20VC Dave Morin on Why Building A Fund Is Like A Company, Why Venture Is A Craft & The Journey To Establish Slow Ventures



In this episode of "20 minutes VC," host Harry Stebbings interviews Dave Morin, a former Facebook executive and founder of social network Path, which was acquired by Kakao in 2015. Morin, now a founder and partner at Slow Ventures, discusses his journey from a small-town upbringing to becoming a key player in Silicon Valley. He shares insights into the evolution of Slow Ventures, which began as a personal investment venture and has grown into a network-oriented fund with an emphasis on long-term thinking and personal relationships with entrepreneurs. Morin also touches on the importance of operational expertise, the competitive landscape of early-stage funds, and his passion for media and biotech. He highlights his investment in Pearlstein Lab, reflecting his interest in the convergence of biotech and software, and his belief in the potential to find cures for rare diseases.

Summary Notes

Introduction to the Podcast Episode

  • Harry Stebbings is the host of the 20 minutes VC podcast.
  • The podcast features power couples in tech, with Dave and Britt Morin as guests for two episodes.
  • Dave Morin is a product visionary known for his work at Facebook and as the founder of Path, which was acquired by Kakao.
  • Dave is also the founder and partner at Slow Ventures, which has invested in companies like Slack, Pinterest, and Evernote.
  • Harry thanks Sam Lessin for the introduction to Dave and Kevin Rose for an influential interview.
  • Cooley is mentioned as a global law firm that supports VC funds and startups.
  • Eve is promoted as the UK's number one direct-to-consumer mattress company.

Hello and welcome back to the 20 minutes VC with your host Harry Stebings.

This quote introduces the podcast and the host, Harry Stebbings.

And we have a very special feature for the show today and for Friday.

Harry teases the special feature of the podcast, highlighting the theme of power couples in tech.

Dave really is a product visionary, having been pivotal to the growth and success of Facebook's platform and connect.

Harry provides background on Dave Morin's career achievements, emphasizing his influence in the tech industry.

Dave Morin's Journey to Venture Capital

  • Dave Morin started Slow Ventures while still at Facebook in late 2009.
  • His motivation was to give back to the Silicon Valley community that supported him.
  • He wanted to learn the craft of investing by putting his own money to work.
  • Facebook allowed him to start angel investing, which led to the creation of Slow Ventures.

Yeah, I started slow in late 2009, actually, while I was still at Facebook.

Dave explains the origins of Slow Ventures and his simultaneous involvement with Facebook.

The big reason was that I felt this great responsibility to give back to the community that's given me so much in Silicon Valley.

Dave shares his motivation for starting Slow Ventures, which is rooted in gratitude and giving back to the community.

I was spending a lot of my time helping people, but I wasn't putting my own money to work.

Dave identifies a gap in his contributions to the startup ecosystem, which he sought to address through angel investing.

The Philosophy Behind Slow Ventures

  • Slow Ventures was named to reflect the craft of venture investing and the importance of learning over time.
  • Dave acknowledges his initial inexperience and desire to develop skills in venture capital.
  • The first two funds of Slow Ventures were each only a million dollars, which allowed for learning and pattern matching.
  • Dave emphasizes the importance of taking it slow in venture capital and entrepreneurship.

I named it slow ventures because it's a craft and it's something I feel like that you have to get good at over time.

Dave explains the reasoning behind the name Slow Ventures and the learning journey in venture capital.

It's easy to get over your skis. So I think that that's like my opinion.

Dave offers advice on the importance of pacing oneself in venture capital and entrepreneurship to avoid taking on too much too quickly.

Transition from Entrepreneur to Venture Capitalist

  • Dave has been recruited by various VC funds but identifies as an entrepreneur at heart.
  • He believes that entrepreneurialism is innate and can be integrated into venture capital.
  • Despite considering joining established funds, Dave's entrepreneurial spirit keeps him on his own path.

I've been recruited by every fund... But at the end of the day, I'm an entrepreneur.

Dave discusses his recruitment experiences with VC funds and reaffirms his identity as an entrepreneur.

If you're an entrepreneur, you're an entrepreneur. It's just innate.

Dave speaks to the inherent nature of being an entrepreneur and how it influences his approach to venture capital.

Entrepreneurial DNA

  • Entrepreneurial individuals possess a distinct internal drive to create and develop their own ventures.
  • Watching the growth of a project from inception to maturity is a fundamental part of their nature.

"It's just like super clear when you have that dna, you're always going to want to do your own thing. You want to plant the seed and watch the tree grow and see where it goes. And it's just your dna."

This quote emphasizes the inherent desire of entrepreneurs to initiate and nurture their own projects, likening it to a natural part of their being.

Early Entrepreneurial Journey at Facebook and Slow Ventures

  • Dave Morin's experience at Facebook and Apple contradicted the media portrayal of quick startup success.
  • Building Facebook was a lengthy and challenging process, involving significant time, energy, and capital.
  • Slow Ventures was named to reflect the long, hard journey of building value and to establish deep personal relationships with entrepreneurs.
  • The slow food movement, emphasizing sustainable and organic approaches, and the value of time spent in personal interactions, inspired the philosophy behind Slow Ventures.

"My experience at Facebook didn't reflect that. It took a huge amount of time and a lot of energy and a lot of ups and downs and a lot of capital to build Facebook into what it was at that point, which is 2009."

Dave Morin contrasts his experience at Facebook with the unrealistic expectations set by the media, highlighting the true effort and resources required to build a successful company.

Cultural Differences in Work and Relationships

  • Dave Morin appreciates the European approach to work-life balance and personal relationships.
  • He hopes for an evolution in American culture to value more personal interaction and less transactional relationships.

"I think that America is a young country, the child of the world. At some point, our culture will upgrade and we'll learn that lesson and take more time to spend more time with each other in person."

This quote reflects Dave Morin's view on the immaturity of American culture in terms of work-life balance and his optimism for cultural growth towards valuing personal time and relationships.

Institutionalizing Slow Ventures and Fund Growth

  • Slow Ventures started informally with Dave Morin and close friends, including Dustin Moskovitz, who encouraged the formalization of the fund.
  • The team had diverse talents and experiences from their time at Facebook, which were seen as valuable for advising other companies.
  • The transition to a traditional fund structure began in 2015, with Kevin Colleran becoming the managing partner and the creation of a larger $65 million fund.

"It really started out as me and a few of my close friends... He was the one that pushed me to think about beginning to institutionalize it."

Dave Morin explains the origins of Slow Ventures as an informal group of friends and credits Dustin Moskovitz for inspiring the move towards a formal fund structure.

Investment Decision-Making and Fiduciary Responsibility

  • Scaling Slow Ventures necessitated new processes for decision-making and partner communication.
  • A documentation process was developed for investments to provide context and essential information to partners.
  • A new diligence process was established to align with the values of Slow Ventures and fulfill the fiduciary responsibility to the LPs.

"Well, I think that just like scaling up any company, you have to put in place new processes in terms of decision making."

This quote indicates that as Slow Ventures grew, it was necessary to implement structured processes to manage decision-making effectively, similar to scaling any business.

Building and Scaling Partnerships

  • Partnerships in business are likened to a marriage, requiring honest, open communication and a collective focus.
  • The process of scaling involves developing structures for communication and building out operations and infrastructure.
  • In partnerships, it's important to manage a "multi-headed beast" because of the collective nature of decision-making.

"It requires really honest and open communication, and an eye towards the collective, rather than a single person, benevolent dictatorship."

This quote emphasizes the importance of transparency and collective decision-making in partnerships, which is different from a single-person-led organization.

Competitive Environment in Venture Capital

  • Slow Ventures differentiates itself by thinking of venture capital as a network, leveraging their social networking background.
  • The firm focuses on building personal relationships and a self-sustaining network to support entrepreneurs.
  • Operational expertise is valuable but not the sole value proposition; the emphasis is on long-term thinking and network building.

"We think of slow, not as venture capital, but as I always call it, a venture know, we're network thinkers."

Dave Morin highlights the philosophy of Slow Ventures, which prioritizes network building and long-term thinking over traditional venture capital models.

Investment Strategy and Ownership

  • As Slow Ventures grows, ownership stake and valuation in portfolio companies become more critical.
  • The fund aims for a moderate ownership percentage, balancing between too many small investments and seeking substantial control.
  • The strategy involves investing early and leveraging the network to gain access to promising companies without necessarily taking board seats.

"We think we can create performance at the two to 5% level of ownership. Do that across many companies, rather than needing to just be at the 20 30% your traditional fund might target, along with taking a board seat."

Dave Morin explains Slow Ventures' investment strategy, which focuses on achieving performance with a smaller ownership stake and without the need for board representation, which differs from traditional funds.

Evolution of Digital Media

  • Dave Morin expresses a strong passion for the future of media, particularly digital media.
  • He sees traditional media companies as having the potential to transform their communities from one-to-many communication models to interconnected networks.
  • The focus is on enabling communities to contribute, connect, and collaborate.

"Up until this point, most of those media companies have been talking in a one to many kind of way with their community, rather than trying to generate and take their community and connect it to itself and enable people to contribute and meet each other, connect to each other."

This quote reflects Dave Morin's vision for traditional media companies to evolve by fostering more interactive and engaged communities through digital platforms.

Building Community in Media

  • Dave Morin has been involved in transforming Dwell, a company focused on design and architecture, into a community.
  • The goal was to create a social experience around the shared interest in modern architecture and design.
  • The digital transformation involved investment, restructuring the company, and launching a social networking app that caters to the specific interests of the community.

"We've created an entire social experience that I call an interest network, really. It's a social networking system, but it's really optimized around this singular interest and this singular passion that people have for design, architecture and modernism."

Dave Morin describes the creation of a social networking experience tailored to the community of design and architecture enthusiasts, which exemplifies the potential for media companies to build engaged digital communities around specific interests.

Favorite Book: The Alchemist

  • "The Alchemist" is considered a timeless classic and remains a bestseller.
  • It's a story about life's journey, mindfulness, and finding joy in the process rather than the destination.
  • The book serves as a reminder of a simple yet often forgotten lesson about life's purpose.
  • It offers enduring value and insights, making it a book that can be revisited throughout one's life.

"I think it's a wonderful. It's one of the great books of all time. I think it's still in the top 50 best selling books. It's a story of discovery and life is really about the journey and being mindful and happy in the journey rather than the destination."

This quote emphasizes the enduring popularity of "The Alchemist" and its core message of valuing the journey of life over the destination.

Mentorship: James Higa

  • James Higa, who worked closely with Steve Jobs, is a significant mentor to Dave Morin.
  • The mentorship began due to the quality of work at Path, which James Higa admired.
  • The relationship has lasted over five years, highlighting the importance and impact of mentorship in personal and professional development.

"James Higa, who worked for Steve Jobs for 30 years. It came about really because of the quality of the work that we did at path."

This quote explains how the mentorship between Dave Morin and James Higa began, highlighting the role of work quality in forming meaningful professional relationships.

Parenthood as an "Operating System Upgrade"

  • Having children is likened to an irreversible and transformative upgrade to one's operating system.
  • Parenthood offers a new perspective on societal structures, laws, and daily life intricacies.
  • It is described as an experience that grounds individuals and provides clarity and meaning to life.

"I think having kids is an operating system upgrade... It really is an operating system upgrade. It gives you an understanding of the world... It's the point of everything."

This quote conveys the profound impact of becoming a parent on one's worldview and the deep emotional connection it establishes.

Favorite Blog or Newsletter

  • Tim Ferriss's podcast is a favorite listen for its content and insights.
  • The Information and Techmeme are preferred for tech news.
  • Uncrate is also among the favored reads.

"I really love Tim Ferriss's podcast. I think that's probably an obvious one. I love the information. I'm a big fan of techme for tech news, and I really love uncrate."

This quote reveals personal preferences for staying informed and entertained, highlighting the value placed on quality content across different media.

Investment Focus: Biotech

  • Dave Morin's current focus is on biotech, which he views as the beginning of a transformative 30-year journey.
  • His investment in Pearlstein Lab, which uses software and CRISPR technology to find cures for rare diseases, reflects his belief in the potential of biotech.
  • There is optimism about finding cures for challenging diseases through the intersection of biology and software.

"I'm really inspired by everything going on at the intersection of bio and software and so I really think that we're at the beginning of a 30 year journey that's similar to the personal computer that is going to be based on genomics, technology and software."

This quote highlights the potential of biotech as a revolutionary field, drawing a parallel to the impact of personal computing, and underscores the investment in Pearlstein Lab as a representation of this belief.

Acknowledgments and Networking

  • Gratitude is expressed for the opportunity to share insights on the show.
  • Connections in the tech industry are acknowledged, including the introduction by Sam Lessin.
  • The importance of community support and engagement is emphasized.

"I'm grateful to you too, Harry. Keep doing what you're doing. I think that it's really wonderful and I wish you the best of luck and happiness."

The quote conveys appreciation for the platform provided by the show and a positive wish for the host's continued success.

  • Cooley, a global law firm, is recognized for its extensive work with startups and venture capital funds.
  • The firm's history of forming venture funds and supporting the VC ecosystem is highlighted.
  • Cooley's expertise covers the entire lifecycle of a fund, from formation to investments and operational issues.

"Since forming the first venture fund in Silicon Valley, Cooley have formed more venture capital funds than any other law firm in the world."

This quote underscores Cooley's significant role and expertise in the venture capital sector, emphasizing its history and the breadth of services offered to clients.

The Importance of Sleep and Consumer Products

  • Eve, a UK-based mattress company, is praised for its direct-to-consumer approach and cost savings.
  • The company's confidence is demonstrated by offering customers a 100-night trial.
  • The discussion includes a promotional offer for listeners, illustrating marketing strategies for consumer products.

"Eve is the UK's number one direct to consumer mattress company because they don't sell through high street stores."

This quote highlights the business model of Eve, emphasizing its success as a direct-to-consumer brand and its customer-centric trial policy.

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