Why I have a portfolio career, as a Venture Capitalist

By Fusion by Fresco Capital,

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.

(Our lively panel at Tech in Asia Tokyo)

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.

(My image of a winner takes all world of talent and of jobs)

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!

(Ending with my book. Cover artwork by Tomoko Yamashita.

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.

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Top 5 Signs Your Silicon Valley Innovation Outpost Is Just Innovation Theatre

By Tytus Michalski,

It’s no secret that global companies have been building Silicon Valley Innovation Outposts, but as Steve Blank cautions, many companies will find that they will simply get entertainment value in the form of Innovation Theatre instead of tangible benefits.

So for everyone involved in or thinking about global corporate innovation and Silicon Valley Innovation Outposts, below are the top 5 signs of Innovation Theatre with a suggested solution to fix each problem.

5. There is no fast track decision making and/or budgeting process for experiments.

A typical scenario is a large company speaking with a startup and saying all the right things. Then, once it comes time to actually close a pilot deal, the big guns from global headquarters (GHQ) are brought in with the 53 page due diligence questionnaire and the external legal counsel identifies 1,000 and 1 risks which need to be negotiated. Rightfully, the startup is thinking WTF. Big guns make sense when scaling up across your entire company but they are weapons of startup destruction at the pilot stage.

Create a fast track for pilot deals with startups. You have to go through the corporate process to create the fast track once, either using a pure internal approach or with an external partner. But once you go through this process, then when you engage with startups you can move at something resembling startup speed because the fast track is already in place.

4. You have no dedicated system for keeping track of startup ecosystem interactions and information.

Corporate and startup introductions are frequently made over reply all email chains with random unrelated subject lines like “Re: Running 5 Min Late”. In addition, companies commonly have various employees in different departments writing internal research reports at regular internals that nobody has time to read. That’s not a system, that’s Innovation Theatre.

You need a dedicated system, and hacking Salesforce for the purpose would most likely make a bad situation worse. There are now dedicated systems just for this, such as Kite, which focus on the needs of corporate innovation. If that feels like too much as a first step, keep it simple with a lightweight funnel tool like Pipedrive which can get you started for the cost of one meeting per month at a trendy coffee shop in SF (disclosure, we are investors in both Kite and Pipedrive because these are real tools solving real problems for real people like you).

3. Your front office team consists of people from a single ethnic group and gender.

Let’s say your front office team consists entirely of white men. This lack of diversity will leave you with a competitive disadvantage when it comes to finding true innovation. Put simply, it’s a dumb business decision. But lack of diversity is not limited to teams of white men. Many companies from other countries also have very homogeneous teams. A team of all Chinese or all Indian or all Japanese men is similarly challenged when it comes to diversity.

Diverse perspectives give you a competitive business edge. The obvious step is to hire from a more diverse talent pool. But if corporate hiring, budget or cultural hurdles are delaying the process to infinity, then at the very least find some external partners who have a diverse team to fill your gaps.

2. You manage tours of famous places and companies in Silicon Valley.

Even CEOs of global multinationals love selfies at famous places, famous events and especially with famous people. But if top leadership is spending time at tours of Facebook, Google and Apple campuses, unfortunately that’s simply startup tourism. Which came first at Google, world leading innovation or free food? Better not to confuse correlation with causation.

Spend more time in the trenches talking to actual startups. The reality is that you won’t have enough time to do everything directly yourself because there are simply too many options, so the most effective strategy is to find partners who can help guide you to the relevant startups for your specific needs. Your selfies won’t be famous now, but if you meet the right startups those selfies will be much more valuable in the future. And, more importantly, you’ll be much closer to the edge of innovation.

1. Getting distracted by the surface level Silicon Valley lingo.

The people in Silicon Valley have their own lingo. It starts with their speaking speed: faster than fast. They also randomly sprinkle in words like big data, machine learning and blockchain, which all started with some meaning originally but have become overused buzzwords with the passage of time. Finally, everyone picks up the habit of name dropping and can figure out a pathway of connections to at least someone from the PayPal Mafia. It’s all too easy to get distracted by this lingo and miss out what’s going on underneath the surface. Coffee shop lingo talk without any outcome is an all too common form of Innovation Theatre.

You need someone either on your team or an external partner who knows how to cut through the bullshit and find the brilliance because Silicon Valley has plenty of both. Someone who can connect you to the right people at the right time and, most importantly, people you can trust.

Beyond Entertainment

When building your Silicon Valley Innovation Outpost, make sure to avoid Innovation Theatre so that you can get tangible benefits. If you want entertainment value, go watch Silicon Valley, the show. It’s cheaper, and funnier.

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Planes, Trains and Startup Exits

By Tytus Michalski,

During the snowstorm of January 2016, travel basically stopped from airports in places on the East Coast of the US like New York City. People couldn’t get out.

And even when the weather cleared up, the travel problems continued. Imagine your chances of getting out from an airport on time when more than 3,900 flights are canceled in one day. You have as much chance of flying on an airplane as a flying on a snowflake in this kind of situation.

Similarly, there has been a lot of talk about a startup winter during in 2016. The consequences don’t look great for everyone involved. Especially people waiting for startup exits.

The last plane just departed
Did startups and investors miss getting the last seats on the startup exits airplane out of startupland? During 1Q2016, we witnessed the IPO of SecureWorks, which is a tech company though not exactly a classic venture backed startup. This promptly resulted in zero excitement during the aftermarket.

If there are no new tech companies going public for IPOs, what other modes of exits exist? The traditional US tech giants are slowing down their M&A activities. The trend at Google is well known while many others are being distracted by activist investors to pursue more share buybacks. Of course Facebook is always a wild card but that’s a pretty short list.

So it seems like both the IPO and tech M&A exit airplanes really have left the airport and everyone still waiting is stuck. That’s terrible news for startups and investors.

Forget about flying
Would other types of exits be possible? As a very rough proxy of how important tech companies are, the sector breakdown of the S&P500 Index shows that tech is the largest sector at about 20% of the total index.

That still leaves 80%. Traditional non-tech companies are clearly big, but are they interested? They’re not flashy, so think of them as trains. Yes, they are increasingly getting involved in startup ecosystems, including M&A exits. Most of these are smaller deals which work very well for capital efficient startups. So that may not leave much space to cram many unicorns inside. But there are also larger outliers, like Monsanto buying Climate Corp or GM buying Cruise.

There are obviously differences between planes and trains. So before running to catch a train, it’s worth understanding what you’re getting into. But at the very least there’s an alternative way to get an exit. For some startups, the train may actually be the better choice.

There’s no way on earth we’re going to get out of here tonight
Beyond trains, is everyone else simply stuck with no hope? Sticking with the airport analogy, there’s another entire building which most people haven’t noticed.

It’s called the international terminal.

The international terminal is gigantic and has umpteen airplanes, plus high-speed trains too, with heaps of seats looking for passengers. Companies from China are leading in activity and the momentum shows no sign of slowing. Importantly, it’s not just China – cross-border M&A is a global trend.

Why is this happening now? These global companies are just starting to feel the potential opportunities, and more importantly risks, of tech innovation. For people living and working around the Silicon Valley tech sector, the mantra of software eating the world is old news. But for companies on the outside looking in, the impact is just starting to be realized.

So whether it’s late or early depends on your relative position. If you’re trying to catch a domestic airplane for a startup exit, it may be too late. Instead, check out the train schedule. Even better, head over to the international terminal where the planes and trains still have plenty of seats available.

Just in case, make sure to keep an eye on international weather conditions.

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