1. What were your biggest learnings at MarketInvoice?
The importance of attracting and retaining the top calibre talent and how the profile of that talent evolves as the company moves through different maturity stages from Seed to Growth. You may have the best and most cohesive founding team, but if you don’t manage to hire a capable team that you feel you can delegate to, your business will never scale, and as a founder, you will get bogged down in day-to-day operations and run a risk of missing the big picture. For some legs of your startup journey, you want fast-moving, fast-learning generalists whose biggest skill is getting sh** done. Eventually, as different functions across the organisation emerge, from sales to account management, customer success, product and engineering, you want to start hiring competent specialists who can take each of the functions to a whole new level of best practice. But if you bring them in too soon, when there’s still a little bit too much chaos, they will slow you down, frustrate your employees and leave quickly. This can undermine your reputation in the job market as other execs check how many senior people had short, unsuccessful stints inside your organisation – LinkedIn makes it very easy to see. A few mis-hires are fine, but it’s a number to keep an eye on.
2. What inspired you to become a VC, and was there a ‘lightbulb’ moment?
My first role in venture wasn’t an investment role. I joined my first fund, Mosaic Ventures, to support them operationally. The challenge was similar to my role at MarketInvoice – driving efficiency within the GTM team, in this case, the VC Partnership. During that role, I fell in love with the industry. You can say I had a ‘lightbulb’ moment – for the first time in my career, I felt like I found something I could do for the rest of my life and keep getting the buzz out of it. As a VC, you spend your days learning about new products and how to successfully take them to market and meet some of the world’s most ambitious people. While doing this, you have a chance to contribute (in a small way) to their incredible journeys either as a capital provider or a ‘sounding board’. What’s not to like? I feel very fortunate that I can do what I do and grateful to founders who trusted me on their journeys. To paraphrase an a16z Partner, Scott Kupor, as VCs, we are only as good as entrepreneurs in whom we have the privilege to invest.
3. ‘The venture capital bubble is facing a slow and messy unwinding. After a historic boom that put even the tech bubble of the 1990’s onto the shade, an adjustment to more rational conditions has started. But structural factors and the psychology of private markets make it hard to tell how long this will take or what will emerge on the other side..(FT 15.07.22).Do you agree and what could be on the other side?
It’s impossible to ever accurately time boom and bust events. When it comes to this one, there are numerous factors at play: decades of loose monetary policies that made the capital cheap starting to reverse, inflation, the upheaval in public and private markets, and the geopolitical crisis in Eastern Europe are a few major ones. The tech industry darlings such as Shopify have gone from an EV/Revenue multiple of 64x back in June 2020 to 6.7x in June 2021. A similar fate was met by many other companies, including Coinbase, Wix, Robinhood and Toast. Those changes have a chilling effect on the private markets. The growth investors are uncertain how the public markets will value the companies they would like to invest in and subsequently float on the stock exchange. This stops them from moving quickly and confidently pulling the trigger on new deals.
Consequently, many of the earlier stage VCs are also sitting on their hands because they don’t know which companies will be favoured by the market when their runway ends. As always, in those situations, there’s a flight of capital to a particular deal profile. The deal profile that seems to be the most appreciated in the current ‘season’ are companies with high capital efficiency. This gets measured by looking at ‘burn efficiency’: Net New ARR / Net Burn – the market favours companies that keep it under 2.5x while continuing to grow aggressively. At Notion, we see the current period as extremely attractive for an early-stage VC. Many iconic companies are created in times of crisis. Airbnb, Dropbox, Cloudera, Twilio, Cloudflare, Square, and Slack were all founded in 2007-2009. This could be another ‘golden vintage’ for tech.
4. How would you define ‘frontier tech’ and where are the boundaries of our capabilities being pushed furthest currently?
Frontier tech is an umbrella term that covers a vast ground: AI, IoT, AR/VR, Space, Quantum Computing, Carbon Capture, Sustainable Energy – it’s so broad it’s probably not that helpful. I’m particularly excited about vertical AI and how it can be leveraged in the real world, for example, via machine vision. We recently invested in an up-and-coming player in the space. The company is called Protex.ai, and it leverages machine vision to keep people safe at work. It connects to the existing on-site CCTV networks and turns cameras into intelligent machines that can detect hazards and alert security teams about them before they escalate into something more serious. AI that saves lives has got to be my favourite type of frontier tech out there!
5. What traits have you seen in the portfolio entrepreneurs supported by Notion that have impressed you, against a backdrop of a pandemic, Rising inflation and the great ‘Resignation’?
Our best founders have shown incredible adaptability during the pandemic and are showing it now as we enter the ‘post-boom ‘period in the venture capital and tech industries. The founders I see succeeding consistently are quick to read and act on signals of change. They think on their feet and iterate rapidly when it comes to their product, ideal customer profile, GTM plan, business model, processes and strategies, to eventually land in a truly unique position, capable of propelling them to market leadership. For me, adaptability is the single most valuable trait you can have as an entrepreneur.
