20VC Tony Conrad on Straddling The Role Of Founder & Investor, What True FounderProduct Fit Looks Like & The Dangers of Party Rounds



In this episode of "20 minutes vc," host Harry Stebbings interviews Tony Conrad, partner at True Ventures and co-founder/CEO of About.me. They discuss the evolving landscape of venture capital, the importance of founder-investor relationships, and the impact of personal dynamics on business success. Conrad emphasizes the value of instinct over thesis-driven investing, focusing on entrepreneurs' passion and vision for their products, as exemplified by his involvement with companies like Blue Bottle Coffee. He also reflects on his dual role as a founder and VC, the challenges of managing deal flow, and the pitfalls of high valuations. Additionally, Conrad shares insights on being an effective board member, stressing the need for empathy and genuine concern for founders' well-being. The conversation also covers the proliferation of capital and its effects on the startup ecosystem. Throughout, Stebbings interjects with product endorsements for Zoom and ViewedIt, suggesting their utility for business communications.

Summary Notes

Introduction to Tony Conrad and True Ventures

  • Harry Stebbings introduces Tony Conrad, partner at True Ventures.
  • True Ventures is an early-stage fund with notable investments in Automatic (WordPress), Fitbit, Blue Bottle Coffee, and Peloton.
  • Tony Conrad is also the co-founder and CEO of About.me, acquired by AOL, and the founder of Sphere, also acquired by AOL.
  • Phil Black from True Ventures facilitated the introduction to Tony Conrad for the podcast episode.

"So joining me in the hot seat today, we have Tony Conrad. Now, Tony is a partner at True Ventures, one of the leading early early stage funds on the west coast, with a portfolio including the likes of Automatic, the makers of WordPress, Fitbit, Blue Bottle Coffee, and recent unicorn peloton."

The quote introduces Tony Conrad and highlights True Ventures' successful investments, establishing the context for the conversation about startups and venture capital.

Harry Stebbings' Use of Zoom and ViewedIt

  • Harry Stebbings discusses his use of Zoom for calls and interviews.
  • Zoom is a video and web conferencing service with a simple user experience and straightforward pricing.
  • ViewedIt is a free video recording tool for personalized communications.
  • ViewedIt offers built-in tracking and immediate playback notifications for video messages.

"My response Zoom, the number one video and web conferencing service providing one consistent enterprise experience that allows you to an array of activities including online meetings, video, webinars, collaboration enabled conference rooms and business im just to name a few."

This quote explains Harry Stebbings' preference for Zoom as a comprehensive video conferencing tool for various business activities.

Tony Conrad's Background and Entry into Venture Capital

  • Tony Conrad moved from Jakarta, Indonesia, to the Bay Area in 1997.
  • He was involved in mergers and acquisitions and corporate development for BSN (group Danone).
  • Tony took a break upon moving and started networking in the tech industry, leading to early investments.

"So I moved here from Jakarta, Indonesia, where I was running mergers and acquisitions and Corp Dev for BSN, which became group Denon, a big CPG firm based out of Paris in France."

The quote provides background information on Tony Conrad's professional experience before entering the venture capital industry.

Evolution of Investment Thesis and Approach

  • Tony Conrad's investment approach has shifted from being market-driven to focusing on entrepreneurs.
  • Initially, he tried to predict market trends and identify smart people with interesting ideas.
  • As he gained experience, he realized the importance of following instincts about entrepreneurs rather than market predictions.

"But as I've evolved and I kind of get to this phase of my career, I realized that I really simply follow my instincts around an entrepreneur. I'm not thesis driven at all."

This quote highlights the evolution of Tony Conrad's investment philosophy, emphasizing the significance of intuition and entrepreneur-focused strategies.

Founder-Market Fit

  • Tony Conrad values understanding how a product will intersect with people.
  • He looks for founders with a clear vision and conviction about their product's impact on consumers.
  • Examples include Blue Bottle Coffee, where the founder's vision extended beyond starting a coffee shop to encompass procurement, roasting, and freshness principles.

"It's about understanding how your product is going to intersect with people. Right? And it's having a vision around that and having conviction around that vision and that vision actually stacking up and feeling rational when they walk you through it."

The quote captures the essence of what Tony Conrad considers important in founder-market fit: a founder's vision and understanding of their product's role in consumers' lives.## Cafe Culture and Entrepreneurial Vision

  • James, the cafe owner, has a distinct vision for his cafe, which includes no Wi-Fi and no plugs, to foster a convivial coffee experience.
  • The cafe encourages customers to enjoy coffee in a social or contemplative environment, rather than as a workspace.
  • James's ethos extends to serving espresso drinks only in ceramic cups to promote on-premise consumption.

...and then he had principles and a vision around what his cafe, how wooden would kind of be in that cafe. So there's no wi-fi, there's no plugs. These are things that counterintuitive, right?

This quote explains James's principles for his cafe, which deliberately go against the grain of typical cafe culture to create a specific atmosphere.

Investor-Founder Dynamics

  • Tony Conrad disagrees with Peter Fenton's view that the best founders make you feel uneasy; instead, Tony looks for a growing comfort with entrepreneurs.
  • Tony values understanding how entrepreneurs think and their personal backgrounds, as it provides context for their business approach.
  • He cites Laura Belazarian, founder of Teamable and former national women's rugby team captain, as an example of how personal context can clarify a founder's business strategy.

No, not at fact. That might work for Peter. And I think each investor, as I've learned, even within our firm, has a different approach.

Tony Conrad expresses his personal approach to investing, which differs from Peter Fenton's and emphasizes a tailored approach within the investment community.

Straddling the Roles of Founder and VC

  • Tony Conrad discusses the challenges and benefits of being both a founder and a venture capitalist.
  • His experience as a founder provides valuable insights into company operations, management, and product development.
  • As a VC, his founder experience gives him credibility with other entrepreneurs and a deeper understanding of their challenges.
  • Tony highlights the importance of leveraging one's network for deal sourcing and staying true to one's circles for effective opportunity filtering.

Yes. So straddling is a bit difficult for those who don't know my background. I'm both an active founder of about me I founded a company called Sphere previously, and I'm also a partner at Trueventures.

This quote outlines Tony Conrad's dual roles and the symbiotic yet distinct demands of being a founder and a VC.

Entrepreneurship as a Contact Sport

  • Tony Conrad describes entrepreneurship as a contact sport that requires active participation and being in the flow of the industry.
  • With the increase in entrepreneurial activity, managing the pipeline of opportunities becomes a challenge.
  • Staying true to one's network and circles is crucial for identifying interesting entrepreneurs and opportunities without overextending.

...entrepreneurship is a contact sport and you have to be out there and in the flow.

Tony Conrad emphasizes the active, hands-on nature of entrepreneurship and the importance of being immersed in the relevant networks and industry circles.## Importance of Community Interaction for Entrepreneurs

  • Entrepreneurs must engage with their community to succeed.
  • Being physically present at events is crucial for networking and growth.
  • A minimum of three nights a week is recommended for young, flexible entrepreneurs.
  • Even established individuals with family obligations should strive to be active in the community.

"If you're single and you've got flexibility, if you're not out there at least a minimum of three nights a week, then you should go do something different."

This quote emphasizes the importance of commitment and presence in the entrepreneurial community, suggesting that success requires significant social engagement.

Balancing Entrepreneurship and Personal Life

  • Entrepreneurship often requires prioritizing business events over personal activities.
  • This dedication can impact personal relationships and social life.
  • Finding a balance or integrating social life with entrepreneurial activities can be a challenge.

"I'd rather go to a founder event than a date, it does not end well."

This quote humorously illustrates the sacrifices entrepreneurs sometimes make in their personal lives for the sake of their business ventures.

Evolution of Capital in Markets

  • The investment landscape has changed with more money entering the ecosystem.
  • The early 2010s saw an increase in both large investments and the institutionalization of angel investing.
  • The amount of early-stage investment has grown significantly since 2009.

"I think we know, but just from the numbers, that's grown 330 now, as opposed."

This quote indicates the substantial growth in early-stage investment opportunities for entrepreneurs.

The Double-Edged Sword of Increased Funding

  • More funding availability allows more ideas to be tested and developed.
  • However, there is a risk of "party rounds" without a strong lead investor.
  • Having an anchor investor is important for guidance and support.

"It's great that more ideas are getting funded."

The quote highlights the positive aspect of increased capital availability, which enables a greater number of ideas to receive the necessary funding to develop.

"I'm not a fan of... party rounds at the beginning."

This quote expresses a concern about the lack of a committed lead investor in early funding rounds, which can leave entrepreneurs without the necessary guidance.

The Role of a Strong Investor

  • A single strong investor can provide stability and guidance to a startup.
  • The relationship between the founder, operating team, and board is crucial.
  • A supportive investor can help navigate challenges and contribute to the company's success.

"It's really being able to have that one person who has alignment with you, that you are their priority, just as you need them to be."

This quote underscores the importance of having an investor who is fully committed and aligned with the entrepreneur's vision and priorities.

Personal Development as a Board Member

  • Learning from failure is a key part of personal growth.
  • Understanding the human element and emotional intelligence is vital.
  • Board members should prioritize the well-being of founders and their teams.

"You often learn through failure."

This quote reflects on the importance of learning from past experiences, especially failures, to improve one's approach and effectiveness as a board member.

"You never asked me how I was doing."

This quote from a founder to a board member highlights the need for personal connection and emotional support in the investor-founder relationship.

"The EQ portion of our business is probably the most important thing that we always have to pay attention to."

This quote emphasizes the significance of emotional intelligence in the business world, especially when it comes to supporting and understanding the personal challenges faced by entrepreneurs.## Importance of Personal Connection in Business

  • Building personal connections goes beyond polite statements; it involves genuine interest in the person's life.
  • Taking time to understand what's happening in someone's life can be crucial at the start of companies for founders.

"It's very different to make a kind of a polite statement versus actually to be interested."

This quote emphasizes the difference between superficial politeness and true interest in someone's well-being, highlighting its importance in building meaningful business relationships.

Quick Fire Round

  • The quick fire round is a segment where short statements prompt immediate responses.
  • The round includes favorite books, mentorship, worst advice in the industry, and investment decisions.

"This should be interesting. I should have a Claxton horn for the 60 seconds."

This quote introduces the quick fire round, suggesting it will be a rapid and engaging part of the interview.

Favorite Book and Leadership

  • Tony Conrad's favorite book is "Shackleton's Journey," which he admires for its story of leadership.

"Oh, Shackleton's journey. I love it. Great story of leadership."

This quote reveals Tony Conrad's appreciation for the book and the leadership lessons it contains.

Mentorship Experience

  • Tony Conrad values the mentorship he receives from his partners, who have a high EQ.
  • His partners help him balance his goal-oriented nature with being human.

"The partnership I have is such a mentorship for me."

This quote highlights the importance of the mentorship experience within Tony Conrad's partnership group.

Worst Industry Advice

  • High valuation is often detrimental advice given to young entrepreneurs.
  • Entrepreneurs and VCs should seek smart valuations to build a solid foundation for companies.

"Go get a high valuation, I think is one of the most detrimental things that happens for these young entrepreneurs."

This quote criticizes the common industry advice to chase high valuations without considering the long-term impact on the company.

Balancing Personal Journey with Investing

  • Tony Conrad's personal journey affects the number of deals and boards he engages with.
  • He focuses on being helpful and may suggest outside board members if more effective.

"Well, it probably means I do less deals for sure. I hand off more stuff."

This quote explains how Tony Conrad's personal journey influences his investment strategy, leading him to be selective and prioritize being helpful.

Board Membership Philosophy

  • Tony Conrad doesn't have a maximum number of boards; he bases his involvement on his ability to be helpful.
  • He remains available for human aspects of mentorship even when not on a board.

"As long as I feel like I'm being helpful, I'll figure out how to be on the board."

This quote outlines Tony Conrad's philosophy on board membership, which is guided by his contribution rather than a set number of positions.

Recent Investment Decision

  • Tony Conrad's recent investment in Milestone is due to the founder, Dave Balter, being a thoughtful entrepreneur.
  • He had previously backed Dave Balter in a successful venture, Smarter, acquired by Pluralsight.

"I backed him at a company called Smarter, which had an excellent outcome."

This quote explains the rationale behind Tony Conrad's recent investment decision, based on past success and the founder's qualities.

Interview Conclusion

  • Tony Conrad expresses relief that the interview, particularly the quick fire round, was enjoyable.
  • Harry Stebbings thanks Tony Conrad and provides information on how to follow him and the show on social media.

"I always get worried about these stumper questions."

This quote reflects Tony Conrad's initial apprehension about the interview's challenging questions, which turned out to be unfounded.

Video and Web Conferencing Tools

  • Zoom is highlighted as the preferred service for online meetings and webinars.
  • Sequoia's partnership and funding in Zoom underscore its value for businesses.

"Zoom really is a must check out for your business."

This quote underscores the recommendation for businesses to consider Zoom for their video and web conferencing needs.

Video Messaging and Tracking

  • Viewed is a free video recording tool that integrates personalized video communications.
  • The tool offers tracking to understand viewer engagement and provides immediate playback notifications.

"Viewdit enables sales professionals, executive leaders and customer support teams to easily record personalized videos."

This quote describes the functionality of Viewed and its role in enhancing personalized communication through video.

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