In this episode of "20 minutes VC," host Harry Stebbings interviews Mark Suster, Managing Partner at Upfront Ventures and a former entrepreneur. Suster shares insights from his journey transitioning from a programmer to entrepreneur, and then to a VC, emphasizing the importance of understanding programming and sales in business. He discusses how too much funding can stifle creativity, the ideal 18-month capital runway for startups, and the significance of investor-founder relationships. Suster also touches on his investment strategy, focusing on lines of growth over time rather than isolated data points, and his preference for underhyped markets like Agtech. He highlights the need for entrepreneurs to build networks and the potential pitfalls of the glamorized startup culture. The interview concludes with Suster's views on the SaaS sector, his reading recommendations, and his latest investment in MeToo Networks, aiming to create a leading Latino digital media company.
"Mark is managing partner at Upfront Ventures, which he joined in 2007, having previously worked with Upfront for nearly eight years as a twotime entrepreneur."
This quote introduces Mark Suster's current role and his entrepreneurial background, highlighting his experience in the industry.
"Mark is also the writer of one of my favorite VC blogs, both sides of the table, which really is a centrepiece to the whole VC community and is a must read for all interested in entrepreneurship and VC."
This quote emphasizes the significance of Mark Suster's blog in the venture capital community, suggesting its importance for those interested in the field.
"I started my life as a programmer. I was a developer in middle school, I was a developer in high school."
Mark Suster recounts his early interest in programming, setting the stage for his career in technology and entrepreneurship.
"Entrepreneurship is not cut out for everybody, but if you want to give it a try, it's infinitely better to start earlier."
This quote highlights Mark Suster's advice to aspiring entrepreneurs about the importance of starting early in their careers.
"There are two skills you're going to need. Minimum two skills you're going to need. You need to take some programming course... and the second piece of advice that I always give people is to get some sales experience."
Mark Suster outlines the two essential skills for entrepreneurs: programming knowledge and sales experience, explaining why they are fundamental to success.
"I ran two software companies. The first was based out of England, the second was based out of Silicon Valley. And having done it twice, having sold both companies, having seen what that was like, one of my backers offered to bring me in as a VC..."
This quote describes Mark Suster's entrepreneurial journey and how his success led to an opportunity in venture capital.
"I think the hardest thing is if, look, all kinds of people can succeed as vcs, and I think one of the most successful vcs of our era, Fred Wilson, wasn't an entrepreneur. So really anyone can succeed. But I feel like you're at a great advantage if you've been an entrepreneur..."
Mark Suster acknowledges that while anyone can succeed as a VC, entrepreneurial experience offers a significant advantage in understanding and guiding entrepreneurs.
"And today we're going to run through kind of a funding story. So the story starts with a team at a startup looking to enter a round"
This quote sets up the topic for the next part of the conversation, which is about a startup team's experience with funding.
"Too much capital creates a certain laziness and people create shortcuts. And that, I think, leads to making a lot of mistakes."
This quote highlights the negative consequences of having too much money too early in a startup's life, suggesting that it can lead to complacency and poor decision-making.
"The ideal amount of capital, if you can raise it, is 18 months."
Mark Suster explains that 18 months of capital is ideal, giving startups enough time to prove their value before needing to raise more funds.
"I always say Abr always be raising. Just so you know that I live what I preach. This morning I had two meetings, one over the telephone, one in person with investors in my fund."
Mark Suster emphasizes the importance of continuously engaging with investors, even when not actively seeking funds, to build trust and rapport.
"An early stage company I want to see in person every single month."
Mark Suster outlines his expectations for engagement frequency with early-stage companies, indicating the need for closer oversight and support.
"We think about if I take $240,000,000 of it, and I say what I really want to do is invest half of the fund into companies and reserve the other half of the fund to follow on my best deals."
Mark Suster explains the investment strategy of Upfront Ventures, highlighting their approach to primary and follow-on investments.
"But I'm super entrepreneur driven. It's something about that Genesequa character of the individual, that they know their market better than most."
Mark Suster describes the entrepreneurial qualities that excite him as an investor, emphasizing the importance of character and market knowledge.
"I'm a seed or a round investor. So I'm usually not betting specifically on traction, which tends to be more of a b round activity." "There's all these intangibles that I'm trying to judge."
The quotes highlight Mark Suster's focus on the personal attributes of founders rather than just the traction of their startups when considering early-stage investments.
"I invest in lines, not dots." "Is this someone I want to do business with?"
The quotes explain the metaphor Mark uses to describe his investment philosophy, emphasizing the importance of observing an entrepreneur's journey over time to make an informed decision about their potential for success.
"50 coffee meetings is committing yourself just one time per week for a year." "The single best introduction is a portfolio company CEO."
These quotes provide practical advice for startup founders on how to effectively network and create opportunities to meet potential investors through a structured and consistent approach.
"Anything in the SaaS space, it's more attractive to me because I know how to be more helpful." "I'm trying to find underhyped markets, things that people are less interested in."
The quotes reflect Mark's investment strategy of focusing on sectors where he has expertise and can add value, as well as his approach to identifying and investing in emerging markets with long-term potential.
"And for three years we started meeting companies in the sector and we didn't talk about it publicly because we didn't want to encourage the market."
This quote highlights the strategic decision to keep investment interests private to avoid market speculation and premature hype.
"I'd say probably selling maker studios to Disney so far has been my career highlight."
This quote succinctly captures Mark Suster's most notable career achievement, indicating its significance in his professional journey.
"I think we've returned to a moment where startups in Silicon Valley and tech have become fashionable and everyone wants to do it which means you're going to have too many companies, too much money, and too many people who aren't truly entrepreneurs, kind of clouding the market for everybody else."
The quote expresses concern over the glamorization of the tech startup culture, which may lead to a cluttered and inefficient market.
"My favorite book that I read recently, which is also my favorite that I've read over the last five years, is the accidental superpower."
This quote reveals Mark Suster's current favorite book and suggests its profound influence on his understanding of global dynamics.
"Thought leader of the know, I've always looked up to Fred Wilson a great deal."
The quote underscores Mark Suster's respect for Fred Wilson's ability to provide sound advice without being influenced by the prevailing trends in the industry.
"I love the concept of people trying to have constraints on an early business."
This quote conveys Mark Suster's appreciation for the lean startup approach, particularly the aspect of operating within constraints.
"That it's fun and exciting and that it's an adventure. And that for most people, it's economically your best alternative."
The quote dispels common myths about entrepreneurship, emphasizing the reality of its challenges and the necessity for genuine passion.
"I love reading Chris Dixon. When he writes, he writes less often, but he has a way of contextualizing issues in a much more concise version than I do."
This quote highlights Mark Suster's preference for reading materials that offer substantial insights and contextual understanding of issues.
"We're trying to build the first ever proper latino media on digital media company."
The quote explains the strategic intent behind the investment in MeToo Networks, aiming to capitalize on a growing and influential demographic.
"What an incredible interview that was with Mark."
This closing statement by Harry Stebbings wraps up the interview with a note of appreciation for the insights and knowledge shared by Mark Suster.