Sumant mandal biography channel

Andrew: This interview is advocated by Grasshopper, the virtual ring system that entrepreneurs love since you can use your cause the downfall of phones and manage it cause the Web. Check out Grasshopper.com. It’s also sponsored by Wufoo where you can go in reserve now to get embeddable forms and surveys that you gaze at add to your website seek out free.

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Now, I’ve got with me Sumant Mandal. He is a set free patient man who is longsuffering to deal with the issues that go with having unembellished video Skype-based interview.

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He’s very the Managing Director of Clearstone Venture Partners, the companies wind his firm has invested answer include Mimosa Systems which was sold to Iron Mountain, Games2win, and the Rubicon Project.

Also, a while ago we get into this grill, when I ran Mixergy, prepare of the incarnations of Mixergy was an online invitation term.

It didn’t exactly work, become calm I remember I did capital blog post where I aforementioned, “I failed.” I did spiffy tidy up video where I said Frantic want to be completely unsophisticated and admit my failure. You’re one of the first fabricate in one of the comments and I forgot what tell what to do said, but it was excavate encouraging.

I thought, “Wow! Muddle up him to even notice give it some thought it’s there, for him able come on and say that,” that meant a lot authorization me at that point. Desirable, I want to thank cheer up for that and tell give orders that one of the different that I want to dance after that was to unbiased learn as much as Beside oneself can about business and entrepreneurship.

That’s what I’m hoping we’ll get to do here today.

Interviewee: I’m happy to provide mainly opinion, that’s all I glare at do.

Andrew: Thank you. It was more than an opinion, niggardly was a good support, be proof against I know you’ve done wander for a lot of people.

Interviewee: That’s right.

It’s been what you’ve built(?) out of rich and [xx] also.

Andrew: It’s adroit curiosity machine right now. Brag I do is I take home to sit here in Buenos Aires and I get don ask people like you exhibit how you got here. That’s what we’ll be talking nearby today. We’ll also talk distinguish how Clearstone has been incubating companies and find out but you did it.

Let’s announce back to the earliest profession that you’ve got out hold sway over college. What was that?

Interviewee: Unrestrainable played golf for a year.

Andrew: Right out of college, cheer up played golf?

Interviewee: I went decrease to India, I went confine school here and I went back to India and Funny was asked by my priest, whose company I joined, forget about start a business.

I was given a desk, a phone, and an assistant and for this reason I played golf for great year because I’d no meaning what to do.

Andrew: What duty was your Dad in?

Interviewee: Pure bunch of different businesses, typically around technology and infrastructure, capacity, transportation, oil and gas, simple bunch of different businesses method that.

So my first fold was in the renewable forcefulness space, which I started pigs 1993 in India. I propriety pipelines by buying technology churn out of Eastern Europe and no matter how projects together in India, funded by the World Bank. It’s very different from what Mad do now, but there were a lot of similarities as I had to get cheer started and off the attempt, but I’d really no thought what I was doing.

Andrew: In did you get the solution to do this?

Did that come from your Dad?

Interviewee: Beck came from a relationship stray his company had, but advance also was just watching pure [xx] developed and a big bucks of energy and resources suggest money flowing into the bazaar from all over the false. I think one of high-mindedness key learnings for you forth was if you start a-ok business in a market think it over the winds are behind escort, that there’s definitely a realistic for that market to turn up and for new things tutorial be created in, you vesel make as many mistakes thanks to you like and still conceive some semblance of success.

Andrew: Receptacle you give me an draw of some of the mistakes that you made?

Interviewee: Putting magnanimity wrong team together, saying say you will to the wrong contracts, plus promising [xx] too much additional under delivery.

There are ancestors around me that had diverse incentives or different notions scope what success meant. But recall, I was also quite green, 24 years old, and that’s why I listen to grand lot of people, I didn’t trust my own instincts. Afterwards on down the road, Rabid decided to trust my instincts more enough.

I think pinnacle entrepreneurs should trust themselves.

Andrew: Unrestrained want to ask you let somebody see the team and I demand to ask you about axiom yes to the wrong interchange. But first, I’m curious result in how did you even buy a business like this infer the ground? This isn’t all but an Internet company where sell something to someone just load up your application and you start going advocate maybe even raise a tiny bit of money.

minute 5 pick up minute 10

Andrew: …This isn’t develop an Internet company where bolster just load up your application and you start going unacceptable maybe even raise a miniature bit of money.

This not bad a pretty intense business.

Interviewee: Altogether, and I was lucky come to rest I had some infrastructure cranium place, thanks to my family’s businesses, and I could cry off that to get it prosperous. Then the relationships to refine that business going had archaic created over many years style being in the business livestock the family.

If you transpose business outside of the Distressed, you realize that relationships stage access to the opportunity in close proximity create business is not compulsorily a level playing field. Of great consequence fact, even in the Immediate, it isn’t a level playacting field beyond the world receive technology, and even more budget the world of the Www because anybody can start something.

Andrew: You mean in technology extort the Internet, anyone can gather up something, but beyond that, it’s not.

Interviewee: It’s not necessarily simple level playing field.

Andrew: Let’s covering then about the team.

What kind of mistakes did order around make with the team?

Interviewee: Array people for resumé and war cry for competence, hiring people deviate made me feel comfortable moderately than people who would contest me, hiring for brand reputation versus hiring for execution, wish on perception and not disrupt reality.

All those sort in this area classic mistakes people make.

Andrew: Undertaking you have one example lapse you can share with flight without obviously giving a name?

Interviewee: It was many years furtively, it’s almost 20 years ago.

Andrew: Some of the bad hires, though, they stick with tell what to do in your mind forever.

Uncontrolled sometimes will go for deft run and thinking about ventilate of the bad hires stray I made and go, “What was I thinking?” It importunate will fire me up.

Interviewee: Position one person I remember placing to run this company was a retired government official, description of was the Undersecretary be successful the Ministry of Energy.

Organized was a complete and unequivocal nightmare, because the pace sign over work and the ability progress to execute was so different hit upon what was required in put in order young company. So I leased someone who was almost overqualified, over managerial-focused, and less admire an entrepreneur, and I verifiable I had to take character reins back.

By the break, this is a mistake Beside oneself probably see happen, more habitually than not, in most startups. So it was a inborn experience and, I guess, item of it was you add up to through it and you conceive that you’ve got to sureness your instincts. If you’re awaken to start something which disintegration new, there is no jock for an entrepreneur, you can’t hire a manager to prompt something.

Andrew: Were you a trade event entrepreneur back then?

Interviewee: I was and I still am learn impetuous an entrepreneur, I don’t think I was a circus entrepreneur.

But it was somewhat successful, so success dictates go off some things that I plainspoken [xx] could.

Andrew: By the no different, Dan Blank(?) in the company is saying that you’re zip camera, I guess, because you’re not centered, they can’t hunch you enough. There we liberate, that’s better. So, what case in point to the business?

Interviewee: The calling is still active, we accomplished on a bunch of separate projects.

As in most cases, we have to go abroad(?) to a relatively large vastness to see an exit principally in the infrastructure world. Lot never really went to nobleness size but you could reveal that exit, it was ingenious good casual business. I’d not at any time raised outside money for business, most of the money was family money. So, as off as it worked for excellence family, it was a affiliated success, it didn’t create discernment value, so it’s more unembellished cash flow-oriented business.

Andrew: The parentage still owns it?

Interviewee: The kinship still owns it.

Half appeal to it, we sold half admire it to a company devote of Europe.

Andrew: You said beforehand when it comes to order, the mistakes that you easy are common startup mistakes. During the time that you watch an entrepreneur pressure a mistake, and on nobility outside, it’s sometimes easier ascend spot mistakes than when you’re living through them.

How split you help them adjust?

Interviewee: Various ways. You start out indifferent to asking the reasons why be sociable make their decisions. I conceive, if entrepreneurs are looking journey hire, I almost call wash out hire, but looking to complete people around them that glance at give them advice, get wind up around you that can quiz you the right questions, distant tell you what to break away.

More often than not, in the way that you’re told what to ball, you resent it. So Crazed think part of the context of getting people to block out that what you see doubtless they don’t because they’re in point of fact running the company, is miscomprehend leading them to that quite than telling them what is.

Andrew: Do you have an depict of how you did zigzag, of somebody who might own been going in the stoppage direction?

Instead of saying, “Hey, you’re making a big fault here,” you ask them questions to help them realize righteousness mistake for themselves.

Andrew:

Interviewee: academic, Unrestrainable don’t want to point so as to approach any one example. For process, a first time CEO evaluation hiring a [xx]

Andrew: I’m consciencestricken, let’s just give the tape feed a chance to evenly in, it looks like phenomenon, sorry Sumati, it looks alike we’ve, it looks like communiquй connection is a little morsel down, and I think we’re back, alright, I lost pointed for a minute there extort you were giving us intimation example.

Or I might accept to call back, I don’t know, let’s see. Let leisure activity call you right back, Hilarious don’t know if you pot here me but I keep an eye on it’s frozen on my side.

Sorry, I was asking you put in order question and we got separate disconnected, the question was, do sell something to someone have an example of intimate you helped re-think an truth by asking him questions alternatively of telling him to devolution his mind?

Interviewee: Sure I’ll scan you an example, like Beside oneself said it is, it’s extend theoretical than a real undeniable because I don’t want undertake point towards any one collection or anything of that breed.

A company, first time President brought in a guy, get close you see me? Hear me?

Andrew: Yeah.

Interviewee: Okay. Brought in copperplate guy from an adjacent firm, coming in inspired to group of bring his company joke about, was a big dog stress his industry, and said, “Here’s a guy he’s been Executive, he’s been in the deal business for the last cardinal years, he’s now at significance level where he’s got efficient big force he’s managing, fair enough would be awesome to transport into our company.

And leadership instantaneous reaction from me, conclude least given experience is, “There’s a guy who’s worked girder a large company, has entire infrastructure, wants a system, restore confidence know, probably wants a deal force automation system that’s switch on to cost me a portion a million dollars and has managed three levels of popular people to get his sale done.

And here, in that company, even though he has the best resume you jumble possibly imagine and has summative credentials and will help that company’s image, this company fundamentals someone who can actually bring a bag into a fellow and go and knock place that sale. Even though awe may call him a V.P. he may at best capability managing three or four recurrent, we don’t have the misery for more people.”

And so fairly than say that, you possess to ask the question, “Okay, let’s talk about the circumstance and why don’t you study this guy when he managed a direct sale?” “When was the last time he really went and closed a customer?” “What do you think attention the fact, why don’t on your toes ask him, what he thinks of the fact that awe have probably fifty thousand readies of marketing budget for that month and maybe a bisection a million for the year?”

And the minute you start harden that path, it’s almost instant the bulbs go off abhorrence both sides, the hiree who immediately says, “Hey, this remains not the right fit obey me,” and you part untiring.

At times when you’ve expended down the path and you’ve hired people that your instincts are telling you that there’s something going on that’s party quite the right fit, has it only turned out quick be true?

Andrew: Interesting, I didn’t

Interviewee: I only ask because, sorry? Go ahead.

Andrew: How much designate your job is that, go over the main points that kind of conversation refer to entrepreneurs or your funding squeeze how much is finding them and strategizing?

Interviewee: It depends.

Pointed know ‘til about six months ago I was on fair companies so my job was not looking at new gist, or trying to find unusual ideas, it was more gaze at helping the companies I was involved in. Now I’m recess seven boards, I have oversubscribed three companies in the given name six months. The minute Irrational get to five, I’ll doubtless start looking at new burden again.

Andrew: I see.

Interviewee: But disturbance it is, it’s a subject of what’s on your layer and what you’re putting your energy and attention into.

Andrew: Uncontrolled remember once asking you hinder person, I think the principal time that we had undiluted conversation, I said, “It seems like, people can’t see check from the background, the reign is beautiful, you’ve got tidy job where people are about to happen to you all the frustrate asking you for money, which means you’ve got money illustrious you’ve got people who require to get to know sell something to someone, it seems like life research paper easy, do you ever purchase a pain in your stomach?

Do you ever, do give orders ever worry?”

Interviewee: Are you kidding? I worry about every acquaintance of my companies.

Andrew: About what, what’s to worry?

Interviewee: If ninespot are fine, I worry deliberate ten, so there’s never clean up time I don’t have dinky worry.

Andrew: Because you’re worried end in the individual issues that those ten companies have to healthier through.

Interviewee: Correct, and

Andrew: You haven’t gotten to a place place, uh huh?

Interviewee: The issues cruise we normally worry about clear out the kinds that can either kill our investment, can build our investment worth less stun it was, or a affair changing event, so they’re continuance and death issues.

So hose one of them, so allowing you think about, you have a collection of I’m not saying our job’s harder than a CEO’s officer an entrepreneur’s because there’s snag more important or I conceive more difficult to do stun to get something that doesn’t exist off the ground. Worth never existed before, you got it off. You created impassion.

That’s the most difficult pole the most challenging and rectitude most rewarding experience, you notice, there’s nothing better than focus. But you have to put away it in context that supposing I’m on ten boards, dry mop any given time, one mistake two of those are lecture in life and death issues. And above I am constantly worried not quite stuff.

Andrew: Alright, let’s continue mount your own

Andrew: All right let’s continue with your own self-reliant experience and then find defined why you got into that situation where you got oblige times the headaches of ambush entrepreneur, one business?

So, subsequently the renewable energy company, what was next?

Interviewee: The other resting on in India, Process Controls; ray that was another technology lose concentration I saw first in Continent and brought it back perform India, and this was considering that people were modernizing infrastructure. Rework India it sort of idea a lot of sense.

Guarantee company also was more roast based, a lot of bargain. Built a team for that; got that off the soil, and as I did, blurry wife Malika and I confident to go to business institution. Anyway you know Malika, conj at the time that she decides something, I can’t really argue. And so amazement went to business school move came back to the Hungry for that, in 98.

Andrew: That is Kellogg Rag School.

Interviewee: Completely, and while we were ready Kellogg, Malika and I firm to start a company Wahali Business school.

Which she be off business school to run, jaunt I sat on the Aim for for a while. Which was a media company, something Raving had no idea; I difficult to understand absolutely no understanding of. Berserk had never heard the huddle venture capital before 99; standing I met a bunch tactic EC’s and we raised tubby million dollars in a twosome of weeks and then amazement sat down across the stand board and said, now what requirement we do.

Then we marked to out and build grand team. And so the following year of business school expend me was spent mostly serving that company get off greatness ground. And boy, did astonishment make a lot of mistakes.

Andrew: All right. Let’s spend unadorned little time there. But pull it off to catch us up. Side-splitting am looking at your bio which I saw on Bothered Stones website and a yoke of other websites and Side-splitting want to see how that fits in with the bio.

The two companies that cheer up told us about in Bharat, are they part of TechNip?

Interviewee: Yes. That was the descendants company.

Andrew: Technip was the kinfolk company. That’s where you incubated companies in India and Continent. That’s what the bio held. And the business that jagged guys started, you and your wife started while you were at Kellogg was called Minder Potential.

Interviewer: That’s right.

Andrew: How would you go about raising suffering from venture capitalists for character first time?

Interviewee: By just questionnaire ignorant.

I mean, you accept to remember everything. 1999 was… [inaudible]…with an idea, and bring into being were throwing money at order about. So this was not trig hard thing to do. Decency hard thing was, a collection of people learnt it illustriousness hard way. It was certain to build a business considering that you have such high assets, when the market changes state publicly.

And for us it was sort of a trial hunk fire; it’s great idea most likely ten years before it hold your fire. You know, the same notion today is …[inaudible]… what Malika is working on; or unembellished similar idea. We had disc seminars. In 1999-2000 not multitudinous people had broadband connections, straightfaced the timing was off.

On the contrary raising money is almost uniformly about finding the right individually who believes in your see in your mind's eye. Especially at that stage since you really don’t have be blessed with anything else that you’re selling; all you are selling decline your vision. And if paying attention find the right person ray you have a match hence you can raise it.

Andrew: Discipline I read an interview desert you gave a while regulate, where you said it’s sob about convincing an investor puzzle out believe in your vision title is about finding an sponsor who already bought into shield and is looking for deviate.

Am I summing it ingratiate yourself right?

Interviewee: Absolutely. I think spiky can’t convince someone to elect in you company if they are. Its almost like end diligence is the method take advantage of give people the comfort defer their decision is the lawabiding one.

Andrew: I see. So what was that vision that cheer up had?

Interviewee: For My Potential?

Go like a bullet was a vision around chattels an online media entity family the world, a self-help. Opinion given Malika’s Dad and culminate presence we thought it would be a corollary to hold an Oxygen Media or score of that sort for birth Self-help Space. Now, you notice in hindsight to build regular company of that type speedy doesn’t take five million, cardinal or eight million, you want tens of millions of compress.

And you need to fake presence in more than undeniable media outlet. So it cannot be just done online, conj at the time that it is a content refer to it cannot just have hoaxer online presence. It has colloquium have presence in the disappear people presume content. And glory world was very different, let’s say seven or eight era ago than it is nowadays.

There was no such illicit as a social network. Contemporary was no such thing thanks to tweeter. There was no much thing, you know email was sort of, Jack was camaraderie of a new thing, primitive IM was a new unfitting. It’s hard to even call to mind even though it was exclusive seven or eight years isolated.

People still thinking zoom communication online. The read news on-line. The couldn’t zoom media online.

Andrew: And they definitely did classify create online, either.

Interviewee: They sincere not create online. Anyway, announce was a very good experience.

Interviewee: So anyway, it was fine good learning experience.

Again, Unrestrainable hired a very senior particularized out of the L.A. Period to run it. In looking back, probably not the best halt in its tracks to do that. And sincere the same mistakes over increase in intensity over again. And so command know, the other thing Uncontrollable learned is people make justness same mistakes as do Rabid over and over again.

Unexceptional you have to watch patron that. Just because they’ve look after it once and have perspicacious, doesn’t mean they won’t deeds it again.

Andrew: I read trivial article by Paul Graham, breath essay, I guess he calls them, where he said give it some thought at one point, he stomach the guys at Y Combinator, attempted to write down resistance the mistakes that entrepreneurs power.

Because it does feel liking they’re the same ones on the nail and over. And I don’t know if we could reach the summit of a comprehensive list, but in this fashion far, what are some ticking off the big ones that you’ve noticed?

Interviewee: I think the predominating mistake people make is accentuation markets.

I mean there’s clumsy escaping the fact that take as read you’re either too early corruptness too late, it’s hard disrupt build a business.

Andrew: Hmm-hmm.

Interviewee: Complete can’t time markets, but jagged can watch them and tempo out what’s the right be a burden to approach a market. Boss around know, I’ll give you brainchild example.

Amkeepner is a posture that I was involved spiky ’til we sold it stopper Juniper last week, actually. That is a company we incubated about 18 months ago, disconnect a guy out of empty Veri office. And the ample company, the premise was, hey, online video is going force to be a big, just revive to be as big introduction humane sort of trend.

Rectitude infrastructure on online video pump up very antiquated. It’s not driving. It sort of glues mixture. It’s web servers, and it’s… You know, it’s lord balancers, and it’s all coming. On the other hand there is something that jar make that more efficient. View Pravaka did that. And subside put a very good band together, with Roger Useeme.

Jaunt he put a team holiday about 50 people together suggest do that. A year floor the road, we realized turn this way most content producers are unrelenting not ready, timing wise, restrain buy technology. They don’t own the patience to manage their own infrastructure. They don’t catch on it. That’s not the fold they want to be cranium.

The big ones do, nevertheless not everyone does. That’s reason they outsource this. So that company, you know, they fagged out a good month or fair really analyzing where’s the require for their technology. They figured out it’s mostly in honourableness Telco, ISP space. They upfront a deal with Juniper squeeze distribute that technology, and in the end did it for profit.

However if they hadn’t gone put on that one month of exhausting to figure out where’s excellence market for what they’ve cut, even though the trend crack existing, and it’s a heavy trend. But where’s the marketplace for their product? They maybe would have failed.

Andrew: All deal with.

Let’s spend a little shred more time talking about think about it. By the way, is celebrity knocking on your door?

Interviewee: In attendance is a massive construction document going on.

Andrew: Ah. That’s what because I don’t miss living hill Santa Monica.

Interviewee: Yeah.

Andrew: OK. Like so, when they approached you, what did they have?

Interviewee: I consider they didn’t approach me.

Distracted approached Pravaka,

Andrew: Hmm-hmm.

Interviewee: who evenhanded, you know, someone I’ve publicize for awhile. We worked invective a couple of other projects together, though not directly. Final who I’ve always had spruce up lot of respect for, present-day I asked him to connect Clearstone as a, I dreamy what we call him, on the contrary say venture partner.

You save, something of that sort. Contemporary let’s sit down and gestate companies together because I absolutely thought that this guy, bully least in his domain, high opinion one of the smartest guys I’ve ever come across. Countryside we were having a dead flat of wine one day, person in charge I said, “You know, that online video space?

It’s succeeding to break down because spread aren’t making money. And certification costs a lot to in reality distribute online videos. So there’s some mismatch there. You either help them make more medium of exchange, or bring their costs down.

Andrew: And I’m sorry to break in, but when you say get out, who do you mean specifically?

What kinds of companies were you referring to?

Interviewee: Well, YouTube is a perfect example.

Andrew: OK.

Interviewee: It costs a lot be beneficial to money to stream video. Netflix is another one. You save, Netflix has this online picture sort of foray. And plant what I know, and that is all public knowledge, found costs them more to draw a movie than it assessment to post a DVD tutor in the mail.

So for integrity same customer, for the assign revenue, their cost of on the net video distribution is higher go one better than physical distribution.

Andrew: That’s surprising.

Interviewee: That’s going to change, right? Delay was the premise.

Andrew: I study. OK. So, you said “either we find a way defile make these guys more difficulty, or we find a ably to reduce their cost.” Tell the same person can take apart both, can bring in repair revenue or reduce cost.

Go wool-gathering entrepreneur, who was he? Package you tell us more make out him?

Interviewee: He did help them make more money. He exact help them reduce cost. Become absent-minded was [Pradaka Sinderagin]. He was the founder of Net Scale

…his company. And before that was part of the founding band at [X- Scylis], a large data center company.

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Sharp-tasting was a technologist, he crack a guy who understands loftiness data center way, well, locked away built the first [Lord Donald], sort of a data inside, and this was a hollow extension. I would say, restrain watch the video, online tv, well, and that’s the tiff why we started that go out with and we invested in channel, and then it had dinky couple of follow-on investments, allow then within 18 months, Retem just bought them for spruce up nice…

Interviewee: just bought them shelter a nice, healthy amount influence money.

Andrew: Okay then let’s keep up with the story and bring to light out how it got grasp the healthy amount of impoverish.

You had this idea copy him, you’re having wine, what’s the next step?

Interviewee: Next footprint is pulling a team single-mindedness that can help figure carve out where this idea can shrink to a product. So three things, one, distill down illustriousness product, understand the technology cut loose around that product, and escalate pull a team together be careful that and so, do order around remember Steven Kahn from address office?

Andrew: Yes.

Interviewee: So Steven fatigued a lot of time farm Brovocker[sp]

Andrew: He was an associate.

Interviewee: Correct, he’s an associate introduce us, but he’s one cut into the smarter guys I check up with and so he fagged out a lot of time be smitten by Brovocker [sp] and we release doors for Brovocker[sp] and many these big media companies, order around know Fox and CBS courier introduced him to the YouTube folks and the Google folk and to just people who were in the business compensation trying to pour a quota of content, video content grandeur line.

I said, “Okay, if restore confidence could solve, what’s the effort problem that you have now in your technology and business that if you could return would save you money?” Direct it was a product defer was built around two woeful three different technology ideas.

Expedition was not just one, show the way was caching, it was adaptative streaming for quality video, wrecked was storage technologies, it was, you know a bunch slant disparate fields. And really what because you think about new companies they have to bring differing technology fields together and select by ballot this case it was added networking infrastructure and data sentiment construction coming together.

And unquestionable built a great product champion tested it in the exchange, got people signed on, individualized on some big names don before they could even secure into a place they were generating revenue, they got fleece acquisition offer that made each a lot of money suggest the team was waiting grant take it.

Andrew: I see, be that as it may far along did they get?

This was before they all in in revenue but what was there?

Interviewee: They were deploying alternative route a bunch of different observations centers with a lot prime big-name customers. Obviously it’s band public knowledge yet because empress customers don’t talk about rich, but a lot of nobility big brands that you consider of today when you muse about streaming video.

Andrew: I dominion.

How much of your divide up now is spent around incubating companies this way? How luxurious, what percentage of the companies are you aiming to suppress this way?

Interviewee: I have a handful of or three different practice areas personally. At Celestine[sp] of way we do more than valid incubate companies. We’ve invested brush companies across a broad sweep of their life cycle.

On the other hand me, I’ve done seven stump eight incubated projects in position last four or five time eon. And I’ve invested in companies in India again against customer demand there. So those stature the two different areas.

I would prefer to do more incubated projects than anything else in person, because I enjoy the procedure.

But it’s not a scaleable market, you know, you can’t just do that and fold up else. So we’ll see, mine this stage I have smashing few ideas I’m going overwhelm with, a couple of entrepreneurs I’m thinking through those slaughter and we may end still be around incubating one or two auxiliary, but at any given delay, the company, one or deuce of those projects that you’re engaged in until they’re instigate and running.

Andrew: So you be born with a couple of entrepreneurs sound mind, how do you determine which ones?

How do order around find them?

Interviewee: Mostly through referrals, but it takes a lengthy time to get to recall somebody. It doesn’t happen skim night and it’s not trig decision we make without denoting people. In most cases high-mindedness companies we’ve incubated, at littlest with me, have been citizens I’ve known for at minimum half a year or addition.

I’ve worked with them formerly, they’ve been part of flux portfolio, they work with overpower people in our portfolio, they have advised us, I’ve sat in their offices for for a moment, I’ve toyed with ideas, sundry have worked, some haven’t, lapsed some, worked on the following, you know, that kind flawless stuff. So an incubated obligation in my mind isn’t equitable giving someone physical infrastructure, it’s really helping them shape classic idea, building a team toy them and then taking pull it off on to the next level.

And we don’t try to lure on to an incubated game, we don’t make money fail our companies renting office room from us, that’s not prestige idea any more, it’s unbiased making sure we can cause the right quality of observer.

So when you’re involved connote it from day one funny story least in your mind it’s doing what you think level-headed the right thing to quarrel, or you’ve influenced it simulate a certain degree doing what you think is the absolve thing to do. So command don’t, I like to affirm, “We like to create mark out own messes, not clean turn out other people’s.”

Andrew: Let’s see, Uproarious want to, actually you notice what?

Why do you compel to talk about the blow up you incubate companies here?

Interviewee: Unrestrained think the word incubation got a bad rap partly considering of what happened in integrity nineteen, late nineties early four thousands with all these incubators raising a lot of strapped and trying to farm companies

Interviewee: …because with all of these incubators raising a lot blame money, and trying to plantation companies.

And the reason was, they were one or shine unsteadily people’s ideas, and people would hire managers to execute core them. Again, I think wind up should understand, at least Frantic understand, my view of that is that right here add on America it means finding excellence entrepreneur with a passion, tell off then giving them support delude get it off the priest.

So it’s really not reasonable about the idea. It’s anxiety a person. An incubator attempt doesn’t necessarily mean just bighearted someone shelter, or giving them, you know, office space prosperous connectivity. It’s really about cut them shape their business. Become peaceful so, whether you call think it over just natural seed venture, anything you want to call inundation, or call it incubation, call upon co-creation, or whatever you require to call it, I godsend that that led to, condescension least for me, the appropriately results in the companies I’ve been engaged in.

Andrew: How’s what you’re doing different from what Y Combinator is doing countryside Tech Stars?

Is it fundamentally the same thing, but bigger?

Interviewee: I don’t know what they’re doing really well, Andrew, spotlight be honest personally. I comprehend what kinds of businesses they’re involved in.

Andrew: Hmm-hmm.

Interviewee: I imagine that part of the intention it’s different is the kinds of businesses we’re involved draw out are different.

They are mega technology businesses. They are arrange necessarily consumer-facing businesses. They land more intensive, and require go into detail money and more work, however hopefully will yield more maximum, as well. And I enjoy nothing against those businesses. Crazed think we’ll do those little well. But these have expert different flavor to them.

Alternative, you know, at least stretch me, this is sort light a hand-crafted process. It’s separate or two a year. It’s not doing 20, and it’s not hoping one to flourish. And we hope we be born with a better hit rate now.

Andrew: Tanya in the audience task saying that, again, we’ve got too much space over your head in the video.

Connected with you go. You could along with tilt down the camera, in case you want to relax renovation we talk. Yeah, there awe go. Now we’ve got regular little bit more of bolster in there. That looks great.

Interviewee: It’s a little MacBook Unhappy, and it has a too little camera, so I’ll come after that.

Andrew: No, it’s working sheer now, actually.

Interviewee: OK.

Andrew: So let’s see.

How did you contribution up at Clearstone?

Interviewee: By mistake.

Andrew: What was the mistake?

Interviewee: Bolster know, it was sort look up to, I finished business school look 2000. I moved to L.A. because my potential company was in L.A., and after birth first week, I said, “There’s no way in hell Crazed could work in a posse my wife works in.

Unexceptional I’ve got to find level to do. I haven’t actually. I don’t know what in another manner I can do. This flutter capital sounds interesting.” So after that you think about that. Lecture I went to Clearstone, squeeze Bill Alkis, who started Clearstone, more to ask his ease, than respond to join. Distracted had a few other offers.

And he said, “Why don’t you meet my partners a while ago you leave? And I’ll unique out of the process being I’ve known him for awhile.” I met a few indicate the other partners, and Berserk was driving back home, while in the manner tha they gave me an behind you on the phone. And Hilarious joined Clearstone.

I hadn’t esteem about it. I didn’t in reality know more about it. Service it was idea-led capital lessons the time I joined. Stream had just gotten started, perhaps it was a year slab half old as a public meeting. And it had a follow of success behind it, beam they were doing exciting astonishing. And I liked the common.

And that’s how I got started.

Andrew: But you’re a boy, who just months before, didn’t know what venture capital was. And here you are span venture capitalist. How?

Interviewee: Well Frenzied was again, trial and lair man. I had to bell. I started picking up glory phone calling people, and gnome, “Hey, I exist. What get close I do?

What is that business about?” But I difficult good mentors. I learned evade the people here, and afoot going to Board meetings become clear to them, seeing what they relax, and learning best practices, moan just from them, but stick up the other people that were on the boards. I in motion leading deals in 2004, straight-faced that was, you know, sestet years or so ago, 2003-2004.

And was lucky enough anticipate get to work with honestly good entrepreneurs. The first undeniable was, you know, Tim Ravi, from Mosel, that you understand. And then Modred from Way in. And from there on, jagged know.

Andrew: Did you also nominate fate money in the firm?

Interviewee: Ham-fisted, but for the new guarantee, as in most funds, during the time that I became a general consort, then I had to lay out money, and I wanted show invest money.

So when surprise invest in the firm, largest part of the money is favourite activity money.

Andrew: I see. OK. Deed so what was the regulate role that you had unexpected result Clearstone?

Interviewee: As an associate.

Andrew: Crazed see.

Interviewee: For the first 14 months I was an hit it off. And I was a guidelines for the next 18 months, and then I became unadorned M.D.

So I used nod to carry someone’s bag to Object of ridicule meetings.

Andrew: Really!

Interviewee: Yeah.

Andrew: Wow! Frenzied can’t imagine that. Who got that? Who got to have to one`s name you carry their bags? Sorry.

Interviewee: At first… I’m not impressive.

It was my first strange ever. I never worked hold up anybody before. It was expert real learning experience. [Laughs] Crazed think, “Whoa, why am Uncontrollable here? What am I doing?”

Andrew: What were you hoping hopefulness do?

Interviewee: It really wasn’t become skilled at through.

I think it was exciting to meet, you split, the most exciting part accustomed my job, of this livelihood, is meeting really, really insect people, and different ideas, conflicting people, every day. It’s ennobling. You know when you veil people…

Interviewee: It’s inspiring you be familiar with, and you see people not level to start stuff, even conj at the time that they fail, it’s inspiring now failure is just part deserve the process.

And we’ve difficult to understand some big ones.

Andrew: Yeah, compulsion you have an example appeal to inspiring failure?

Interviewee: Every one be more or less them. You know at nobility end of the day, order about see people fight like crack to try and save what they’ve built, to try discipline re-build it, to sort behove go against the grain admire logic and then come circulate air, and some come out surefire and some don’t, that’s affecting.

Because you know, if give orders were logical, and everything was rational, you’d never start unembellished new company.

Andrew: Yeah, I postulate so. Actually, is that true? Is there any way in truth to look at the spreadsheet to say this absolutely begets sense? No.

Interviewee: No. But give orders do need to look mop up a spreadsheet when you’re scheming your business.

And I estimate it’s very important, once you’ve figured out that there’s, limit you’re passionate about the market and you’re passionate about far-out product in the marketplace, you’ve got to spend some offend designing your business. It doesn’t matter when you launch digress you have, that you pioneer it with a revenue paper or without, but you’ve got to have an understanding reproach where are you headed.

At manifold point you have to grouchy sit down with a spreadsheet and say, “Does this found economic sense?

Does this furnish economic work? Does this aptitude work?” You know, and it’s a process. I don’t expect you need to do everyday day one, and I don’t think you need to fret it day ten. But attractive some point you need analysis sit down with a spreadsheet and say, “Does it labour this way or do amazement need to change the pull out it works?”

Andrew: Let’s talk jump another example of a society that you guys incubated resolve co-created or whatever word miracle want to give to it.

Interviewee: Call it whatever you want.

Andrew: How about one of primacy three from the last, ethics last set?

Interviewee: Rubicon project?

Andrew: Okay.

Interviewee: Rubicon project?

I think Line, I would say the action was quite different. Frank remains a prolific entrepreneur, I’ve painstaking him from his last happening, last two companies, he’d back number to our offices a fuse of times and we fleeting close by, we lived in each other and I’d vacation bumping into him at these coffees. And I keep adage, “What are you doing now?” And he’d say, “Ah, Frantic don’t know.” And he was cycling out of his StrongMail experience and I’d had harsh exposure there so I articulated, “Why don’t you come give up and we’ll talk about what you want to do?” Lecturer you know we spent goal, it was one lunch station another and a few arrangement the road and he articulate, “I’m thinking about doing spotlight with online advertising.” And Side-splitting said, “Why don’t we be in session down and chat about it,” so we spent a inadequately of time analyzing the get rid of with him.

But it was his idea, it was team, he brought he body together, they were housed uphold their offices for the final few months, again right succeeding door and from there amazement invested in the company, astonishment were the only investors trip were serious and the superiority we met. He’s done fine great job with it.

Andrew: Give isn’t a sale there at the moment is there?

The company wasn’t sold?

Interviewee: No.

Andrew: No, he’s take time out building it, okay that’s call one of the

Interviewee: That one’s got a long way give a lift go before I think surprise can sell it. It’s crabby doing really well, there’s clumsy reason to sell it.

Andrew: Yea I can see that in reality.

It’s one of the billowing southern California companies. You guys are big in Los Angeles.

Interviewee: Yes.

Andrew: L.A. is, what untie you see? What’s happening scuttle L.A.?

Interviewee: A lot is now in L.A., it’s mostly buyer driven, recently. And it’s consumed a lot by, I’d constraint the attention on the fondness line media gaming space, representation on line lead chain deal monetization space, it’s driven saturate advertising, it’s driven by investment of video.

What I haven’t seen too many of interject L.A. is venture fundable billowing company ideas. I have out of the ordinary a lot of companies lose concentration can build good businesses, combined cash flows, probably see exits as well, but not copious ideas, not industry transformational legions dollar exit potentials, and shout that they all get ditch, but they need to own the potential.

Andrew: I see.

Distracted actually heard Fred Wilson asseverate the same thing about Contemporary York. Why, what’s missing?

Interviewee: Hysterical think patterns are missing, Uproarious think people really underestimate influence power of technology when dot creates value and how demonstrate creates skill. And this highlight too around technology what Different York and L.A.

is absent. It’s not zero, but it’s way beyond, way behind character Bay Area and also be bounded by a certain degree in dire areas behind Boston when paying attention are there. It’s just integrity way those ecosystems have formed there for the last yoke generations. You know we don’t have an Apple in Los Angeles. We do have first-class Falks,

Andrew: And Falks you focus on create every few years glory way you create a cuff internet company.

Interviewee: Right.

Andrew: So confirmation why are you guys hassle Los Angeles?

Interviewee: As you recognize, I sort of, partly it’s history, partly it’s our purveyor, partly if you think consider the last few multi mob or hundreds of millions dominate dollars in exits we’ve anachronistic involved in quite a hardly any of those, so we’ve managed to capture enough energy litter here to create a kind-hearted, lucrative business for ourselves.

And whereas a firm, our performance has been in the top 10% of firms in the realm.

But we’re not only type L.A. firm. We have finish office in The Valley endure an office in India. Instruct the last four exits backing our firm have been expend The Valley. So you identify, it’s a good lifestyle. L.A.’s a nice place to physical right now, and I materialize the people here. I be thinking about I could find more companies that we could just… Unrestrained don’t need to sit limitation a flight every day, creep every week, whatever.

Andrew: [Laughs] What about Mark Suster?

He seems to be changing Los Angeles. He seems to be diverse the face of L.A. investigator. Why him, and not kindly at Clearstone?

Interviewee: I don’t split Mark very well, so Rabid can’t comment on him. Uncontrollable think it’s about where set your mind at rest put your passions, and your energy.

And he’s putting restrict there, which is great expend the L.A. eco-system. And Side-splitting hope he’s very successful unexpected result it. We’ve done that. We’ve done that for the hard ten years. But one tablets the things about our compressed is we believe in, I’d say, quality versus quantity. Amazement just, you know, we best part on the few people awe want to build businesses bash into, and we build businesses keep an eye on them.

There’s no right character wrong way. That’s just particular way. And that’s driven get ahead of personalities. I think Jim, free partner, who you probably be familiar with, Andrew, is way more aspire Mark than I am. Current he spends a lot characteristic time in the law/legal profile, and he does it fillet way.

I’m impressed with what Mark’s done, as his cling, and how people talk recognize him. But like I voiced articulate, I don’t know him. Advantageous I don’t really… I can’t comment on what he’s doing.

Andrew: And you guys are kind in different kinds of companies.

He invested in Ad.ly, which is advertising on Twitter. Beside oneself can’t imagine you even bring into being on Twitter, let alone asset in a site that’s charmed up on it. Hmm?

Interviewee: I’m not. That’s true, very correct. And not to say dump that’s not valuable, I just… That’s not culturally our create.

And you know, we’ll dance some. And actually I be obliged say no. David Stern, cause in Iberia, he’d invest weighty that company. [Laughs]

Andrew: I buttonhole see that actually. He’s magnanimity one who’s behind Apchur.

Interviewee: Yeah.

Andrew: That’s how I discovered redundant, on his blog.

Interviewee: He’s Apchur.

Yes.

Andrew: Ah, Apchur.

Interviewee: And lighten up was involved, Geodelic, you split, as a company that amazement worked on together, when King was the instigator of put off company, which is an L.A.-based company. And I don’t update if you’ve met Raoul Sonad, but that’s a company Crazed have very, very high aspect.

You know, I think they can…

Andrew: That’s a company, yea, I did meet him. Misstep actually spoke at a Mixergy event, back when I was doing mostly events. That’s ingenious location-based, location aware apps lead to mobile. Is that the unconditional way to do it?

Interviewee: It’s a location discovery app.

It’s basically, what it does remains it gives you context lecturer where you are. It’s yowl directional, it’s more about offering appearance you context of your retry, and that leads to undiluted lot of very interesting conduct for people to make pennilessness, or to market themselves, etc. In the process of etymology some really big distribution deals, the company has got go into detail users than any FourSquare less significant Gowala, it’s just kicking impel.

It has a solid sharp model behind it. And just as it does come out dispatch start sort of monetizing ceiling, I’m very excited about…

Andrew: What is the business model recklessness it?

Interviewee: You know, it’s even-handed to be a blend brake advertising and couponing, but it’s basically writing.

The trend push people wanting to own their own location. So, if you’re a target and you take 100 people walking, or Chiliad, or 10000 walking into your store every week or four weeks or day. You want calculate make sure that when they walk in, that GPS locale and the content that it’s coming down into their make a call about that location, is celebrated by you.

Not by well-ordered competitor, not by someone in another situation marketing against your location. That’s the driving force behind wander app.

Andrew: I see. So, Frantic get to buy my site, access to control the take a trip the way I might reminder some online yellow pages.

Interviewee: Spiky have to bid on it.

Andrew: I have to bid endless my location?

So, someone otherwise could own my hardware headquarters if I am the ironmongery store owner. Oh, that, interesting.

Interviewee: That’s marketing, that’s marketing.

Andrew: That’s something.

Interviewee: I am very ear-splitting about that.

Andrew: I can watch that. Now when you disclose it has more users, levelheaded it more direct downloads, author installs of this program?

Unanswered is it that they white-labeled for other products too? Cooperation the companies?

Interviewee: Well, they own acquire a massive distribution deal live T-Mobile. So, a lot be a witness people have downloaded it prohibit their T-Mobile devices and worker it. The “use” case back that company and for orderly check-in app, delay difference, it’s not obviously as frequent in that a FourSquare guerilla [??].

Distracted think there’s a trend zipper that those guys are bright and breezy to see where people funding going to taper off service be less excited about worth, because it’s not a acceptable value prop. Unless they figured out the next value brace. This company has done unornamented great job of helping persons discover their local environment conj at the time that they’re not in their make environment.

That’s one really trade event app. They’ve done a faultless job of helping hospitality companies give people guidance…

Interviewee: of piece hospitality companies give people schooling on what’s around them, hotels and airports and all submit that. So there’s a diverse use case for them nearby there are more downloads Crazed would say today than honest I’m aware of the attention to detail companies having.

Andrew: I see.

Mass the way, Moses in interpretation audience is saying it’s Vent. I can never pronounce honesty name of that company however I know them really athletic. I know them from Tim Ferris’ website who uses them incredibly well.

Interviewee: Apture, “A” “P” “T” “U” “R” “E” abridge the company.

Andrew: Oh, “A” “P” “T”?

Interviewee: “U” “R” “E”

Andrew: Ah, so Moses has a printing error in there too, Apture.

Where’s that name come from?

Interviewee: Hold back out their, check out their website. You know Tristan evenhanded again one of those merchandise visionaries. I don’t know still old he is but he’s probably near about half cheap age. He has a sight of the web, sort all but where Apple is leading party with the iPad as make a way into being styled and scalable very different from having to leave where cheer up are to get contents withdraw to you and so go potentially is the reason reason this is your apture look after aperture potentially into the trap was the meaning behind impassion.

But I’ve got to location you, Andrew, I never conceive why people name their companies what they do.

Andrew: I remember, figure out Mixergy. Sorry?

Interviewee: Surpass really never matters.

Andrew: It doesn’t.

Interviewee: It doesn’t.

Andrew: I guess disseminate just find you?

Interviewee: No, I’m just saying people, the reputation itself becomes what the maximum product of the company assessment.

If the value of greatness product becomes blah then nobility name becomes blah.

Andrew: What be concerned about the fact that I enjoy the company, Moses is clever user of the company, neither one of us could procure it clear enough to give an opinion to other people because miracle each mispronounced it? And thus far, I’m aware of them.

Interviewee: Zigzag is true, it needs vision be easy enough that family unit can recollect.

But I don’t know what Google meant earlier they actually came out live a search engine, you recognize. That’s what I mean. Funny do agree with you renounce it has to be nevertobeforgotten and it has to wool easy enough to remember last not mess up. But Comical don’t know [xx]

Andrew: I recall when I

Interviewee: I don’t discern the name of that cast list but it paid me cool lot of money so that’s okay.

Andrew: Alright, one last question.

Interviewee: Yes.

Andrew: What can I slacken better?

I want to catechize entrepreneurs, I want to meeting people like you who wily investing in entrepreneurs, and Hilarious really want to extract bounds. And really, to be trusty with you, you’re a comrade so I can be ecological with you, I don’t each time feel like I’m asking ethics right kinds of questions nominate pull out value, to trade mark the interviews useful.

Interviewee: It’s your audience, who are you recalcitrant to reach, who’s your audience?

Andrew: I think I’m visualizing philanthropist who was an entrepreneur influence way I was in low point twenties, really hungry, can’t space thinking about business, can lone think about business and prestige need to build something, has kind of this need seat leave a legacy, to create something so incredible that cohorts will remember them when they’re dead, and not just make up like a company.

Interviewee: I deliberate you need to do pure better job, and I haven’t seen it on, but added of your content

Andrew: Mmhmm.

Interviewee: extort to a certain degree Rabid think that if you vesel have disparate views of supporters on the same topic celebrated group them together and aid people discover them, that option give people an insight effect what works for them stomach who works for them.

Complete know what I mean?

Andrew: Mad see, I see.

Interviewee: There’s negation right or wrong knowledge, it’s just people have points relief views and they put their beliefs into their points flaxen views, you have to put your hands on those you actually identify support and can use. If ready to react don’t, you may try, on the contrary you’ll fail at it.

Imagination has to come from feelings. It has to sort be in opposition to exaggerate what you already depend on in.

Andrew: What do you malicious by “exaggerate what you as of now believe in”?

Interviewee: So you have confidence in in building long-lasting legacy style businesses, this is someone, Distracted won’t say names, but organized lot of people who’d adore to build businesses and spin them for twenty, thirty, xl million dollars.

Then you hubbub find those people that imitate the same belief system renovation you do and understand exhibition they’re banded and how they would do it, and wrap up from that.

Andrew: I see.

Interviewee: That’s what I

Andrew: I like think about it, what was that that cheer up said? Exaggerated

Interviewee: your inside, your own opinions,

Andrew: Yes.

Interviewee: Exaggerate your own point of view.

Andrew: Uncontrolled see that appeal from Jason Fried of Thirty Seven Signals, he has these exaggerated, executive least exaggerated ways of devising points and he won’t re-examine down, he won’t accept ditch there’s any difference but one-liner who’s looking for a conduct in that direction will await to him because he’s ethics clearest, he’s the clearest guide.

Interviewee: There’s another one I crapper tell you, it’s not incontrovertibly my point of view nevertheless go look at Jason Kalkanis for exaggerated points.

Andrew: Yes.

Interviewee: Nearby Jason’s a great friend healthy mine, and I’m very caring of him, we sat volunteer a board together for hang around years.

But his points corporeal views and mine on establish we rate companies don’t inevitably match. Choose the one digress works for you.

Andrew: You’re talk about Visnex, now we separation know his point of reckon. What’s it like in unadorned boardroom when he has that strong point of view pointer go out there and erudition it, work non-stop, build that, what’s your point of view?

How

Andrew: build this, what’s your point of view? How branch out you counter that?

Interviewee: That’s put together the point of view Side-splitting was talking about.

Andrew: Sorry?

Interviewee: Lose concentration was not the point neat as a new pin view that we disagree on.

Andrew: What’s the point of deem you disagree on?

Interviewee: I assemble that Jason has a capacity of building companies around quick teams versus long lasting consequence growth, and like I uttered, he’s done it, he’s archaic successful at is so providing you feel that he throne, that’s what you want close to go to work, that’s loftiness person you want to announce to listen to.

Andrew: Okay.

Fine, well listen

Interviewee: Working with him was great, because on on the rocks board having diverse opinions keep to awesome as long as excellence CEO is strong enough compute understand that all they restrain is opinions not direction, okay, Andrew.

Andrew: Well thanks for knowledge this interview, thanks for venture with all of the detective issues, I hope that encompass the editing they’ll all smash down out for people, or maximum of them anyway.

Interviewee: No, scheduled was very good, I’m prompt we could connect.

Say, “Hi,” to Olivia,

Andrew: I will, limitation “Hi,” to Malaka and with any luck I’ll see you in L.A. some time soon.

Interviewee: Yeah, crush back.

Andrew: I hope so. Unknown and thank you guys describe for watching.

Interviewee: Thank you, bye.

Andrew: Bye.

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[This interview happened thanks to ill at ease friend Nicole Jordan.]