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Rishi Garg

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24
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2017-01-18
most recent
2017-01-18
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1
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  1. “Yeah, it's a NASDAQ traded company. And I just bring it up because people always wonder why in the world I'm on this board because it seems Silicon Valley and stuff like that. And it's actually a fascinating business that provides access to household goods. So access is the first thing. And then safety because it's not a credit product. There's no hit to credit if people can't pay. Provides assets and safety to the bottom of the pyramid and providing financial services that are not deleterious to the bottom of the pyramid, to people that don't have access to high incomes is a real passion of mine. And so it's a company that, you know, I'm very optimistic about and that I think is doing some interesting stuff.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Great question. So, as part of Mayfield, since I've only been here for seven or eight weeks alone, I haven't done a explicit public investment yet. We have a couple in the hopper that are going to be announced before too long, but I can't talk about them just yet. I will tell you that exactly along the lines we're talking about, I did about 10 or 12 different investments that are sort of angel-like in nature in the last year or so, and a couple of them are in the social media space. So I do believe that certain use cases will be solved. There's a couple of square alums who are starting really cool businesses that I've been able to contribute to and support. I may tell you that there's one public sort of involvement that I've had that may be just interesting, which is that I'm the board of a company called Rent to Center, which is based in Dallas, Texas. It's a $3.2 billion revenue company that provides rent-to-own furniture for the lower income users all around the country. Rent to center.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Be one or two. There's a couple use cases that still aren't solved, and I see companies coming to the fore and hope to back companies coming to the fore that can solve those problems.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Funny, I think we're going to be in this world of a controlled but ever expanding oligopoly. And this is an evolving perspective of mine. But I think we've witnessed no less than seven sort of social platforms achieve more than 100 million users in the last seven years, which is unprecedented creation of wholly owned new media platforms. I don't think you're going to create another seven tomorrow, but I won't be surprised if in the next couple three years we see one or two more because there are, when consumers sort of find the social media platform they love, they use it, they really dig it, but eventually they grow and they want new kinds of expression. They want to think about new sorts of things. And new platforms do come along to provide that. That's why people are on Snapchat and WhatsApp and Facebook and Instagram and Twitter. It's very common. So I think we'll continue to see slight evolutions where users will find new ways to express their identities on new social media platforms, maybe not a scale, but there's a couple of use cases that still aren't solved. At scale meetings, there's not going to be 10 of them.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Some of them are wait but why, Tim Mervin's blog. I love strategery by Ben Thompson, which I quoted today in a post I just had on TechCrunch. Those are probably two of my top ones. I like Nautilus and Quartz a lot just for talking about really interesting topics. Those are probably the main ones.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “I think that one of the hardest things about Square was finding its second big hit. So once you have millions of small businesses using your product, you should be able to build several sort of ancillary businesses on top of it. And I think Square sort of showed how hard it is for companies to have more than one big success. We tried Square Wallet. It was unsuccessful. We backed it for too long. We kept it going for too long. I think there wasn't enough focus on creating the same kind of 10x value proposition in that product that Square's core product originally had.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Incredible product market fit. They did an incredible job of taking a process that was terrible for small businesses across 10 different dimensions and making every part of those 10 different dimensions fantastic and innovating across each of those 10 different dimensions. And they supported that innovation on the consumer product with two things, incredible operations. So they built a machine that allowed them to just get the readers into people's hands and do the KYC and get the product out there in the marketplace with incredible skill. And secondly, technology. It had an incredible payment stack, incredible engineering, world-class risk management that resulted in industry leading risk loss levels. So they did those things very well together. The second thing that worked really well was culture. Square was definitely a place that along several dimensions, whether it came to values or purpose or vision, had some really world-class cultural elements.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Two favorite books the autobiography of Malcolm X and Buddhist art of living and dying. The autobiography of Malcolm X is because it showed me how great a man could be when he sets his mind to accomplishing something. It's one of the most profound American rags to richest stories in my mind. The Tibetan Book of Living and Dying is just special because it's sort of the best explanation of Tibetan Buddhism, I think, I've ever read and one of the most accessible and a pretty big influence on me spiritually.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Depends on the project. At the series seed stage, right? You may answer a bunch of questions in six months because you're devising a set of experiments to do so. And then at the series seed, I'd always say like you want to basically double your money. So it's going to take you 600 grand to answer three or four top hypotheses, try to raise a million two. In the series A, hopefully you've answered one or two hypotheses and you're starting to find traction in one direction or another and answering some bigger hypotheses. So you might think about it roughly the same way, maybe a little bit less. Maybe you don't double the money, but you sort of think, okay, you know, it's going to take me nine months to figure out or 12 months to figure out the key hypotheses I need right now. So let me add another nine to 12 months of runway onto that. So that puts you kind of into the range you mentioned, that kind of 20 to 24 month range. That usually feels pretty good. You said 18 or 24. And like, I don't think there's a science to it. I think that just sort of feels like the right amount of time to answer a set of questions. Sometimes it takes longer. Sometimes it takes shorter.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Into a budget, and it happens more often than you think. And I think that's sort of the tail wagging the dot. This process should be about trying to answer questions on your way to building a business so that you can find product market fit.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “With this, and with almost every kind of question like this, I try to focus on data, right? What is it that the entrepreneur wants to prove? And by the way, this should apply for every round. It comes up more frankly in series seed than in series A. But the basic idea is that the progress of a startup is the progress of having hypotheses that you then want to try to answer. And so when you're constructing around, you should be able to think about what are the few things I know? What are the things I don't know? How much money is it going to take to figure out the things I don't know that are really important? And then how do I have an adequate cushion so that when I figure out the things I don't know, and it turns out a lot of great ideas I had won't help me build my business, I have enough capital to learn from those hypotheses and then formulate several new hypotheses to go and test. And that should give you some sense of how much money you should raise. Now, the way that most things happen, especially for seeds and series As, is people say I have a certain amount of dilution I want to take. I don't want to take more than X, right? Dilution. That means I back into a certain round size, and that means I back.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Something. That lack of capital focuses effort. It focuses operational discipline. And I think there's just a lot of good that comes from that. And I think if you look at the data, look back at all the companies that have been founded and ask yourself, how many of the best companies that we're most proud of started out with really huge Series A's? Very few of them have the dynamic. That doesn't mean it's not going to be the case in the future, but very few of them have that dynamic.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “There's some of that on the marketplace today as well. Now, the problem is, and every business is different, but generally speaking, really big series A's can come with some serious negative side effects. And I think it's pretty obvious what they are often. It's down rounds, complacency in the execution. You know, down rounds is sort of a lagging indicator, right? Although that's certainly an issue. It's more just like when you have a lot of dough, you might be a little bit less focused on prioritizing the one or two or three things you have to nail to be successful. And for a long time in most businesses, it comes down to one or two or three things you have to nail. Even into the growth stage in a lot of cases. I think that there's a certain physics to the way that startups and funding have evolved in the valley where you take a very small amount of capital, a small focused team, and go try to accomplish something big in a short period of time. And then you get more capital and earn your way up the stack once you've been able to show that you're actually honest.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “It's funny, it reminds me a lot of the late 90s and what happened just after the late 90s, where people see big outcomes. I think there's a few different dynamics at play. People see big outcomes, meaning that if I invest capital at an early stage, I'm going to have the potential for creating a billion dollar company. And we had a lot of exits and had a lot of great outcomes over the last several years. So there's that feeling in the marketplace. The second thing is that founders have credibility because they've been at a Facebook or they've sold a company to Braintree, whatever it is that they've done. And so as a result, they can command to the marketplace sort of premium attention. And when that happens, you sometimes have more leverage over investors who want to get into backing these founders no matter what. The third thing is very structurally, when you have new platforms that have been created, like the internet period or in the last seven years, the mobile revolution, there's just bigger opportunities to go and fix, to go after. People want to raise more capital to protect them against a downturn. And actually, that's the fourth reason, fear of when the good times are rolling that the good times will end.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Well, that's a tricky subject. I mean, ideally, you know, you're never in a place where the VC has to barter or negotiate between founders. What I think the role of a VC is, is to support the same way they support other strategic questions, choices, et cetera, that founders and entrepreneurs are dealing with as they build their businesses. The role of VC is to call out that this is an important consideration, that is something they should spend time on, right? Put attention to, and then suggest means of doing so. And I think that's the right level of role to play. The same way that pattern recognition that a venture capitalist would have when investing in a company that could help serve the company along things like how do you hire and strategy and stuff like that comes to the fore. So I think that's the right way to implement it.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “For doing business in general. And so a willingness towards transparency, leaning into transparency is sort of a key factor or filter that I look for in founders.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Great question. You know what? It should, it entirely depends on the nature of that discussion. If it was one of those things where there was honest conversations, even if they were painful, where founders had to decide in the best interests of the business what the right personnel or founding team was to move the business forward, and they were willing to make hard choices in order to do so, that's usually a good sign. If instead you've got founder dynamics that rapidly sort of broke apart or where there's still bad blood or where there's a lack of understanding about why things ended up the way they are, that may suggest that founders aren't willing to have hard conversations with each other as much as you want them to. And you can suss this out by doing the natural thing that people do, which is just diligencing whether, you know, what the circumstances was of a founder's departure. If a founder is very reluctant to have you speak to the ex-founder, usually that's a signal as well. So I've always found that a willingness towards transparency is extremely confidence building. And I don't mean this just when it comes to investing. It's just sort of a good rule for life in general.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “So let me understand what you're asking. Are you saying after you've made an investment, if founders change or during the diligence process, if you find that founders, there's been some founder churn of the business that whether or not that's a concern?”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Are you, especially with first time founders or younger founders when they find co founders who they haven't known for some time? But you should also ask about if they have known each other for a long time, have they been able to sort of have authentic conversations about their strengths and weaknesses? And the key sort of answer, a consistent set of answers that usually indicates that you're onto something positive with co-founders is that they are willing to be open and transparent about their struggles, their conversations.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Question So, how do you find out? You know, I think you find out there's a few key questions you can ask that are leading questions. One is you can learn how much time they spent on making hard decisions. So there's some research actually. There's a guy named No Wasserman who has found that whenever founders discuss equity splits at length, even if they end up just dividing at 50-50, okay? The fact that they've had the conversation is a higher indicator of long-term company success based on enterprise value than if they divided at 50-50 or chose whatever the division was going to be without having a discussion. And it's probably obvious why. It sort of means that you're willing to have hard conversations and discuss things and tackle thorny issues, which is critical for founder success, right? Authentic communication. So one simple question to ask is, how did you guys divide the pie? I mean, it's just one thing you can go over. How long did it take for you to divide the pie? What's the biggest question or issue that's come up between you? What's the biggest hole between you as founders? How long have you known each other? Often a little bit.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “After the fact, after an investment's been done, rarely is it the case that amongst all the programs that are offered to help people grow businesses, is there a lot of input into, hey, how do you develop a better founder relationship? Since that's such a critical access for success. So that's what I mean by there's a lot of, I think, and this is very exciting for me because there's a lot of great work that we can do to make the founder experience, both in terms of co-founder relationships, in terms of founder psychology better, less painful, more transparent, and doing so make the process of starting and building a company easier, less painful, and hopefully more likely to be successful.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “So I think if you ask most VCs, they'll say that what they care about when they choose to invest is team. Because when you're dealing with very early stage companies, your bet is on how good a team is, how good is a founder, and good is sort of a weird word, right? Or it doesn't say very much. ACG is some combination of having a chip on your shoulder, energy, and intellectual capacity fit with the problem that you try to solve, grit, substance, magnetism, and your ability to attract talent, those sorts of things. But what VCs generally do is they rely on their systemic ability to sort of perceive these things in meetings or reference checks. One of the things they don't do is systematically evaluate and try to dig into what are the relationships between co-founders look and feel like. They don't tend to, it's rare, I think, that people talk about them. Usually founders are pretty good if there are issues in the dynamics. They're pretty good at covering those up in the course of the process, which is understandable because they are presenting themselves. So rarely are questions really asked about those dynamics. And even more importantly,”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Called Founders Conversations, which was something I did with a couple of other professors, which basically got 30 founding teams in a room, and we spent a day or so doing work where we worked on their founder dynamics, their ability for co-founders to be able to speak to each other effectively, get a line, have authentic communication, break down barriers, et cetera. Because the research shows that the better founder communication is, the more likely you are to be successful. And so that's the kind of thing that I want to implement and sort of operationalize here. So that was a key, this is sort of an example of the operating experience working. The second thing, the second overall area is that I have a very good sense of what great entrepreneurs look and smell and feel like because I got to work with so many of them, not just the founders of Square and Twitter, but also the credible operators and entrepreneurs that we brought into the fold. So people like Kay on Bigpor found a Periscope and Josh McFarlane found a telepart. I mean, these are the kind of people that we really, really world-class founders. And I guess I have a pretty good sense of what they look like and smell like it and are like to work with. And that's, you know,”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “I mean, there's a lot of stuff. So, first of all, the operating process of being under the gun every single day at a gross stage company to have to execute when you have a tremendous opportunity in front of you really forces you to be excellent at day-to-day work, like just making it clear decision about what you want to accomplish and then doing it very fast. And so for me, it really honed my operating skills. And as I come into venture, one of the things I, a couple things I bring that are helpful from that standpoint. One is that I'm able to see operational excellence in companies. The second is that I'm able to, in my own work as an investor, I'm able to operationalize my work so that I can build machines, if you will, build ways of seeing patterns here using the resources that I have at the firm so that we can make better investment decisions or that we can learn about certain things much more quickly. The other place that played a role is a lot of my work here is going to be focused on how do we create programs that help entrepreneurs be successful where existing investors may not be so helpful. So I'll give you an example. When I was at HBS, I did a thing.”

    2017-01-18 · The Twenty Minute VC · 20VC: How To Test The Strength Of Co-Founder Relations, The Dangers Of Raising A Large Series A & Why The Biggest Challenge For Consumer Companies Is Finding The Second Big Hit with Rishi Garg, Partner @ Mayfield Fund · IDENTIFIED FROM THE TRANSCRIPT · source