Adventures in VCland

My Talk on Mobile Web Trends at MobileMonday

2010-04-14T21:13:00.001-04:00

MobileMonday Toronto - Apr.10 - Google Presents Insights on Mobile Devices from MaRS Discovery District on Vimeo.

Tweaking Google products for Tablet computers/iPad

2010-04-02T17:39:00.002-04:00

http://googlemobile.blogspot.com/2010/04/google-services-on-ipad-and-tablet.html

Its kind of a big day for me

2010-02-10T04:26:00.001-05:00

Today, I launched Google Buzz for Mobile:

http://googlemobile.blogspot.com/2010/02/introducing-google-buzz-for-mobile-see.html

This was an amazing cross-team effort and we ended up launching many products on the same day to create this entire mobile Buzz ecosystem.
Very excited!!

Who is a Google Product Manager - Part II?

2009-11-28T11:53:00.010-05:00

A couple of years ago, about two months into my Google career, I had written (some might say prematurely) my assessment on the qualities needed to be a Google Product Manager. I got a bit of response on that post, some flames (including someone who asked me if I was fired yet!), and some genuine discussion on the points I laid out in that post. I always meant to write another post a little later to follow up on that initial assessment.

So about ~2.5 years later, I will try to take another stab at whether my opinion had changed. In the intervening time, I have launched 2 products for Google, and now am working in the super-amazing Mobile group led by Vic Gundotra.

The key points I laid out in my initial post about Product Management were:

- Google is not hierarchical especially where it comes to Product Management
Being a PM at Google is a classic case of no-authority, all-responsibility situation in a matrix org. A recipe for intense stress some might say. However, now I perceive it as an interesting artificially-constrained ecosystem where to thrive, you have to figure out the delicate balance of credibility, authority, influence and responsibility. Once you do that, you are gold, and you will get more done than if you owned the people who worked around you.

- Product Managers are not tied to a particular product or sector for the duration of their work in Google
I went from search to Google Books/News org to Mobile. I faced no hinderance, no one questioned why I want to shift sectors. The company on the whole supported the transitions and worked hard to give me the tools I needed to succeed. However, once I was in there, I was usually handed a intense product with little notice. And left to swim or sink. The result: I learnt more than I could ever in more sectors of the company.

- Most Google Product Managers are generalists (especially MBAs)
Not much to say there. It ties in with the previous point. If you are perceived as generalists, you are allowed to move around quite a bit within the org. And PMs have that liberty.

But what makes a good Google Product Manager?
This what I wrote in my last post:
1. Managing immense complexity ( a direct result of the mixed structure here at Google)
Totally, absolutely, totally agreed. A PM's job is intensely complicated. You own the product, you own nothing. You are responsible for everything but in a matrix org where many people are responsible for many things. Everyone around you is a world class expert, but you are supposed to be the expert on the overall product. And thats probably because, few have the time/inclination to grapple with the enormous complexity of the various facets of the product.

2. Influencing people, a trait that needs credibility, communication skills, and a people-skills
Yup. But I have noticed one thing. As time goes by, and you establish a track record of launching products (hopefully somewhat successful), this (as you would expect) gets easier. But till that happens, do not expect a nice, mellow ride. Googlers will question every decision, every move that you make, till only the best decisions backed by logic and data can get through. This sort of socratic way of doing (Question everything to derive logic) things makes for an intellectually challenging workplace, but one's brains are constantly in danger of overheating.

3. Making decisions. One needs to be able to decide, take responsibility for those decisions and live with it
This one I will stand by. Good Product Managers make decisions, quickly. And then take responsibility for them. They buffer their team from the stress of dealing with the consequences of the bad ones, and share the credit for the good ones.

4. Something that is different from the rest. Have to have something special in terms of achievements in their background.
Ho hum. Google Recruiting still looks for this secret sauce in folks, but I am increasingly suspicious of this. I think good, smart, emotionally intelligent people come in all stripes and shapes. We miss a lot of them because we keep looking for overt signs of achievements. Having said that, I would rather lose a few good Product Managers, then hire a many good ones along with a couple of bad ones. Conclusion: A higher bar is probably a good thing.

5. Extremely good understanding of the Internet services landscape and opinions on everything from state of online video market to new mobile business models to future of search
Enough said. This stays true regardless of how much time goes by.

6. A passionate self-starting personality helps. Self-starting especially because no one seems to tell you what to do out here, yet everyone seems to be doing the things they need to do
You need to make big decisions. You need to think above your pay-grade and not be scared to take your product into new directions. And this without much top-down direction. That usually comes only when you have failed :)
Also, passion really helps because it inspires people, and makes a leader out of you.

And one more that I think really merits adding to the list:
7. Emotional Intelligence:

I could write a post on just this topic, but truly, this is 60% of a good Product Manager (anywhere but more so in Google given its unique, crazy culture). I will not by any means imply that I am one, but I do know that the good ones tend to be bold yet diplomatic, calm yet inspired, and passionate but not emotional.
This last one is key. Good leaders are passionate about their work, but not overtly emotional. That just creates a bad vibe in the team.

So you see, some things have changed and some have not. Overall its more same than different though.

There have to be some glitches though, right?

Success is a bit of roll of dice
This is probably true of life in general. But in Google, since PMs are generalists and because you don't know any better when you start in a new company, you could start off on a product that has too much baggage or history around it, or just plain ineffective leadership. This can hurt your Google career big time till you manage to get out and find your way to an area that matches your working style/culture.

People Management takes a disproportionate amount of time
Matrix org, non-hierarchical setup, so many seriously brilliant, opinionated people == Loads of time spent in people management.

Overall, the company is probably the best company out there in terms of how well it takes care of its people. If you fail at a product in Google, only a million people probably used it. And it that lies Google's biggest strength and biggest gitch. Most of us will probably never have a better shot at making a bigger product than by working in a company like Google (Most not all), however, sometimes just sometimes...it can feel like too much of a bubble.

Intense Work/Personal Life

2009-11-21T18:34:00.002-05:00

I went from having a sane work-life balance to one where I am scrambling to maintain some sanity in my personal and professional life. Suddenly realized that I defined personal life as time with my family (wife), and professional as time spent at work. This leaves me with no time for myself :)

The first casualty of any work-life balancing act (based on definition above) is the much needed me-time.
Anyways, am straddling a life between Toronto and San Francisco. My mobile product is getting closer to launch. I love what I am doing. Though as life is Google generally is, I feel like I could be better rewarded for my efforts :) But that's probably because I am working so hard; harder than I ever have till date, and will need a break soon lest I burn out!

Will write more about the mobile world soon. Right now, I have gotten a few years worth of mobile experience in about 5 months! Such is the rigor, excitement and intensity of Google's mobile organization. Fun! And Crazy!

The comments are better than the blog!

2009-08-14T19:44:00.003-04:00

Ok, so I am pretty impressed with the kind of comments I have been getting on the blog. It is certainly inspiring me to write more and respond to the comments through my posts. Appreciate the commentators and their interest.

@Singh, yes, I am definitely enjoying my job a lot. It is super challenging, and a lot of fun, and plays to one of my biggest strengths - Managing Complexity. So I love what I am doing, and what more can one ask for, right?

It is hard for me to give a % or a number to the number who are as passionate. If it's an Individual, its easy to give an opinion (wrong or right). A group? You have to be a bit more circumspect I think. There is a good chance of falling on my your face.

Having said that, Google PMs (the ones that I have interacted with) are typically pretty smart, very organized and ambitious. A smaller percentage are very very good, very bright, understand the industry in and out, very aggressive, and have been some of the strongest people that I have worked with. Doesn't make them easy to work with :), but then their job is not easy by any means.

The industry works on reputation. Reputation is built by your body of work (and by luck). In Google, the hierarchy is reasonably flat still, and very senior folks are still called "Product Managers". My argument is that yes, if you become a VP, you rock and you must be very good. But there are tons of PMs in Google, who are rockstars and have a legacy of success behind them. I can bet that any of those could easily go to any other company and become Directors or even VPs. Don't get hung up on the title. Yes, title matters no doubt. But what do you say to a guy who is titled "Product Manager" and manages a multi-million dollar business with millions of views?

Now about the challenge...

About building the user-base versus building on user-base. What's the difference in terms of people adoption? In either case, you are adding numbers to the bottomline and thats what matters most. Granted, there is a huge edge for a Google PM. We start off based on numbers that impossible for many companies. That is a huge advantage. But do keep in mind, other companies had that advantage too, and squandered it. Maybe one day Google will too, its not that day yet.

You cant beat up someone up for having a strong advantage. You still need a huge sizzle to build on that advantage. However, I don't think you are wrong in saying there is an edge.

Is it as challenging as organically building a product from scratch with no Google behind you?

I think building a product from bottom up and organically drawing millions to it is amazing. You have to be a very strong, passionate person and really really lucky. That is a very hard task, and I will never underplay that.
I just think you are comparing apples to oranges.

Who is more brilliant? The guy who invented the Telephone or the guy who led the mapping of human Genome (backed by some of the foremost research labs of the world)? I know who is more famous :)

Should I have taken those offers?

2009-08-12T23:55:00.004-04:00

An interesting comment on my previous post prompted me to blog the response. First of all, Anon, thanks for your wishes on my wedding. Am a punjabi, so it was days and nights of Bhangra and eating :)

VC has always been a niche industry, but there was still something in it for the smaller firms, and now I do not think this is true anymore. I think the opportunity has shrunk dramatically. Its hard to sit here and make generalizations on the demise of a whole industry, and so I will stay out of that. I just think it is way way harder to become a partner these days. Who wants to join a VC firm to stay an associate?

Now comes the fun part of the question which deals with the wisest of all thought processes, Hindsight. In hindsight, would I have taken those not-so-sexy VC offers and then traded up to better VC firms now?

Here hindsight and my present sense of where I am come together to respond with a resounding NO. Here is why it would be a bad idea to take those not-so-sexy opportunities (I do not think there were sexy or unsexy by any means, they were just not right for me):

- Two years in a job you don't like is a very high price to pay for anything. Period.
- Two years of your life doing anything that you don't like is a high price to pay in general with some exceptions
- I did not fit there, then I would have probably been not good at it
- The industry is reputation based, whatever you do, create a brand for yourselves. Taking those jobs would have been counter-productive (if I didnt fit)
- Very few people get VC jobs. Even fewer trade UP from a Tier II firm to Tier I. There is a lot of horizontal shifting but very little vertical

And then some more reasons..but I think you get the drift.

Now the second part of the question: Is it better than being one of 300-400 PMs at Google?

Are you kidding me :)? You know how amazing it is to be a PM in Google? Yes, even with the crazy matrix organization. And no, I have not drunk the Kool Aid. But think about it for a moment. Google is probably one of the most influential companies in the world. Lets say there are 5 companies in the world which are comparable in terms of impact (Tech or otherwise). Lets say each of them has on average 300 PMs (unlikely but lets take this for now).

I am one of 5x300 = 1500 folks in this world (atleast in the field of technology) who have a shot at impacting millions of life. And this is not hyperbole (or arrogance). I can't even begin to tell you how much impact each PM (in Google, you are basically the visionary on your product area) can have through their products. Even a failed product in Google is used by thousands nay... millions.

I get this chance because I work for Google. So I have to give this opportunity the respect it deserves. I am very happy that I made the choices I made. That was for most part, luck and sound advice.

Finally, I am not saying we should all become PMs in Google, there are sexier jobs in top VC firms, PE or whatever floats your boat. But for me, the sexiest job is to do what my friend A does. He bootstraps his way around, he is passionate, he works hard in a room somewhere in Menlo Park, and is slowly but inexorably building a team around him. He is building his own startup.
Damn, thats cool. I wish I had the balls to do what he is doing.

Definitely one day.

So long...so long (since I blogged)

2009-08-07T18:41:00.004-04:00

So a LOT has happened in the last year or so. I have launched another product, have shifted sectors within Google. Am working on a crazy new product which is both intense and invigorating, and involves shuttling between Bay Area and Toronto.
And most importantly, I got married :) More about all this later.

All this may explain the lack of blogging to some extent. But the real reason was that I got so immersed in the operational world, that the core motivation to write this blog became at odds with why I started it in the first place.

Initially, it was my chronicle of the journey towards becoming a VC. Now, after a couple of years in the industry, that motivation has become incidental. I am not sure if I want to find the opportunity to be in VC anymore.
Now, before you get me wrong :)... I would like to be in investing and I would love to work with startups, but the intersection of great group, culture, awesome investment thesis, good people, and luck is so small, that I don't think this is an industry choice anymore. If an opportunity works out for you, great! But there are so many I know who just do VC for the heck of it, and are not happy about it.

The few who are doing it and are happy, are those who landed in that small intersection. So, instead of looking, I am just going to do what I like, and if the chips fall in the right place, and I like the opportunity, then I will do it.

This means that I am equally likely to be a VC, entrepreneur, operational guy in a large company, cafe owner or run a bookstore :)

Somewhere along the way, ambitions morph from a specific role to a state of mind. With marriage, good job, happy family, my ambitions are turning...like the leaves outside in Toronto. Its going to be fall.

New Product Launched

2008-09-09T04:27:00.005-04:00

My first product launched today :)

Here are the details: Google Official Blog Post

Excited.

Long time...

2008-07-16T19:30:00.002-04:00

It has been an incredibly long time since I posted. I need to get back to this before I make it a habit of neglecting my blog. So while I am out here, let me post an update.

Work is progressing at a fast clip and I am feeling more and more certain of my products now. It is amazing how something which is such a small piece in terms of the overall scheme of things, needs so much work and coordination to get done. My products are small, probably will not be noticed much in the first couple of years of their existence as they evolve and gather critical mass, however they require an enormous amount of time, resources, money to put together.

This whole experience has been very humbling. We spend so much time using Internet based services, and it is so easy to be critical of a product experience, or worse, just take it for granted. However, the truth is that a lot of thought and work goes into building a usable, intuitive and smart product. I have been a part of technical teams building up ideas, invested in companies, built one before myself, and still I am constantly overawed by the creativity and vision required to take the seed of an idea and make it into something that impacts people's lives.

So yes, I am having an incredible amount of fun trying to build this up. My life is chaos currently, work-life balance has gone for a toss. And I am just loving it!

PS: Will write more about the key issues one should worry about when putting together a consumer facing product. Right now, this is just to signal that I am alive!

Stay Cool

2008-04-25T03:33:00.002-04:00

The atmosphere in the room was tense to say the least. I was in a meeting discussing certain decisions that we had to take recently in the product. One person in my team were not happy with the way things were going. I knew that we were doing the right thing in the long term for the product, and was attempting to reach out to him and explain the reasoning behind the way we were approaching the problem. But he was just ranting at this point, lacing his responses with heavy sarcasm. Now Google is an intense environment but rarely have I seen folks lose their cool. There is a lot of discussion, and hashing out of solutions through arguments and discussions, but never this way. At that point, the one thing that was going on in my mind was "Stay Cool".

It is how we react under intense situations that defines us. We can all be genial, happy, smart and cool when the going is good. It is way harder to do that when your decision making skills are under question, and you feel as if you are in the middle of an inquisition.

As the discussion moved on, I kept my head up and kept answering his questions. You could cut the tension in the air with a knife, and I knew I was getting angrier at every step as the discussion dragged on. Thankfully the meeting ended. I got up and went for a long long walk, cleared up head, calmed down and headed back to work.
Soon I found out that the person had gone through a very tough time lately. A few days later, I approached him and we sat down and sorted out the issue.

In work, board meetings, team meetings, negotiations, and in many other situations, there are constantly conflict points in a discussion. One could get defensive and lose one's composure, or one could take it lying down and suck it up. But there may be a third way. Be firm, be logical about your opinion, respectful and lastly, dignified. In all, just stay cool.
You will not only be respected a lot more, you will also sound consistent and more credible.

PS: Don't try this in personal situations. Logic does not work there!

Warren Buffet on life and work (and the economy)

2008-03-07T20:04:00.004-05:00

I would be foolish not to post this. This guy is amazing and yet all that he says is plain old commonsense. Just goes to prove how amazing plain ol' common sense is.
Do yourselves a favor, read these notes from a recent reception hosted by Warren Buffet for some MBA folks.

Notes from Buffet Meeting

Love him, hate him, but you can't doubt the wisdom of his words.

Get your hands dirty

2008-03-03T15:50:00.003-05:00

One of the common Bschool misconceptions is that we will (after we graduate) spend all our time sitting behind fancy oak desks, and making strategic decisions. That our life would be like the typical Hollywood depiction of an executive. Fancy suits, ties, shiny shoes, board meetings etc etc. Some of that actually does happen, but what we miss is the grind behind all of that.

I have noticed a strange reticence to step in and actually do some of the grunge work, be it coding if this is a technology company, or operations, or something else. The common thought is, "Hey, I went to Bschool to escape all this! Why would I do this again?". However, the truth is that it is practically impossible to make the right decisions for your team/startup/product/company unless you took atleast some time out to get down and get under that hood. This tenet probably applies to those with operating roles more than the others. Services can be a different story. The only exception might be folks in Venture Capital who tend to be better if they have seen some of the mess that they invest in firsthand .

The more you come up through the grind, the more respect you have for the folks sitting across you, the more credibility you have when you are trying to influence others into buying into your vision, and finally, you are more insightful when you have to make those great strategic decisions from behind those lovely oak desks.

I spent some time last week at an operating site. For that week, I was an understudy to a great engineer who taught me the details of the product that I was supposed to be building. I worked with ground floor technicians who explained to me the intricacies of the hardware we used and the deficiencies of the software we build. Now, I am back home and have a 10x better understanding of my team, our product, and know how to optimize things much better than I could earlier.

So my learning from all this? Don't be afraid to muck around the code, get under those machines, work as a underpaid technician for day, learn the details of your business bottom up and then make decisions from the top.
"Get your hands dirty!"

Don't take your job too seriously

2008-01-30T23:08:00.000-05:00

As I ramp up on my other product, I am faced with two very different teams. One is huge, spread out, with a large budget, and complex operations that need to be set up from scratch; the other, small, agile, and with relatively simpler operations. One has such complexities that most sub-teams prefer a clear-cut direction and do not want to bothered with the issues across teams. The other has people who are very engaged in every aspect of the product and proactively involved in areas beyond their core work. The only thing common among them is that they are both startups of some sorts.

Both, are ideas that are coming to market in their own styles. And both require dealing with in slightly different ways. However, some things stay the same (and work like charm). Like most engineers (by training), I tend to deal with complexity with process. But while process can make things easier, they do not help deal with personalities. While dealing with atleast 6 different personality types in a single day, things can get messy. And in dealing with this, I have hit upon the perfect mantra. If I had thought of this when I was younger, my previous jobs would have been much easier.

While your job is important, it is not that important. Maybe just maybe, we want too much control in our jobs. We want to be able to control all the things that our position implies we do, we want picture perfect roadmaps, and teams which work like clockwork. And since people (or rather all of us) do not work like that, the trick might be to just let go a little bit. Trust that things will sort of work out the way we think. Plan but not over-plan. So I let go of certain things, and share responsibilities a bit more. Trust people to make up on those roadmaps which are sliding. Let someone keep a bit more control, while you cede a bit on your end. The end result: A bit more relaxed team and a calmer me. There are lot of people around me who are biting their nails and worrying about things. I believe that if we really want to lead, we need to stay calm and composed. Even amidst chaos. In fact, I propose that to be effective in today's chaotic product development environments, the prime capability one needs is composure.

Maybe the trick is to remember that we are all in this together and there is no clear-cut definition of what we do or what we need to do. I realized that by maintaining a balance between process and controlled chaos, definition and ambiguity, control and lack there of, I was calmer and much more effective at my job (successful? I do not know yet).

Maybe, Ladies and Gentlemen, the idea is not to take our jobs too seriously.

PS: On a crazy travel schedule for the past 4 weeks. Have visited Bombay, Delhi, Bangalore, New York, Boston among other places. Right now, all I want to do is to head home and sleep.

Happy New Year from India

2008-01-16T16:27:00.000-05:00

Yes, it has been some time since my last post but then things have been crazy here. Addition of a product to my suite of things-to-do has effectively trebled my work. Travel wise, I am on the plane most of the time these days. Right now, I am in India. Spent the last few weeks at Bangalore and now in Bombay before heading back to Mountain View. Then will be off again traveling coast to coast. This lifestyle is teetering on the edge of being dysfunctional.
Incidentally, it was the first time I ever worked in India per se. It was an interesting experience by all accounts. A few observations:
1. Bangalore is disgusting infrastructure-wise. All I could see was a tons of cars driving crazily, and a few non-Indian expats hopping/dodging trying not to get killed as they navigate their way on the streets of the IT city. Thankfully, I hadn't yet forgotten how to run across a street full of traffic! Though the weather rocked.
2. Larger cities like Bombay and Delhi are doing so much better in terms of infrastructure and life seemed like it was getting better here relative to where we were years ago
3. The Engineers in Google India office are unbelievably brilliant. Just awesome
4. I "felt" (and this is mere opinion and a gross generalization) while I worked here, that people interactions tend to be more personal in nature. I also felt that folks were a lot more nervous where it came to day to day work (risk averse). This actually makes sense given the cultural context. Now crucify me for stereotyping the whole country
5. The country is piping hot. Reliance Power IPO was gone literally in 60 seconds and oversubscribed multiple times in the time it takes to watch an average Indian soap. Love the excitement. You can see it literally everywhere!
6. It is exciting but harder to live here (still), but that has to be balanced by the tons of opportunities here currently.

Now time cometh to head back home to Mountain View. As usual, India is glorious in its contradictions. I can no longer figure out the right amounts to tip people, and what to haggle for with the rickshaw drivers, since the prices are so convoluted. Anything labor oriented is so cheap, it is silly. Everything else pricewise, might as well as be in US. Its gotten do expensive!

Enough about India. Back to US now.

6 Months

2007-12-10T01:02:00.000-05:00

So they gave me another product to manage. Well, since it is a mere idea yet, more than "managing", it needs to created and launched. On one hand this is a good thing (validation, more responsibilities, higher profile, yada yada), on the other hand, it puts me in a situation where I will have rework my 6 month old working style and reinvent a new one. More on that in a later posting.

Can you believe it? This week, I will finish 6 months at Google. It is almost time to think about the next step (grins). The following values have helped me be moderately successful at what I am doing (which is: not getting into trouble). Most of it is commonsense and somewhat contradictory.

1. Over-communication - I run a constant roadshow about my product in the company. I write monthly notes to my team, I make every presentation on my product as if it was a pitch to investors, and I constantly keep updating relevant folks with the latest state of the product. This has built momentum, reduced misunderstandings, and help garner attention for my product internally.

2. Under-communication - On the flip side, it is a good idea to shut up and not to say a lot more than is needed. This does not mean I am the authority on what needs to relayed and what not, but sometimes keeping quiet is the best way to maintain the sanity of the larger team.

3. Create Consensus - Instead of dropping my supercool product onto the laps of the various reviewing committees, I spend a bit of my time meeting most of the relevant folks in smaller groups unofficially (1-on-1, office hours etc) as I develop the product. This means that by the time the official reviews roll along, I would have probably got the backing I needed. More importantly, my product would be a good, solid product which would have incorporated much needed feedback from a lot of experts around the company.

4. Become Religious - Define a core set of principles (features, marketing segments, UI, etc) that you truly value and believe in. Dig deep into why you believe in them, and what is the logic behind that belief. And then, do not let go of them unless somebody convinces you (or rather teaches) why the contrarian view is appropriate. Being religious about your product's core values helps, because the barrier to criticism and opinions is so low in a product which is unproven and still a concept.

5. Do your Homework - And do it well. Last but not the least, you have to make sure (if you are CEO or a PMM or a PM or an engineer whatever) that you are absolutely on top of all those things that are directly your responsibility. If you are good at what you do, you will have the credibility to push others to line up behind your vision.

All this is barely keeping me afloat, whether I am truly good will be decided when I actually can implement these principles. The proof of the pudding will be in the day my product sees the light of the day, and is used by some of you out there. Till then, here's to the next 6 months at Google.
Hopefully (grin).

The key to starting up

2007-11-15T03:00:00.000-05:00

I write these monthly letters to my team. I call them PM Notes. In these letters, I outline the state of affairs in the various sub-teams of the product, progress, and finally concerns/issues that I see us facing the near future. Invariably, engineering is the least of my concerns. Why is that?
I believe I have never seen the kind of engineering talent that Google has amassed within its confines. I have a Bachelors and Masters in engineering myself, and am no pushover where it concerns software or hardware. However, the kind of issues that would take a week or more to deal with, is solved within a few hours out here. Truly the prime reason for Google's success is the quality of its engineering. Larry and Sergei were hard core technologists too. Though it is true that they had to build an ecosystem of business savvy people around them to get to where they are now.
Where am I going with this?
My point is that the key to starting up is engineering talent. If you want to start a company, find a great technologists and then wrap them up with business acumen. I have spent the last two months helping a friend kickstart her company, and the biggest challenge we face is to help her find a great engineer. I can figure out the financing, help her write a business model, fine-tune target segments, do what it takes for her business to have a shot at success, but if I cannot code, she can't even get started.
A good engineer can take a company from A to D, a good savvy entrepreneur with business acumen can take it from D to Z. But without the first few steps, everything is useless.
It is actually quite ironic. When I was an engineer, I used to look at people with business sense with awe. Now that I am on the other side of the fence, I look back at my engineering days with a lot more respect and awe.
So, if you are first time entrepreneur struggling to get off the ground, the first person you should be actively looking around for should be a fantastic engineer. That will ensure that you get from A to D. Don't bother about ideas, ideas come when smart people get together. Find that engineer.

State of Politics (and Bay Area)

2007-10-23T03:49:00.000-04:00

Today, for the first time ever, I encountered politics in Google. Now, I was not naive. I was sure there is a ton of it floating around but I still believed that it is a lot less than what we have in the outside world. That observation holds true. My observations about Google and a corporate job anywhere is that there are primarily two kinds of politicians on campus:

1. A few very dominating people who will have opinion but will not do their homework before honoring us with it
2. A set number of people who are insecure about their job and so try to protect it by exercising their (so-called) power, or worse keeping critical information to themselves. They usually make for bad bosses and even though I am lucky to (really) have an awesome mentor/boss right now, I have seen enough employees go bad because the boss is insecure

The best way to deal with this (other than to start a company of your own, which seems like the best way to deal with anything these days) is that if you encounter the first kind, then just do way more homework than they do, and keep asking very intelligent questions. At some point or the other, you will notice the sound of a big ego slinking away.

In the latter case (usually the most egregious kind of politician), have a heart to heart. Talk to the person, make them feel at ease. Actually try to decrease their insecurities. And if they are scared (or scary) enough that a simple chit-chat does not help, then just remove all the potential grouses they could have. Establish better communication channels, be on the right side always, and then keep working single mindedly towards the goal.

As a wise man once said, "There will always be people that don't see eye-to-eye or are distracting. Just work hard, be
aggressive (in a good way) and get the product launched. Stay focused on the goal and others will get behind you."

The moral:
- Be good (and on the right side)
- Be open
- Be focused

All else will follow.

Epilogue: Life in Bay Area is going well. Work is going well, weather is awesome, the itch to do something has restarted. All in all, perfect recipe for Bay Area living. The company is exploding to put it mildly, and one has to be in the center of the hurricane to see what the hell is going on here. Though at a macro level, some storm clouds appear in the horizon for Silicon Valley. Oh well, I have seen those before.

Taking responsibility

2007-10-09T03:26:00.000-04:00

In a nutshell, that is what a PM's job is all about. Taking responsibility for the product, its launch, its features, its ecosystem; making decisions. Making decisions is a large part of my day. Making decision with half information is almost all of it.

Someone asked me how does Google integrate its various functions like marketing, patenting, partnerships, legal, Ops etc so that they work for the product in synergy. The answer is: Through the PM.

The PM owns the product, all the functions work for the product. There is no direct reporting here, however there is one guy who is the common thread between all these functions and it is the PM. Invariably, there are decisions that need to be made at a macro level that define the work and strategy of these sub-divisions. Those decisions are the domain of the PM. Once the structure is set, then these divisions have a free reign to set their agenda. This is how Google manages a flat hierarchy yet ensures efficiency.

It makes one person's job incredibly tough. Mine. I spend all my day surrounded by folks who know more than me, but who look towards me for structure. So I have to learn how to think very fast, ask the right questions, and make quick decisions. Almost always the plan I put together needs significant tweaking. However, more often that not, a plan is better than none. Hence my value-add to the product.

A lot of people worry that the PM has all the responsibility without any authority. On the contrary, my experience has been that most people are so glad to have you on their side, providing structure to the chaotic product that they are trying to put together, that it has never been difficult to influence people to get stuff done.

The bottom line is - People do not like ambiguity. Anything (anyone) who helps decrease ambiguity is welcome and a strong asset. In Google, a PM provides direction, vision, and creates a framework on which multiple teams put together a product. It is the job of a CEO-in-training.

Its midnight, I am still working but I love every moment of what I am doing. Its been three months for me out here at Google, and thankfully, I can say now that regardless of whether this was a better decision than going to VC (that time will tell), it definitely was not a worse decision. I love my work, and that is more than what most can ask for.

Who is a Google Product Manager?

2007-09-12T02:32:00.000-04:00

I have had a lot of people ping me in recent times to ask this question. What does it mean to be a Google Product Manager? What credentials are required? How does it compare to an APM or indeed to other functions?
I will try to put together an intelligent answer to this question based on my initial two months here at Google. (Yeah, it is almost two months! Can you believe it?) I will probably revisit my answer to this question in another 6 months or so.

What exactly is the role?
Product Management at Google is a complicated beast. Your ass is on the line if the product fails, yet there may not be any direct reports. You are the guy pulling together multiple functions - marketing, legal, PR, Sales, Engineering, Operations, Technical Account managers, User support, and many more, to run the product. The product is yours. The various functions used to run the product aren't. The principle tool that you have at your disposal is Influence.

At first, this may not sound too different from other product management roles in similar sized companies, but there are some key differences that I have noticed:

1. Product Management can be pretty hierarchical in many companies, it is not in Google

2. Like the other functions, Product Managers are not tied to a particular product or sector for the duration of their work in Google. They are free to rotate at reasonable intervals to completely different sectors

3. Most Google Product Managers are generalists (especially MBAs). They are recruited for their overall well-rounded skills and not necessarily for a particular sector focus. (There are however, some PMs who are recruited especially for their sector expertise)

What are the key skills that successful Product Managers at Google have?
In my perception, most PMs at Google have to be good at (in no particular order)
1. Managing immense complexity ( a direct result of the mixed structure here at Google)

2. Influencing people, a trait that needs credibility, communication skills, and a people-skills

3. Making decisions. One needs to be able to decide, take responsibility for those decisions and live with it

4. Something that is different from the rest. Have to have something special in terms of achievements in their background. This is especially true for the generalists who can't necessarily distinguish themselves on uber-sector-specific-experience. That special sauce could be starting one's own company at some point, MBA from a top B-school, or some such thing. Something which helps differentiate you from the rest in some way

5. Extremely good understanding of the Internet services landscape and opinions on everything form state of online video market to new mobile business models to future of search

6. A passionate self-starting personality helps. Self-starting especially because no one seems to tell you what to do out here, yet everything seems to be doing the things they need to do

Who is an APM then?
Short answer, an APM is usually an undergrad with a little bit of work experience. These guys tend to match the typical profile of that target segment of many of Google's user facing products. They tend to be pretty young, passionate, and incredibly talented folks. Kind of like Wharton undergrads relative to Wharton MBAs (If you went to Wharton, you would know the story here)

Oh come on, there has to be some glitches
I do not know if these are glitches but they are definitely things that one needs to know before deciding to work here at Google. These challenges ensure that certain personality types love it here, and others hate it:

1. You make your own job. I found my product, I am helping define my role, and beyond a minimum bar, have to decide how much I can take a bite off. If you like structure, you are going to be frustrated

2. If you like hierarchical companies, with organization definitions, Google will hurt you. It is hard to work just by influencing especially if you are used to a more hands-on approach to delegation of work

3. You hate good food :). (That's a little bit of humor, an ode to the obsession with food that Google inculcates in us Googlers)

I am sure I am missing something. And I am also sure that some of the traits I pointed out are not Google specific. Keep in mind, its only a couple of months. It will be fun to revisit this in a few months to see what I would like to change in this post. I will compare it to the other functions in Google (OSO, PSO, Biz-dev) etc at a later date. I am in the thick of an exciting new product out here, there are loads of challenges, the team is around the globe, the product has an exciting mix of legal, sales, technical challenges, and my life is awesome.

Lesson II: Propagate those Whys

2007-08-22T18:44:00.000-04:00

Now this is something that is difficult to do. To build strong companies, you need strong personalities but so often strong personalities overwhelm the company, and create auras of their own. I see this in many large companies, and even in Google. People in positions with strong personalities become gatekeepers of important processes in the firm. This, in turn undermines the same entrepreneurial nature that brought the company to where it is today.

Be a visionary, but don't become a cult-head. There is a fine difference between the two and the trick is to know where to exercise your power. This does not mean cult-heads do not work. Apple's CEO is probably the nearest one gets to being one. However, using the power to initiate significant shifts in the industry is one thing. I have seen many instances of amazing ideas not going anywhere because the gatekeeper did not like it. This can be exacerbated if the gatekeeper is not in tune with the trends especially if this is a fast moving Internet services industry.

One thing a startup needs to do if it has to survive in today's age, is to avoid the culture of fear. People should be able to question everything and feel like they have a say in things. This obviously should be balanced with not getting muddled in chaos. But there is a way to do things that makes it more transparent and empowers people and yet does not sacrifice efficiency.

In a previous company that I worked for, our projects would get shut down seemingly arbitrarily by the VP. As an engineer, this was incredibly frustrating and demoralizing. I am sure there was a sane reason to shut down the project, but it is as important to convey why the project was shut down as to shut it down. The action of shutting down ensured that the company did well fiscally (or whatever the business reason was). The why (and the true why not the business gobbledegook) is what ensures that the creativity and morale stays high.

Google is sliding from the startup scale towards the large company scale. As time goes by, the whys will becoming harder to discern, and things will look increasingly arbitrary. However, this place is still way more transparent than most places of its scale. And this brings us to the most important tasks of a Product Manager: ensuring that the why of any action that impacts the team is known, and conveyed truthfully and sincerely.

In a startup, the CEO is the Product Manager. And s(he) needs to ensure that the whys are propagated.

Lessons for a new age startup I - Subverting the Order

2007-08-08T00:04:00.000-04:00

There are some interesting lessons to be learnt from the success of Google and some other up and coming companies in the valley these days. In this series I will put together a list of lessons that wannabe entrepreneurs like me cannot afford to discount.

There is no hierarchy, the old hierarchy is dead

In a period of 6-8 years, the old way of doing things has been completely subverted, and has been replaced by a new, egalitarian, non-hierarchical system which is revolutionizing the way people work these days. Having spent a month at Google, I have had the opportunity to experience this new way first-hand. I am not saying Google is the perfect example of this new order, but it sure it is nearer to this model than most other companies regardless of industry, location and sector.

Nothing is more evident in the new order than the lack of hierarchy. Sure, there are directors, Senior execs, VPs etc, but they are there to provide direction, a way to massage the processes so as to create efficiency which in turn helps scale the company. No one orders others about what to do. Hence, no one is beholden to anyone else. Work is accomplished through influence. In this new order, accounting, finance, marketing take a backseat to the most important MBA course one can take - "Managing People at Work" ( Hat tip to my Wharton professor, Mike Useem).

There is no bar for age or experience. You are respected for your work which may be a factor of your age and experience (and then maybe not). So we have high flying, young, out-of-school Associates doing wonderful things because they are allowed to, nay, because they just can. You are only held back by your ambition (and luck). Try telling others what to do, and you will be relegated to the back. The old school of Silicon Valley companies will have to change because the new age tech companies are empowering their employees and in turn, attracting the best ones to their folds.

Is this a mirage or is this really happening? My thesis is that this is what is going on around you right now in the Silicon Valley. The whole basis of the technologies that these companies are producing is empowerment of consumers.
Products like social networks, blogs, p2p, are harvesting the long tail and leveraging an individual's power to create an interesting era of techno-egalitarianism. How can they peddle these wares if they did not, to paraphrase Google, "eat their own dogfood", and implement the same thought-process and concept in their own internal systems?

Anyone who wants to be connected to this coming generation of companies whether as a VC, or an entrepreneur or an executive will need to learn how to work with this new flat order.

Look out for Lesson 2.

Muggling Along in Googleland (and how Punit Soni got to drink the Kool-Aid)

2007-07-26T14:47:00.000-04:00

All the views in this blog are mine, only mine, and not of Google's or anyone affiliated to Google..yada yada yada...Need to put this so that I can be a good corporate citizen.

The Kool-Aid
So here I am. I came to work in the morning, gave my car to the valet to park, and then applied for reimbursement for my newly connected Internet (which might be useless since the Google WiFi works very well in my new apt in downtown Mountain View). Then I got down to work and saw this guy called Larry Page walk right by my cube. Reminding myself that is no big deal, I got back to work. Then realizing that my legs were hurting because of the early morning move into my apt, and so I went to a massage chair and got myself some machine love.

Glug
So what I am doing now? I am drinking the "Googley" Kool Aid. And no point being cynical about these guys. They are after all, pouring more money back into their employees than most other companies do. Why should we grudge them their riches then?
I came here partly because I wanted to experience the buzz around this company myself and partly because I believe there is a learning here about how to build and run a new age company. And so this experience is an eye-opener.

Me First
The company creed is employees first. This is going to be tested these first few weeks where I float around trying to find something that interests me and that they have an opening for. I want something that makes me happy and useful. But the same process that facilitates that at Google also hinders it.

The Process
In many ways, this is a different from going to a regular company. In a regular company, they hire you, make you sit through orientations that talk about the product suite, culture etc. At Google, you come in, and automagically they assign you to a vertical within the company (there are a few large verticals). And they give you a bit of time to snoop around and you have find something pretty quickly. Now that kind of pressure ensures you learn super fast about what the product suite looks like, what is going on in which part of the company, and what is good for them and you.
If someone thought of this subtleity and then put in this process, then kudos to them. They found the magic potion to ensuring new employees figure out the company in no time. When you butt is on the line, you don't walk, you scamper.

The Glitch
The only glitch is that this ambiguity also carries with it the frustration of being assigned to a division that you may have had no interest in. And then in your first two weeks at work, you run around like a headless chicken trying to convince others that this is not what you wanted to do, and then providing them an alternative with your 1 week's worth of diligence. Which leads to confusion, nervousness and all that.

All in all, I am stressed but having fun. And hoping that things get real fun real soon. I know I will get a couple of very interesting things to do, and so things are good on my end.
However, I do not know if this is the best way to recruit PMs. This way increases the chances that the guy is frustrated. Most PMs I have met have figured their way into what they really want to do in a few months or in a year of being here, but that initial time is pretty chaotic for most. Incorporating some feedback from the guy I am hiring before throwing him into the pool should be rule no. 1 if you want to make your employees happy. Or atleast tell them which division they might end up in before making them sign the dotted line.

I guess I have not drunk enough Kool Aid yet.

Whirlwind

2007-07-17T19:08:00.000-04:00

I am sitting squat on a red couch. Wore a pant to work yesterday and stood out like Hannibal in a Pixar flick. "Googley", "Noogler", "GBus"...random phrases are swirling around in my head.
That this place is a different kind of company would be an understatement of the century. The first thing I noticed was the demographics. I was standing in the central courtyard next to Charlie's cafe, and everywhere, there were young people. At first glance, it looks like 85% of Googlers are in the age group of 20-35. The average age looks like it is younger than at Wharton. This place is young. Very young.
The next thing one notices is the food. There is too much of it. Its very good, very healthy and very fun. I, for one, never thought that I too would be carried away by the valley's obsession with the food at Google. But here I am. There are starbucksesque cafes with smoothies, snacks, and what not sprinkled around. And then there are the micro kitchens, juice bars and happy hours.
Right now, I have not had the time to notice much beyond this. The next few weeks are going to be intensive and so I will have to get used to putting in such lean, mean blog entries. Will also need to check with the legal about this personal blog. Aaah...corporate life. But I will ensure my blog flows freely.
All sorts of people make good product managers. I am not sure which sort I am going to be. Right now, I am just interested in shutting up and listening in. All the cliches about this place are turning out to be true. Let's see how long the myths hold up.

The next step

2007-07-06T17:59:00.000-04:00

I have spent the last two years on a rollercoaster ride and for most part, you have all been with me. You have seen my thought process go from sniffing at Venture Capital, to being committed to VC, to getting opportunities in VC in the Bay Area, to veering off towards startups and finally getting to this point.

I am going to start working as a Product Manager at Google. I have debated this opportunity along with the others that I had for a long time. I spent time talking to VCs, entrepreneurs, people here, people in India, parents, girlfriend among others, and finally decided this is the most exciting next step for me at this point.

Why Product Management at Google
A veteran VC friend of mine once said to me, "Being a Product Manager at Google is the closest you can get to being the CEO of a small startup without being the CEO of the small startup."
And one day, I intend to be the CEO of a small startup.

Why Google?
Because that is the only operating role that I applied to. The only job in a large, fast growing company that could entice me from Venture Capital and other startups.
And because I do have to learn what they have to teach. For all the experience, I am still a startup myself. I have not taken a product from concept to launch till date, and this is my shot at learning it from the best.
Because the network of amazing engineers and business types that I will make, will be as useful to me as my Wharton experience has been.
And finally, because I believe in the company and the sector I will be working in. For most part, it is the one place (other than my own startup) that will make me feel excited about getting to work (at this point of my life).

What happened to Venture Capital?
I got a few offers in the space. They were all good solid firms. But I had my concerns as I didn't want a position that would:

- Lock me into a niche sector or a nice role
- Hinder my chances at being in the best place in whatever field I was (Venture Capital in this case)
- Not provide me with the relevant mentorship to grow. And by mentorship, I mean exposure to growth opportunities, and not handholding

A lot of my offers failed on one criteria or the other. Even though they were fantastic jobs and fantastic stepping-stones for a good career. At the end of the day, I had to make a call on the choices I had, and I did.

What happens to this blog?
Nothing. It is still my intention to be a VC one day. Not just in the near future. In fact, I do not fancy looking for a VC job. I think the right one will probably find me if I am good enough. Do expect the content to be a bit more operational in the near future. I am still around cutting edge products, people, entrepreneurs and of course, VCs. So I will keep penning down my thoughts as usual.

Some things, like the tagline of this blog for instance, will have to change.

The Bottom-line
The last four months have been very enlightening for me. I wanted something and wanted it badly. I got it. Then when I was faced with a real decision, I realised that I was happy to leaving them on the table. Maybe I will make a little less money in the short term, but as the say in the MasterCard ad, learning how to build and lauch a product, priceless! So I changed course midway and here I am.

The Lesson: It is important not to lock into something so hard that you forget what you really want. What I really want is to be immensely successful and immensely happy. And Venture Capital is one way to it.

For those of you who are thinking of MBA, hopefully my thought process helps you clear things about the MBA experience (and what to get out of it) a bit. For the aspiring VCs, hopefully it helps understand the process to getting a position and how to go about deciding on the opportunities. For the others, you can continue to enjoy a ringside view of my loony life.

The rollercoaster ride goes on.

The next post will be a wrap-up on my Wharton experience. Something a few of you have asked me to blog on.

Back to Bay Area

2007-07-04T01:32:00.000-04:00

So I am finally back in sunny CA (The picture is from behind my temporary apartment). It has been a long wait and I have been raring to be here for ages. When I first left to do my MBA, I was looking forward to a good stint in the east coast. Sometimes, I even wondered if I would ever come back. However, a month or two into my stay, I was clear that my heart was out here. Barring India, there could not be a more exciting place for me. And even India pales in comparision when I consider the weather, the trails, and all that jazz.
I am currently based in Redwood Shores about a minute's walk from the bay itself. There was a Stingray in the water behind my apartment, and I walked five minutes to get to a bird sanctuary. Yet, about 5 mins drive away is the world headquarters of Oracle, and 15 mins away lies Palo Alto, Stanford, and the crazy entrepreneurs hacking away on University avenue.
The contrast between India and Bay Area could not be more stark. However, one thing is common. There is a buzz in the air in both places. People are building companies everywhere and there is a feeling that anything is possible. It is almost like 1999. Well almost. The ideas are a bit more mature this time around, and the people more restrained.
Anyways, I am back and spending a lot of time meeting entrepreneurs, VCs, valley people of all stripes and shades. If you are in town, and want to meet up, drop me a line. My plan is to spend about a month and a half, listening and talking to folks out here. Then, hopefully I will be ready to lock in on something and start working again. All I know right now is, life is so much fun!

India

2007-06-05T02:41:00.000-04:00

So I have been out of business for a few days now. Was traveling to my parent's place in Mumbai and whenever someone lands in India, it takes some time to absorb and get one's bearings right. The place is madhouse. The usual clichés are true, and then some are not. Here are some observations in the week I have been here:

1. The infrastructure sucks
It does. It really does. It’s terrible but surprisingly people think things have gotten better. I don't know how. I lived in India for 20 years of my life, and the roads are more crowded, Bombay gets flooded every time it rains, the nearest park is further away, and in general, its messier. What has happened is that people have access to the things that make life easier to cope with. So the middle class has multiple ACs in the house, multiple cars, multiple phones, TVs and all that. But I do not know how sustainable that is. God save Antarctica at this rate!

2. The economy is booming
Dat true. And boy, is it booming or what! Scorching pace of growth. The signs are all over the urban areas though I have my reservations about the boom effect in the rural hinterland. Retail, Real Estate, IT, Telecom, Airlines, everything is dynamic. Whether they do well in the long term or not is up in the air, but right now, things are just crazy out here.

3. Venture Capital has a rosy future
Am not sure of that in the short term. Absolutely sure of that in the medium/long term. Too much money chasing too few good investments. This country needs good managers and the older generation of large corporation managers are too risk-averse. Whether the traditional Internet space is viable or not, no one knows. The telecom ARPUs are actually down. But then there are these unbelievable, crazy inefficiencies in the market that beg for attention. And these inefficiencies will make the future rosy for the deals of vintage 2009 or later. Venture Capital in India is a different business from what we know of as Venture Capital (in US).

4. The market opportunity is big
Are you kidding me? This can't be doubted. However, it is not in the places people are expecting it to be. The opportunities are India-style. They solve problems that are very specific to India. The solutions have to be tailored accordingly. Do not expect to superimpose a US technology roadmap on India, and expect things to work. The mobile Ads market does not really work here, finance software, Insurance and retail related investments are better bets than your traditional Web 2.0 gigs. It’s really a hotbed of opportunities, but those opportunities have to be vetted out.

5. The Media sector is exploding
It really is and there is tonnes of money to be made here. But the content really is shit and that means such an opportunity for someone to come in make a killing. By content I mean things like Independent movies, intelligent News, offbeat music etc. There are markets galore. The go-to-market needs to be fleshed out. The broadband is getting there for a small, elite percentage of the population, but if done right, that group is a small European country, and is only growing.

Bottomline: Loads of opportunities for those who can live in India. This is not the place for people who want to jump in, make a few investments, and the jump back. You need to be here. Be vested and be ready for the madness.

On a personal front, I am in India because I have to flesh out a couple of opportunities that I was working on earlier. Right now, my search is incremental. I look at opportunities as they come and then make a decision wrt what I have. Its tricky because I am open about all the options I have, no apologetic about finding what is best for me (personally and professionally), and still mean no disrespect to the opportunities that I don’t accept.

I have turned down the two VC opportunities. I have a few more I am looking at, in India, and in Bay Area, and then that lovely PM job is there too. I was never obsessed with VC, and so it was never a matter of just accepting what came my way. I have a vision for myself and those opportunities don’t fit with that vision. However, something else might come my way that I might believe in more.

Some people look at me funny these days. Some days I wake up and think the same. It must be crazy to turn down these great opportunities. But I believe I know what I am doing. And even if I am being silly, its good to make these mistakes and learn. In the long term, hopefully I will be wiser. On another note, a lot of you have emailed me personally and through blog-comments, with your insights. I appreciate all of it and really really thank you for your support. Will keep you posted on my journey to a post-MBA career.

Right now, it is back to eating these unbelievable mangoes, and downing some milkshake. The monsoon clouds are gathering in the hills behind my house. I have run through 5 books in the last 3 weeks. My life is good.

The Latest: Operating Job versus Venture Capital

2007-05-17T02:15:00.000-04:00

Ok, so I have been offered a great opportunity as a Product Manager at probably one of the best companies out there, in their new mobile services division. Then I have a couple of VC options. I have also graduated and have my degree now. All this has happened in the last 3 weeks and this means that life is a blur at this point.

I am still spending my evenings hanging out with my Bschool buddies in local bars, and have not yet figured out that my MBA life is over. I have still not left Philly and do not know when I should. I should though. Its all very surreal.

Should I take the VC opportunities I have? Or should I go build a product for this fantastic company? Or should I find a nifty startup to work with? I do not know. After having spent two years trying to position myself for Venture Capital, I am not sure if I have the right jobs. I have great VC shops in the bag but I have a feeling that the fit (from my end) is probably not right. And I never got into Venture Capital for the sake of getting into Venture Capital. I want to find the right position where I can contribute the most and where I will be happy. And except for that PM job, I do not think I have it yet.

So I will keep talking to folks. I will keep butting my head against the never-ending recruiting process because the end-all of this process is not getting a job. It is getting the job. And maybe there is no real "the job" but it is important to find that out too. The process is the destination and I will keep walking.

I would love your comments on my now public dilemma. Right now, to be in this position is in itself a happy place for me.

Semiconductor Cheatsheet

2007-05-03T00:58:00.000-04:00

I cannot understate the value of creating cheatsheets for every sector that one wants to position themselves in Venture Capital. It is not only important that you understand the investments in the sector, but you also need to have an opinion on the state of the industry. I will take this opportunity to put together one such cheatsheet for whatever it is worth.

Since my positioning has always been Semiconductor/Mobile Services/Telecom/India, it is obvious that I get asked a lot about the state of Semiconductor industry. Now even though it does look quite morbid at first glance, there is a lot going on in this sector. One has just has to look a bit harder. Below is my cheat sheet on the Semiconductor sector.

Key Characteristics
• Can be capital intensive and will give less than lofty returns
• Two primary ways of making money- either find Chinese based manufacturers or find extremely capital efficient US companies
• Investors in this sector require significant technical knowledge
• Moore’s law is nearing physical limits and so there is a search for alternatives. These can be Nanotechnology, Bio-electronics, Bio-sensors or something else
• Out of these technologies, Nanotech has the brightest future. Even though single nano-tube circuits are working, there is no interconnect technology yet to scale it. At this point, that technology is 10 to 15 years out. (Nantero claims to solve this, however I have not done any technical diligence on them. Last heard, Draper invested in them and this is always a good sign)
• Out of the currently viable technologies, 3D assemblies, parallelisms and optical interconnects can keep the Silicon CMOS viable (22nm)

Bottomline: In the end, it is important to know the technical obstacles in this industry, and then keep an eye out for those startups that claim to advance these limits.

Current Trends in the sector
• Rise of fabless semiconductor companies
• Increase in Design jobs worldwide
• Customer base is shifting to Asia
• Not surprisingly, manufacturing is also shifting to Asia
• Huge R&D spend on future technologies like Nanotechnologies
• Wireless devices, Video, consumer electronics driving semiconductor demand

What about those Fabless Investments?
Most fables companies take in about 30M in 2.5 years to get the chip out. To get 50% margins, you are looking at revenues of around $60M. To get this for high priced chips, you need volumes of 2M x $30 and for low priced chips, you need 12M x $5. In either case, this involves a significant sales effort. So firms have to either decrease cost upfront or delay getting cash till the cost of capital declines.

Bottomline: Things to look for - Not an incremental technology like a cheaper chip or a bit faster chip, but unique IP and most importantly, a great team. Given the requirement for capital efficiency, it is very important one backs seasoned entrepeneurs in this sector.

Finally, What are the two biggest barriers in this sector?
• Exponentially soaring design costs (costs are around $50-75M for 45-65nm nodes)
• Low chance of an IPO

This cheatsheet coupled with an investment thesis can be a staging point for a good discussion on the semiconductor market. At the end of the day, creating such quick notes for each sector that I am positioning myself in has helped me immensely.

Punit Soni and the Venture Fund (Round 9)

2007-04-24T13:59:00.000-04:00

Writing this between interviews, life is amazing.

The only thing that is different between a long drawn out boxing match and Venture Capital recruiting is that in this case, both sides are working together towards a common goal (they hire me, I join them).

The rest is the same. I spar with my fellow VC friends at school to prepare for the big day. Each trip to the Bay Area is like the sound of a gong signifying the start of a new round. We talk, poke, nudge, sniff around for weaknesses, and do our diligence on both ends. Every round seems pretty inconclusive. I am not sure they dislike me, they are not sure they like me. And we keep going at each other. Round after round.

I am into the second month of interviewing with some firms. People like me, some swear by me, but I need to meet each partner in the firm and so I fly in and out of Bay Area. The rounds continue. And the best part is I am still standing.

The best news so far is that I have no bad news. No. Not even a single iota of negativity. Everything is moving forward. I like some firms more than the others. Some firms seem to believe in me more than the others. And so it goes...

What's the lesson here? Venture Capital recruiting is about three things:

1. Opportunity
2. Capability
3. Patience

Opportunity is something you co-father with fate. Capability is primarily self-belief, more an attitude than your resume. Patience is what seals the deal. The best fighters are not the ones who jab aggressively at every opportunity. They are the ones who know when to fight and when to rest. They are the last men standing.

I am still up and about.

State of Interviews

2007-04-11T12:58:00.000-04:00

As I go through my VC interviews, one thing that strikes me is that this is not just about capability (a lot of us are capable enough), it is about luck and timing. I see jobs that I know I am good enough for go by just because someone did not remember me when the opportunity came by. So for all those people working hard towards a career in VC, remember, it is all about your network at the end of the day. It is only when you get the opportunity that you will get the job.

So what are Venture Capital interviews all about? Depends on the position I suppose. Let's reframe the question: What are Venture Capital interviews for an Associate position all about?

I will bucket what I am asked into three categories:

1. Technical/Investment
2. Financial Knowhow
3. Interpersonal/Fit

1. Technical/Investment - This category of questions focuses on your ability to know the sector you are positioning yourselves in and your awareness of the current startup scene in it. One is asked questions about what trends they see in this sector, what kind of companies are succeeding and what are failing, and what is your projection for the future. A second sort of questions are around any investment "holes" that you see in this sector, and any areas of opportunities. This part of the process usually ends with some recommendations for interesting startups in multiple areas of your positioning.

2. Financial Knowhow - This category has to do with the finance of Venture Capital. Now, I have heard conflicting stories from different interviewees. Some vouch for the fact they were never asked any financial questions and some (like me) will tell you that we spent days working on significantly complex models for these interviews. A brief list of things that you should know:

- Cap Tables/Pro-forma Cap tables
- Effects of various sorts of Anti-dilution terms
- Different kinds of securities and their impact on exits
- Returns Analysis
- The overall VC method of valuing deals
- Basic Corporate finance (chump change for Wharton Students)

3. Fit - This is probably the most important part of the interview process. The first two sections are used to weed out the candidates. The last part is used to select them for the job. This can seem easy to deal with at first, and it is if you have thought through your motivations to find a Venture Capital opportunity. I believe that if you are really sincere about this field and have worked your way towards understanding it, then this part is more about cultural fit between the firm and you. You should spend as much time questioning them as they do, because you need to fit in as much as the firm needs to fit you. Expect questions about Why VC, why particular sectors, What you like or dislike about the field, and where do you see yourselves in a few years. Again, things that you have dealt with multiple times in Business school.
However, do not underestimate the power of establishing rapport and connections with the partners interviewing you. I subscribe to the theory that one should be themselves and not go out of one's way to appeal to the interviewers because at some point, the facade will lift and you will be one misfit in the firm.
All in all, spend a ton of time thinking through the fit part of the interviews.

The investment and fit part usually happens on location during the interviews, however I have been given business plans and case studies to work through at home before or after my on-site interviews. This gives you some time to understand how to attack the problem, but it does involve a lot of work.

In the end, I would say have fun with the process. If you do not enjoy the interviews then you will not enjoy the job. The only problem with this process is that it is SO LONG. It goes on and on and on...and you do not know where you are. If VC was a girl, then she better be very very attractive because that amount of courtship would wear out most men!

Oh well, I am still in the game (and enjoying it for what it is worth).

Investment Banking

2007-04-01T22:35:00.000-04:00

Yes, I do not usually do this but I just have to. I just have to refer you all to this hilarious blog by an anonymous I-banker. He is just amazing and it is a wonderful piece on what kind of shit is happening in the high flying banking industry. Yeah, all of them are not so but I daresay many of them probably are.
Just amazing. Read the story of the I-Banker

On another note, busy with recruiting interviews so kind of slow on the blogging side. Having said that learning a lot about what the full time recruiting is all about. Will write more on that as soon as I finish this recruiting assignment that I have to submit by tomorrow.

Lessons from the Mountain (and then some Venture Capital)

2007-03-21T00:51:00.000-04:00

So I am finally back and have recovered enough to write a post. As explained earlier, I was out during the Spring break as the Venture Fellow for the Wharton Leadership Venture to Cotopaxi - a 19347 feet Volcano in Ecuador. The trip was pretty hard on me physically because I was pretty ill when I headed out to Ecuador, and the illness does make acclimatization pretty hard. Quito is at 10000 ft and the itinerary involved a practice climb on Pinchincha (15500 ft), and life at Cotopaxi base camp (16000 ft) for a few days before heading off to the summit.

This time I did summit and it was pretty intense as expected. I remember an instance that was pretty memorable. It was 4:30am and we had been traversing the glacier towards the headwall for about 4 hours now. A snowstorm hit us from nowwhere and it became cold... very, very cold. My eyelashes froze, my glasses froze, the rope froze, everything that could freeze, froze. I remember panicking because I could only see a foot ahead of me and was practically blind. Then my training and experience (of having climbed this mountain last time) came to help. I remembered that this was the absolutely pits and things could only become better. The sun would be out soon and it would get better. Moreover the headwall was around the corner and then summit is not too far. And there in lay the lesson from this trip.

When faced with insurmountable obstacles, experience and patience usually help find that inflexion point from whereon things get better. An important lesson whether one is starting a venture or climbing a mountain. Experience can assist in moments when the spirit is down. I knew things would get better and they did. And in that feeling lay the source of great strength.

Another important lesson that I learnt was a result of my being pretty ill and weak through a large part of the eight day venture. I had been on trips with physically unfit people before and had always gone out of my way to facilitate a great experience for them. However, I have never been the weak person on a trip before. It was very humbling to see how it was to be constrained by one's physical conditions, something which is out of one's control at that point of time. You learn to conserve energy, stay humble, be aware of your limitations, and most importantly, swallow your ego and ask for assistance when needed. I believe it is important for everyone to be at a position of disadvantage at some point in their lives so that they can truly appreciate what it means to reach out and help someone else in that position the next time.

All in all, another great Wharton Leadership Venture and another great opportunity for me to learn as Venture Fellow.

And now to more mundane matters.
The search continues though things do look brighter with a few options in the horizon. If I play my cards right, I might have a couple of options to play with by the time school is out. On the flip side, that may not happen and life may suck. But right now, I have a sudden rush of perspective. Getting a job in Venture Capital (or any job for that matter) is about luck and timing as much as talent. I know I have the capability, the question is do I have the luck and timing?

As they say, you create your own luck. I know I am.

Trying to climb a 19,347 feet Volcano

2007-03-06T16:51:00.000-05:00

I have had a fever for two days before I started this trip and am probably at 50% fitness levels. My head has a constant headache because of the elevation (I am in Quito, capital of Ecuador, 10000ft above sea level). The illness makes it difficult for me to acclimatize.
The practice hike up Pinchincha (15,500 feet, 8 hours) that I complete on a gallop last year, took my last ounce of energy yesterday.
Today is a rest day. Tomorrow we go to the base camp which is at around 16,000 feet. And on Friday, we try to summit Mount Cotopaxi.
But right now, I am wearing Bergen wicking clothes, red bandana, cool shoes, and sitting in a internet cafe near my hotel in downtown Quito. Nirvana lits up the background.
I am a Wharton venture fellow and thus am leading the expedition. I have two jobs. One, faciliate the experience for the participants. Two, climb that summit. My 2nd job is a personal whim and my first one is the real reason Wharton sent me here. And I am doing that one.
Now, the question is, will I overcome fever, cold, altitude sickness and general weakness to make it to the top?
My life is so fun!

Putting together an Investment Thesis

2007-02-27T00:29:00.000-05:00

A typical question asked in a VC interview is about one's investment thesis. A basic methodology to follow when putting together an investment thesis is:
( Note that this is an exhaustive way of doing this, one does not necessarily need to go through all these hoops to have an opinion on a sector)
There are four basic steps:
A. Create an Ecosystem Map
B. Use the ecosystem to come up with an exhaustive taxonomical analysis
C. Identify opportunities
D. Identify startups targeting those opportunities

1. Create an Ecosystem Map - Research and create a map for the technology ecosystem enabled around the sector of choice. This is facilitated through three methods:
1. An analysis of current investment trends
2. Market research of the evolution of the sector
3. Discussions with industry leaders and Venture Capitalists investing in this field

2. Create a taxonomical analysis - Use the ecosystem to come up with an exhaustive taxonomy of the sector. For instance, when looking at the mobile services sector, one can go through the following analysis:
• Business: Going beyond VoIP phones to unified messaging, web conferencing, enterprise IM, access to enterprise data from any device.
• Lifestyle: Media convergence (e.g. IP TV), mobile blogging, mobile audio/video, gaming and mobile payments

or slice it another way:
For ex: Mobile Services Taxonomy - eCommerce, Security, Content Management, Enterprise Content, Device Management, Location Based services, Operations Management.

3. Opportunity Identification - Based on the aforementioned analysis, one should be able to answer the following questions. What is the ecosystem (infrastructure to applications) created by this taxonomy? What new applications does it enable? Who are the incumbents & entrants?

4. Key Startups in the area - Finally, round off the analysis with a survey of key startups in this area. Identify those which recently got funding and those in the market that are still looking. Nothing gets a VC's attention more than a potential deal.

In General, the following frameworks will be useful here:
(My classmate, Prasanna Krishnan came up with this list for a joint project)

a) Scenario planning - If it is a disruptive technology, then past trends are not good indicators of the future. In addition, there is a high degree of uncertainty around the apps & players that are likely to succeed. Hence scenario planning is a particularly useful tool.

b) Technology Speciation - In addition, the key to disruptive technologies in any sector is having killer applications and many of these applications are likely to be in unexpected new domains. Technology Speciation is a useful tool to study this phenomenon.

c) Technology strategy in lumpy market landscapes - Useful in identifying latent market needs & hence determining what applications are likely to succeed in an undefined market.

All in all, this is a good template to write up an investment thesis paper. Or just cruise through it to create an on-the-run investment idea for your next interview.
Talking about interviews, anyone know of any good Silicon Valley VC opportunities?

Preparing for a VC interview (and then waiting around for months)

2007-02-18T11:09:00.000-05:00

Woke up on sunday morning and thought I should write a post today detailing the checklist of items to prepare before heading into a Venture Capital Interview. This proves that I am in snowy Philly with nothing better to think of that this amazing field of Venture capital. So here goes:

1. Fund Profile - Look at the commited capital, past performance, news articles related to the fund, and buzz in the market. Do you diligence on the fund as if you were doing diligence on a potential investment for the fund. After all, it is an investment into your career.

2. Partner Backgrounds - Read the bios closely. Note down points of convergence in your backgrounds and interests with theirs. If you find nothing, do not panic but if you find something be sure to bring it up in your interviews. Also, look out for red herrings. If you are interviewing with a ex-banker for a growth stage fund, you might get many more financial engineering questions than regular investment thesis questions.

3. Know thy Resume - It is amazing how few people get this in its entirity. When one heads into an interview, expect discussions on everything under the sun. If you had a gig in EDA (Electronic Design Automation for the uninitiated), you should expect a question about the industry in general, growth prospects, and investment ideas even though this may not be something you have worked much on, or thought a lot about.

4. Think about your Investment Philosophy - Mine is "Team, Problem, Solution (Plan B), Economics, Exit". Obviously, there is a lot more to it than just those five words however it is good to have a succint way of putting across your investment philosophy. Back it up with ideas, good VC practices, and practical insights. This is the question one gets asked a lot so we need to ensure that we can provide answers beyond mere cliches.

5. Read up those VC Bulk Packs - If you are at Wharton, then go buy the Venture Capital and Financial Innovation textbook or bulkpack, and read it from cover to cover. Be sure you understand how term sheets are structured. Be exposed to the various VC financial and legal jargon. Not knowing what a cap table is might not be the end of it but will definitely hamper your chances.

6. Venture related Extra-curriculars - If you have done any study project for a local VC, worked on any deals on a part-time basis, internships etc, then be sure to highlight them, read up on them, and talk about them in your interview. Nothing builds more credibility in front of a Venture Capitalist than prior VC experience.

7. Investment Thesis - This is probably the make or break part of your interview. Line up atleast 3-5 different investment ideas in the areas you are positioning yourselves in. For ex:
I position myself as a Semi/Wireless/Mobile Services guy, hence I have investment theses in:
a. Mobile Ads
b. Mobile Video
c. Mobile DIY
d. Semiconductor (Chips and chip technology)
e. Broadband Wireless Technologies
f. Mobile Computing
g. Others (a big bucket for the various other ideas that I have in spaces as diverse as Network Storage to Internet Services)

When thinking about an investment thesis, concentrate on three aspects:
- Idea
- Viability (Market, Competition, etc)
- Existing Startups in that space
- Any new startups that have not gotten funding yet.

After all, nothing gets a VC's attention more than a funding idea.

If you do all this and more, then you can sit around for months waiting for that elusive call. And the Kafkaesque search will start.

Google: Searching for Success (and getting it)

2007-02-06T10:26:00.000-05:00

Everyone talks about Google. Currently, it looks like one of those demigods that can do nothing wrong. But what actually goes on inside that factory of creativity? Are they really all that they are made out to be?
Recently, I was at the Mountain View site and met with a lot of folks running various Google blockbusters like Search, Google Docs, GMail etc. It was an interesting experience meeting them and talking about the various aspects of Google strategy going forward. (Everything below is my opinion and not theirs', so no breach of NDA and all that!) I felt a post discussing where the search giant stands currently and what challenges it faces might be interesting.

Google Strategy Going Forward
The future initiatives of Google will probably be built around four somewhat complementary aims.

• Increased Content – Examples:Book search, Google Earth. Though Google's Book search has got embroiled in various legal difficulties, it still is indicative of the future direction Google intends to take. That of facilitating (controlling?) all the information in the world.

• Easier Computing – Examples: Muni Wifi, Google Pack, Google docs and spreadsheets. Again, Muni Wifi is stuck in the pipelines in SF battling against other contenders (though I have used the Mountain View Wifi and it is pretty good). Google is going the Intel way by attempting to create an ecosystem to facilitate the usage of its products.

• It's all you – Examples: Implicit search, personalized home, Gadgets, API, Syndicate, Google Notebook, Custom search engine.This is in line with the overall trend of customization and personalization sweeping the tech industry. It is here that in combination with the various mobile services that it intends to provide, that Google might have the most immediate traction.

• Search Search and Search - Though there are no real examples to talk off here, I am sure Google is working pretty hard on atleast three fronts:
1. Making Search work better in non-US contexts so that they compete better with Chinese and soon-to-come Indian search engines.
2. Making Search contextual in an intuitive user-friendly way. Why should I think of whether I should go to image search, video search, regular search or some other search? An interesting initiative in this direction is SearchMash. Incidently, if one reads the privacy notes, it is backed by Google.
3. Making video search better so that it relies less on tags and more on the content in the videos.

There are other areas like Mobile services that are probably getting more attention within Google but the various initiatives in that division (Personalization, Location-based services, and different applications for different geographies) could be linked to aforementioned four main areas of thrust.

Meanwhile what should it be worried about?
Here is a laundry list of challenges in front of Google (in no particular order)

• Governmental interference in controlling/regulating search results (Case in point - China-Google Saga)
• AOL supplies 12% of the google ad revenues. That is significant buyer power
• Government regulations mandating access to search records. This could severely undermine Google's "Do No Evil" policy
• Video Copyright issues with the proliferation of Video based sites like YouTube, Google Video
• Google has not had a great track record with effective integration of its past acquisitions (Blogger). However, there are signs that this is changing
• Integrating a 2.1B acquisition with its own strong culture (Youtube) might be quite a challenge
• IP Rights issues especially in the arena of Book search
• Activities like Phishing and Click Fraud

Regardless of all the challenges, the impact of Google (now and in the future) cannot be underestimated. The startup has become a monolith, the food is still very good (Oddly enough, I never understood what the hype around free food was, it's good, but its just free food guys!), the people are amazingly creative and brilliant.
Google is growing at a massive rate and will probably continue to in the near future. How this impacts its culture, creativity, and its ability to churn out products at the rate that it does, is probably going to be its biggest challenge.

Failure

2007-01-28T21:28:00.000-05:00

I am about three months from graduation (and loss of freedom), and this weekend was the first in about two months when I had a chance to breath and reflect. Wharton is whizzing past and I know that soon I will be out and about, back in the professional world, eking out a living and working on the next stage of my career. Would it be exciting? That would be an unqualified and resounding "Yes". Am I apprehensive? Maybe a bit.
I am excited about finally getting out there, and trying something really big, and maybe failing, maybe succeeding. I come from India, from a pretty risk-averse middle class family, and this is one of the first times I intend to go out on a limb. I can’t even call what I am doing as "risky". Sitting out of the interview period at Wharton to look for that elusive VC/startup position is barely risky at all considering where I come from - Silicon Valley. So there is not much to be smug about.
I was having a discussion with my girlfriend recently about the fear of failure. At Wharton, failing is not rewarded; it is not necessarily considered a positive development. In fact, in the ultra-competitive environment that B-schools are, fear of failure can be the most significant obstacle to an absolutely fulfilling career (or life for that matter). People can be just a bit too concerned about what others think about them, to try anything new. And this is so different from Silicon Valley. That brings me to a few thoughts about trying and failing.
The Reward of Trying
Failure is rewarded in Silicon Valley. It is a badge of honor that an entrepreneur wears with pride. The attitude of try, and then try again, is appreciated out there. That I believe is the single biggest attribute of that place which makes it such a hotbed of innovation. Nothing is guaranteed, and that means that anything is possible.
The Risk of fearing Failure
What if we all took the "risk" of fearing failure? We might all end up as mid-level managers, technocrats working for the real innovators. Sadly, it is my opinion that most of us MBAs end up in that bucket. After all, if we did not try, how would we know what we could be?
Failing is Learning
Ever thought of a prototype, a test-bed, or a market survey? All do the same task - that of collecting information, which in turn increases the possibility of future success. Failure, I believe, in the same category. If we fail, the worst we do is actually learn from it.
Finally, it's kind of like Climbing Cotopaxi,it probably does not matter that we failed to reach the summit. What mattered is that how we tried to reach it, and that we tried.
Something to hold on to as I traverse the next few months.

Ten Questions

2007-01-23T01:35:00.000-05:00

Ten questions you should ask a Venture Capitalist mentor if you land an informational interview:

Always start by giving a brief background of yourselves so as to provide context to the discussion.

1. Can you give me a sense of how you got to where you are? What has been your career path till date?

2. Why did you choose to do Venture Capital over other available career paths?

3. Would you change something if you got to start over again?

4. Where do you see yourselves in the near future? In 10 years?

5. What is personal investment philosophy?

6. What sectors do you invest in? Why?

7. What is your favorite investment till date and why? (Expect to keep this information discreet)

8. What is your advice to an aspiring Venture Capitalist?

9. What more should I do to position myself for a VC position? (List what you have done till date)

10. Can I reach out to you if I need some advice in the future?

In my opinion, asking these questions is probably the most efficient utilization of the little time you will have with the VC professional in question.

State of Antarctica and My New year thoughts

2007-01-11T03:01:00.000-05:00

So I am back. And with a lot of new experiences in the bag. Wharton has an awesome Leadership Ventures program, and I have been fortunate to be able to do two till date. Another is due in March which means that when I am done, I would have participated in three ventures, one as a participant, and the two as a Leadership Fellow. A Fellow is like a TA, responsible for delivering the leadership curriculum and the logistics of the whole trip. I genuinely believe in experiential learning through pushing people out of their comfort zone, and camping for a week in Antarctica is pretty much out there. I daresay I learnt more than I faciliated as a Fellow. After climbing Mt. Cotopaxi, I felt I had a life-altering experience. Antarctica was not comparable in terms of stress, but being cooped up in that camp for days, there was so much that I learnt in terms of dealing with people.

What did I learn?
One of my most significant lessons was about patience and humility. I have partaken of the leadership Kool-Aid and so came
into the program with set views on how it should be run. But everyday would throw up situations that I did not expect and challenges that went against my idea of the venture. However, this time around when faced with such situations, I tried something different. I let go. I humbly stepped aside to let others run things their own way. The interesting result was that everytime I did that, the person concerned would come back with a greater understanding of why things were done according to the original vision, and I would gain immensely in credibility.

Lesson
Sometimes letting go of one's ego is the best way to let others see your point.
As relevant in business as in a venture. The ability to genuinely try and see the other point of view, the knowledge that one cannot be omniscient, and the humility to lead without being directive (atleast all the time), all characterstics of a good leader. You cannot step aside all the time in business, but you can learn to lead without stepping on your team's toes.That is true leadership.

What about Antarctica?
Its warm. Way warmer than you would expect it to be. Global warming is happening. The ice-shelves are melting at a fast clip and it is pretty disconcerting to see those ice-falls and loads of fresh water flowing into the sea. There are practically no humans, so the animals are not afraid of you at all. I had penguins, sea loins and seals walking around my tent all the time. It was surreal to watch the new year tick by while I sipped wine outside my tent which was about 50ft away from the ocean, surrounded by all these animals and Wharton friends (who depending on their mood are hard to differentiate from the animals).
And finally, do not trust American Airlines. They lost ALL my gear and sent it to Dallas instead of Chile. As of now, I am officially one of the few who have gone to Antarctica with a day bag with practically nothing in it. I wore the same clothes for 8 days straight. Always a good thing for the rest of the people in the tent!

So how is Venture Capital doing?
It's going well. I have a few leads. And all my leads are not necessarily Venture Capital ones. I have always been the slow and steady kind of guy. Conservative in commiting, risk-loving in ambitions. In the last few weeks, I have learnt more about what kind of firm to avoid than what kind of firm to work for. Here are some do's and don'ts while evaluating the firms you would like to work for:

* Track - Are you on partner track or not? A two year in and out kind of program might sound like an fun career move, but it can also leave you stranded with no obvious operating role expertise, and no upward mobility in the program. Moving horizontally to another VC firm may entail starting from scratch again especially given the long-term nature of a partner track job. Having said that if you are interested in a two year in-and-out program, ensure that it creates tangible value for you and the firm you are hiring into

* Mentorship - Will you get the requisite mentorship? Some VC firms are prone to using associates as diligence resources. While grunge work is necessary to learn the ropes, it is also important to have a good apprentice-based program, where one can see the big picture context of what one does on a day to day basis

* Cultural Fit - If you do not gel with the people you are working with, no amount of remuneration can make you happy. It is important to see whether you share the same investing ideals and work ethics with the rest of the team

* Lower Tier, Worse Deals - Working in a lower tier VC firm may entail getting access to lower quality deals, which in turn leads to lower quality exits, and exits are the only report card of a VC. In the end, all this may have nothing to do with the quality of your work, and hence working in a lower tier firm could cause immense frustration

* Sector - It is important to be on the same page with respect to the location, sector and stage of investments that the VC firm wants to pursue. It is important to look at these carefully and see if they align with your investment philosophy. If the philosophies clash, expect tons of frustration especially given the low leverage of an Associate/Principal position

* Long Term Decision - Venture Capital (especially on a partner track) is a long duration career decision. It is important to be congnizant of every factor related to the position before commiting. Also, be prepared for no validation of your skills as a VC for the first 5-6 years. This is much longer than the time it takes to prove oneself in most industries

*You are what your Deals are - The deals that you do are your report card and resume. So be ultra-careful about what you associate yourselves with. No amount of intelligence can wash away a low quality investments

In the end, I have always believed that it is important to stay focused on your goals but there is no need to become obsessed with Venture Capital. It is a great career track but only if you are in the right place. And the right places are far and few between. So tread carefully.

Of all the places...Antarctica!!!

2006-12-25T03:14:00.000-05:00

It has been fun blogging away on random topics related to Venture Capital for the past few months. I will continue this process after the winter break. Meanwhile, I am away from school leading an leadership expedition to Antarctica. If I come back on Jan 5, then I shall continue this blog. If I do not, I must have found a nice VC position out there in Penguinland. Please request Wharton to waive my student loans.
Happy New Year. And have a good one.
- Punit

Aptitude Tests do not define us, Mr. Kawasaki

2006-12-17T23:13:00.000-05:00

Recently, I chanced upon the much talked about VCAT test by one of the most esteemed Venture Capitalists out there.

I cogitated on this blog posting for quite a while. (By the way, my score asked me to email 2000 VCs and pray, something that I already do). I have exchanged emails earlier with Guy, being one of the thousands of Biffs, Sebastians, Brooks, and Tiffanys who want to be kingmakers, and he was generous in his advice and prompt in his response. I felt that the blog posting accurately reflected his opinion but I was taken aback by the significant generalizations inherent in the post.

I re-read a few of my earlier blogs, where I detail the reasons for my wanting to be in Venture Capital. At some level, this particular ambition invokes an emotional undercurrent in me. That probably is because to look for a VC position is to be in such an underdog position, especially in Business School. Young people do not naturally gravitate towards VC positions, Mr. Kawasaki. One has to sit out of dedicated interview periods, knock on hundreds of doors, and email many successful people like you to get a break. It is not a comfortable place to be in, and most people do not take it to it naturally, cocktail parties non-withstanding. But that begs the question. Why Venture Capital?

We do not work towards a Venture Capital job because we see cocktail parties, 0.5M dollar salaries and huge carries. On the contrary, most of us know that it is hard work, reasonable salaries and years before any particular break of any particular significance or visibility comes our way. So, then again, why Venture Capital?

Because most of us believe in our ability to help other companies move forward. Because most of us are young enough to have the energy, and have a finger on the pulse of what's going on and what's coming next. And because most of us want to be a part of the system that has built some of the most amazing technological innovations in recent times.

Many of us have worked for quite a few years in large, mid-size and small startups. We have worked on products, indeed built them, marketed them, and then supplemented that skill-set with advanced degrees in technology and business. We might not be as experienced as some senior partners out there, but we compensate for that with our energy and youth. I will argue that Venture Capital is not something to be done at the end of one's career. It is a great experience to have, to get one of the most well-rounded business experiences out there. It looks like a closed club from outside, but most of my friends who work in it vouch for satisfaction they get from their experiences.

I look at Venture Capital as a state of constant entrepreneurship...that builds other startups. You have to be driven, motivated and bright to succeed. Having not done a startup does not merit contempt when one is helping entrepreneurs. Nor are former entrepreneurs the best advisors to other entrepreneurs. Sure, there is something to be said for having gone through the experience many times over in one's lifetime before getting to be a VC. However, there is no reason someone with the right education, experience and attitude cannot help build successful companies. Most of us do not think that being a VC will involve making mere spreadsheets and giving random consultisque advice. Most of us look at it as an opportunity to work with the best and brightest, as a part of multiple teams, in multiple ways, and making a difference.

I think it is a significant underestimation of our capabilities to think that we are naive enough not to know what is in store for us in the Venture Capital industry. I may not get the right opportunity in this industry and might get the right opportunity in an appropriate startup. Or vice-versa. Neither is a backup for me. Ultimately, it is important to find satisfaction in whatever one does. I am interested in entrepreneurship, people and technology. And Venture Capital is one route to that.

I beg to differ Mr. Kawasaki. It is impossible to condense the capabilities of a person into an aptitude test. No aptitude test ever defined a person.

India

2006-12-15T19:34:00.000-05:00

I do not think I need to start this post by talking about the opportunity in India. That is a given. From both buyer and supplier point of view, India has become a force to reckon with in the last decade or so. In recent times, more than 40+ VC firms have established base in India. In fact, currently most VC firms of any consequence have an India strategy. But will they prosper?

What is the nature of the opportunity in India?
First of all, there is far too much money in India by all accounts. An excerpt from an India-focused report by EValueServe sums it up concisely.

Over 44 US-based VC firms are now seeking to invest heavily in start-ups and early-stage companies in India. These firms have raised, or are in the process of raising, an average of US $100 million each. Indeed, if these 40-plus firms are successful in raising money, they would garner approximately $4.4 billion to be invested during the next 4 to 5 years. Taking Indian Purchasing Power Parity (PPP) into consideration, this would be equivalent to $22 billion worth of investment in the US. Since about $1.75 billion (or approximately 40% of $4.4 billion) has been already raised, even if only $2.2 billion is raised by December 2006, Evalueserve cautions that there will be a glut of VC money for early- stage investments in India. This will be especially true if the VCs continue to invest only in currently favourite sectors such as IT, BPO, software and hardware products, telecom, and consumer Internet. Given that a typical start-up in India would require $9 million during the first three years (i.e., $3 million per year) and even assuming that the start-up survives for three years, investing $2.2 billion during 2007-2010 would imply investing in 150 to 180 start-ups every year during this period, which simply does not seem practical if the VCs continue to focus only on their current favourite sectors.

What does this imply?
Firstly that there is indeed more capital than there are deals, and secondly, to invest effectively, VCs will have to move beyond their favorite sectors. No wonder, there is a trend among VCs in India to invest in pickle factories, electrical fittings and other later-stage, more private equity type of deals.

So?
So this means that early stage VCs moving into India will either invest in later, more growth stage deals than they used to or will under-invest. However, there is a third scenario that is possible. There is one school of thought that believes that large VC players are moving into India with the sense that they may get hit in the short term. Their motivation is not to make loads of money in the short term as much as to create a beachhead of sorts. The next few years will be hazy but if they can ride the storm, they would have enough network, crediblity and deal-flow that the deals of 2009 Vintage will more than compensate for any less-than-stellar returns from deals of today's vintage. And while that happens, VCs will move into more later-stage deals.
If this is indeed true, then it will tie in all the four major phenomena occuring in the Indian Venture Capital landscape:

1. Influx of VCs into the Indian market
2. Too much Capital
2. Very few good deals
3. Later stage Investing by early stage players

Finally, the biggest need in India right now is not Venture Capitalists but effective operators. There is a big dearth of good managers in India and this presents an interesting opportunity for people like us. On another note, VCs have a big role to play in this market. This is especially true for those who do invest money but more than that, offer their experience, ideas and manpower to their portfolio companies. Very exciting times out there! So, if you are an entreprenuer looking for capital or good people, mail in!

Another Buzzword flogged to death: Web 2.0

2006-12-05T18:30:00.001-05:00

Having gone through a few VC interviews, I have learnt that Venture Capitalists tend to cut through the jargon and look beneath the hood where it comes to things like "Web 2.0". And I have been asked quite a bit about my opinion on this latest buzzword sweeping the tech industry.

So I thought I would put together a simple primer for the uninitiated about what really is this Web 2.0 and what it means in terms of investment opportunities. Most of us know these concepts in bits and pieces. I am just trying to put them together in a short tutorial. And this tutorial is by no means exhaustive.

Identity
First of all, 2.0 is simply the software way of saying, updated. Web 2.0 is defined as the next version of internet infrastructure and applications. It was first coined by O'Reilly Media and John Battelle as a set of principles:

Value System
1. The web is a platform for the new wave of applications
2. Data will be the driving force for this wave
3. Social Participation will leverage this data to create immense network effects
4. Distributed development (read open source) of applications (widgets) will hold sway
5. Business models will be based on services rather than products
6. Applications will always stay in "beta" mode (no version system)
7. The long tail will create immense revenue opportunities

Key Technologies that prop it up
1. AJAX - a web-development technique that makes the page more responsive by not reloading completely everytime a user-interaction occurs. For ex: Geojoey.
2. Mashups - A technology that interfaces two different site functionalities into one service. For ex: "http://www.housingmaps.com/">Housing Maps.
3. RSS/Atom - Used in combination with feedreaders to check for updates on RSS-enabled websites (Content feeds). This allows the users to find out if their content sources have been updated. You can add my blog to your feedreader by bookmarking this.
4. Blog - This is not as much a technology as continually updated diary. The ease with which this could be created and used led to an explosion of content on the Internet. There are many variants of it (vlog (video logs), mlog (mobile logs) etc).
5. Folksonomy - The technique of categorizing content by making the users "tag" the content with "tags" (keywords). The social nature of this technique leads to a very efficient information retrieval system. Most Web 2.0 sites work on this principle. For ex: You can search on YouTube by clicking on the tag related to your interests.

The Newsmakers
I will categorize the companies in this realm in terms of various functional buckets. However, this is going to be a 30K feet view of the web 2.0 world. In fact, some of these can be placed in multiple categories.
1. Ecommerce (goods, services or classifieds) - eBay, craigslist, Judy's Book, Zillow
2. Content - Wikipedia, Flickr, Geojoey, YouTube, Last.fm
4. Retrieval Infrastructure - del.icio.us, Digg
5. Advertising - Adsense
6.Communications - Skype
7. Applications - Google Docs, Netvibes
8. Collaboration - Socialtext, Basecamp
9. Blogs - Technorati, Bloglines, Jotspot
10. Social Networking - LinkedIn, facebook, MySpace

All in all, Web 2.0 means different things to different people. The impact of this new wave of technology is being seen all over the Internet, and this probably brings us closer to the original vision of the Web being a completely democratic, open, and free network. We shall see where this ends up.

And then a little bit of whining
On another note, I can safely say my recruiting season has finally started. And it has been weird to say the least. I am getting calls from VC firms, they talk to me, nothing (that I know off) goes wrong, things look good, there is the usual, "We will bring you into for another discussion sometime soon", and then poof!
What exactly does sometime soon mean? I am not sure but from what I have heard, it could be weeks, months or tomorrow. The result? I sit around not sure whether I am doing well or not. If this is not wallowing in ambiguity, I am not sure what is.
Oh well...We shall persevere. This is SO much fun!

Deciding to do a Deep-Dive

2006-11-26T15:09:00.000-05:00

How does a Venture Capitalist decide that they need to spend more time on a business plan and do comprehensive due-diligence on it? What factors are important and what is the thought process behind sending back an idea, and spending time on an idea?
Through my experiences at Intel Capital and University Venture Fund (Wharton Chapter), and discussions with mentors in the industry, I have seen a common theme come up. This thought process is important especially for post-MBAs because that is what you will spend a lot of your time doing: Sifting through business plans to find that elusive investment gem.
So here I put together a simple (and frankly very common) framework to take a look at a business idea. The framework has five aspects to it:

1. Team
- Who is on the team and what kind of background do they have? Are they credible and more importantly, are they hungry?
- How is the team relevant to the business plan that has been put together? Why are they on the team in the first place?

2. Problem
- What problem is the startup trying to solve?
- Is there a market for the solution? Is the Total Addressable Market (TAM) above a particular size (usually ~$300M or more)

3. Solution
- How is the problem being solved? What are the details of the solution?
- What is the competitive landscape of the sector?
- What other kinds of solutions are out there and what is the point of differentiation for the startup?
- Does the solution create some other potential problems?
- How do they plan to reach their customers? Is there a distribution strategy and if so, is it viable?
- Is the solution defensible and has IP protection?

4. Economics
- What are the margins on the product? Are they sustainable across the channels?
- What kind of capital do they intend to raise? Where will it be used?
- What are the financials of the company 2-3 years down the lane? What about 5 years later?

5. Exit
- What are the potential avenues for an exit?
- What kind of exit do we forsee, and what kind of return do we see on this investment (Ballpark figure)?

This exercise may not take more than a few hours at most, and less than an hour at least, but it should quickly provide the potential investor with a sense of whether they want to devote more time on this idea or not.
At the end of the day, an idea does not make a company, people do. Hence, beyond these questions it is probably more important to pick up that phone and call a friend to ask about the team behind the company. And then proceed from there.

My 2 cents on how to quickly surf through an idea. You do it differently? Shoot me an email or leave me a comment.

NexGen Partner Profile Series: Alexander Harrison (Sequoia Capital)

2006-11-20T11:08:00.000-05:00

Continuing the series where I profile young Next generation partners who I admire for their accomplishment and personality.

Alexander Harrison (Sequoia Capital)
Alexander is incredibly affable and probably one of the most accessible Venture Capitalist one will meet. This is especially commendable for someone who has accomplished so much so quickly. I remember reaching out to him during my internship at Intel Capital, and not only did he promptly reply, he also stayed engaged till we could figure out a mutually convenient time to meet up. And after that, he has been helping me and supporting my ambitions more than anyone who met someone just once would do.

Education - BA from Darthmouth College

Previous Venture Capital Job - Summit Partners

Last Job before Venture Capital - Goldman Sachs (covering communication semiconductor firms)

Positioning - Financial Services, Healthcare Technology and Services

Out of the blue deed - As a child, Alexander was a stage and TV actor

Personal Mantra - "Its not show-fun, it's show business", "All you have is your credibility"

Investing Philosophy - Alexandar works in sectors where you typically find:
1. Savvy entrepreneurs
2. Business models with strong early operating leverage
3. Ability to scale a company without heavy vc investment early on

The Drift - If you are truly ambitious and passionate, Alexander will go out of his way to help you.

Corporate Venture Capital: Are they really VCs?

2006-11-14T01:49:00.000-05:00

So I did my internship at Intel Capital, which is probably the world's largest and most influential corporate Venture Capital shop. I have been working for the last year and a half at University Venture Fund, which is probably the largest student-run Venture Capital shop. Does this mean the time cometh for me to work at the world's largest traditional Venture Capital firm? I do not know but I do know that I have an opinion on the differences between these different models of capital deployment.
So today let me give you my two cents on Corporate VCs. In the past, questions have been raised on whether Corporate VC investments actually increase firm value. I contend that you can love them or hate them, you can't ignore them. After all, in the second quarter of 2006, Corporate VCs participated in ~20% of all VC deals.

Corporate Venture Capital
Corporate Venture Capital arms of large technology firms (or any firm for that matter) probably started from the corporate development divisions of these companies. They owe their genesis to the tendency of large technology firms to shore up their growth through inorganic means (M&A). At some point, many of these made the transistion from acquiring startups to investing in startups (to acquire them), to investing in startups for their strategic benefits. In that sense, Intel Capital is probably more traditional than most because it tends to invest for IRR reasons as much as strategic ones.

Some of the prominent Corporate Investors are:
1. Intel Capital
2. Cisco
3. Siemens Venture Capital
4. Comcast Interactive Group
5. Motorola Ventures

Specifically Corporate Venture Funds have multiple objectives when they invest:
1. Create a potential window for scanning the market for novel technologies
2. Create an ecosytem for their core products
3. Invest in inorganic growth by building up startups for future acquisitions
4. Pre-empt competition by investing in strategic technology
5. Create returns for their parents through traditional investing strategies

Depending on the firm one is looking at, there is a different order of priority between the four objectives. Intel Capital for example is very much focused on 1, 2, 3 and 4, but is largely driven by 5. Hence, it ensures that it remain a top quartile fund inspite of its strategic objectives.

Key Observations
1. It is these, sometimes conflicting aims, that makes the job of a Corporate VC incredibly difficult. And exciting. But the glass is half empty or full depending on how one looks at it. The same job can be exciting or frustrating depending on one's investment ideology. Corporate VCs juggle these often contrarion aims on a daily basis.

2. On the boards of their portfolio companies, they remain representatives of their parent firms and are sometimes silent observers (due to liability issues).

3. Corporate VCs often work way harder than their traditional counterparts. Their investments (especially in firms like Intel Capital) span across the globe and can be incredibly difficult to navigate through. There are whole host of regulatory, multi-national, macro-economic, and political issues that creep into an investment decision. This makes their work quite complicated.

4. Yet, many Corporate VCs do not get carry. They have immensely important jobs and sit on boards. But corporations (so as to not misalign incentives) shy away from putting together a carry compensation structure. This lack of power-compensation structures has always been an issue in Corporate VC.

5. There are inherent information asymmetries associated with dealing with large Corporate funds and their parent companies. This can create some apprehension among potential startups and other co-investors.

All these issues create a unique Venture Capital model that has significantly altered the investment landscape and been responsible for some very large investments in recent times (Intel Capital's $600M investment in Clearwire).
Finally, this is by no means an exhaustive list or an expostulation of the pros and cons of Corporate Venture Capital. It is more of a 10000 feet view of this model of VC. After all, I owe a lot of what I learnt to people like Ron, Rohini and others from Intel Capital who mentored me during my internship there. And hence, probably owe my budding career to Intel Capital.

Why do I want to be a Venture Capitalist? (My Kauffman Fellowship Essay)

2006-11-07T23:29:00.001-05:00

I wrote this piece for my Kauffman Fellowship Essay. A bunch of you pinged me to send them a copy after I had applied. I am reprinting it here so as to show one perspective of the motivations behind wanting to get into Venture Capital. Again, its just my opinion and thoughts. Feel free to give me feedback. One is always learning and this is just an experiment in PDA (Public display of Ambitions!)

Why do I want to pursue a career in Venture Capital? This question is even more important today as I skip the recruiting period at school and work on my Kauffman Fellowship application. Success for me is the ability to discern what the core of my motivations is, and then incorporating that into my career. I am at a point in my life where I do not need a job but am looking for the job. That search culminates at Venture Capital, a profession at the crossroads of technology, people and entrepreneurship.

My tryst with technology started in High school where I studied Electrical Devices as a vocational subject and continued on through bachelors into Graduate School where I developed a new semiconductor layout technology called VOILA – VLSI Overall Integrated Layout Application. It progressed at Wharton where I won the Venture Capital Investment Competition (VCIC), the Wharton Technology Case Competition, and resulted in a blog called “FutureVC” at http://futurevc.blogspot.com/.

I started my professional career at Avanticorp as a software engineer, using my expertise to integrate Electronic Design Automation (EDA) software tools across different functional areas. Five years, four promotions and two job changes later, I was the youngest Member Consulting Staff (MCS) at Cadence, considered the largest and most technically advanced company in EDA. But before that I spent some time trying to build a startup as a senior engineer in Softface using EDA algorithms to create next generation taxonomical software. Working in entrepreneurial settings like these taught me how to handle group dynamics, impending deadlines and complex technical issues with equal adroitness.

At Wharton, I am an associate and Outreach manager for University Venture Fund (UVF), an $18M early-stage technology fund. As an outreach manager, I am responsible for creating partnerships with VC shops around the east coast and enhancing UVF’s deal flow. As an Associate, I am responsible for conducting due-diligence and making investment decisions on deals ranging from home security to network storage. However, the watershed of my budding Venture Capital experience has been my internship at Intel Capital (ICAP). As an Investment Manager Intern, I developed a financial valuation tool for ICAP’s broadband investments, helped source, negotiate and value a $8M emerging market broadband wireless deal, and proposed a new mobile services investment strategy. Most of all, I learnt from mentors like Ron Reich, saw the Venture Capital mindset at close quarters, and learnt to work with entrepreneurs. It was here that I started my transition from an engineer-MBA to a Venture Capitalist.

I came to Wharton to initiate that transition. In my Wharton application essay, I wrote – the "perfect business degree" provides the right blend of theoretical knowledge, practical implications of that knowledge along with a quality network of individuals from which to draw expertise, advise and confidence as I pursue my goals. But school, like life is what you make of it. At Wharton, I chair the Wharton Technology Conference and am leading a group of 25 Wharton Students on an expedition to climb Mt. Cotopaxi – the world’s tallest active volcano at 19,347 feet. I think these activities are very important because they help me explore my leadership style and my ability to facilitate, and create significant experiences. Replace “experiences” with “startups”, and this is not too different from the job profile of a Venture Capitalist. On the professional side, I complement these experiences by working on the side with entrepreneurs in Silicon Valley to implement business development projects for their startups (Suggestica).

In the long term, I plan to use my skills in finance, entrepreneurial management and technology to plug into the revolution sweeping across the globe. This revolution is breaking down the traditional market economy and creating a new way of doing business, one that combines the powerful market forces of capitalism with the egalitarianism of technology. I aspire to be a change agent, a future thought leader, who can combine vision, enthusiasm and experience to create a new generation of technology ventures. I know my chances of success would be greatly enhanced by the education and preparation provided by the Kauffman Fellowship program.

I am applying for admission into the Kauffman Fellowship program with the intention of being able to leverage my work experience and technical background so as to carve a niche for myself in the Venture Capital industry. With my background in Semiconductor, Wireless, Mobile Services and India, I have strong insights into the direction in which Venture Capital Industry is moving. A few years of experience in frontline and mid-level Venture Capital positions will create a solid foundation for me to hone and implement my own personal investing philosophy.

And this investing philosophy extends to the way I plan my career too. Whether it is life or a potential startup, every new investment in time and resources should be scrutinized with greater acuity than earlier. After three degrees and eight years of higher education, any further investment should be experiential, efficient and critical. The Kauffman fellowship fulfills all three criteria.

I believe I am going through an exciting phase in my life where my ideas are being honed by experience, and synergized by knowledge. Now I stand poised at the next step towards attainment of my goals – A Kauffman Fellowship. I understand the semiconductor space, have done an enterprise software startup, and did a deep-dive into broadband wireless investments. I have a growing network of entrepreneurs and Venture Capitalists in Silicon Valley and India. But I also understand that domain expertise, operating experience and network alone doesn’t make a good Venture Capitalist.

This summer, I was sitting across the table from Curtis Feeny from Voyager Capital. We were talking about his experiences in Venture Capital. During our conversation, Curtis leaned forward and said something that I will remember throughout my career. “Good Venture Capitalists are good human beings first.” People count, ideas count, the rest follows. If selected, I will bring my knowledge, drive and people-skills to the next class of Kauffman fellows. But more importantly, I will bring respect for entrepreneurship, humility that will fuel my thirst to excel and incredible energy to the program. I am very confident that my experience as a Kauffman fellow will pave the way to realizing my ambitions and look forward to the opportunities it will provide me in the years to come.

Oh Man, Kauffman

2006-11-06T01:41:00.000-05:00

Susan Wu from Charles River Ventures pointed out that I need to talk about the Kauffman Fellowship if I wanted to really mention all avenues to make it in Venture Capital.
Kauffman Fellowship is a program setup to select, train and place the next generation of venture capitalists. Kauffman Fellows are students of the Center for Venture Education, and can be either temporary or permanent full-time associates of the Venture Firm during the time of the Fellowship. As associates, their salary, benefits and expenses are the responsibility of and determined by the firm.
There are two ways to become a Kauffman Fellow:
1. Regular Matching - for people who apply to the program on an individual level (usually MBA students). They are usually no connected to any Venture Capital shop.
2. Affiliate Matching - for people who are affiliated with a VC shop. These are usually folks in non-partner positions with less than three years of current Venture Capital experience. Usually the VC firm sponsors their tuition for this program

Both Regular matching and Affiliate matching has very similar application process. The only difference is that in Affiliate matching you are required to get a recommendation from a firm mentor.
Both of these processes require:
1. A completed online application
2. Painfully procured copies of your transcripts from every school you have attended
3. Three recommendations
4. $250 application fees

All in all, from what I have heard ( since I am not a Kauffman fellow (yet), I can only base my observations on hearsay), it is pretty selective process. Last year's statistics involved something like 500 applications resulting in 40 finalists and maybe only 5 really "matched" people.
The caveat there is that many of the other finalists found jobs in the ensuing months.

The Process:
1. Apply - The first step is to actually apply to the program and get your information through before the deadline (Nov 1 this year)
2. Semi-Finals - If you are one of the lucky 80-100 or so you are selected, then you will go through an interview process with a specially selected panel of VCs. Your performance here will determine whether you go to the next round or not
3. Finals - If you are a finalist, congrats. You have made it to the final round. In this round, you are "matched" with partnering VC firms. Being matched with these firms is pretty much like the usual interview process. If you are matched and have gone through the finals, then you are a Kauffman fellow.

What does this finally boil down to?
A Kauffman fellow gets to work as an associate/principal in a leading VC firm (which he/she is matched to). That person has a firm mentor in the matched VC shop who is responsible for training the fellow. The fellow draws a salary just like any full-time employee but also has to go through the educational component of the fellowship by traveling to various locations for classes at regular intervals.

And Finally
In the end, it is a great way to get in. To maximize your chances, I would advice building up your credentials from the time you step into B-school (or even earlier). The fellowship is competitive but is definitely a relatively fool-proof way of making a dent into this seemingly impregnable industry. I have applied and frankly, I cannot judge my chances.

For better or worse, one thing that I got from it was that, I spent a lot of time thinking about the reasons that I wanted to join this industry. This was important as I wrote my Statement of Purpose. It helped me coagulate a lot of my motivations and allowed me to focus on the real reasons for my ambitions.

All in all, a very useful exercise. In the next post, I will do the unthinkable. I will actually post my Kauffman fellowship Statement of Purpose on this blog. If nothing else, it should give you one perspective on why one is motivated to be in this industry.

NexGen Partner Profile Series: Mamoon Hamid (USVP)

2006-11-01T09:38:00.000-05:00

So today I am going to start a new series on this blog. It will deal with the stories and profiles of people like us, but maybe a little ahead in game. These are MBA students who have graduated recently, and have gone out and carved a name for themselves in the VC world. I think their stories will give us a lot more perspective on what to do in the near term (and what kind of people succeed in this industry) than if I profiled senior partners and legends. The legends will have their own valuable insights but these are people who are young enough to be like us, and have achieved things that are inspiring and encouraging.
So to kick this segment off, I will start by profiling a friend.

Mamoon Hamid (USVP)
Mamoon is probably one of the humblest and most modest guys I have met. We met during my random search for someone to talk to in the Venture Capital world. He not only returned my cold call but also was exceptionally kind to me, and connected me to his mentor in another VC firm. If you want to stay optimistic while doing this crazy search, he is the guy to meet.

Education - Mamoon has a Bachelors in EE and a Masters in Management Science from Stanford. He also has an MBA from HBS
Venture Capital Jobs - Voyager Capital, USVP
Last Job before Venture Capital - Xilinx (Senior Marketing Manager)
Years of Experience - 7
Positioning - Semiconductor, Consumer Internet, Mobile Technology
Out of the blue deed - Started a Pakistani-Indian restaurant in San Francisco. I have had dinner there and it is good

Personal Mantra - Do what you like, do it right and you'll do fine in life

Investing Philosophy -
1. Go in early, support the best people - people who've got the je ne sais quoi and domain expertise. Ideally, these are people you know and trust.
2. Always address a market of consequence ($500m+SAM)
3. Avoid investments that require change in human behavior - whether that’s an engineer, network administrator or plain old consumer. People rarely change (just like in real life) and if they do, it’s over a time period that extends beyond the VC investment time horizon
4. Deal terms (aside from valuation) protect the downside – so if you’re getting bogged down by specific terms, ask yourself whether you should really be making the investment.

The Drift - If someone says, you got to be aggressive to succeed in Venture Capital. Ask him to contact Mamoon.

What about getting that Startup experience?

2006-10-28T03:20:00.000-04:00

One key asset to have to position oneself for Venture Capital is to have startup experience. Learning how to survive and operate in entrepreneurial settings makes for a much more credible VC. To this point, Ashish Chordia (my friend and a second year Wharton student) has written an interesting article on his search for a startup internship for the summer.
Much like me, Ashish spent the last few months before summer looking for that perfect summer internship in a startup. While nothing in life is perfect, he did manage to maximize his time doing something that he really loved and learnt a lot from.
His article should be a great read. Check it out.

Get It Started: How to snag a summer internship with a start-up

And that is NOT Ashish in the picture in that article.
Also, he will be a guest writer on this blog so look out for his experiences in Startup Land! He has an interesting blog going on his time at Wharton at: http://lifeatwharton.blogspot.com/

Learning VC the Hard Way - VCIC Part I

2006-10-25T00:37:00.000-04:00

I have a very close friend called Ashish Chordia, who left Wharton midway to join Wharton-west, and be near Silicon Valley. We both attacked a few competitions last year and won them, one of them being the Venture Capital Investment Competition at Wharton.
Now Ashish has significant entrepreneurial instincts and is destined to be one for better or worse. I really wanted to give VCIC my best shot given my interest in Venture Capital and roped Ashish in. This brings me to the rule no.1 of building teams, always work with people you like to work with. Complementary skills are important but still secondary. In fact, Ashish and me have very similar skills and mindsets. So at this point, I set about thinking about how to build up this team. We added Siddharth Sudhir to the team. Sid is a financial wiz who churns out models by the minute and practically runs a hedge fund out east. Then we got Preet Gona, who is a biotech guy with some Venture Capital experience. And finally, we rounded it off by adding Christine Chan, who has experience as a M&A analyst for Lazard.
So all in all, we were five first years with no pretensions of being able to survive this competition.

Ashish - General Tech (Software)
Christine - M&A
Preet- Biotech
Punit - General Tech (Hardware)
Sid - Hedge fund

All in all, a good solid Venture Capital firm:)
Now, the VCIC at Wharton is structured as a 24 hour contest. And this is how it all panned out:

Friday 5pm - Pick up Business Plans
Sid went and picked up the five business plans. Funnily, for a 24 hour contest, I was not really showing much urgency. I remember having gone to a dinner with an alumni and then ambling back toward's Sid home around 10pm in the night, only to see all the rest four sitting around in various corners reading various business plans. And so it started...

Friday midnight - Analyze the Business Plans
We made a decision pretty quickly to eliminate 3 business plans and pick 2 to concentrate on. In VCIC, one is given a particular fund profile with a particular level of fund divestment along with a time frame. This means that our investment decisions have to be colored with the kind of urgency we have in terms of where we are in the lifecycle of the fund, and how much money we have to still invest.
All of us picked up one business plan based on our core competencies and decided to be the champion for those deals. First, we had to convince ourselves that we liked the plan, and if we did, then we have to convince the team. This worked well because we were hard to please, opiniated MBA students. 2 out of the 5 plans were eliminated pretty quickly by the respective "champions". This approach worked well for us in this part of the competition. However, it proved to be disastrous in the next stage when our decision to invest had to be dependent on not just viability but also the audience. Something I will explain in detail in the next post.

Saturday 3 to 5am - Build basic building blocks for the next day
Once we had eliminated the 3 out of 5 business plans, we divided up into teams. A team of two was responsible for building the basic model to be used to value the companies. The rest started analyzing all the business plans and creating a list of questions to ask the entrepreneurs. Soon, we have a list of about 30 questions or so for each business plan irrespective of whether our guts told us we should invest or not.
In parallel, we built up the model based on our top investment choice and set up the cap tables, ensured that the model was in synch with the pro-forma that we have created based on the financials that the entrepreneur had given us. In addition, we set up sensitivity analyses, created best-case, fair-way and worst case scenarios. All in all, set up stuff so as to minimize our work the next day.
Now armed with the questions and models, we crashed with the alarm set to wake us up in 2-3 hours.

Saturday 8am - Entrepreneurs Presentations
This part of the contest was relatively laidback. We had to sit for about 2 hours listening to all the five entrepreneurs pitch their business plan to us. For most part, this served as sanity check for us. We confirmed and questioned our assumptions on the plan. We also had the champion of each business plan listen very carefully to their corresponding pitch while the rest made notes and cross-checked the diligence questions that we had created the last nite. This session was immensely important because it gave us a sense of how well we had understood the business from the plan that the entrepreneur had given us.

Saturday 10am - Diligence Sessions
This was intense. We have 15 min sessions with each entrepreneur. We had tons of questions to go through and in each session, we had a real Venture Capitalist judge sitting in, taking notes on how well we were performing. This part was incredibly stressful because we had far too many questions, the entrepreneur wanted time to properly explain his/her plan but we just had to get through our questions. Here we stretched the limits of politeness and tried to be as brisk as possible. We hit upon a plan to tackle this. The Champion would start the questioning, then each team member would chime in with their questions, one person in the team (usually the champion of the previous diligence session) was the time keeper and would ensure we stayed on track.
With this plan, off we went. We started and quickly realized that we were incredibly aggressive and bordering on rude. We didnt mean to be this way, but we had so much diligence questions to take care off.
On the positive side, we came off as incredibly prepared and organized. On the negative side, we came off as very rude, aggressive professionals who bordered on being snobbish. This would be a major part of our feedback at the end of the session.

Saturday noon - Lunch and Investment thesis work
From noon - 3pm, we had three hours to come up with a valuation for the deals we wanted to invest in, a investment thesis, a term sheet and a power point presentation. We had to submit this to the judges at 3pm and then present as a team to the venture capitalist judges as if they were the investment committee.
This part of the afternoon was incredibly smooth. We broke off into teams. One team worked on the valuation and one team worked on the presentation. Here is where our composition of the team helped a lot. It was obvious very quickly to all of us, that we all were very good in terms of working together. A few of us were very good at creating effective presentations and analyzing the arguments for and against a business. Two of us were very good with numbers and so the engineer and hedge fund guy were building the term sheet and valuation model. One of us (yours truly) was good at nothing, so he spent time coordinating between everyone else. I would sit with the presentation team and ensure that we were in synch with what the valuation team was thinking. Then I would spend some time with the valuation guys trying to ensure our term sheet made sense. So being the jack of all trades helped. I actually worked in this role in the later stages too and our respective competencies really made for a great team.

Saturday 3pm - Presentations
Every team had to make a 15 min presentation and then a 10 min Q&A session. The presentation went very smoothly because we did not worry too much about the form as much as the content. Our presentation was simple but effective, and we used colors to signify many of the factors that we judged plans against. All in all, our presentation was probably what clinched things. All of us spoke, in tandem and in a way that it was very professional and effective.
The Q&A session bordered on chaos and panic. We were mere first years with not that much knowledge. The judges were seasoned VCs and we were asked some very difficult questions. Somehow, we ended up answering many. There was one hilarious confusion between C-corp and S-Corp to which one of us retorted, "Yes, our lawyer will figure it out. We do not think that mistake is a big deal!" I do not know how we survived that one. But overall we were fine.

Saturday 5pm - We Won
In general, by this time we were incredibly exhausted having barely slept for 24 hours and having gone through one of the most intense experiences at Wharton. Little did we know that once we won, a more intense experience awaited us. We sincerely believed we learnt a lot and that was prize enough.
Ashish and me had won the Wharton tech competition a couple of days ago, and we both believed that our luck had run its course. In fact, when they announced the 3rd prize, I was thinking, "Man, we didn't even come third. This is the pits!". Finally, when they announced the winners (and it was us), you should have seen our faces. We did not know what hit us.

This was probably the first time as a team we believed that we could do this. We had no clue that we were even reasonably good let alone imagine winning. But now, we felt we should give this us best shot. This changed the dynamic of the team dramatically (for the better) and we started preparing earnestly for the regionals. But that is a story for the next post.

Why did I write down this story?
Because I think there are important lessons to be learnt here.
1. It is very important to build a team of people who like each other
2. A good VC team is a team of complementary skills
3. Do not ever disrespect the entrepreneur (We did a bit when we rushed them and we learnt our lesson the hard way)
4. Plan, plan and plan in advance. Our team was effective because we were so good at breaking tasks and working in parallel
5. It does not hurt to take the lead and give away leadership of various chunks of the work to various team members.
We had one person who would quickly break off things and hand it over to various sub-teams. It worked because everyone was so focused on doing well, no one cared if someone became the de-facto team lead.

Its important to learn to lead with respect and care. That probably answers a very rudimentary question in team dynamics.
Q: How does one lead a team of peers in complex situations?
A: Very Carefully

Finally, we were an awesome team. And we became great friends. Those days are remembered fondly everytime we see each other. Everyone had competencies beyond what their resume indicated- Ashish had pure guts, Christine for her amazing organizational ability, Sid for his financial warren-buffetesque brain, Preet for pure confidence in answering any question thrown at him (even if we had no clue what the answer could be!) and me, me for being amazing at nothing yet reasonably good at everything. Wait for the next stage. I will probably write about it after a few other posts.

The search for the one

2006-10-19T01:15:00.000-04:00

During my undergrad engineering days, I was in a batch of 60 students in Electronics Engineering. 54 of them were men and 6 were women. And my class has more women than most other engineering majors at school. Naturally, the supply-demand situation was skewed. It led to significantly low reservation prices for most men, and huge premiums on most women. All my life, I found myself in these situations. BSEE, MSEE, Silicon Valley companies, Wharton, the list goes on:)
So it is natural than I would want a job in Venture Capital. The supply-demand situation is as bad (well, not as bad as in engineering school but pretty bad) but my previous experiences have engendered the skill to survive in highly rationed markets. This continues to stand me in good stead. And will help when (if) I land up on Sand Hill Road because after all, where are the women Venture Capitalists?).
So beyond going to parties (networking), can we hit some online sites and look for VC jobs? What resources are out there to source those few and far between? I will try to list a few for mutual benefit. As usual, if I miss something, leave a comment, email your indignation or come talk to me.
Venture Capital Internship/Job Resources:
1. Doostang - All right, We in UVF passed over this deal an year ago because we were not sure the market needed another professional "Linkedin" clone. The long term viability of this site may be suspect but right now, it has some of the best venture capital jobs out there. Ask someone to invite you in and see for yourselves.
2. LinkedIn - Well, everyone knows what it does. There are some VC jobs posted here also. Though if someone posted out here and you just saw it, you probably already missed the boat. Still just generally from the professional network point of view, this is the best site out there.
3. Glocap - This is a PE/VC recruiting firm and it does a reasonably good job of ensuring its presence and profile in Bschool campuses. It has more PE (obviously) jobs than VC but that's the nature of the beast. They do have a nice job status tracking system. I tend to differentiate between later stage stuff and our typical, crazy early stage stuff by calling the former PE and latter VC. You can call it what you want, this is just nomenclature.
4. PERecruit - This is more EU focused. They come to campuses to interview folks and get a headsup on the applicant pool out there. Most jobs are Europe focused. They are rumored to starting a Mumbai office soon.
5. Pinnacle Group - It is another one of these executive recruiting sites. I like the fact that they are more proactive about creating personal relationships and actually exchange emails with prospectives before the jobs open up, so as to get to know them better. A good place to hit and establish a relationship with.
6. PEWire - PEWire has an annual internship lovefest. They will ask VC firms to send in job reqs for summer internship and then will post them out in a huge list on their newsletter. Keep an eye on this. Its easy to miss as it comes as a part of their daily newsletter, and it can have interesting opportunities.
7. Your Business school Venture Capital Club - Frankly, Wharton's VC club is barely there. We have a huge PE club which funnels the hordes into later stage shops but Venture Capital does not have much following (here or elsewhere). Too much risk appetite required. Having said that, things are improving by the year. Look up your VC club site. Most VCs will post through the management of that club.
8. Sharon Park Starbucks - The Sharon Park starbucks (right next to the safeway and behind Clearstone/Lightspeed and other VC firms) is the place to really sources those jobs. You basically sit there day in and out during your summer, and drink latte after latte. 50% of the guys in navy blue shirts and khakhis are VCs. Just lunge at them and grab their foot. Don't let them go till they offer you a gig at their office. Don't lunge at the ones wearing suits. Those are the entrepreneurs and bankers.
Ok, the last one is just me trying to be funny. Don't try it. But then, maybe you should. Who knows what may work.
It's late. Midterms are over. I am not recruiting courtesy my Venture Capital ambitions. A week of pure unadulterated VC networking:) Life is good. Good nite.

What did I do (and am doing) to position myself?

2006-10-10T01:25:00.000-04:00

So I remember mentioning somewhere that I will list out the things one could do at school to position themselves for a Venture Capital job. Let me list out what I did and we can go into some detail on each. This is in ascending order of importance (in my opinion).

1. Take a VC class - Yeah, you could do that. It may help some. But as I have said before, the amount of process stuff that one needs to learn to do well in Venture Capital can be learnt in a few hours. The rest is (as they say) is experience and intuition. This means you got to have experiential knowledge.

2. Do a Field Application Project - Do a study on an issue of importance to Venture Capitalists as a self-study in school. I did one of these last year with Professor Steve Sammut (on oddly enough, Pharma sector), and it was an awesome experience from the point of interacting with Safeguard Scientific and learning about the business.

3. Do a VC Trek with your fellow students - This is a good one. A first year mentioned this to me recently and I think this is incredibly useful. I would say try to organize a trek if you can, but the next best thing to do is to go on it. One gets to meet a lot of VCs in a very relaxed atmosphere, and it is an easy way to make a few contacts in the industry.

4. Compete in VCIC - The Venture Capital Investment Competition or VCIC as it is known, is the single best, intensive course in Venture Capital one could take. A team of five are given a bunch of business plans. They have three days to diligence, evaluate, grill entrepreneurs and come up with an investment thesis. We won this last year at Wharton and barely lost the 2nd spot in the regionals. All in all, a fantastic experience.

5. Work for a local VC firm - I am an associate for University Venture Fund, which is not really a local VC fund but has enough reach and deal flow to keep me busy and teach me the inner workings of a successful venture fund. Try to get into a local VC firm or your university's Venture fund (if there is one), and this could be the best thing you could do for yourselves beyond landing a summer internship in Venture Capital.

And in the end, spend the rest of the time looking for an internship, networking and reading tech blogs:)
Between all these things, you should have enough on your resume to take a serious stab at a career in Venture Capital. Beyond that, it's fate, timing, luck, whatever you may call it.

What's thy disposition, O' VC God!: Current Trends in Venture Capital

2006-09-26T10:13:00.000-04:00

Disclaimer: I am a student, this is my opinion. If you know better, teach me. Leave a comment or ping me directly.

Understand the industry dynamics to find the job
Like those mythical dragons of China, jobs in Venture Capital seem to be exist but then maybe not. You see people getting hired but you are not sure how because no one knew, no one heard, and yet people are hired. Dragons probably don't exist but Venture Capital jobs do. And they exist in the realm of hearsay. You have to hear about them, they are not posted. Someone speaks, someone listens and in that wondrous journey of words through the ether, jobs are snatched, people are hired and history is made.
Ok, so the first paragraph was a whim of mine. To blend my somewhat childish literary tendencies into a professional blog. Now back to normalcy. Venture Capital positions are available but far and few. The trick is for someone to remember you when an opportunity arises. As discussed earlier, Networking is the key. But it's also important to understand the nature of this industry and where it is going.

State of the Industry
Simply put, there is far too much money in the industry and not that many great deals. The result is Overhang ( a nice, simple explanation of the problem is here courtesy Paul Kedrosky)and loads of good money chasing a few good deals. Most of the returns in the industry are made by the top few firms while the others scamper around for the scraps. That said, there are good VCs everywhere. However, this industry can be a vicious cycle. Past history is the only indicator of future performance. Far too many legends sit around on their past laurels while very capable people struggle to make a name for themselves. You have to be in a great firm to get a hold of the best deals (so that you can make a name for yourselves). You have get a hold of the best deals and display great aptitude in working on them, to get a shot at the best firms. And so the grand vicious circle of Venture Capital is created.

So?
So since there is so much money floating around, there are a bunch of trends:

1. Move towards Emerging Markets - Countries like China and India are seeing a tremendous inflow of VC capital. A lot of firms are looking east to see if they can invest the money they have raised and make some profit. Whether they do so or not, is the topic of another posting. GigaOM has an excellent article on VC investing boom in India. Check it out.

2. Move towards Later Stage deals - Many VC firms are trying to invest in later stage, traditional Private Equity style deals. This, in the case of emerging markets, can be the low hanging fruit and might be a decent way of divesting larger bite sizes and getting the necessary returns. This means competing against hedge funds and PE shops, increased prices and lower returns.

3. Bigger is Better - There are few brand name funds being chased by a horde of LPs, and this is leading to huge amounts of capital in these select funds that are being raised. Small size funds are almost a misnomer. Look at this Quarter: Oak raised 2.56B fund, NEA raised 2.5B and Vantagepoint raised 0.9B (less than its target of 1B).

4. The incredible shrinking machine - Because of a combination of the factors above, the big will become bigger, the rich will become richer and the credible will become, well...more credible. A lot of small players will exit and the number of VC firms will decline dramatically (more so from the bottom).

Ok...so?
So, the jobs will be fewer, people will be more selective about hiring you and most importantly:
you should be more selective about which firm you want to work for!

I will talk a lot more about this and each of the above trends in the coming posts.

Beyond Networking

2006-09-20T22:14:00.000-04:00

Networking is essential to Venture Capital however it can only go so far. It cannot replace the skill set that is need to be a good Venture Capitalist. Now, I will caveat this by saying that I might not necessarily be a good one but I do know (through discussions with VCs of every stripe and shades) what could make an MBA student a good VC.
In my opinion, there are three kinds of skills required (in no particular order).
1. PROCEDURAL KNOWLEDGE
2. VENTURE EXPERTISE
3. EMOTIONAL MATURITY

PROCEDURAL KNOWLEDGE: All the skills that can be learned and form the basic transactional foundations of the day to day activities of a VC. You will do this and need to know this to be a VC. However, this alone does not make you a VC.
a. Venture Capital Theory - An introduction to Venture Capital model of financing and its methodology.
b. Basic Financial theory of Venture Capital - simple to learn, easy to implement. It involves knowledge of things like termsheets, valuation models and methologies, most of it can be learnt from a simple Corp Valuation or a Venture Capital class at school.
c. Legal Aspects of entrepreneurship - Knowledge of legal convenants/terms used in termsheets. Very useful in structuring deals and basic bread-butter stuff for most VCs.

VENTURE EXPERTISE: Builds on the procedural knowledge and is the part which distinguishes a good candidate from a bad one.
a. Technical Expertise - Having technical knowledge in one or more technology sectors is key whether it is semiconductor or biotech, security or wireless. This can be attained through general expertise in a sector or through BS/MS/PhD in it.
b. Domain Expertise - Following up the technical expertise with a genuine interest in the direction of the market is important. It is key to stay abreast of the general industry trends through a combination of blogs, articles and news-wires.
c. Operating Expertise - Having general operating experience in the industry is very useful since it proves that you have the ability to place yourselves in the entrepreneur's shoes and have been exposed to the usual situations that plague tech startups. After all, what advice would you give an entrepreneur if you don't know how it is to be in his/her place?
d. Entrepreneurial Expertise - Even better than just operational expertise. Having experience starting something or working in a startup is one of the best skillsets you can bring to a Venture Capital firm. After all, you know how it is.

EMOTIONAL MATURITY: Builds on knowledge and expertise. You can be the most knowledgeable expert in this world but it is useless if you don't know how to use your skills.
a. Ability to Connect - The nature of a VC job is such that you spend 90% of your time connecting with others. Be they partners, Entrepreneurs, customers, management teams, lawyers or bankers. It is important to be able to connect with a wide variety of people and work with them.
b. Communication Skills - It is important to articulate what your inner self says. You will be wearing many hats at the same time. Interim CEO, board observer, Venture Capitalist and what not. All of these require the knack of switching hats and communicating with a different audience.
c. Empathy - Remember the Entrepreneur? They are the gutsy one. They are taking the risk with her career/ambitions/time/resources to do this. Empathize with them. Its important to do all you can to help them succeed and most importantly, empathize with their situation. A good relationship with your entrepreneur will lead to many more interesting deals/ideas and coupled with expertise, will add credibility to your working style.

At the end of the day, as Curtis Feeny from Voyager Capital told me once, its more important to be a good human being than a great Venture Capitalist.

Did I miss something? Do comment if you think there is something else to add to this list. Next post will deal with what I did through the first year of my school to position myself!

PS: I am not a VC (yet) and neither do I have a VC job (yet). Most of my musings are based on what I learnt over the last year and through my VC friends.
PPS: Everything know or do or have done is because someone in this industry gave me a chance, talked to me or taught me. This should go a long way to prove that "nice VCs" is not a oxymoron:)

How did I Network?

2006-09-04T01:05:00.000-04:00

First of all, the art of good networking involves not considering it as a process but an experience. You have to enjoy meeting people, talking to them about their ambitions and of course, you goals. The aim should be to connect with the person you are talking to and make a friend. Everything else will follow. Meeting people with warmth, with openness to new ideas and people is the best form of networking.
If you find the process of networking cumbersome, then maybe Venture Capital is not for you. The industry is an art form more than a precise science, and it works primarily because it is a collection of tightly-knit, extremely bright people. Every deal that you source, diligence and close might involve phone calls to your friends in the VC firm across the road.
The process of finding a VC job is not too different. It's not about applying for positions in a VC firm, it's about knowing when they appear. When someone comes across an opportunity that might be a fit, that someone has to remember you.
So Networking is important and more important is Networking with genuine sense of openness and fun.
The way I went about the process is not too different from what most of the MBA students do when they look for an internship/full time position.
Step 1: Create a Pitch
Create an effective 1-2 minute pitch on your background, credentials and ambitions. Being very clear about what you want to focus on is important. Ultimately, the question is what do you bring to the table. And this has be answered in a clear and concise manner. I found strong, effective pitches were the best way to get the attention of the person across the table or phone. Also, the people who you are talking are usually pretty busy and are taking time out of the work to lend a helping hand. Speaking clearly and articulating your ambitions unambigiously helps save their time and also helps them help you in the most appropriate way. You also come off as an impressive, motivated individual and that can't hurt!

Step 2: Collate your sources
You have to first of all collect any initial contacts that you might have in VC world or related to Venture Capital.
For us MBA students, these are primarily from the following sources:

1. Friends who are in the VC industry
2. Friends who are entrepreneurs and who have interfaced with VCs at some point in the lifecycle of their startup
3. Your peers at school who might have had VC experience
4. Business school Alumni

Step 3: Get Started
From all this, create a list of initial contacts who you can talk to and start pinging them one by one. Before you speak to them, practise your pitch with a few peers!
The way I have done it till date is by sending them an initial short introductory email with a short bio and a request to meet/talk for a few mins. Obviously, using your contacts to "warm call" people is more effective than "cold calling" them. Having said that, when I started, I did not know that many folks in the VC world and I have been reasonably successful in talking to loads of VCs. The trick is to ensure that you have some valuable to say and you have the confidence that you deserve to be given a chance.
I can say that the people you will end up getting responses from are a self-selected group of VCs who are generally less-stressed, warm human beings (there are exceptions and I have been at the recieving end of those). Trust them, rely on them, talk to them and lay out your ambitions. At the end of each conversation, ask if they could do you a favor by introducing you to someone who was a relevant person to talk to. This is a long shot but you have nothing to lose and you can end up winning a "warm call/referral".
That is the way the network grows.

Finally, as you network will grow, you will learn how to pitch better, you will figure out the VC parlance and know what the trends in the industry are. In a very subtle way, you will become smarter and will understand what this industry is about.
And that is a good point to re-evaluate if you are indeed a good fit for Venture Capital. Thus, networking will help you not only in finding a job but in deciding if you actually do want the job.

Till now, I have been aggregrating my experience in VC recruiting but I am curious about what other's experiences have been? Anything different to say or an experience which does not match what I outlined in this blog? Do comment or ping me.
Next time, I will talk about what else can we do beyond networking to enhance our chances.

The Process

2006-09-04T00:45:00.000-04:00

"The Process". Sounds like a John Grisham novel right?

Anyways, so here is the process:
1. Be self-aware
Know what you bring to the table before you start talking to people.

2. Refine a pitch
When you starting talking to people, you should have a brief/impactful way of introducing yourselves.

3. Know what you want to know
Have an idea of why you are networking. Don't get on to the phone and ask for a job. Try to find out about field, genuinely and sincerely. Jobs come and go, knowledge has to be invited home.

4. Network
Talk to as many VCs as you can and get in front of them with your ambitions in tow.

5. Do a field study in a VC related topic
Try to do a field study in a VC related topic preferably with a VC firm and get a hold on the street lingo in VC land. ("Carry" is not a verb as much as a noun in a VC song and things like that).

6. Network
Refine your idea of what you bring to the table and what kind of VC job you want, and use that to talk to more VCs.

7. Subscribe to tech/VC blogs
Ensure that you are on top of the tech startup world/trends by subscribing to influential, interesting VC/tech blogs.

8. And network a bit more
Keep talking to as many people as you can. Essentially, when the right position comes by, someone should remember you. That is the only way one gets a job in VCland.
(Unless you are Ankur Luthra (Summit Partners) who got his pic in Wired magazine gazing at a wall full of business plans)

How to find out how to find a VC internship

2006-09-04T00:02:00.000-04:00

No. My english isn't that bad. I just thought that it was a funny title for a blog entry.
A geek like me can find 10 girlfriends (at the same time) easier than find a VC internship. Not a great analogy and probably an exaggeration. That said, it is "hard" to find a VC internship.
But hard is relative. Its harder than finding a McKinsey gig or harder than finding your IB gig. But easier than starting a successful startup. The trick is to commit to finding a VC internship. If you are hellbent on finding one, you probably will. The way I structured my search was as follows:

Step 1. Talk to all 2nd years who did anything related to Venture Capital
This is the best resource that us Bschoolers have and we usually dont use it well enough. Find people who previously worked in VC or did something related to that in their summers and talk to them. They have gone through the phase you are going to go through and they know the drift.

Step 2. Find mentors/people who will bat for you (among your peers/2nd years)
I found Arif Janmohamed, Mukul Chawla and Sandeep Lodha. Arif now works at Cisco M&A, Mukul is at Warburg Pincus and Sandeep crossed the border to Bain. But all of these had VC related summers or had recruited at VC firms. I got to know them and they mentored me on everything from my resume to the process to the pitch. They gave me contacts and opportunities. And then coached me on how to make the best of those opportunities.
Find people like that and hang on to them. Its a small world, if you are good, you will cross paths with your peers. So don't be afraid to ask for favors. You will get an opportunity to return it. But most of all, don't waste people's time. If you are not commited or are just testing waters, be upfront about it.

It's kind of like life right? There are usually people who know more about things than you do. Your options are to bumble along and find the path yourselves, or to be open to learning the path from others. Some paths are to be forged individually and some are more apprenticeship-model based. VC is more latter than the former.

Anyways, at the end of these steps, I had a clue as to the process that awaits me.

My first steps into Venture Capital

2006-09-02T19:09:00.000-04:00

So I decided that I will try to figure out where I can make a career in this field. Everywhere I talked to, people tend to be discouraging and do not think, there is a way to get a position in VC directly out of Business school. Maybe there is a grain of truth. There is not much you can contribute to a VC firm if you are just out of school. However, most of us are NOT just out of school.
Most of us have a few years of operating experience and even multiple degrees before we get to Bschool. Having said that, there is a profile which is especially conducive to getting in.
(This does not mean people with different profiles can't get in, this is just more conducive)
1. Have an advanced engineering degree (BS, MS in EE/CS/other engineering disciplines)
2. Have startup experience either through starting something or by working on the groundfloor of one
3. Have operating experience of some significance
4. Be a hustler

I think the last point is probably the most important one. You need to hustle quite a bit. Get in front of incredibly busy people, charm your way to an audience and then make the most ouf it. This is NOT IB/consulting, there is no set path. You should be genuinely interested in meeting other entrepreneurs/VCs because you are interested in getting to know them. And you can't do that unless you are 100% passionate about this technology and startups.
Which brings us to the main criteria to get a VC job:
>>>> YOU HAVE TO REALLY WANT IT
VC jobs are not backups and you will not be very efffective recruiting for IB/Consulting/etc and try to get a VC job in the background. That said, startup jobs/tech operating jobs can be a consequence of looking for a VC job. You start talking to people to find a VC internship and suddenly, you get a great operating internship in a nice tech startup.
That happens more often than we would think.

So having spent enough time talking to 2nd years/VC friends, I decided I was going to go find myself a VC internship. And then process really took off.

Why Venture Capital?

2006-09-02T18:34:00.000-04:00

Why? Indeed I spent quite a bit of my time at school (at the expense of that amazing market strategy class) looking blankly at the professor and thinking about what I wanted to do with my life.
So many avenues were open to me and the economy seems to be doing well too. But what should I be focusing on? This is the question most people are faced with at regular intervals of their lives and I sincerely believe the ones who succeed are those who can answer it in a way that it aligns with their darkest, innermost urges.
What is your elixir?
What makes you happy?
What would be a satisfactory life if I fast-forwarded 40 years and you were in the autumn of your career/life?
Most people try to look at life as a ladder and look at the next few rungs at a time. I do not believe that is a unreasonable strategy. But I like to atleast take a stab at fashioning my life from the big picture down. What is the 30000ft view of what I want to do? And then lets zoom down to see, what the potential next few steps might be.
Unrealistic? I do not know. I am 29 and have worked enough and studied enough to atleast make an attempt to figure my ambitions out.
But I ramble. The question was: Why Venture Capital?
I have a bachelors and MS in Electronics and Telecommunications. I really love technology. No, not just in a geeky sort of way. But I genuinely believe in its power to change our lives. Tell me the last consultant/IB guy who changes the way we did things? But the guy who invented the VoIP protocol, and the guy who created/marketed Skype changed our life immutably. So, post-MBA whatever I do, it has to do with technology. Then these are the options I have:
1. IB with a tech focus
2. Consulting with a tech focus
3. Operating role in a large/midsize tech firm
4. Do a tech startup/ground floor of a early stage tech firm
5. Invest in tech (PE/VC)

Of all these options, 4 and 5 seem most interesting to me. I dont seem to be excited by 1 or 2. And have done enough of 3 in my prior life.
So, it boils down to either investing in technology or starting a company of my own. Both of which are viable, reasonable options and none of which is a backup to the other.

Somewhere in the first couple of months of my MBA, after hearing the experiences of tons of alumni/2nd years, I decided to pursue a career in Venture Capital and/or look for entrepreneurial oppportunities.

Why start this blog?

2006-09-02T17:59:00.000-04:00

This blog started was inspired by a comment from Will Price, who is a principal at Hummer Winbald Venture Partners. Will was probably the last VC I met before I left Bay Area to get back to my 2nd year at Wharton.
I was doing my usual thing, making a contact, getting advice as to what more I should do to position myself for a VC job and out came this nugget of wisdom.
"Write a Blog"
"About what?", I said.
"Something that you are good at related to Venture Capital", came the response.
Now I have an extensive semiconductor background, have been in operating roles in large, small, mid-size firms and have domain experience in Wireless/Software among other things. But so do many others. Why should someone come to my blog to read about my take on things "unless" my take was seriously unique?
Then came a flash. Why not write about this process that I am going through? I have spent days/months/almost an year in this industry, meeting people, cold-calling, warm-calling, mailing, doing what I can to figure out if:
a. This industry is a fit for me
b. If I am a fit for this industry

I have spent countless hours meeting VCs and Entrepreneurs of all shades and stripes. There is something in my experience that would be useful to other aspiring VCs and other professionals who might want to get an insight into this as a career.
And more importantly, what I learnt from my countless encounters.
So thats that. Thanks Will for the idea. By the way, he has an excellent blog going. Check it out.