I’ve been in venture capital 14 years and invest in a range of areas including consumer, software, data intelligence and fintech. I spend a lot of time thinking about technology catalysts, the broad waves of disruption they create and the new companies that will emerge from these waves.
My Interest in Information Businesses
I am particularly interested in information businesses, because they tend to be the best of these companies – networks, marketplaces, communications platforms, data services and software generally. Information businesses have different economic characteristics than manufacturing and services businesses that make up most of the world’s economic activity. They have zero or low marginal cost to produce, store and share. They are write-once, read many, and store potentially forever. Information tends to self-organize into networks over time given that it is most useful when aggregated, and the best information businesses are themselves networks that aggregate human activity around information and become more valuable with more participants – companies like Google, Facebook, Twitter and eBay. Given how quickly information can be shared over the internet, today’s information network businesses have grown faster than any other network businesses in history.
The amount of information the world is producing is growing at a breathtaking pace. As Eric Schmidt recently noted, every two days the world produces as much data as it did from the dawn of civilization until 2003, and this rate is increasing rapidly – it is expected to grow 44x by 2020. This suggests that the next few decades will witness the emergence of some of the most significant information businesses the world has yet seen.
Importance of Great People
As much as I try to understand the specifics of these trends, I frequently meet brilliant entrepreneurs who are many steps ahead of me and who have developed a clear vision of what the world will look like in a particular space and have outlined a compelling new business idea to pursue in it. This is the most fun part of my job, and above all I spend my time trying to find the great new entrepreneurs of tomorrow.
When I Like to Invest
I like to invest early in companies I think have significant disruptive potential and can be big and help these companies develop their product and business strategies and build out their teams. This is the time where I feel I can add the most value to these companies. Most of the companies I invest in have less than 10 employees, and most have not yet launched a product. I’m happy to invest however much an entrepreneur needs, and my initial investments generally range from $500K to $15m.
Machine learning is a technology that I think will fundamentally transform the business landscape over the next several decades. I led the initial venture investment in Dataminr, a pioneer in the field of real-time information discovery that applies machine learning to social media and large public datasets. I was the initial investor in Intent Media, another machine learning innovator that enables ecommerce companies to monetize their customer intent data assets with dynamic segmentation and on-site advertising.
I recently led the initial venture investment in Clara Lending, a full-stack online mortgage bank that is revolutionizing both the front end consumer mortgage experience and back-end mortgage supply chain. Other consumer investments I’ve made include Care.com, the largest global online marketplace for care services (IPO), and the Gilt Groupe, the largest private sale ecommerce company in the United States (acquired by Hudson’s Bay).
Software companies I’ve been involved with as an early investor include Quiq, a messaging-based customer service software application; JBoss, the leading open source application server (acquired by Red Hat); Conductor, the leading SEO SaaS marketing application; and OatSystems, the pioneering RFID application platform (acquired by Check Point Systems).
My Interest in NYC
I live in New York City and am a big advocate of the New York startup ecosystem. I started investing in New York in 2003, when the venture capital industry viewed it as an unconventional idea. New York is now one of the fastest-growing startup ecosystems in the world, and in my view its growth will only accelerate in the decades ahead. My wife is a genomics entrepreneur and helps support the growing biotech ecosystem in New York.
I care a lot about international development and serve on the board of Endeavor, a non-profit organization that supports entrepreneurs in emerging market countries and helps catalyze startup ecosystems in these countries. To date Endeavor has supported over 1,200 high-impact entrepreneurs, and today their companies generate over $7.7 billion in revenue and have created over 500,000 high-wage jobs.
I’m also board member of the Weekend to Be Named Later, an annual gathering of particularly interesting people.
When I’m not chasing the next big idea or my sons around the house, you might find me windsurfing or kiteboarding wherever I can find a strong enough wind.