The following is a brief excerpt of an interview that Harry Stebbings (TechCrunch) conducted with Arielle Zuckerberg, Mark Zuckerberg’s youngest sister, to discuss how she transitioned into the VC world and how her first few months have been as a Partner at KPCB. Although this isn’t an exact transcript (some non-essential content is omitted), this zooms in on those questions and responses that provide a good summary of the first ten minutes of the 30-mins. interview… and it only takes a few minutes to read.
We encourage you to listen to the full interview here or follow Harry Stebbings on twitter here. Harry Stebbings is the founder and host of The Twenty Minute VC, an independent podcast focused on Venture Capital.HS: Welcome to the Twenty Minute VC…. Can you share how you made way into VC? And made the transition from Product Manager to Venture Capital?
AZ: A lot of people say there path to VC was kind of random compared to the normal path. The normal path is probably my path.
I studied at Claremont-McKenna in Computer Science & Philosophy and became a Product Manager right after college at Wildfire Interactive – which was acquired by Google. And I worked at Google for about a year and a half. Then I went to a small startup called Humin and started angel investing about a year and a half ago after reconnecting with Tyler Willis who taught me everything I know about investing.
Then about 2 years after working at Humin, a friend of mine at Kleiner Perkins recruited me because he thought I was a good fit for the venture fund based on my product experience, angel investing experience and my network.
HS: What were the major takeaways about your learning from Tyler Willis?
AZ: The most important learning from angel investing which I didn’t necessarily take to Kleiner Perkins is that you really have to do a lot of investments based on the Power Law: one company out of your portfolio will probably make a return for the entire portfolio. You have to think that every company you invest in is going to be that company that returns your entire portfolio. You have to do a lot to take on risk and realize that most of them will probably not return anything, let alone have a good return. So that was the key takeaway. And how to evaluate companies for investment: looking at the team, the market. Is the product differentiated? Are the terms good? This is not as important in angel investment – the terms don’t come into play as much.
HS: Tyler wanted to know – How do you evaluate new products? (…because he said you are “world class” at it.) How do you do it?
AZ: The product should definitely be easy to articulate what it does and the value it offers to users.
- Does it solve a real problem?
- Is it forward thinking?
- Does it impact a lot of different people?
- And appeal to a diverse user base?
HS: Tyler also wanted to know how do you learn so quickly?
AZ: 5 years of product management experience and investment experience for a year and a half helps. I’m a very intellectually curious person. I’m probably intellectually promiscuous as well…. I ask a lot of questions like being a detective in an area to uncover some mystery. Another way to evaluate a team or product requires an obsession with the customer and a complete understanding of the industry. So when I’m questioning a founder…I love it when they can answer all my questions because they’ve clearly thought about it. And they’ve already talked to customers and know what they would say.
HS: What do like to see in founders? (characteristics and traits)
AZ: I love great listeners. We talked to a company recently and after every meeting we would give them feedback. Their pitch was better every single time. That really wowed me. I was super impressed. So that’s an important skill to have – being a great listener – especially in Series A investing and seed investing even more so. The team is the most important thing.
HS: What’s been the big challenge in venture investing?
AZ: A switch has gone off in my brain where I start to think of people more in terms of their intellectual capital – way more so than I did before. It’s very challenging for me because I feel like I’m losing myself a little. More thinking of:
- How can I be helpful to this person?
- Who can this person be helpful to in our portfolio?
- Will this person be a potential founder one day?
Thinking of people in a context that makes me a bit uncomfortable…. Authenticity and being genuine is super important to me. Becoming more transactional – I have a cognitive dissonance about it.
Like you talk to someone who knows the IoT space super well and he becomes your IoT person … and they give you a great landscape. Then you meet someone else and they’re a great IoT person. Then you think – I already have a “go to” IoT person. It’s hard to explain. It’s really been a challenge for me. That’s the biggest change that I didn’t experience as an angel investor or as a product manager.
HS: Do you have “go to” thought leaders in a space?
AZ: I recently talked to Rex St. John from Intel a couple of days ago…and also Clark (Landry)– thank you for introducing him to me. He’s great on adtech. Hearing people’s perspectives who have been both entrepreneurs and investors in a specific industry or vertical has been really cool and valuable. I get the most value in one-on-one conversations with people… with people who have been referred to me by a friend. Because I don’t have the confidence to do it myself right now. So I’m a little jealous for people who go out there and have these incredible, well-articulated positions. At the same time, writing about outer space doesn’t make you an astronaut.
HS: What do you try to adopt in the first few months? Do you try to meet as many people as possible for those 1-to-1 interactions or do try to effectively try to plan your calendar to get the optimal meetings?
AZ: Some combination of both. While I was interviewing with firms, I talked to as many people as I could. And people offered to introduce me to others which was really helpful – a lot of friendships and advice come out of that. I definitely think early on, it is helpful to talk to a lot of people – but through trusted and warm introductions.
You can listen to the rest of the interview here to learn about how Arielle proceeded to interview with a handful of VC firms and what she accomplished in the first six months.
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[Ed Valdez is Vice President of Global Business Strategy at G51.]
[Arielle Zuckerberg photo courtesy of TechCrunch and KPCB]