's growing really fast to say like anywhere between 10 to 15. And I would like to say we probably have somewhere north of 250 active companies. So even though we have more than 350 investments, roughly half of them have exited. So I think maybe for three 50 To three 80 investments, we have 170 exits, so we have 200 or so companies, and so I think it's still a pretty good ratio in terms of the companies we can handle, and we are investing to grow the team and to make sure that we have capacity to help.

AI assessment note: “Today we have about 26 people in our team. Roughly 10 of them”

Q When you go through a process of effectively hunting down a company, what does the due diligence look like when Toby first answers your call and you've already invested all this time and energy into getting there? How do you take that initial excitement and then turn it into some type of research process?

A You just got to be a great listener. And I'm just looking for unique insight. There were a couple of things that happened when I showed up. The first one, It's something very unusual where Toby said, look, we're doing something a little bit crazy. We only have 20 engineers and the whole company was, I don't know, 50 people, something like that. Maybe they had 25 engineers. And he said, I'm taking my best engineers off of product development, but they're going to build this real-time database for me. So then I have this real-time visibility into everything that's going on. And somebody else would have looked at that and, great, I'm absolutely walking out of here. The CEO is crazy. And I saw something that I saw exactly at Google, exactly at 50 people at Google, Larry said, you know what, we need to move even faster, and if we only put engineers on projects as they become relevant, It's not fast enough and we're going to fall behind. So for the first time in the history of Google, he took three people. He's like, from now on your Google research, you're not beholden to anyone. Go work on crazy things that we probably going to need a couple of years from now, but when we need it, you will have already worked on it. It was such a subtle thing, but unless I had that experience from Google, I don't think anybody would have appreciated. Everybody else was like pouring through the numb…

AI assessment note: “You just got to be a great listener. And I'm just looking for unique insight.”

Q Why don't we start and go all the way back to your family and background and where this entrepreneurship bug first came into play?

A I am the son of two entrepreneurs, so I feel like maybe I had no choice but to become an entrepreneur by lineage. Both my mom and dad started companies, and I watched them do it, and I think it inspired me. It was really cool, and my dad, obviously, but more importantly, my mom, because growing up in Turkey, in Istanbul, you know, you don't have a lot of women entrepreneurs that start things solo, and she was also one of the most respected executives when I was growing up. In seventies and early eighties, the only women that did well had inheritance or were running family companies. Very rarely did you see people starting a career from scratch and being successful. So that was, I think, a great role model for me.

AI assessment note: “I am the son of two entrepreneurs, so I feel like maybe I had no choice”

Q How do you think about the trade-off of your initial idea when you were angel investing of just wanting to be in the best companies irrespective of how much you could put in versus this idea that you want to have enough of the businesses and maybe in some situations being a lead investor?

A Honestly, the strategy is not different today. There are many situations where because our true north is to be in the best companies, the only thing that has changed is we went from by default and by capital scarcity to be only participating investors to now, I think we lead or co-lead about 70% of the investments we make. And there is still 30% where we make strategic investments, and some of those are our most successful companies. So when we realize that It's either a small stake or no stake. We still offer the small stake because once we're in the company, we're very confident that if we can do a good job, we can over time increase those investments, which we've successfully done so far. So we don't really see it like all or nothing. It's about like, just get into the right company. And if you do the right thing, you will have opportunity to grow your stake over time. I think the thing that we realize, it sounds like it's easier to do participating investments Versus leading investments, because to lead or co-lead, obviously it's much more difficult. It's bigger check. But even in those cases, Canva is a good example. It's one of our most valuable companies. Our initial series A ownership was probably around single digit percentage, mid single digits. In other world, ABC is like, oh, we can't even get 10, 20%. We're not going to do it. Look at where that investment is now. …

AI assessment note: “we lead or co-lead about 70% of the investments we make. And there is still 30%”

Q Which two people have had the biggest impact on your professional life?

A The first person is Omid Kurdestani, one of the most formative Google execs. He gave me my first Google offer, and if it wasn't for him to give me a chance and take a chance on me, I don't think I would have been here. The second one, even though I only worked with him for a year, I'm going to say Larry Page, just for the sheer fact that if you ask my wife, my team, or my founders, probably the person that I quote the most is Larry. I always like to say, hey, you know, when I was working with Larry or when I was at Google, this is the thing that I learned, and he is the person that I learned the most from. Even though some of those were very hard learned lessons, is that I learned a lot from him.

AI assessment note: “The first person is Omid Kurdestani... The second one... I'm going to say Larry Page”

Q I'm really curious to drill down a little bit on the process of how you get there, because when you have that broad of a canvas to paint on, the first question that comes to my mind is, how do you end up sourcing the deals you want when it could be the whole world, it could be every sector?

A That's a really good question because one of the things that really helped us is even from the very early on when we didn't have the strongest deal flow, we always thought that our job was not to wait for the companies to come to us. Our job was to find the companies that matter and regardless if they heard of us or not, go find that company and do whatever it takes to be an investor in that company. And to be honest with you, my experience at Google was hugely helpful. I remember being responsible for Japan. I never lived in Japan and I had such a crisp plan. I'm like, I want to find all the portals that matter. And I knew that if I was in seven of the top 10 portals and was successful, and I did solo against a competitor that had 30 people, most of which were Japanese. So we did the same thing in venture. This is a race To find the best companies, and the earlier you find them, and hopefully you do find them, and you close them, that's going to be the factor that's going to make you successful. So for Shopify, we had the thesis that, look, we wanted to invest in a formative commerce company, and it was in a crazy environment, and I was meeting some other founders that basically refused to take money from me, and in my defeat, I went to their blog and saw an interview with Toby, and I'm like, oh my god, this is the company. This is the company we're looking at. It wasn't, we w…

AI assessment note: “our job was not to wait for the companies to come to us.”

Q So as you started as an angel investor, how did you approach investing? You had a lot of experience as a business executive. This is a different thing. So how do you think about the type of investment you wanted to make?

A Well, two things. One, I didn't have any experience, but the one thing that I knew if I wanted to be successful is to have very concrete benchmarks and a very concrete strategy. And in my free time, I love reading military strategy books, but the one thing that you learn is that if you're going to go into battle, you cannot win by fighting on somebody else's strength. You have to find your own strengths. And so I did two things. One of which was, first of all, understand the landscape And understand what it takes to be great, not just good, but great in venture. And so I had different firms for different things. And then the other thing that I decided to do was what is one thing that I can do that is so unique that would play into my strengths, but would be very difficult for other people to copy. And at that time, it was very interesting that it was the first wave of companies that could get started with a lot less money. A lot of these things like servers and other stuff started becoming on demand and It wouldn't take a lot of capital to start a company. And so if capital is not that critical, what is the thing that is most critical? And it was literally a very subtle shift in the power going from capital to the founder. And if the power is with the founders, then the only thing that matters is your ability to demonstrate conviction and build trust with the founders. So I dec…

AI assessment note: “I was going to find the world's best founders and be their trusted advisor”

Q When you go through this, as you start talking about it, I could easily think, wow, you are so well prepared to be the CEO of another tech company. So I'm curious when you got through those years at Google, what was your decision process at that point in time when you left of what to do next and why you decided to leave and move on?

A It's really interesting because when I was leaving Google, they came to me. Hey, Aydin, look, you've done so well at Google. We trust you. Do you want to go and run Google Turkey or have a regional role? And I think what I realized is at that point, I was very happy to serve Google, to have great contributions, but I wasn't motivated to go manage thousand people or let me be the CEO of Google Turkey or Google Europe or something like that. It just didn't motivate me. I think I am much more driven zero to one. Then one to end. I'm not a political person. I'm very plain spoken. The other thing that I realized is, Hey, you spent six years at Google, but you weren't a director or VP. That was actually a lot of people asked me when I was trying to get the VC.

AI assessment note: “It just didn't motivate me. I think I am much more driven zero to one.”

Q How do you distill the passion and the vision that comes from looking for those opportunities to your team?

A I tried to lead by example. I mean, it's very much like, uh, apprentice model. It's not like I have a magic bullet. I think Shopify took me eight emails until Toby said yes. And he asked me to fly to Ottawa. Addion took me two years to break through. Rovio took me a year and a half and I had to meet them in the U S and London in Helsinki. So it's not like I figured out this industry is the right industry. And I found the company, but I had to be relentless getting smashed into a wall and hearing a no and no smile, like something's Skeptical on the other end. I think until I broke through the ice, that's the funny thing. And I go back. And the reason why I can do this is because of my experience in living in these crazy countries or dealing with these people where I'm like, how the hell am I going to convince them to buy what I'm selling? And that's the pivotal experience that keeps me going. And they see that. And also if you are not showing emotion, and if you're not showing that you care, then I don't think people want to work with you. So many people think that just because they have the degree, they have the title, they have the idea that the deal and the win is going to fall into their lap, and the founders, they are putting their life into this, they don't want to think that this is just like a little check mark or a little transaction in your Excel spreadsheet. What they…

AI assessment note: “I tried to lead by example. I mean, it's very much like, uh, apprentice model.”

Q So from your experience at Roche and then watching Silicon Graphics effectively collapse, what did you learn about running a business from those experiences that then as the first product manager you knew how to do?

A First of all, let me be very intellectually honest with you. I don't think anything that I learned or could have learned aggregately could not even like prepare me for what I encountered at Google. I think it was probably the most formative experience because we never did anything as it was thought or it was done heretofore. Like Larry was very much an original. He was a crazy thinker. He had a very simple philosophy, which was, I'm going to ask you to do insane things. And they are insane by default because If they're not insane, you're going to basically revert to status quo and you're going to come up with incremental ideas. And the only way to not revert to status quo and not come up with something incremental is that I'm going to ask you something so insane that you're going to have to come up with something brand new and insane to do it. And if you don't try, you can't do it. So you have no choice, but to do it. I'd like to say, oh my God, my MBA prepared me so well and all of that. In all honesty, none of my professional roles, nothing I've ever lived in my life prepared me for what was to come. And for good thing, right? I mean, I just kind of learned to never say, it can't be done, or it's impossible. Because every time we said, there's no way, we somehow figured out a way to do it, or at least get close. So his favorite saying was, if I ask you to go to the moon, you …

AI assessment note: “none of my professional roles, nothing I've ever lived in my life prepared me”

Q So you mentioned coming out of business school and you found your way to Google early on. Why don't you touch a little bit on that experience and particularly the things you learned?

A Absolutely. Well, that's another really crazy story, because when I was in business school, the company that proactively wanted to interview me was Green Giant. And I took one trip to Minneapolis. I think it was like -25. And I'm like, God, I love you guys. I cannot be in this weather. I love people from Minneapolis. I'm just not made for this kind of weather, and I don't want to be managing frozen burgers. And then I realized Silicon Graphics was coming to campus. I somehow made my way to the interview list. And the only reason why I'm mentioning it is again, my career could have been totally different. I didn't get lucky joins Google and the rest is history, but I had three years at Silicon Graphics, which I think was an equally impressive company with amazing people, just had no contingency plan, had a really great thing going and thought it's never going to change and just got killed in record time by windows. And I had to see a lot of close friends and a lot of great peers get laid off, even though they were very smart. They were very capable people. And most people don't realize this because look, nobody in history, nobody like talks about the losers or the companies that get extinguished, but a lot of companies like Netscape, TiVo, like all this, like digital recording, all these are SGI technologies. And it's so funny that then permeated to other companies like Nvidia. …

AI assessment note: “engineering manager that I work with as a Product manager ended up going to Google”