I am a techno-optimist, serial entrepreneur (Color Health, Mixer Labs - acquired by Twitter) and investor.
I'm an investor in companies like Airbnb, Airtable, Coinbase, Figma, Gitlab, Instacart, Notion, Pinterest, Retool, Samsara, Stripe, Square, and others.
I'm super excited about the current wave in AI (think OpenAI, Stable Diffusion, HuggingFace etc). I used to work on AI-driven products at Google (ads targeting), Twitter (search) and Color (health data sets). I have been investing in the machine learning area for 10+ years.
How should a startup approach finding a market?
Most startup opportunities are definitionally non-obvious. If the idea were obvious, others would already be doing it, and there would not be an opportunity. Some places to look are things you keep building for yourself at a company or would use yourself, focusing on a specific customer type and working with them on their needs, or going to the frontier of new technology that .may open up opportunities such as transformer-based AI models today.
What is the #1 mistake you see startups repeating?
Startups tend to die either due to running out of money (which is a proxy for no product market fit) or cofounder conflicts that blow up the team.
The number one reason for cofounder conflicts is saying both founders make decisions together and “just work it out” if they disagree. You ultimately need a cofounder who is CEO, which means if all else fails, they can make a final call. The non-CEO cofounders then need to “disagree but commit”
i.e., even if they feel otherwise, accept that the CEO will need to make a final call (on occasion) they may not like.
What's the M&A market looking like today?
I have written a lot about M&A in my .blog and my .book. We have recently gone from a period where no one wanted to sell their company for 4-5 years—because funding was easy to get, you could easily sell secondary etc—to one where I am getting lots of pings from founders thinking about selling. I think this will only accelerate and we will see a lot of companies exiting in the next 3-18 months.
How should founders think about raising a seed round today?
Most of the market shifts to date have been to later stage rounds. While seed valuations have come down 20-40%, lots of capital is still available. The amount of time to raise money has reset to 2019 levels, which was still exceptionally fast. So most people can still raise a pre-seed or seed in a few weeks when it used to take 2-3 months.
How do you know it's time to leave a cushy job to start a startup?
Startups are an act of desperation—you either really want to do it (so your career has the chance to advance much faster than average) or you feel compelled by an idea or problem (including either a specific product or the idea of a startup itself). This is one reason big company VPs rarely start companies—too much opportunity cost and too little desperation.