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I am in a people and relationships business

“The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.” – Ralph Waldo Emerson

I wake up every morning thankful for how fortunate I am to be doing something for a living that I truly enjoy doing. The most interesting and important part of my life as a VC is interacting with the fascinating people that constitute the startup ecosystem. I am fortunate that some of the smartest, most bold and creative people share their time and attention with me, allow me an opportunity to get to know them, and give me a chance to share in their successes.

People who don’t work in/around startups sometimes think I am in the finance industry. I take time to explain  that I don’t spend a lot of my time developing financial spread sheets, creating powerpoint decks, or editing legal docs. I build networks and participate in them. I open doors and ask others to open doors for me. I work hard to earn people’s trust, evaluate and invest in opportunities, and then work hard on their behalf. I am in a people and relationships business.

I was catching up on email earlier and saw notes from a least three people who were generously connecting back and offering ways in which they could be helpful to me. Two of them were candidates I interviewed for senior roles at portfolio companies and one was an entrepreneur that I had recently passed on as an investment. I was not able to do business with them in the context in which we met, or were introduced, but they ‘paid forward’ to reach back out and shared their desire to continue our relationship, friendship and ability to support each other.

Just this Monday I was trying to evaluate a new investment opportunity with a short fuse, and some extremely busy and senior investors and an entrepreneur took phone calls on literally a few hours notice and provided feedback. They were generous not only with their time but also with their honest opinion and feedback on the opportunity. We were able to decide before sun set that same evening.

It is the generosity of startups founders, investors and others that makes the startup community so resilient and thriving, despite the known fact that most startups eventually fail. There is something about this culture of ‘paying forward’ and ‘pulling the other person up’ that is special. I am definitely a beneficiary of this, and hope to be able to contribute to the same in many more ways going forward.

Advisors vs Mentors and Coaches. Every founder should have them.

I was fortunate to be invited to the MIT Media Lab this week, to speak to and spend time with, a group of students, entrepreneurs and senior executives working in advanced imaging areas. It was a fantastic event and I met some very interesting new people + ideas. There was so much learning for everyone. People pitching new ideas, new mathematics in imaging, new applications of imaging in connectivity, productivity, health, and everyone open to discussing how to succeed at the nexus of technology, design, and business.

After my talk on startup activity in the imaging space, and why it was not an easy space to build companies in, somebody asked about the role of advisors in a startup. And who should be asked to join as advisors to help entrepreneurs from falling into familiar traps. A lively discussion ensued as clearly it was a topic on a lot of people’s mind.

We discussed that young startups, and especially first-time entrepreneurs, should be very careful in choosing advisors. This is not an opportunity to list all your favorite people on a PowerPoint slide. Most advisors unfortunately don’t contextualize their advice, and others carry hammers where everything looks like a nail to them. An advisor’s advice is one person’s opinion, often heavily influenced by their own (limited) experiences. Some advice can be outright dangerous. That said, the right advisors at the right time can be super helpful.

I shared two other thoughts that often come to my mind when I think of advice for less experienced entrepreneurs:

(1) Many startups list lots of advisors to artificially demonstrate credibility in front of investors and customers. Be careful not to overpopulate such lists, or add frivolous people. Not only are people familiar with this tactic and hence it could backfire, it can also create a clusterfuck of ideas in your mind if everyone’s POV is considered. For every advisor, there should be at least one topic that you consider critical to success of your company that you would really want advice from them. If you cannot assign at least one such topic to each advisor, you are doing it wrong.

(2) Rather than generalist advisors, founders should ideas look for and recruit mentors. Advisors can be dime-a-dozen, mentors are not. People sometimes easily agree to being called an advisor to an early stage company (without really contributing much in that role) but they tend to be more guarded and thoughtful before accepting to be a mentor. Mentorship involves building of significant trust, it’s a personal relationship, and it involves a much more significant investment of time/effort and over an extended period of time. I believe everyone should have a mentor…and it’s a relationship that helps one be introspective, grow, and build over time.

Two additional int’g sub-topics came up as we discussed mentors for early stage founders:

(1) several people I spoke to at the MIT Media Lab were senior executives at companies. Some of them mentioned that they feel having a ‘mentor’ vs an ‘advisor’ could signify to others a level of inferiority or lack of seniority in the team. I tried to explain my POV that I wasn’t concerned about semantics…my point was to highlight a difference in relationship. Advisors can give passer-by advice…they sometimes do, and sometimes don’t, contextualize advice to your startup, your personality, and your personal struggles as a founder. Advisors tend to share best practices, but I wish there was a recipe cook book on how to deal with startup challenges. There isn’t. A mentor on the other hand invests time in understanding you. He/she believes in you and wants you to succeed, irrespective of the particular startup you are with at that time. Mentors share their experience but also spend energy trying to understand how your experiences might be shaping the struggles you are facing personally or professionally. I think simply stated, mentors care more than advisors, and I like people who care more about founders.

(2) I found myself mixing the words mentors and coaches when I spoke and realized later there is a big difference. And I think founders need both. Mentors are people founders look up to as role models. Mentors are often in a position to say “if I was in your shoes, this is what I may have done”, because often they have been in such situations before. Mentors can sort of stand in your shoes. Coaches on the other hand are not that. They are smart, thoughtful, high IQ and EQ people who help you figure out your own strengths and weaknesses, and find your own particular solution to the problem you share with them. They are like the basketball coaches of NBA players (who are often much shorter than the players) who have never stood in such big shoes but they help players find the best in them to compete at the highest levels. Coaches are professionals. And one may not look up to the coach, but a good coach is deeply deeply respected.

I am deeply thankful for all the people who have given me advice in the past, and continue to do so. I am also thankful to all the people who hVe provided advice to my portfolio companies, their founders and CEOs. And I am thankful for the few that have agreed to be my mentors and coaches because it would be really hard to learn to be better without you.

What is a ‘pitch’? Do some entrepreneurs view it differently than investors?

A 1-hour coffee last night with a first-time entrepreneur/founder turned into a 3+ hour discussion on many topics related to technologies, startups, founder issues, CEO responsibilities, team dynamics, investor/Board management and so on and so forth (we were eventually kicked out by Coupa Cafe or it would have gone longer).

During this conversation we stumbled into an int’g discussion around what is a ‘pitch’? Investors frequently ask for a pitch and founders often find themselves giving a pitch. We realized quickly that, indeed, we both meant slightly different things when we used the word ‘pitch’, and while perhaps the difference was subtle, it actually made a big difference in communications, esp between entrepreneur and his/her investors.

This particular entrepreneur thought a pitch meant a short (or long) description of how awesome the team, idea and business opportunity was…delivered with an extremely positive filter so the investor would be compelled to open up his/her wallet and write a check asap. A pitch meant showing strengths, not weaknesses, all questions had to be shown as either already answered or getting answered, and that it was an opportunity to wow the investor.

Investor (me) thought a pitch was a description of the business opportunity such that it conveyed the opportunities and the challenges in an honest fashion so a new investor could determine if the team and the space was the one to get behind at that particular moment in the startup’s trajectory. A pitch was not a rose-colored glasses view of an idea but an opportunity to introduce the business, the team, the reasons why idea was worth pursuing and what challenges/risks would need to be overcome to reach the next important milestone in the company.

Maybe the two views described above sound rather similar to many…but in my humble opinion there is a big difference. The entrepreneur did not intend to hide anything, but when asked to ‘pitch’, he/she was basically willing to place all fears and uncertainties to a side to simply excite and entice potential investors. And not just investors, the entrepreneur would consider a ‘pitch’ to mean the same when delivering it to business partners, employees or potential employees.

On the other hand, when an investor asks for a pitch he/she is typically looking to not just learn about an exciting opportunity but also take steps towards building a relationship of trust with the one pitching, and also coming to an understanding of the risk/reward embedded in the particular investment opportunity. What questions remain unanswered? where do you need help? What keeps you up at night? etc…How could we build a partnership of trust if everything you shared with us was painted in a positive light…esp when we all know every startup has warts and challenges.

I learnt in this discussion that semantics do matter. And not only can the conversation go off rails if people mean different things for the same word, a simple misunderstanding of what is implied in a ‘pitch’ could affect how we come to trust and respect the other person, or judge their credibility. It could cause grief in existing relationships, and bring about unnecessary turmoil to startup teams. Startups, and especially investors, tend to have their own industry jargon, and the word ‘pitch’ may be one casualty of it.

Computational Sound: the next frontier in hardware+software+internet revolution

Lets state the obvious upfront: we are witnessing a hardware tsunami. Cost of developing hardware has gone down, computational power accessible even on mobile platforms has gone up, connectivity is widespread, and amazing things are being done at the intersection of hardware + software + internet.

One of the areas that has benefitted tremendously from the this revolution is the field of imaging. Over a few short years we have gone from traditional 2D photography to advanced digital imaging, 3D imaging, augmented reality and virtual reality. Cameras are now able to capture a tremendous amount of information at very low cost leading to amazing innovations in both image production/processing as well as image mining for data. At Lux, we have invested heavily in the computational imaging space with our investments in MatterPort (3D scanning), Planet Labs (satellite imaging), CyPhy (aerial/drone imaging), LensBricks (computational imaging), Orbital Insight (image analytics), AltSpace (virtual reality).

But one area that I feel we are just barely starting to recognize as almost equally important is sound. I am really interested in what I have been calling ‘Computational Sound’. Sound is present and adds color/data to wherever we capture images (for example consider all the examples I listed above and how they would benefit by capturing the right sound for their applications). But we have taken it for granted, or have had very complicated and expensive ways of working with sound. I am interested in how we capture sound, manipulate it, analyze it, play it and share it. As we try to capture smart sound in an otherwise noisy environment, we need better sound collection devices. We need better microphone technology, but we also need to be able to triangulate sound from multiple sources to paint a more holistic 3D view of sound, or only capture sound from a certain direction or form a certain distance away. We should be able to create a 3D sound stage using computational techniques (and perhaps with use of simple hardware accessories if needed). We should be able to project sound in certain directions, selectively cancel sound in certain applications, and provide immersive experiences in sound not dissimilar form immersive experiences in virtual or augmented reality. Let me give just some examples:

  • canceling noise of drone in your ‘follow-me’ drone video
  • capturing low threshold sound from an interesting subject on camera despite noise from other sound sources
  • projection of surround, 3D or holographic sound in spaces. Create elaborate sound stages across devices and environments
  • optimizing sound in cars without using 6-7 speakers. Canceling ‘highway noise’, better hands-free phone experience
  • immersive sound experience in VR, including dynamic movement of sound with scene in view
  • new music instruments, synthetic sound
  • simplified/accessible sound engineering and encoding etc for consumer apps, games across devices, platforms
  • others…

As I have dug into this over the last few weeks and months, I have realized there are amazing scientists and engineers innovating in the space…but what we need now is entrepreneurs to focus on the space and bring exciting companies to life. I would love to hear from anyone working in this space. And hopefully become a partner in building a great company in this space. Contact me at bz@luxcapital.com.

Optometry: a field ready for innovation

I have been wearing eye glasses since I was probably 10 years old. I don’t enjoy wearing them the least bit and don’t look forward to going through eye check-ups every 2-3 years. But unfortunately I have to. As a result I went in today to get my eyes checked, especially to make sure my prescription had not changed in the past few years.

I went to a local optometrist, who was extremely nice, professional, and qualified. However, I walked out of her office thinking this business is going to die. Or at the least get transformed in a very significant manner in the next few years. We just need more entrepreneurs focused on the space, and also put up the kind of fight Uber and Tesla have had to put up against regulatory fiefdoms.

A few observations:

  • American Optometric Association represents roughly 36,000 optometrists across the USA. They work out out of stand-alone offices, doctor’s offices or retail locations. They are the primary eye-care providers but it is clear that quite a bit of what they do on a regular visit should no longer be a part of their offering. They take up an hour for a regular eye check-up when that entire process could potentially be automated and done in a few minutes, either at home or at something resembling a minute-clinic. As health providers beyond eyesight prescription checks, they obviously have a role to play, but their offering and workflow needs to be altered and brought into the 21st century so they can provide better service at a lower cost to the system.
  • The equipment most optometrists use has practically not changed for 25 years. The entire check-up process still seems so manual, and frankly is no different than the process a local optometrist used with me ~25 years ago when I got my first set of eye glasses in Pakistan. It includes putting a variety of lenses in front of my eyes and asking if I see better with 1 or 2, 3 or 4, 5 or 6?…and so on and so forth. Could there not be a more automated, quantitative and less subjective way of doing this. I sit in that seat always stressed if I may be straining too much to read, or squinting, or not focusing enough.
  • Given such a significant part of the test is simply changing focal lengths and refraction angles etc, why can’t this be done on a mobile device that I could use at home myself ? I am hoping Eye-Netra may have a solution for this.
  • The optometrist showed disdain for my online purchased WarbyParker eye glasses by informing me that the lenses were off-centered by 1mm, and if I had bought them at a store this would not have been the case. She may be right, but I think that is also a problem that could be easily fixed with a digital tool. Her solution was itself a tool that was probably invented in the 1950s and I have to believe this can be replicated a dozen ways using my cell phone and/or Oculus type device.
  •  As a part of the test, my eyes were dilated. Well, here’s the fun after-effect if you haven’t had this done before: you see really blurred for a few hours. So I left the store unable to drive, and unable to read anything on my phone or laptop. In fact had to cancel all my afternoon meetings, and 5 hours later I am still waiting for it to become safe enough for me to drive home.
  • Many optometrists also try to sell you eye glasses. These can cost anything from $150->$500. Through the founders of WarbyParker I know that they really should not and its all monopoly pricing from one company. In fact the actual cost is likely not more than $10-20. No surprise that when I did not show any interest in a purchase, the store brought up “high quality Asia-made” frames that they could sell me at very low pricing. They are kept in a separate drawer and not displayed publicly.
  • Since I am significantly near-sighted, when I try new frames at the store I have no idea what I actually look like! I am blind enough that I can’t see myself in the mirror when I don’t have my glasses on. Unfortunately there is still no solution to this (what I do? I take pictures of myself with frames on and see them later…alternatively, my wife picks for me :)

It is estimated that nearly three-quarters of the US population needs some type of vision correction. This is a very large market. And is desperately calling for attention from innovative entrepreneurs. I hope to learn more about them.