Question from Ryan: You have pinned on your Twitter feed right now, "No victory or defeat for the team will eclipse the real reasons we are here to help entrepreneurs become people of substance and impact." How do you define substance? How do you define impact?
Right to the good stuff, Ryan! I can’t recall if we’ve ever talked about the difference between resume virtues and eulogy virtues. Resume virtues are all those things you list on your resume or LinkedIn profile. Eulogy virtues are the ones that get talked about at your funeral—were you kind, loving, honest, faithful? When you pass, nobody says, "Ryan was a really wealthy guy.” They'll talk about the impact you had on people's lives. So for me, I've had time to reflect on, ”What is success?” Is it to make a lot of money? Is it to build a great business? The answer is deeper than that. Joy is this feeling that lasts. Happiness comes and goes. And for me, I’ve realized that joy comes from helping others become the people that they were meant to be. After a lot of soul searching and some tough bumps in my own journey, I realized that the most important thing my wife and I are going to leave on this earth is the good or bad influence we've had on others. I feel inspired to help entrepreneurs become people of substance and impact. That means becoming the people they are capable of being—not just the business builders, but leaders—and having the full impact of what that means to others.
Question from Ryan: You graduated from Harvard, you got your master's from Chicago Business School, and you received your MBA from Stanford Business School. At some point early on in your childhood, growing up in rural Georgia, how did you learn that striving for success academically was something that was going to be important to you?
As I’ve shared before, my dad was my hero. He unfortunately suffered from Multiple Sclerosis (MS) and was diagnosed when I was quite young. My mom did superhuman work to raise my sisters and me, all while taking care of him. She was stretched pretty thin. There were times she was struggling or we were struggling as a family, and I found if I did well in school, it was something that made us both feel better. I figured out that if I put in the work, I could succeed and it lightened her load just a little. I never wanted her to worry about me and I wanted to get to a place where I could take care of her. Additionally, I think I realized the better you did in school, the more doors opened. I also really enjoyed learning, so I embraced it.
Question from Ryan: During that time, at what point did you say, “I can keep up with my peers and I'm on the same level as them”? I know coming from where you did and getting into some of those circles that you were in and being able to carry your own weight is not an easy path.
The truth? That's still a struggle to this day. I continually show up with questions about whether I can hang. I’ve learned to just take it experience by experience. Whether it was arriving at Harvard and saying, "These kids are way ahead of me," or trying to play pro soccer and saying, "Wow, I didn't realize people were this good,” or starting a venture fund four years ago wondering, “Will our different way of doing things actually work and help founders in an unprecedented way? Can I really do this?” Struggles like these are where you grow and learn and for me that’s what it is all about. We're meant to stumble along and stretch ourselves and grow. I don't know any other way. Perhaps oddly, I almost feel anxious when I am not testing myself and pushing my limits. I truly believe if you're not uncomfortable, you're not learning. Discomfort is an important part of the journey and I keep pushing, but believe me, there are still days I feel like an imposter and I'm not sure I belong.
Question from Ryan: You've been able to compete at the highest level in arguably the toughest arena in the world of business and venture. You and I have talked about some of the similarities between great athletes and great founders. Talk a little bit about those—what are the things that stand out to you that elite athletes, founders, and investors have?
It’s really two things. First, there’s this balance that all great athletes find between believing in themselves and their ability to overcome even the greatest odds, and the humility to keep learning and improving. The very best in sports, and in entrepreneurship, in my opinion, have this strong inner belief, motivation, resilience, and perseverance. At the same time, they are willing and interested in seeking out critical feedback and learning from others. They want to hear how they can improve and elevate their abilities to perform. Most are obsessed with perfection. Athletes work with coaches and other athletes to improve techniques and decision making. Founders seek out founders, executives, and investors who have gone down the path ahead of them. The thing elite performers share in either arena is this insatiable desire to learn from others and consistently get better. I half joke with our founders, "The difference between winning and losing at a startup can be 1%, just like the Olympics or professional sports." You have to be maximally efficient to win. That means learning from others and translating that to your own performance. The second common trait I see in great athletes and entrepreneurs is a commitment to consistent excellence. It’s a drive that comes from within to routinely show up and give maximum effort. Not just when you feel great or the sun is shining, but when you are sick, tired, or sore, and when it is raining or cold. You can’t teach it. So many people glamorize being a professional athlete or a startup founder and claim to have the energy and fortitude to win. But as Bobby Knight said, “Everyone has the will to win, but not everyone has the will to prepare to win.”
Question from Ryan: You've had this illustrious career and you've been ranked on the Midas List. You're respected in the game by your peers and some of the best investors in the world. Some of your advisors that you've worked with over the years—like Andy Rachleff and Kevin Compton— are on the Mount Rushmore of venture. Talk about Unusual and the firm you're building. More specifically, what are the values that you're trying to build and have built within the walls of Unusual?
I appreciate that question and comment. Yes, I've been very blessed to have people like Andy, Kevin Compton, and Jim Goetz as mentors. I think part of my journey has been looking for people to play that father figure and mentor in my life. These are people who have built amazing firms like Benchmark, Kleiner, and Sequoia. When we sat down to start Unusual, we thought long and hard about what we wanted to be and what we wanted to stand for. We were very clear that there were key things that mattered very much to us, such as who our LPs were, how the team was composed, how we treated one another, and how we treated founders. Would we be differentiated? Would we truly provide a level of service that was unprecedented and not just say that? We knew the journey would be difficult, so we had to be sure we had the right motivations to sustain us because the truth is starting any new company can have overwhelming moments. My partner, Jyoti Bansal, likes to say, "It takes 10 years to build anything of real value." We knew it would be a marathon, not a sprint. So then it comes down to what kind of values and culture do we want to have because we knew if we got these wrong, our motivation would fail us. I’ve learned from experience that culture isn't what you put on the wall or what you preach, it's what you tolerate and what you promote. What kind of behavior would our team have and how strongly would we adhere to that culture? I think in the venture and startup ecosystem we can all point to examples where people chose to overlook bad behavior because of great performance. We just decided that that was not going to happen at Unusual Ventures. We were absolutely going to win, but we would do so in a way that we were proud of our culture and manner of treating people.
Question from Ryan: I wanted to understand the roots of the firm, values, and convictions of the firm from the leadership down because it is really important. I know that these values are important to you because they allow you to create a firm that is somewhat of an outlier—“unusual”— in the sense of the realm of the ecosystem. Part of that is you and Jyoti creating a team. You've assembled some really talented people that believe in this idea too.
Working with a team of people who have amazing capabilities and who we are proud of is the most rewarding thing about building Unusual. I can honestly tell you that when we started I didn’t know how much I would enjoy putting a team of people like this together who are committed to our mission. If I look at my partners—just on the investment side: Sarah Leary, Sandhya Hegde, Andy Johns, and Jyoti—these are people that I am so proud to call Partners at Unusual. Not just because they're brilliant and work so hard, but because of who they are as people. Sarah Leary founded Nextdoor, she was a national champion athlete at Harvard, and she's a leader in her community. Same with Sandhya. She worked at Khosla and Sequoia earlier in her career. She went to Stanford Business School and helped build Amplitude from early revenue to triple digits. Jyoti, my co-founder, he's a superhuman entrepreneur and he's a good soul at the same time. We actually have more operators than investors at Unusual—we hired people from Okta, New Relic, LaunchDarkly, AppDynamics, Mongo, and Databricks—so we could take the lessons from building yesterday’s iconic companies and pass along the lessons learned to tomorrow’s founders and builders.
Question from Ryan: One of the things you hear often in this ecosystem is “value add.” How do you describe that at the stage at which you're investing, at the pivotal moment where founders need the most help in the earliest days?
In the venture capital industry everybody's got an angle and a story about how they are differentiated. How do they help? What's unique about their platform? For us, we are specialists at the early stage and we have an engagement model that goes much deeper than anything else out there for founders in those initial years. While every founder's journey is different, they all tend to face a lot of the same obstacles to find product-market fit (PMF): Hiring the core engineers, figuring out how to tell your story in an empathetic way from the outside in, getting the right design partners, and closing those first few deals. The modern startup has to embrace a constantly evolving go-to-market motion and we built a team of people who are experts in their respective fields, eager to dive in, and DO alongside founders. I constantly make light of the fact that we learn in life through suffering. Our model is such that we suffer alongside our founders. We wanted to build a team of people that didn't just give advice—advice is EASY—but that actually got in the trenches and knew how to build companies at the early stage. Our team of operators spends near full-time with groups of founders—one or two companies maximum at a time—helping them with the nitty-gritty. The early hiring, the website copy, the sales deck, building pipeline, closing the first 10 customers. They're not telling you how to do it. They're actually doing it. That's how you learn as a founder when you work with Unusual. I can't gush about our team enough. We have over a dozen examples now where we successfully worked with founders to get their companies to PMF, and then raised additional funding rounds to accelerate growth. I know that VCs like to say they are unique, but I truly believe what we’re doing is unusual.
Question from Ryan: You’ve seen a lot of evolution in the venture ecosystem. What are some of the things that you appreciate that have changed about venture and what are some of the things that you don't appreciate?
When I first started in the industry almost 20 years ago, there was a more collaborative spirit about the industry. We saw a lot of firms working together and partnerships often investing side by side on early stage ideas to provide more resources and experience to help founders succeed. If you fast forward to 2021, we've seen the rise of extremely large funds and multi-stage funds. Their intention is to be the lead investor, not just in one round of financing, but in multiple rounds and accumulate a large ownership position in a particular company. The thinking they advocate is, “We support founders all along the way and we have the capital to support you even if things don’t go as well as planned.” What I find these firms to be less forthcoming about is the flip side of that coin, namely that one firm having a large ownership position in a company is not necessarily good for founders or the company, and that when a multi-stage firm chooses NOT to lead a follow on round, there is negative signal in that. I also personally don't believe firms can provide the best level of support infrastructure for founders at every stage—that specialization does indeed lead to optimal performance, but I recognize that isn't necessarily a common view.
Question from Ryan: I know faith is really important to you and to your family. How does that play out in your life?
I fully respect that religion is a personal thing. I grew up with it, so I had exposure to it as a child. As a young adult I struggled and got away from it. In my thirties, I reached a point where I had to look back and reflect on what was working, and candidly, what wasn’t. I realized that when I followed the guidelines that I felt God lays out for us, I was a much happier person. And when I didn't, I wasn't. I knew I had to make a choice about the kind of person, husband, and father I wanted to be and no more faking it. Since then I have made an effort to “practice” my faith. I read, I go to mass, I try to pray at least a little every day. I made a conscious choice to stop looking at my life like a series of milestones that I had to achieve or gates to advance through. Instead, I decided to embrace the idea that my job is to do my best with whatever comes my way and have a mindset to trust that God has a plan for all of us. While we may not always understand, we can accept that each challenge we face is all part of a plan to shape us into the people we are meant to be. When I allow myself to do that, and believe me when I say it isn’t easy, there is tremendous peace and freedom.