Category: Medium

Last week myself and 200,000 of my closest friends made our annual visit to the Consumer Electronics Show in Las Vegas, Nevada. As usual it was a crowded, hectic, sensory stimulating, and informative event.

Catching up with some of my CES veteran friends on the last day of the event, they said to me: “CES was lame this year. There was nothing here to WOW me.” My friends were looking at CES with purely a consumer eye: the major announcements were just bigger and higher resolution TVs and cool concept cars. Incremental changes at best over last year for sure.

I told them that this CES was one of my most inspiring for what I saw from my Venture Capital eye. As a VC, I saw five things that did WOW me. Here they are.

AI was everywhere- VR was nowhere

Two years ago, Virtual Reality was everywhere. Rows and rows of VR booths everywhere you looked. Samsung had a major exhibit where 25 people would use the Samsung VR headset at the same time and ride a virtual roller coaster. At the same time, AI was nowhere two years ago. One or two booths may have had a “powered by Machine Learning” label on it, but that was about it.

Oh how times have changed. AI was everywhere from self driving cars to AI powered batting cages. VR was nowhere.

AI has definitely gone “mainstream.” While a lot of booths had AI in there mostly to take advantage of the hype, the overwhelming majority of the AI at CES was super practical. Smart refrigerators using AI to figure out the right grocery list, smart fitness and nutrition recommendations, and automated farming equipment (which was stunning) augmented the steady stream of AI powered drones, self-driving cars, and industrial robotics.

From my experience at CES, once a technology makes it up from the startup alley to the Samsung and Sony exhibits, its here to stay.

The Trump Effect: Chinese participation was way down

Having lived and worked in China, I have a lot of friends and colleagues from China visit CES. In years past, my WeChat use to light up with requests to meet. In addition, large Chinese companies as well as hundreds, if not thousands, of small companies would exhibit.

Not this year. Very few Chinese nationals were at the event, my WeChat was silent, and most of the Chinese companies skipped the show. Ironically, except for Huawei, who did not send any executives but had a large booth.

Its on: Alexa vs Google Home

Google was by far the largest vendor and sponsor. The Las Vegas monorail was branded all by Google and they had a massive pavilion (not a booth) that even had an amusement park ride. Amazon had a big booth as well and they had stands all over the place where they handed out bananas to the attendees.

Both companies had a massive push for their digital voice assistants: Alexa and Google Home. There were partners all over the place and just about every major product featured one or both of the players. Forget iOS v Android, the new battle is Alexa vs Google Home.

Last Mile Urban Mobility is the next big thing

While the automotive section has grown over the past 4 or 5 years to be as big as a major auto show and automatous vehicles were a major theme this year, solving for the last mile in major cities was a dominating theme.

Everything from scooters, bikes, electronic bikes, concept 5–7 person autonomous “people moves”, food and package delivery, and delivery drones were on display. A friend of mine who studied urban planning said that we are still a ways out from implementing these solutions due to the fragmentation of the market and the speed and budgets of major cities, however, it is pretty exciting to see how this problem will get solved. All the pieces were on display at CES this year.

Sleep Tech is taking off

Fitness tech has been a big deal at CES for the past decade. Wearables and all kinds of cool stuff (like the AI powered batting cage) are on display.

What was amazing this year was how sleep tech has taken over the fitness tech area this year. Sleep tech is anything that ranges from connected devices that monitor your sleep to smart mattresses, smart underwear/pajamas, to countless “calm” apps. Sleep tech was well over 50% of the fitness section. A section that was once dominated by Fitbit and Peloton. Keep an eye on this space as last year sleep tech was just a handful of booths.

So while the bigger 8k TVs did not wow my friends, the above five trends blew me away. Looking forward to CES 2020. 😉

Five Things That Wowed Me at CES 2019 was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

The shift to doing good, creating a holistic education program and 8 nuggets about Edtech in China

Earlier this month, Beijing hosted one of the largest education technology conferences in the world. This time last year, the GET Summit brought together 6,000 attendees – they doubled this year. 12,000 attendees from all over the world landed in smoggy Beijing to wheel-and-deal, greet-and-meet and educate themselves (pun intended).

This is a summary of thoughts and observations from the summit. It will be split into 2 segments: the plenary session’s keynotes and everything else.

A plenary session is basically the stage-of-stages. It’s where all the main guests present; in Beijing, where all the reporters and government officials (and everything in between) gather. It was kicked off by from Tencent.

Tencent went from powerhouse that could do no wrong, to being criticized by the Ministry of Education of China for addictive non-productive games. It lost $160 billion in value, roughly a Netflix equivalent, due to the backlash. This set up for an interesting keynote by Daosheng Tang, Vice President. The VP delivered a speech at GETSummit that in short, summarised Tencent as a socially responsible tech company. No longer was the focus to attract users to it’s entertainment ecosystem (it owns Clash Royale, Clash of Clans, League of Legends, Wangzhe Rongyao, and 42 percent of China’s gaming market; equivalent to almost half of Tencent’s profits). Mr Tang’s speech had zero mention of entertainment, but lots of mentions of helping underprivileged communities, and helping said community members upgrade their skills, etc. The 180 degree change was made crystal clear to everyone watching, and now Tencent is going to do everything to leverage their wide reach (e.g. WeChat is used by 83% of Chinese smartphone users) for the greater good of the Chinese people.

Once you have the biggest player fall into line, typically others follow suit. Ensuing Tencent’s socially responsible tech company speech — TAL Education Group was up next.

Last year’s summit, STEM education was all the rave. The conversation revolved around getting more STEM in the classroom, in the tutor groups, and into homes. That sentiment no longer held up. Songye Zhou, General Manager at TAL, talked about how home/family education is critical but it must be founded on love, morality and spirituality. The focus should be less on “hard” education (read: standardised test) and focus on “soft” education.

As the plenary session progressed, it was clear that all the companies got Beijing’s memo. You must focus on being good and doing the right thing. DadaABC, Netease, and the remaining Chinese education firms echoed the same sentiment as their larger peers.

Contrast this to what has been happening with the largest companies in the US, such as Facebook and Amazon. This just shows how companies react to regulatory pressure, what goes through the senior managements’ thoughts, and ultimately how that trickles down to the users.

On other nuggets from the conference, we will do a quick hitting point-by-point summary:

When in China, use Chinese lucky numbers — we are capping the nuggets at 8.

1. WeChat still runs supreme. It’s on the local’s tongue, mind and (most importantly) phones. Very few non-Chinese truly understand WeChat and its reach/power. This is shocking, given it’s been huge for more than half a decade now.
2. On a similar note, KOLs (aka influencers) are big. KOLs in China are bigger. Mom KOLs in China are the biggest. The best way to spread the word amongst Chinese Edtech consumers is through KOL Moms.
   Side-only-in-China-note: one of the keynotes was given by a private tutor —Kaiwen He. Key nugget is this private tutor has 6.6 million followers on Weibo (Kobe Bryant has 9 million Instagram followers).
3. Beijing’s de-emphasis of standardised exams, combined with change of wind sweeping “hard” education away. Beijing is aware that the population needs to be more creative, holistic and value-add; precisely what they are addressing.
4. Saying a lot by not saying anything: Not a single mention of the ongoing trade-war. Even though the event had almost 1,000 non-Chinese attendees.
5. B2B businesses, especially in Education are still in the early stages of their development. Most of the successful Education businesses in China are in B2C space. The conference reflected that, where most of the “market entry” strategy workshops were focused on how to get the parent/family/ student to buy in, rather than the school/university/corporate.
6. There is a growing positive sentiment amongst Chinese Edtech to sell to markets such as Turkey, Russia and other markets shunned by the US/European players. Chinese Education companies feel the consumer behavior is closer to their own, compared to US/European markets.
7. Pricing is critical in China. The more ways you can price your product, the better off you are. Group buying, term/yearly discounts, rebates on social shares — and everything in between. The more ideas you have on your pricing, the better chances you can sell, and ultimately succeed.
8. Valuations are cooling down. Cooling down is a relative term, but going from crazy to not crazy is still cooling down. Long term everyone is better off; short term, founders will have a slightly harder time fundraising.

The global ecosystem goes in waves of increased and decreased volatility. This isn’t a new concept, but what is clear that each wave requires ever fresher approaches and ideas. Therefore, companies and individuals that are more adaptable and creative will flourish. Beijing knows that.

The 1+8 Things You Need to Know About Edtech in China was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Like millions of other Americans this weekend, I went to see Bohemian Rhapsody, the recently released biopic about Queen. The movie was so bad, I melted into uncontrollable giggles at its most serious moments. After two and a half long hours, I was fed up by overdramatic montages, a meandering plotline, and undisciplined editing, so I walked out before the completion of the film. As it turns out, so did the Director — which explains a lot about why it was so terrible.

What it does not explain is why I have been nonstop, obsessively thinking about Queen ever since. The more I read about them, the more I listen to their albums, the more I watch their performances, the more memories come flooding back to me.

The first time I heard “Bohemian Rhapsody”, it was the early nineties and my Grandma brought over a copy of Wayne’s World. You might find this odd, since I was somewhere around five years old at the time, but she insisted we would like it since it was based in the glorious town of Aurora, Illinois, only a few miles from where we lived.

I do not remember when she realized I was way too young to be watching Wayne’s World. What I do remember is re-enacting that opening scene for years afterward, belting “Galileo!” at the top of my lungs, packed into the backseat of shitty cars all over the Midwest. I remember stomping my feet to“We Will Rock You” before my high school basketball games, and “We Are the Champions” after we had won. I remember debating in an ethics class at Harvard whether or not it was okay that Vanilla Ice had stolen the opening riff of “Under Pressure” for “Ice Ice Baby”. I remember watching countless newly married couples dancing to “You’re My Best Friend.”

How could Queen have somehow woven themselves into the fabric of my entire life without me even realizing it? You might not think about them very much either, but Queen is actually everywhere. They have sold over 300 million albums worldwide. They have spent more time on the British charts than The Beatles. They have been featured in over 375 films.

The Quiet Genius of a Very Loud Band

As romantic as music can be, it is a business. A band is a company. The members are a team. Instruments are features. Songs are products. Concerts are experiences. In either case, music is the heart and soul.

Just like the record labels, venture capital is notorious for constantly being on the hunt for the next big hit. However, we are not looking for one hit wonders. We are looking for generation defining technologies; the companies that change the shape of our lives without us even realizing it; the experiences that find their way into the deepest crevices of our memories that we don’t even know they’re there. Basically, we are looking for the nerd’s equivalent of Queen.

So what can we learn from Queen? What makes them so special that they’ve been able to transcend time, genre, and space? Why does it matter if you’re not a musician? Whether you are in the music, technology, venture, or any human business, here is what we can all learn from Queen.

1. Team is everything — diversity is required.

Queen consisted of four musicians with very unique strengths: Freddie Mercury (vocalist, background in design), Brian May (guitarist, PhD in astrophysics), Roger Taylor (drummer, tried dentistry but got a BSc in Biology) and John Deacon (bass, background in electronics). Though he was often the face of the band, Freddie Mercury once famously said in an interview, “I’m not the leader of the band, I’m the lead singer.” He recognized he was nothing without his team.

In fact, Queen’s greatest hits were written by all members of the band. Freddie wrote “Bohemian Rhapsody”, Brian May wrote “We Will Rock You”, Roger Taylor wrote “Radio Ga Ga”, and John Deacon wrote “Another One Bites the Dust” and “I Want to Break Free”.

A truly remarkable team requires members with unique strengths, diverse backgrounds, and a shared commitment to making music. When a team like this comes together, individual intelligence transforms into collective magic.

2. Innovation requires commitment and constant experimentation.

Queen was formed in 1970, but they didn’t release their first album until 1973. They hustled their way into the only slot available at a friend’s recording studio, which required them to record from 3–6am. This is ultimately how they got noticed — they were very loud at a very quiet time.

“Bohemian Rhapsody” was recorded in 1975, though Freddie Mercury had been writing versions of the song (initially called “The Cowboy Song” for the opening line) for nearly ten years before the band ultimately recorded the hit. Once they did record it, the track notoriously took three grueling weeks to lay, with sessions ranging from ten to twelve hours per day. In some sections, it featured 180 separate overdubs. Yes, the final product was epic, but it took years of imagination, hard work, iteration, and experimentation.

Whether you are a band or a business, nothing world-changing is built overnight. It’s not about what you want — everyone wants massive success — it’s about what you’re willing to give up to get there.

3. Find your audience — sing to them, love them, engage them, and empower them.

In 1970, Queen started by playing to college audiences because it is what they knew and where they were accepted. After all, they were students themselves. As they grew and evolved, their audience grew with them — their fans graduated from college just as Queen was graduating to real concert venues. They got married and had kids as Queen continued to pump out hits, and it was these same fans that brought their kids to concerts when the band started playing in stadiums all over the world. It was Mike Myers, who had listened to Queen growing up, that threatened to walk off the set if “Bohemian Rhapsody” was not included in Wayne’s World, ultimately leading to the song’s second run at the top of music charts nearly twenty years after its initial release.

Queen had staying power because they were incredible at engaging audiences — not just figuratively through their lyrics, but quite literally in the performance of their music. Whether it was the stomp-stomp clap of “We Will Rock You”, the “Ey Oh” call at the beginning of “Under Pressure”, Freddie Mercury’s unforgettable exchange singing “Radio Gaga” with an audience of over 70,000 people at LiveAid in 1985, Queen rarely sang alone.

Though their power fans were small in the beginning, Queen serves as a reminder that if the most powerful companies speak directly to their users. If you can unify, engage, and empower customers, you will be filling stadiums for generations.

4. Don’t let your past define you.

Freddie Mercury was not born a British rock star. He was born in Zanzibar (now Tanzania) as Farrokh Bulsara. His family was originally from India and he spent his formative years in Mumbai until his family ultimately fled Africa for England in the late 1960’s. Given the constraints of coming from a traditional Parsi household and his conflicted identity as a gay man in a conservative society, he created Freddie Mercury as a way of liberating himself from where he came from.

Throughout my own life as a very American American who somehow found her way into the business of building global companies, I have learned that you are not defined by where you came from — you are defined by your choices, your mindset, and what you create. Most great filmmakers agree (if you need some good references, look for this theme in The Last Jedi and Bladerunner 2049).

Whether it is in the world of music, technology, or business, innovators are not constrained by their origins. The only way to find out what you truly can do is by letting go of what you were and what others tell you that you are. Farrokh Bulsara did just that, and thus Queen was born.

5. Embrace contradiction — turn ‘buts’ into ‘ands’.

So, what is it that makes Queen so fascinating that they have hijacked my ears and my mind not only this week, but arguably since I was five? How are they so subtly relevant today? Why are they everywhere and nowhere? Who else can possibly make grown men cry, and young women scream in the way that they do? What is it about them that seeps its way into our lives, no matter where we are or what kind of music we like?

Freddie Mercury was painfully shy, but somehow one of the best performers of all time. All the members of Queen were all highly intellectual, but also made head banging rock songs. Their lead singer was gay, but the love of his life was a woman. All four band members asserted they hated each other, but they also insisted they were family. A lot of Queen’s lyrics are gibberish, but their music is rich with meaning. Freddie Mercury died in 1991, but he sang alongside a captivated audience at the closing ceremony of the 2012 Olympics in London.

The answer to these questions, and the essence of Queen’s genius, is captured in a hotly contested scene in the movie about the release of Bohemian Rhapsody, in which Mike Myers (aka Wayne from Wayne’s World) insists that the song can never be a hit single because ‘it’s opera but it’s rock’, because it’s ‘six minutes long, but has no chorus’.

Once it was released, the length and unusual nature of the song forced Queen to market the song with a video — which is widely credited as the invention of the music video, seven years before MTV went on air.

What is it that made this level of innovation, depth, creativity, and longevity possible? Queen embraced their contradictions. They defied definition, they refused to be categorized — and thus created something truly new and meaningful. They worked really fucking hard in the process, and ultimately they turned ‘buts’ into ‘ands’. They are a rock band and they sing opera. Their lead singer was Farrokh Bulsara and Freddie Mercury. They possessed a rare level of intelligence, and they made universally accessible music. Freddie died of AIDS, and left his entire fortune to a woman (and cats).

Whether you are a musician, an entrepreneur, or just a regular person on the street, you can only innovate by embracing and exploring your inherent and inevitable contradictions. It’s not easy, and it’s the only way to change the world.

5 Business Lessons from the Music of Queen was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Last weekend was the 3rd annual e-Zest and Fresco Capital Hackathon in Pune, India. The theme of the event was “Blockchain for Good.”

The Hackathon was kicked off on Saturday morning by e-Zest CEO and co-founder Devendra and myself. After some set up, the teams began coding for the next 24 hours. We had about 80 teams/200 developers which produced 75 Blockchain projects.

After a few hours of coding the project themes started to emerge. Most projects were looking for gaps or inefficiencies in the marketplace and filling them with a blockchain solution. The developers were working very hard and only had a few breaks for food. Us organizers were equally as busy as we had a seminar, startup pitch event, and CIO roundtable going on at the same time. After a few hours my hosts brought me outside to relax with some refreshments.

After a long day of coding, around 9pm, we needed to spice things up and get the blood flowing. A local band came and played for about an hour to allow everyone to wake up with a little dancing. This is a very effective way to take a break at a 24 hour hackathon.

People worked though the night, but the sleeping bags were provided so people can grab a nap. By early morning everyone was back at work and the first judges arrived on the floor around 6:30am.

At about the 23 hour mark, we went back to a conference room and started to whiteboard all of the teams and look for themes and shortlist a group to present for the prizes. There were a bunch of projects around problems in the Indian market, but all have some relevance globally. Judging was biased towards systems that used the blockchain for the right reasons. So we were looking for problems that needed a distributed solution, operated in a trustless environment, and were transaction based (as blockchain is just a ledger of transactions, not an inventory management system.)

Here are the top teams/projects:

• Using blockchain to manage the custody/supply chain of blood donations. (This was the winner) In India there is a big problem around fraud and counterfeit blood donations. In true Indian style, this team did not use any public or open source blockchain, they wrote it themselves.
• Identity management using distributed identity. Alternative to Facebook Connect.
• Certificate validation of HTTPs sites using blockchain. This is a very developer centric solution, but a big global issue.
• Criminal records via blockchain. At first I thought this would be a private blockchain run by the police, but it would be open for say hotel owners, shop owners, etc to enter data related to a crime or criminal investigation. Responding to a failure of the public sector (a common theme this year and last year.) A similar team had a chain of custody blockchain solution.
• Voting records via blockchain. There were several teams doing something similar, again responding to a public sector failure.
• Securitization of Solar Energy. Instead of having the grid buying your excess power, you would be compensated in tokens. Renewable energy/pollution was a theme of several companies.
• Insurance smart contracts via blockchain. Had a focus on the sharing economy as well.

Hyperledger was very popular, a handful of teams (including the winner) spun up their own blockchain, and the Ethereum blockchain was very popular with any smart contract team.

As always the hackathon was an amazing experience and I’m already looking forward to next year!

Blockchain in India was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

By Eriko Suzuki, Partner at Fresco Capital

I am a portfolio worker and a Venture Capitalist.

I am both Partner at Fresco Capital, a mission focused global early stage startup investor and Director at Mistletoe’s Investment Group, a social impact investor founded by Taizo Son, the younger brother of Softbank CEO Masayoshi Son.

As we all know, new ways of work have been evolving. The financial crisis which occurred exactly 10 years ago, propelled employers to look for lower cost labor and employees to think more flexibly, and their needs were matched and enabled through the development of digital platforms. Today, we not only see freelancers who work from project to project, but also parallel workers or portfolio workers who take on multiple tasks and roles simultaneously. Such ways of work are now more proactively embraced by millennials and generation z cohorts who value work flexibility.

Yet, even in the US and Silicon Valley, I have not come across a fellow portfolio worker or “contributor” type Venture Capitalist.

How did I get here?

I personally “strumbled” (a combination of struggling, hustling and stumbling) into this portfolio worker career, through my journey to find meaningful work whilst also raising a family.

I started my career in investment banking as I wanted to acquire business skills to one day build a socially impactful enterprise. I also had my first child and worked banking hours whilst raising him, but eventually decided to join a large global luxury retail company for more manageable hours. However, the 9–5 arrangement put me on a “mommy track”, and I felt unable to gain the deep operational experience to one day launch that social enterprise. So I jumped on the opportunity to bring a US drone startup to Japan as country manager.

Then, as the startup pivoted and I searched for my next “gig”, I stumbled upon Mistletoe, a social impact VC at which I could combine my skills in finance and technology to support socially impactful businesses.

It was finally finding this ideal job, that gave me the impetus or a no more excuses attitude, to make things work. At the time of my joining, Mistletoe did not have any employees working flexible hours etc., but I set about to make such a culture.

This experience lead me to write my book, “How we live will be how we work” (Daiwashobo, 2018), in which one of the key message is to find work that you are passionate about, and make work work.

Soon after, I also joined Fresco, to further pursue all of my passions, and become a portfolio worker VC. At Fresco, I am able to support mission driven global minded entrepreneurs through a more traditional VC investing model and also help bring about large scale change by helping our investors which are large corporations better embrace technology and innovation.

Why portfolio working is the future

I am truly grateful that Fresco and Mistletoe appreciate me for walking the walk as an investor in future of work trends, and I personally swear by this portfolio worker VC career.

It was on a recent panel at a Tech in Asia conference, that I became even more convinced.

The panel was on “Japan’s startup ecosystem” and as we were joined by the Chief Strategy Officer of a large VC firm and early investor of Mercari, a flea market platform which recently went public only 5 years after its establishment with a $3.6bn market cap, we had all anticipated to talk about “hot” investment trends or latest exits, etc.

Instead, we spent 30 minutes talking about people and one of the key points of the panel was that “winners” like Mercari is increasingly hiring portfolio workers. The best people are often already hired, but can be convinced to join other projects on a part time basis, and such people contribute significant value even in a this part time capacity.

In fact, attracting such multitalented polymaths through attractive work environments, is the key to growth and success, even for all of Japan’s innovation ecosystem.

Companies or projects which do not allow their employees to work flexibly and do not hire portfolio workers will see their demise as they will further and further be disabled to hire and attract talent.

We are in a world where the winners-take-all the best talent.

I also thought this can be true for the ones being hired as well.

Recently, I have been contemplating taking on yet another portfolio work, particularly in the crypto/blockchain space which I am also passionate about.

Very luckily, I have received several offers to join exciting teams and projects even in my part time capacity. Extrapolating from my lucky scenario, I wondered if we are entering an era in which a few highly qualified individuals will hold multiple portfolio roles at multiple organizations, while others may not even be able to get a single role.

Multi-hired individuals will enjoy a network effect of sorts, because through their multiple roles, they can accumulate more networks, connections, and information which will also enable them to be more sensitive to the winds of the market and acquire the best and most updated know-how and skills.

On the contrary, individuals working on only one role might have less opportunities to update their skills and thus can more easily become irrelevant or outdated.

The hired get more hired.

A winners-take-all-jobs world.

Of course, there is a finite number of portfolio work one person can take on, at least with the current state of human augmentation tech. Nevertheless, while we shun the giant Amazons and Facebooks today (and hence my fascination with blockchain decentralized technologies which help to disintermediate such forces), we may indeed enter the era of GAFA of people instead.

Whilst I prefer to see a world in which almost everyone is involved in several projects across the globe which are most fitting to them, which are relatively evenly disperesed and equitably decentralized, we may indeed see “superpeople” who become contributors to multiple projects and even run companies, foundations, build products, designing, etc. all at the same time all to themselves.

How to be a portfolio worker

So what should we do?

The message is simple.

Start flexing your portfolio worker muscles sooner rather than later.

Start small, as indeed juggling multiple roles is not easy and context switching requires focus and self-discipline. One could even start for probono projects or by working on small moonlighting hobby passion projects

I am also still learning and iterating these processes.

However, I believe one of the most important skills are open and active communication.

I personally strive to have open and real time communication on job descriptions and KPIs.

Open and transparent communication is also important in clarifying access to information. In lieu of bureaucratic red tape and overzealous firewalls, we can cultivate a culture for respecting security and confidentiality. For my personal case, I openly communicate to our portfolio companies that I work for more than one VC and that should they feel any conflicts or concerns, I will seek their guidance and thoughts.

One might also think that heavy self promotion and branding is necessary for portfolio work.

Though it may be true, I am an introvert and often feel very uncomfortable doing such things, so instead I try to be hyper-authentic. I openly express both perhaps my strengths but also my weaknesses and vulnerabilities, and luckily, I have found that this has lead to building more sincere networks and long-lasting relationships.

Finally again, I am still learning, and am bound to make mistakes.

However, I also try to embrace this fact. We are all pioneers in this new way of work.

And as I say “we”, I hope to connect to more people in this way of work.

If you are a closeted portfolio worker VC please reach out.

Additionally, we at Fresco invest globally in the future of work, so if you find such platforms for the future, which I would imagine will be decentralized and equitable platforms which highlight each individual’s unique skillsets and experiences and connect them to projects globally, please also reach out!

An image of an opening inviting to another space, or is it a guiding minaret?)

Why I have a portfolio career, as a Venture Capitalist was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Today, I ate my breakfast at General Assembly San Francisco, listening to Claire L. Evans talk about the untold history of badass women in technology as featured in her book Broadband.

Her key point was that, in spite of the fact it is indeed a male dominated industry, technology is not an inherently masculine endeavor. There was a time when it was actually dominated by women, probably because the core mission of technology has fundamentally female qualities. Since their origin, computers and the internet have been about building unexpected connections, democratizing access to information, and creating unprecedented opportunities. Isn’t that what women are naturally the best at? So then, why and how did technology become such a boy’s club?

In spite of spending the last six years building tech businesses across borders, this is my first time living in “the Silicon Valley” and I have spent the past few months seeing it with an outsider’s eyes. There is no doubt in my mind that the Bay Area is truly the quintessential American hotbed of entrepreneurship, the land of opportunity for wealth creation, and the birthplace of our generation’s most transformative and impactful companies. We, as venture capitalists, are meant to be the fuel for that fire.

We all know the VC industry has been under attack for being a shameless old boy’s club filled with hypocrites; an impenetrable network tasked with finding and knighting the changemakers of tomorrow, yet it still looks more like a picture of the past (read: old, male, and white). I am fully committed to changing that reality, but it will take time. In the meantime, I am wondering — how did this come to be?

After all, venture capital is about finding and empowering innovators. It is about seeing value where others do not. It is about aligning yourself with people who are smarter than you, better than you, and more determined than you. It is about putting your ego aside and working tirelessly with others to help them succeed at all costs. VC is all about nurturing deep and meaningful relationships, but it is also about ruthlessly prioritizing. It is not about the spotlight. We are not the actors on stage, we are the producers cheering them on and making shit happen behind the scenes.

Aren’t these things that come most naturally to us as women? Have we not been playing these roles for centuries in our personal lives as mothers, wives, daughters and friends? Could it be possible that venture capital is actually, inherently, a lady’s job?

I’d like to think so. But, either way, there’s no reason why it should be dominated by men. Or anyone, for that matter. This is certainly one corner of the world where it should be an asset to be different.

Venture Capital: A Lady’s Job? was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Over the past year there has been a lot of focus in the financial services community on social impact investing. Investors who have not traditionally been in the social impact space are now making changes to their investment charter to include mission driven, for profit companies. Venture Capital and Private Equity firms that have been ignoring social impact have jumped in as well.

The presence of the PE/VC crowd is changing the ecosystem and some traditional social impact investors are now taking a different approach. NGOs, foundations, and banks have always been in the game, but are starting to behave differently as well. Each of these players think that they have the right blueprint for social impact investing: They are all wrong.

Blended Capital

Social impact companies and investors can benefit greatly from something called Blended Capital. Blended Capital is the mix of government or non-profit grants, equity investments, and bank loans put into a startup. The salient point is how the capital is sequenced:

1. Foundations, governments, and NGOs go in first and grant non-equity taking, non debt capital to a social entrepreneur with an idea. This gets the founder out of the garage and gives them the ability to hire a small team, build a product, and attract initial customers. This de-risks the investment for the next stage, but adds a lot of impact, accomplishing the foundation’s goal.
2. Next VCs and Social Impact funds come in and make equity investments, typically getting the company past the initial stages of product-market fit and into a growth mode. This helps the company scale in ways a grant would not allow and de-risks the investment for the next stage.
3. A lot of times the company will need to finance inventory, equipment, or the expansion into a new market. This makes more sense to finance by bank loans rather than dilutive capital. The banks get to lend to the company at commercial rates as the company has been de-risked by the previous two sources of capital.

Blended capital only works if all three parties (non-profit grant agencies, equity investors, and lenders) work together. A blended capital deal does not make sense to any one player if the other two are not involved, creating more opportunities for social entrepreneurs. For example most foundations “spend $1 to buy $1 of impact, but that $1 goes away forever.” Now those foundations, governments, and NGOs can get a better return on that $1 if they work with equity and bank finances on deals, creating sustainable, lasting companies that not only provide a return on investment for their investors, but a longer return on impact for their grant-givers. Now a foundation can spend $1 and get $10 or more of impact.

In the past these players worked independent of each other, creating misalignment and inefficiency, reducing the amount of impact and opportunity. For example, I watched a social entrepreneur try to finance inventory of their portable solar lights to send to Puerto Rico after the hurricane. No bank would finance the operation, despite several customers (in need!) lined up.

If that company had been allowed to take advantage of blended capital, the sequencing of the grants and equity financing first would have made the startup attractive to market/commercial lending rates for any bank. Because blended capital was not available at the time, the founder had to turn to expensive equity financing for that inventory. (VCs typically don’t finance inventory.) Because of dilution and the expense, only a fraction of the original inventory was financed, bringing the company far less revenue (and profit) and impacting far less people in need.

An alliance of philanthropic and for profit investors is needed to solve some of the world’s most pressing problems. Experts estimate that the opportunity is measured in the multi-trillion dollar range. Its time for all the social impact players to stop working in silos and work together.

Blended Capital: The Future of Social Impact Investing was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Fundraising is never easy. When dealing with corporate investors, there can be extra layers of confusion during the process. At Fresco Capital, we’ve been able to interact with a wide range of corporate investors from all around the world. Based on the thousands of hours of direct experience plus feedback from our network over that time, here are some hacks for everyone involved to have more zen and less confusion in the process.

1. Be wary of the quick “yes”

Fundraising from corporates can be time consuming, and so a quick “yes” in the first meeting seems like a good thing. The key is follow through. We have seen a corporate go from “yes, we’re investing $5M” in the first meeting, to “we want to invest $500k”, to “by the way, here is a 10 page list of special demands we would like.” It’s easy to reject offers like this when you have other options. Don’t make any assumptions until the deal closes, especially with a quick “yes”.

2. Review stock prices, 10-Ks, and investor relations materials for public companies

Publicly listed companies provide detailed disclosure about their business. For example, you can head over to the investor section of Microsoft and see a wealth of information. In addition to annual and quarterly results, there is a set of updated materials about the company’s recent acquisition of Github. You can also review the company’s stock price as a check on market sentiment about the company’s strategy and execution. In the case of Microsoft, the market has clearly been impressed by the changes during the last several years.

3. Visit their offices and look around

Online research can only go so far. An under-appreciated way to learn about a company’s culture is visiting their offices. If things are extremely quiet with everyone busy at their cubicles and you have a team that is always talking loudly and enjoys skateboarding in the office for fun, it’s worth noting this difference. If the company has an expensive art collection and yet is trying to scrape out small $ from you in negotiation, that’s cognitive dissonance. You can learn a lot just by walking around an office.

4. Don’t use fake deadlines, use real ones

Startups tend to feel that working with large corporates is slow, and on a relative basis this is absolutely true. One week for a startup can be the equivalent of one quarter for a larger organization. Some people suggest using fake deadlines to add urgency but the problem is that in many cases the large company simply can’t move quickly enough and the deal will fall apart. It’s much better to run a process where you have multiple options, even if one of the options is simply going alone, because at least then you have a real deadline to move things forward instead of being held in a holding pattern.

5. Learn about their key competition

Most corporates have specific companies that they view as direct competitors. When engaging with a corporate, it’s important to understand both how they perceive their competition and also to have your own view. If a corporate believes it is dominating the market but you feel that they are in a high risk situation, there are several things to consider. Will you simply accept this difference of opinion? Will you bring up the issue in the hope of a strategy change? Should you even be engaging with this corporate?

6. Spend time with junior people

A common piece of advice for startups is to focus on decision makers. If you know everything, that makes sense. What if you only know 50% of the context? 20%? Most decision makers will prefer to share things on a “need to know” basis with you. Junior team members will tend be more open and will appreciate the chance to share their opinions. They will also be more motivated to close a deal with a startup as a way of proving themselves internally.

7. Having a diverse team gives you more options

As a diverse team ourselves, we’ve experienced all sorts of combinations between our team and other investors. The historical default that people tend to prefer commonality is still true in many cases. However, we’re also increasingly seeing that corporate investors value diversity and inclusion because that also gives them a differentiation vs. competition. Having a diverse team isin’t just about doing good, it’s good for your fundraising.

8. Provide updates, don’t just chase

As you wait for feedback from a large company, what’s the ideal way to engage? Rather than sending reminders that say “have you seen the message I sent yesterday”, which may backfire, it’s worth sharing new updates about your progress. This gives new reasons for investment and also serves as a soft follow up. You should absolutely pay attention to the responses to these updates — if you send 5 updates over three weeks and get zero replies, that’s a sign that something is not right and at that point it’s worth being more direct.

9. Find an internal champion

Why is finding an internal champion at a large corporate key to making progress? Things get lost — there will be emails that drop, fuzzy memories about conversations, and competing priorities which take up scarce attention. You simply won’t know enough about the internal dynamics to take care of all these details. Your ideal internal champion is passionate on a personal level and highly aligned from a business outcome to push on your behalf — make your success their success.

10. Don’t rely on a single internal champion

While a single internal champion is better than none, the ideal situation is to have several touch points at the company. You will receive feedback from multiple perspectives — the legal team, finance team, and marketing team will all have their own business targets. Meeting with additional stakeholders is especially important to identify potential obstacles before it’s too late.

11. Watch out for internal rivalries

When working with large corporates, be careful about internal politics and rivalries. We have come across corporate investors where the internal teams do not co-operate internally to support their startups and are instead in competition with one another. In addition to being confusing, that can be a waste of everyone’s time and energy. Better to be aware of these issues, ideally before getting into a formal business relationship. This can be accomplished by having trusted relationships with 3rd parties (like your existing investors, for example) who know the reality of each corporate investor.

12. Demystify constraints

It’s understandable that investors will have internal constraints. Take the time to find out why constraints exist. If a corporate investor says “we can’t be a lead investor,” it’s worth understanding why that may be the case. Is it because of a previous bad experience as a lead investor? Is it because they have never been a lead investor? Is it because their investment team is too busy with existing investments? Each of those reasons would lead to a different set of follow up questions and possibly a solution.

13. Hang out with lawyers

Lawyers don’t get much attention beyond legal work. I’ve had a chance to become friends with many lawyers and the successful ones are knowledgable on all sorts of issues. They’re helpful in making introductions, reference checks, and even feedback on fundraising pitches. They’re obviously not going to reveal any confidential information, so don’t even try going there. Instead, take them out for a coffee to have a casual chat.

14. Be prepared for last minute changes

Large corporates will typically have an impressive in-house legal team and some of the sharpest external legal advice that money can buy. So when it comes to negotiating deals, they will have a tendency to push hard even until the last minute. That’s what they’re paid to do. If you have a realistic option of walking away from a deal, be prepared to do so mentally even until the very last minute. This will put you in the right frame of mind to make the right decision even under high time pressure.

15. Maintain the relationship even after a “no”

Sometimes the timing is wrong or there are other specific reasons why a corporate investment won’t be a good fit. It’s still worth maintaining a relationship over time in case the situation changes. This doesn’t mean giving detailed weekly updates. It does mean that in 6 months or even 18 months if there is something which you feel is specifically relevant, it’s worth sharing an update. The answer could still be “no” from that investor but they might have another introduction for you which they are now comfortable making because you have made progress over time.

Success between corporates and startups is hard work. But it’s possible.

We’ve found in our own work bridging the corporate and startup world that communication is key. Yes, that means a few extra calls and meetings need to happen, sometimes at odd hours of the day or night. Yes, that means repeating assumptions to ensure alignment. Yes, that means using multiple methods because some people love email, others are always on WeChat, and some will only open up in person.

In the end, it’s worth the effort because the upside from successful corporate and startup partnership can be massive for everyone involved.

15 Zen Hacks for Startups to Survive and Thrive with Corporate Investors was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

The other day a startup was pitching me and stressed the importance of the startup competition that they won. They had a whole slide complete with photos and online articles written about their victory. I told the startup that they should delete that slide and not tell investors about the competition as startup competitions are a waste of time for startups. I advised the founder that the only competition they should be entering is the competition for customers in the marketplace.

Naturally I got a lot of pushback.

Based on my experience as an investor, a former judge at countless startups events, and the winner of the business plan competition in b-school, I laid out what is wrong with startup competitions.

Startup Competitions Send the Wrong Message

By pitting startups up against each other, reality TV style, startup competitions create a “beauty pagent” that stresses the wrong things to win. Founders waste time polishing their pitch and focusing on how to put their best foot forward.

This is not how startups work.

Startups work by doing experiments, measuring the results against expectations, and iterating on their business model based on that feedback. Every minute spent by founders focusing on a competition is a minute not spent building their business in the real world.

The Judges Can’t Evaluate Properly

Whether you are doing an one evening pitch competition for bragging rights or a small check, a month long competition for a $10,000 grant, or a 6 month grand challenge for a $1m grant, the judges, no matter how awesome they are, won’t be able to evaluate the startups properly and the winners will not be the best companies.

At best the judges will only have a short bio and company write up to prepare. Then they see the startups for about 5 minutes and have the opportunity to ask one or two questions. Hardly the type of due diligence required for proper evaluation and feedback.

If you are part of a longer form challenge that has a council of judges and multiple interviews, those judges will have constraints set by the challenge organizers, preventing the best companies from advancing. The challenge organizers have to meet certain marketing goals so they create artificial criteria and categories that prevent the judges from selecting the right companies: sending the wrong message to the startups that apply.

Misaligned Incentives

Startup competition organizers are not investors.

At best they are non-profit organizations that put some money into a startup, however, they are driven by other incentives that put them at odds with the startups they support. The competition is motivated by attracting celebrities to their events and getting as much press and attention to their organization as possible (in order to raise more money to run more competitions.)

Typically if the winner of a startup competition receives money from the competition, the competition is a non-profit and does not take equity. This leads to a massive misalignment between the competition and the startup as the startup needs to build a sustainable business, not be a marketing pawn for the competition. Even if the competition takes equity, not being professional investors they usually are poor board members. Due to the misalignment of incentives, they usually give the wrong advice and push the founders to attend worthless events. In addition, they can’t help the company grow or help introduce new investors as most of the investors they know are equally as mis-aligned.

Lastly, startup competitions have the moral hazard of giving the startup who won the false sense of pride and even a sense of entitlement. In reality the startup has done nothing except make a good presentation and were lucky enough to match the organizers criteria. Worse yet, it can be demoralizing for the losers, potentially much better companies.

Stop Wasting Your Time

Stop wasting your time and stop entering startup competitions. Win customers, not competitions. You think winning competitions will help you find investors: It won’t. Very few companies that won startup competitions went on to build high growth companies. While there are some noticeable standouts, I’m using Medium, WordPress, and Google to produce this article and Facebook and Twitter to share it. None of them ever won any startup competitions.

What’s Wrong With Startup Competitions was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Last week, the Fresco team visited Washington DC and participated in a dialog with members of the US Congress. It was organized by a trade organization we are members of: ACT, the App Association.

ACT represents more than 5,000 tech companies in the United States. They advocate to the US government for a competitive environment that inspires and rewards innovation. Some of the issues ACT has prioritized this year involve law enforcement’s lawful access to data, cybersecurity, broadband, Net Neutrality and STEM education. ACT publishes an annual “State of the App economy” report that outlines broadband access and the number of tech jobs and Computer Science graduates.

The Cloud Makes Things….Complicated

We were the only VCs at the event, so you may ask, why should we care about policy in Washington DC?

To give you an example, Fresco invested in a SaaS startup based in Europe with customers all around the world. They also have several employees and a physical office in the United States. Their data is stored on Amazon’s AWS servers globally.

If one of those customers is accused of a crime and law enforcement demands the customer’s data, the startup has some legal problems. If they just hand over the data, they may be in violation of their local and EU laws. If they don’t hand over the data, they may be in violation of US or the accused’s country laws.

Very quickly a small startup may need lawyers in three or four different countries in order to solve the issue. That can get expensive, real fast.

The CLOUD Act (Clarifying Lawful Overseas Use of Data Act) helps to solve this problem. Passed this year in the US Congress with the help of ACT, it states that law enforcement’s request for data housed in the United States must follow the due process for the country of the accused person’s citizenship. While it is not perfect and there are still many issues to iron out, by clarifying the rules, it will have immediate benefit to tech companies worldwide, drastically reducing the burden on startups.

“Sarbanes Oxley” for Data Privacy

The members of Congress and their staff are up to speed on most of the tech issues, however, they struggle to prioritize the issues important to our industry against the zillion of other things in front of them. That’s why we went to Washington DC to have a dialog. We visited several offices and had very deep conversations on the CLOUD act, cyber security, consumer privacy, broadband, and quantum computing (in regards to encryption). We were able to link the issues to the economy, national security, and most importantly-their districts.

With the EU’s new General Data Protection Regulation (GDPR) about to go into effect there is a bill in front of Congress today that would take GDPR and push it one step further in the United States. It is basically “Sarbanes Oxley” for data privacy, creating a ton of new regulations, reporting, and legal requirements that would drastically increase the cost of doing a SaaS or consumer business. In addition, it would be illegal to store several types of data which could effectively kill the business models of Facebook, Google, and hundreds of other companies.

We were able to describe to members how this would effect the business of the companies in our portfolio as well as drastically reduce our future deal flow. We stressed how this would stifle innovation and the members clearly got the message. Several offices have already followed up with me and other members of the delegation. When this bill is up for debate, it will take into account all the concerns we brought up and the final bill will be very different-in part because of our dialog.

Our Responsibility

As a VC, it is our job to stay on top of all the new technology, demographic, and macroeconomic trends in order to to spot opportunities and invest in the best companies. We also have to be up to speed on everything in the startup ecosystem in order to give our portfolio companies the best advice. (Like advice on crypto and ICOs, for example.) Understanding the current regulatory and policy environment is now something we have to be up to speed on in order to best serve our investors and companies. I never thought going to Washington DC would be part of the job description of being a VC, however, it clearly is.

What a VC Learned by Visiting Congress was originally published in Fusion by Fresco Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.