Venture into Venture Capital with Venky Ganesan

[00:00:00] Hey everyone. Uh, I'm Luke Reiser and today's one of our regular fireside chat events. Hosted by Abnormal Business School.

Luke: Uh, Just to give some brief context. Abnormal Business School is a series of programs within the company designed to motivate, educate, and inspire the next generation of business leaders here at abnormal. And our fireside chat series is a recurring series of guest speakers who invite to come and share their knowledge about entrepreneurship and leadership in enterprise software.

And it consists of a conversation with our guests in our host, followed by an audience Q and a. So please save any questions for the end and you'll be able to submit those via slack. Uh, for today's event, I'm extremely excited to introduce our guests. Uh, Venky is a partner at Menlo partners and also an admirable security board member.

And before his investment into abnormal, thank you sled a ton of extremely successful investments in the likes of [00:01:00] Palo Alto networks, Upwork and Redfin, among many others. And, uh, prior to getting into venture capital, he founded Trigo technologies, which was acquired by IBM and has worked for some really legendary business giants like Microsoft and McKinsey.

So without further ado, let's jump into today's fireside chat, hosted by, uh, our very own CEO and founder, Evan Reiser. So Evan, why don't you take us into the, uh, conversation portion of today's event? 

Evan: Thank you again, that sounded very formal. So you use that you set a high bar for, for me and Venky. Um, well, Venky, I mean, first of all, thank you so much taking the time to speak with the team.

Um, I've learned a lot from you in the, you know, year we've been working together and excited for you to share some of your wisdom and advice to the rest of the team. Um, maybe just for, I know, you know, we work together pretty closely, but, um, you know, I thought maybe just to kind of start off, if you could share a little bit about like, you know, what do you do, right?

Like, what is it, what does it venture capitalists? You know, who do you work with? How do you engage with [00:02:00] companies, right. As a, as a board member, just maybe for some folks are less familiar with kind of, you know, venture capital, be great to you to kind start there and just, um, you know, uh, share more about, you know, what, what do you do on kind of the average week?

Venky: It's a great question. Evan, if you ask my wife, she says, all I do is, you know, sit in meetings, drink coffee, and occasionally, you know, uh, speak. And, and, and so I think in the grand scheme of. Part of what's exciting for me, why I choose to be a venture capitalist? Is that when we do this, right, and I'm not saying you always do it right.

And we probably, we do this. Right. And we are able to connect capital to amazing entrepreneurs and help build companies that are transformative. And again, examples of stuff. But I think about what Menlo has done, right? Right. We incubated a company called Giliad sciences in offices. Uh, 40 years ago, 1991.

Uh, because one of my partners came after his winter break and found that there was no antivirals, so only [00:03:00] antibiotics. And so when he had the flu, does nothing anyone could do other than say, stay home and get dressed. And that was the basis was starting the company. Now I bring that up again. That's not just a financial success because it saves a hundred thousand lives, literally a hundred thousand lives every year.

It's a company that came up with a cure. It builds the field of field of antivirals, cures, HIV, right? The only way to cure HIV is that Gilliad rods. And actually for a long time had the only kind of therapeutic remnant severe for COVID. Uh, I say that because that's like the ultimate example of, Hey, can we do something which creates a great company, creates jobs, creates wealth, but also fundamentally changes humankind.

And that's a bot I'm looking for by abnormal. So it's not just enough to be, as you have said, a hundred billion dollar company, but you also got like change people. 

Evan: Well, the good news we have the opportunity to vote, to do both right. Both, uh, cranberry valuable business to, um, you know, for, for all of us, right?

Including, you know, your metals investors, which [00:04:00] are hospitals and down, you know, university endowments, things like that. Um, but also have a big impact on the world. 

Venky: Um, and then just, just follow up on that. I mean, like, I talk about what men, but like, if you look across, have a life today and look at all the companies, venture capitalists stash, right?

Uh, the top five companies on the NASDAQ, Microsoft, Amazon, Google, Facebook, they all are venture backed companies, Netflix, Tesla, and Tibet. So venture capital has done a great job in those cases, but I don't want to sugar coat it. We also have lots of things we need to do. Right. And we have this, I can go down a list of things, but when we do it right, that's what.

Evan: And Becky, you talk a little bit about just like, you know, what is the, you know, what is the role of a board member, right. And how do you, you know, um, well, many people may not know is like, you know, venture capital a lot more than just like writing a big check. Although, you know, you guys do that very well, but like, you know, what does the role of the board member and how do you really kind partner with, you know, [00:05:00] uh, founders and companies, right.

Executives to help build some of these companies. 

Venky: Yeah. So, so the first rule of the board members of juvenile hall, it's sort of like the Hippocratic oath first do no harm to the patient. Um, and then, and that's a low bar. I mean, if that's the only bar you're looking for, then that is not what, uh, taking venture capital past the past, the fact of do no harm is can you really help the company?

And the three ways in which I think board members can help the company, right? One way is can they be a strategic thought partner for the management team because they get to see a large number of companies that can they help in thinking about what are the big strategic issues, right. The second way they can help us.

They can help in recruiting. Can they help you find talent, convince other great people to join the company, help you think about bringing that talent. So it'd be, they can help. Isn't helping you think about your big financing decisions. When do you raise your next round? Ben, do you go public? If you were to buy some company, when would that [00:06:00] be?

Those are the three, I think good places. And I guess the fourth one I'd say is like introduce you to customers. And those are the places in which I think venture capitalists can add a lot of bathroom if they're doing anything. Other than that, they had the wrong place at somebody, the wrong place, and the conversation needs to be had because being a board member is about making sure, you know, your boundaries and helping on the right side of the ball.

Evan: Um, so for some of those you don't know, and Becky I'm going to say is gonna know you're a very humble person. Right. But, uh, you Menlo is one of the top, right. You know, venture capital firms in the world. And I have to imagine you guys probably, you know, you guys come across, you know, 10,000 companies a year, right.

Maybe you meet with a thousand companies or some subset of that. And they invest in a very small number. Right. Probably like 10 or so. And so part of the role in venture capital is to try to identify, what's kind of like the next big thing before. It's a thing, right? Whether that's a, you know, uh, from a company value perspective, from a proper perspective from a, I don't know, team or culture perspective.

Um, so I guess when you're looking at, you know, when you're trying to identify, [00:07:00] right, you know, the one out of a thousand companies, that the ones for you to invest your time, money, energy reputation, and there were some of the characteristics you look for in kind great. 

Venky: Yeah. I mean, so it does depend a little bit about the stage.

So very early, like we led the series B, so Menlo usually does seed series a and series B, right? I think in the seed or series a you're very focused on the market and the team because lots of times that does not get product. So when I say market it's like, what is the problem to be solved? Why is this an important and urgent problem?

And is this problem getting bigger over time? And that's literally the way I say, what is the problem that we solve? Is it an important problem? Because it was an important problem. People will pay for it. Is it an urgent problem? Because if it's not urgent, somebody else will have time to solve it. So, so the best problems are something that's both important, urgent.

Right? And is this problem going to get big, go with time, like as we go across time, is this problem [00:08:00] going to get bigger? So that's the maybe think about the market and then when it comes to the team, I think you'll really look and say, okay, What does the product found the fit? Why is, you know, some explain people in the world, why is this person one of the top 10 people in the world to go after?

What is, what is it about this plus as background or knowledge or insight that makes them the right fit for this company, right? That's, that's what I call product part of it. And then you're looking for, I call it energy intelligence and integrity. The last one is the most important, but if you don't have integrity and you have energy and intelligence, you're screwed as an investor, but if you idly get all three and their product found a fit, then I think that feels that's the team piece.

You are now in a slightly more mature company. In addition to marketing team, lots of things about. And then all these stages, you may not have product, but exciting moments. You say the product and the product tells you a lot, right? How the product is built, how much detail is put in. And to me, [00:09:00] like my favorite example is like, you know, I think Steve jobs said like, you know what, you're painting the fence.

A lot of people do a good job painting the front of the fence, but do they paint the back of the fence? And I think the best products of one bad people care about all the details, including the details. I may never get noticed by somebody. And one of my favorite examples of that is like, whenever you get a phone call, when, when you first bought the iPhone and you listen to music, you got a phone call.

Um, the music won't just stop. It'll like degrade slowly, like, like slowly go down. So some engineer somewhere, spend time to say, you know what? And the phone call comes. We don't want to, just to be an abrupt ending. We want to slowly lower it. So it feels like a graceful transition. No, it's not a feature anybody's going to talk about.

It's not a feature you're going to buy new ones, but you can tell the detail that went into the product. And so in my experience, the best companies have people who perseverate over every detail of the product and make it just even if nobody else notices as they care enough about it, that it [00:10:00] just, it just stands out.

Sorry, longer than answer. No. 

Evan: That's great. Um, so maybe just, you know, um, switching gears a little bit, but I think this is adjacent right there there's many people at abnormal that have joined abnormal, right. To really kind of learn and grow as much as possible to tee them up for the next thing. Right.

And for many people that weren't, 

Venky: and if all of you in a few years from now, and he's starting a company called me because of that, that's really, we really want to create the next generation of amazing founders, that alcohol. 

Evan: That's right. And you know, many people writing, I saw Nicole has put something in chat.

She's an example of this, right? When Nicole oughta call you out of here. Right. But like when Nicole, when Nicole is thing about joining, she said, Hey, I want to like, go start my own company one day. Right. And I want to make sure I'm really kind of making the most of my time and I'm normal. So I kind of learning grow and ultimately set myself up for success.

And I think many people here, you know, want to, you know, maybe they want to be an entrepreneur. Maybe they want to be a company executive. Right. They walk on, move into a more senior role and they want to go into management. Um, you know, uh, love to [00:11:00] talk more broadly about co all those groups, maybe for the first group.

Right. You know, for the people that are aspiring, you know, founders and entrepreneurs, right. The people are gonna be calling you up and, you know, two or three years, hopefully three years, um, right. Saying, Hey, thank you. Like I I'm, uh, you know, I want to pitch you on like my new idea. I want my lesson and best, like, can you talk a little bit about, um, especially given your, your experience with seeing, you know, thousands of companies and entrepreneurs.

What are some of the qualities you look for? Right. And kind of like the next, you know, like in a really, really great first-time entrepreneur. 

Venky: Yeah. So, so, you know, the framework I think about it and by the way, a little bit about the framework I even thought about when I started my own career out of it, I mean, look went through my background, probably the most glorified way than it actually is, but like what the reality is, like when I was out of college, I did computer science at Caltech and I did.

And when I was graduating, uh, this was a long time ago, but 96. And so, uh, I was really thinking between, uh, joining a financial quantitative trading firm called credit. So it's financial products. They actually do [00:12:00] tourist trading. They were the top third is creating shop, uh, in, uh, in, in the, in the country at that point.

And so. I don't know immigrant from India. I have never seen anybody in my life. They gave me me. I had, I mean, sorry, I had the highest off the main, uh, Caltech BSS fee. I got a $250,000 offer as a, as a senior. And, and I was the, but the faculty is going to be a, to illustrator in New York. And the alternative was to go to McKinsey, which did not pay.

We probably paid less than half. And it was a really tough decision because, you know, I have college loans and not come from money. So I was like, how do I think about this? And I went to talk to a couple of people who were my mentors and I re distributed. I said, listen, when you're starting your career, you want to optimize the long run because compounding will help you write very early on.

Compounding is like the. One of the world. And the amazing thing about compounding is that if you can pick the right things and be patient, it was in your favor. And the compounding thing, my mentors to me, it's like [00:13:00] watermelon 10 years from now. It's not your first job and how much it mean is who are you working for?

What are you learning from? And are you in a place where you can learn world-class? And so that convinced me to go and join McKinsey. And when I look at my career trajectory and what I learned at McKinsey is a great place learn what excellence is. I was just surrounded by exceptional people and because of who I was surrounded with, but, you know, um, to those from me was a woman named Cheryl Sandberg.

She did. Okay. I think. And then, and then when I went to, when I went to South Africa, my office next meeting was a rollout Bota. Who's also done. Okay. Who ended up actually, when I became to venture capital, ended up introducing me to a company called Plaxo and then to a company called Peloton efforts. I bring this up because.

Choosing to be in a place where they're exceptional people and understanding excellence, is that how you build compounding over the long periods of time. And so while that decision that [00:14:00] I made in 96 to sort of pivot towards McKinsey, which was really focused on finding people and excellence to me has just compounded in a way different way than sort of going to credit Swiss financial products.

And to me, that's why I say to anyone starting the career, I say go to the best place you can because you want to learn. And if you look at what makes Silicon valley exceptional is that when people end up in those places, they learn and see what excellent. And because they've seen it and they've connected with a bunch of folks who are like them.

Those tend to be your co-founders. Those tend to be your first employee. And those tend to be the people you learn from, and then eventually recruit. So to me, that's what I've always felt the best way to optimize invest in yourself. The way you invest in yourself is putting yourself in a place. I can see excellence with people who can learn from and people who are going to be incredible network builders for you for the future.

Evan: And again, I apologize if this ends up, you know, producing a, [00:15:00] uh, repetitive response, but, uh, maybe it's kind of applying that to, you know, the, the team at a normal, right. Like, you know, uh, what would be your advice about how, you know, how should people be thinking about. Uh, like, I guess what, what, what could be able to do to really kind of accelerate, you know, their career, career directory while working at abnormal to tee him up for the next thing and like, you know, what, like what specifically, like, do you recommend, it sounds like one thing is really investing in kind of the network.

Right. And making sure you're, you're kind of, you know, meeting, you know, people will be your future colleagues or peers or mentors. Like what else would you suggest to the average person that's trying to really invest? 

Venky: Yeah. Well, first thing let's get the obvious out of the way, right? Like, look abnormal is a rocket ship.

There's just no question about it. We track across all companies, campuses, the fastest growing company in the Menlo portfolio period. And we have some good companies, so it's a copy of group and it's probably the fastest growing company in cybersecurity. We have every investor now, 41 years. Right. And we track things like ARR growth, logo, growth, net revenue, retention growth.

So, so the first thing is by being here, [00:16:00] you are getting an incredibly, you're getting a seat on a rocket ship. Right. And you're getting to see how something takes off that's. Most people don't get that chance. So in between choosing value, first thing is you gotta be on the rocket ship. It doesn't really matter which seat you're on, because if you're on the rocket ship, you're going to get an incredible view.

And most people never get to sit on a rocket ship. So that, that in itself is a huge advantage. Now that you have the rocket ship learn as much as you can and learn as much as you can by taking responsibility better of a possible to me, the big difference between exceptional people and just, you know, good people.

It's like who takes responsibility. Who's willing to sign up to take more. And who puts their hands up and things go wrong. Right? A good test is all this to say, like, when things go wrong, who's willing to take responsibility for it. Most people don't want to. And if you can take responsibility, this is an opportunity for you not only to be in the rocket ship, but into your way to the front of the rocket ship.

The view is always better than the front. And so the more [00:17:00] you can get the front and be on the rocket ship, these are the things that, so if I am an abnormal right now, I am trying to learn as much as I can put myself in a place where I can do what I am doing really well, connecting with people and understanding all elements of the business, because one of the things I see with.

They knew their piece really well, but to really build something, you need to have exposure across the entire value chain all the way from ideation to productization, to how do you go to market? How do you market it? And, and how do you see? Because a lot of people have not seen that growth, right? And part of what you're going to have as you, you have this incredible, let's say you're here for four years.

In the four years, you're going to see the kind of scaling that most people will never see in their lifetime. Now that is an incredible advantage because when you go and start your own company, you now have pattern recognition to see, am I scaling the right bait? What makes sense at a millionaire or at a 10 million era, a hundred millionaire and a billionaire era.

And in four [00:18:00] years, people are going to see that, that whole journey at abnormal. And that's the advantage of being in a place, right? And we feel that that's, those learnings can be compounded over that entire. 

Evan: If I can just kind of go back to the earlier question, right? Like there's someone at this company, right.

Um, maybe multiple people, right. Then I'd be kind pitching you as a venture capitalist or they're going to be, you know, um, trying to get an executive role at one of your portfolio companies. Um, I know that like, you know, when, when we've kind of talked about, you know, executive hiring, even when you were interviewing me, right.

Um, a lot of things, it sounds like you look at our kind of like, you know, what, what have, or how people kind of really stepped up taking more responsibility or they really kind of demonstrate their own credibility. So I guess, like what advice would you have for again, the future founders, entrepreneurs, executives at the company today about, you know, what's the story, you know, you want to hear from them right.

About kind of, um, you know, how they've really accelerated their career. Like, you know, what is, what's kind of that perfect, you know, career narrative, right? Or how do people demonstrate, right. Some of their leadership 

Venky: [00:19:00] capabilities. Yeah. And I think like the two, two sets of like, Paradigm, right? Like when you look at people there, the people who, what I call who have high slope, which is like the growing very fast, they're constantly learning.

And then there are what I call intercept folks and intercept are like people who have very high degree of knowledge, but are staying flat. Now in the early days, the person who's got a high degree of knowledge has an advantage because they have a high degree of knowledge. The person is starting to slope is starting from a place, much lower down, but they're growing really fast.

And so to me, an opportunity in a place like I'm not as to learn how do you, how to grow really fast. So I'm looking for someone who's shown. They can come in, take responsibility, like at the end of the day, In whatever function they have, have the comment, have they owned that function? Do they know exactly what it takes to be world-class in the function of what they're doing, right?

And then [00:20:00] how they scaled because world-class in a function is different at different stages of the company. And so I, Leon, come into someone said, I know what it means to be world-class in a particular function I've learned now to actually see how to grow as a company has grown to continue to be world-class as the company has grown.

And, and if you see someone who can scale the role and build it in a really fashion Weinman, that school, that to me, like that's the golden experience that that's why. Someone at Google right now, not as interesting as someone at Google who was that 2000 to 2004 and saw hypergrowth. And so someone is snowflake right now, not as interesting.

The . So people have experienced, hyper-growth stayed in seeing that growth executed really well. They are the most valuable assets in venture capital and th th that's golden and they are the opportunities they have as boundless. Right? And so to me, [00:21:00] if you are yet, um, normally you want to see that growth, see and learn what it takes to go so that you can credibly both know what to do and articulate why you can do it again, because the point is like, there's not going to be the last, this is hopefully we are going to be like PayPal.

And at one point you're going to have, you know, a celebration of the abnormal mafia, but dominating infrastructure software. But part of that is that you want to make sure people learn and see that scale. 

Evan: So, thank you. As I know, you're familiar, right? There's this concept of, you know, exploration versus exploitation, right.

In, in resource allocation that applies to investing and some machine learning problems. Right. And the, the trade-off right. Is like, do kind of explode, try to like double down the thing that's working or do you kind of take time to go explore and find out kind of what else is, you know, could be useful.

Right. Even though it's a little bit unknown. So I guess like when, when people, I think a lot of people I talk to about career advice for abnormal are kind of have this struggle right. Where they're like, Hey, so like what's kind of the right career strategy for me. Right. How much should I be like doubling down on the thing I'm doing today and getting really, really good, you know, doing my expertise [00:22:00] there first, how much should I be?

Kind of like, you know, really branching out kind looking at other parts of this, find other ways to contribute maybe outside of expertise, even though it's a little, maybe higher, higher risks. Right. So I guess from a career development perspective, right. Um, how do, how should people kind of manage that trade off?

Right. Is there like a 80, 20 thing there? Like, you know, how should. 

Venky: Yeah. I mean, I think it's human nature and every, the shiny penny is always very attractive. Right. And the grass always looks greener on the other side, but my experience has been like, you probably want to make sure that the core is predefined.

The core of what you're doing right now is that you really execute on the core. Like that's gotta be 80%, maybe 80, 85%. And then the exploration has got to be 15%. I, the exploration is always, it's really interesting when I was in, because I looked at it investment. Like I was like in 96, I want to do emerging markets because emerging markets are growing so much more faster.

And then you do the math. [00:23:00] Even though emerging markets are growing so much more fast yet the us, which is growing at 4%, 1% of the U S growth was bigger than all of emerging markets over the next five years. So even the emerging markets are going really fast to the base was so small that like the U S growth rates smaller than emerging markets because of the basis of big follow-ups.

And so I think what happens is we all have this sort of psychological attractiveness to new things because we want to know, but the reality is so much is in the code, especially the core is working. So I feel like dominant, owned the core and then use 10, 15% to make sure you you're learning new things on exploration.

But if you flip that, then you end up not having any, anything that you really own. Like at the end of the day, I feel like for your career, for your portfolio, for anything, you got to make sure that the core you own and that only in competence. So, so my experience has been. The biggest issue for all of us [00:24:00] right now, it's like focus, like focus.

Like it's easy to get distracted. I have to have this discussion with myself every day. It's like, you know, I can do I focus on stuff. I do look at new stuff. And the reality is it's tempting to always look at new stuff because that's what's new, but, but focusing and doing what I need to do actually delivers the most amount of impact.

Evan: Um, there's a lot of people kind of have this dilemma today, right? There's um, there's probably some, you know, senior software engineers that are like, Hey, I'm already kind of an expert in this thing. Right. Maybe I should start looking at other parts of the business. How can I apply my expertise to, you know, sales and marketing?

Right. If I have some really great salespeople. I kinda like, know how to like, do this thing, right. Maybe I can take, so that experience and go help, give better feedback in the Proctor, help enable, you know, more people in the team to kind of learn those best practices. So when you think about kinda this like expert explorers, explorers, exploit, trade-off when it comes to like, you know, cross-functional work or participation, right.

Is it, is it the kind of, you look at it the same way, right? Or kind of what's the right. What's the right balance there. 

Venky: I think it also, [00:25:00] it's a little bit different on the growth rate of the company. If the growth rate of the company is kind of slow, then you want to explore. If the growth paid as a company is high, then you want to focus because the focus is it's a different problem.

Like part of this is like, look in my experience for most people in Silicon valley. What defines life satisfaction is autonomy mastery. And. Right jobs and make sure you have autonomy mastery and booklets. And so, so to me, mastery is, is a very important cause of almost Gandy, almost anyone in this, these are self driven people that they didn't get to be here.

They didn't get to where they are. They live, or they think they don't get to be an abnormal without a high degree of self motivation. And for people who are self-motivated, they always, you know, they try on mastery because they want to get better. They want to be experts on their craft. And if you're growing really fast, just being on your core to be extra, your craft is changing all the time, right?

[00:26:00] Because it's like the environment is changing. And so that, that intellectual satisfaction it's to me, you've been, you're not going fast. That's when the job gets mundane. Like if your job gets to the point where you can close your eyes and kind of. Do it by mailing it in, then you should find something else to really learn and grow because you've got to invest in yourself and university yourself by being at the edge of your discomfort.

I find like my growth is higher for the edge of my discomfort. I'm challenged. I'm not overwhelmed, but I'm right at the edge. And that's when I'm growing. Right. And it's not something I haven't done before, but if I, if I build something I've done all the time and I can do it in the eyes close, there's no growth there.

And so, so to me, like a lot of those, like if you aren't Cisco, at this point, you should be exploring because there's not a lot of growth lab, but if you're in a paper growing, then just learn and try on that growth. And so to me, What drives jobs is that personal growth? Am I learning new skills? Am I connecting and learning a new people again, the [00:27:00] fast boat and why?

When you're constantly building new relationships because new people are coming into the, into the company and you know, how good is the manager you most people's job experience is directly influenced by how good they imagine is, is imagine creating room for them to grow and learn as individuals. Do they care about the person and those two elements drive, and then do they set you up to succeed?

Evan: So I want to open it up to questions. Maybe you can share the, the link to the Slido and maybe it's while people are kind of answering their questions. Thank you. I I guess, let me kind of just open up a little bit. Like, what other advice would you have for, you know, um, the abnormal team? 

Venky: I think, you know, look, the abnormal team is, and I don't mean there's a lot of luck involved.

Let them lots of content people. Out there who are not sitting in a rocket ship. And so, so, and, and they're not sitting in because just some random quirk of fate, just like, you know, like [00:28:00] I was, I got, I was lucky to be, to make it in Silicon valley, but if I didn't make it a Silicon valley, I might be the same person, but I might not have the same opportunity.

So the first thing is just recognize, uh, the gratitude of how randomness and Providence helps you be in the right place. Sometimes second thing is just, I think it's a unique opportunity. We have, Abby could build a huge company and that opportunity doesn't come that often. So we got to take advantage of it, like lots.

I mean, like in my career, I know that you only going to get two or three companies like this, so you gotta make the most out of that. And you make the most out of that by being focused and speed, right. To be the both of those, I think about focus and speed. Can I get something done? Today, can I get something done?

If I can get something that I'm doing, can I get it done this off? And just being moving fast, knowing that I moved past, sometimes I make mistakes admitting that they're not going to be perfect, correcting them [00:29:00] and moving on is super important and, and making deliberate choices on what to do with those not to do also super important.

It's easy to get distracted. And so, so to me, those are the things I would say is like focus speed. And, and let's just make sure that we have a sense of urgency in everything we do. 

Evan: Thank you. That's, that's pretty good. Considering we haven't put you through our cultural indoctrination. That's very, very aligned.

I think how we see the world, uh, abnormal as well. Um, well guys, check out the check out. The link I put in the chat would love to see kind of more, uh, more questions. I'm just gonna kind of go through these in order and just forgive me if I'm paraphrasing a bit, um, love to see questions from people other than Luke, although thank you for praying the first one.

And so, um, Lou, Lou, um, so you kind of read the question. Thank you. But I guess like how, how do you, how do you find the right mentor and how do you look, you know, how do you know it's the right person for you? 

Venky: No, that's a great question. So I think the right mentor is someone that I think first, you know, is one in less time in here.

Right? Did they care [00:30:00] about you? Uh, because my feeling is if someone doesn't care about you, the rest of the matter, like most of us are very tuned to knowing, does this person care about me second? Do they have. Value to respect because it's very hard to consider someone amended if they could be incredibly confident, but if they don't have the values you respect, you can't see in them, the person you want to become, then it's really hard.

So, so to me, do they care about you? Do they have the values you have and can you see me? Can you see yourself becoming them? Do you even want to see yourself becoming them? If you don't want to see yourself becoming them, that there's probably not the right. Maybe you down. Right? And then the last part is like, you know, objectively what other competent things they can teach you because if they care about you, they're values to believe in and they can teach you something.

Then that's the right set of mentors. 

Evan: Cool. I, um, that was very insightful. Thank you. Um, so, uh, guys,[00:31:00] please, please, we've got a couple more questions in here, but please feel free to add them and just upload the ones you guys want to hear. And those will go to the top. Do you want us to ask Venky, you know, what valuation Menlo be investing in the future, whatever comes top of mind to you feel, feel free.

So, um, question from a Tejas. Uh, so thank you. When you interview people right with past experts or rocket ship company, how do you identify right. If they were kind of like drivers or passengers on that 

Venky: rocket ship? Yeah. Great question. I mean, there are some people I know who have just been complete passengers, right?

So, so when I interviewed them, I'm interested. Great. You have this amazing experience. Like, let me get into level of detail. What did you do? What did you see other people do? And I'm looking for, what can they objectively point out in terms of their contribution? And I'm looking for, you know, are they, did they, what did they learn from that experience?

What did they take out? How did they help other people. In their teams achieve their goals. Right? So, so to me, like sometimes people end up on the rocket ship. I was on this [00:32:00] rocket ship if I did this and this, and the reality is most of the time, it's never, I alone. Most people just very hard to do anything by yourself.

So do they appreciate and understand that like those other people who help them appreciate and understand their role, appreciate and understand that there's some randomness to it that, you know, this is some amount of luck and they understand the role of luck in that. And then they are reflective of.

That didn't work out, but they learn from right. What are you looking for as not someone who has never made a mistake, those don't exist. They're like, look, he is, I had this assumption, I tested it. And so I'm looking for you already in the rocket ship. Great. Do you have a sense of perspective about all the issues without being the rocket ship and did you have a growth mindset around it?

And if there's something I can motivate as someone being comfortable, the growth mindset and a growth mindset is just, if you haven't read, right. It's a great book by Carol Rebecca. She's a professor at Stanford really talks about how [00:33:00] we don't. We are not fixing availabilities that we believe we can continue to grow.

And, and growth comes from us willing to see. And things that we haven't done. Well, look at that as the opportunities of learning, as opposed to opportunities of judgment, when something doesn't go well, I'll be focused on judging the situation, judging ourselves, judging others, or we focus on learning from it and thinking about how we can and the people who take that as a learning opportunity to reframe every setback, not as a setback, that's an opportunity to learn something about themselves and about things they can do better.

And how I convinced myself, I would have something goes wrong. 

Evan: And thank you. Like, is there anything else you'd add on about, like, if you're trying to find like, evidence of that leadership, like, you what do you look for? What does that kind of a good, what's a good answer or a good kind of, you know, career, narrative look like, right.

That kind of gives you credibility as a venture capitalist that you want to bet you, you know, your reputation and your LPs money on this new entrepreneur. I'm 

Venky: [00:34:00] looking for details. Like when someone tells me, Hey, oh, we grew the company from. I don't know, eight millimeter, 15 million. That's nice. But I haven't said it was like, yes, I grew the company.

Let me tell you the people I brought into this company. Let me tell you about this customer that I worked on and how we managed to convince them to buy all. Let me tell you about this product feature. We built why I chose to build why I thought it was the right fidget, build, widen, think the other fidget.

So you can just tell in the level of detail, what someone has done, the more abstract and generic. It is the less able to articulate clearly, right? Not just success. Why did it happen? How did it happen? Uh, it's sort of like the difference between. Uh, the detail and the painting, right from 10,000 feet paintings of the same.

But then when you get down to those one feet is the difference between the great painting and the good paintings. And that's what I am looking for when I have that. Okay, great. [00:35:00] Awesome. You will in this rocket ship, but what would that peel the onion? Do you have layers and details and do you understand the layers and details?

Will you would like just being, well, you just accidentally strapped on and being dragged on how are you actually influencing what's happening? 

Evan: That's a little monkey. Um, moving on to the next question. Right? So as an aspiring entrepreneur and engineer, how do you know when you kind of learn what there is to learn abnormal?

Right. And I'm sorry, how do you know if there's like more to learn and kind of keep, you know, stay on the rocket ship and at what point, you know, what will be the signal for you to maybe kind of jump off, you know, and do something else? 

Venky: Usually I think for most people, if something is growing at a hundred percent of boring, There's so few companies, there's all this great studies about people have grown a hundred percent of that.

Very few companies can go a hundred percent every year. If you're growing a hundred percent or more every year, invariably, that things to learn that are super important. It's [00:36:00] to me, even the growth rate slows that you have asked yourself if your growth rates rose, then you need to have different roles to have the same learning.

But when the growth rate is high, even in your current role, by just the nature of that velocity, you'll continue learning. Um, and so on the call, me looking, one thing I just check in every quarter and say, Hey, what did I learn? When did I feel challenged? What new people have I met? Because we met, we learn from other people.

And so if, if you go through multiple quarters where you don't have good answers of things that you have learned in of. Your craft or things you've learned in terms of, from other people, then you should ask yourself, okay, am I in the growth rate I need to be? Am I compounding my knowledge? 

Evan: That's great feedback.

Thank you. I I like, I like just that those are very specific, you know, questions and thoughts to think about. So moving on to the next one, um, this one from Fanga that you've met in the past, um, so five of the mentor question, how do you identify? Someone's going to invest time [00:37:00] with you or even maybe has the time to invest in you.

Venky: We always have the time. So, so, so I never buy, when someone said I don't have that. No, what you're saying is it's not a priority. I get it. Right. I mean, like if, if my wife calls me right now and says pipe's broken, what is in the house? I'm going to go, I'm going to make it a priority. If you had told me before, do I have time to spend on a plumbing?

You shouldn't know, but when something urgent happens, I have it right. So, so I feel like when people tell me they don't have the time or they know you have the time, you just does not a high priority event for you. And so just say, there's not a high priority event. And so, so I don't believe in this. I don't have the time.

It's like, it's not a high priority. That's fine. And we prioritize. And so to me, like when, if someone, if someone is not in metric times, they just saying that this is not a high priority interaction for me. Like, I always say, like, I there's no excuse for me about missing my kids because I would say it was a high priority.

I'll make it. And if I don't make it, it's not because I don't have the time because I didn't prioritize it high [00:38:00] enough. And so I believe in being very intentional about your time, because that's the only thing you can't get back, you can get back money, right. You can own it back, but you can't get back time.

And we all have some limited number of seconds in our lives. Right. And so I think very actively about every second, say, are you spending it on a purpose and a mission that you're passionate about? Are you with people you care about. And you want to be in this. And so being intentional about that. So coming back, if I would just ask the mental, Hey, this is high priority.

And one of the things I've found, that's very important when you ask questions is to make it safe for the other person to give you an answer. That's no. So I'm always like, it's okay. If it's not a high priority, I'm not going to take it personally. I just want to know. And if it's not great, no issues, right?

Make it safe for people to say no, for some reason what happens is we all culturally trained not to say no. And so we don't make it safe. And I always think is most important for people to give you a negative answer because once they give a negative answer that's [00:39:00] trust. And if you accept the negative answer, And he accepted magnanimously, then just, you will have a break too, because we just have a much more trust-based authentic relationship and one limit, you don't create that space for someone to give you a negative answer.

That's that get into like all this confusion that person's kind of saying yes, but really no. Yeah. I'm going to tell you I'm going to in math, but I'm not really. And so if we can somehow create a space in our relationships to make it safe for people to say no, or say things they don't, we don't want to hear.

I think there are a a lot, a a lot more. And so to your question, I truly believe this as a mentor and then the ministers here, I'm going to say, so tell me exactly. And so I always say awesome. When you say you got to spend time with me, you're really busy. How would you manage to squeeze this into your busy schedule?

And when you ask the hard question, if they can't give you any level of detail, It really means, no, it really means like, I didn't want to say no to you. So I'm going to say yes, but I'm not taught to it. And if I'm not taught [00:40:00] through it, like all a stuff, someone, like if I say I'm going to work out, but I don't schedule when I'm going to work out, it means I'm not looking at because the only time I woke up and I scheduled it and that's the thing.

If I, if I don't think to the, how it's going to happen, it's not going to happen. And so when someone tells me they're going to do something and say, well, how are you going to do it? Can you walk me through the next few steps? In the end? He says, situation. Someone says, yeah, they're going to buy it. How are you going to buy it?

Like, what is the PR? And if they can articulate how that means, that was just a, that was not a real, yes, that was just a Golby 

Evan: that's great advice making that applies to all parts of life. And I think, say for front, you know, find a good mentor, right. It really is a partnership. Right. And if you can't have that, it's probably good to test that like level of candor and intellectual honesty and, you know, critical thinking upfront, tried before you really personally invested a lot of time in that mentorship.

Venky: Yeah. And by the way, no relationship succeeds, if it's one day. So, so if you are a man P you should ask yourself, [00:41:00] what am I going to bring to the table to a mentor? And by the way, everybody brings something. And so everybody can bring something, you can bring attention, focus. So to me, knowing and understanding what you'd bring to the relationship is equally important.

And being able to articulate if you don't know how figuring out how we can bring something to the table, because no relationship is sustainable. If it's just one big, 

Evan: uh, thank you. What keeps you motivated as a venture capitalist? 

Venky: Um, I think, I think for me the most exciting part is the people part, right?

I mean, ultimately. Uh, this is a freezy amazing job in the sense that, you know, you get to meet the best people in the world. And that's a privilege that I know I don't take lightly. And that kind of like motivates me emotionally because like, I just feel like almost to a point, all the entrepreneurs I work with, I learn something from them.

I see. And in fact, one of my test is if I'm not learning something from the entrepreneur, [00:42:00] Then it's probably not the right fit for me because they like the best people are one where I learned. I mean, I like how this person thought about it. And I have found that I'm in situations where I am constantly learning.

I'm learning something about the industry and I'm learning something about getting better. Uh, I, I mean, one of the areas, I just, like I said, I think about it. It's like every quarter I ask myself, what am alone? How have I grown? Who has taught me? Am I meeting new people who are? And so, as long as that happens, I just take the, the core.

If I go to multiple quarters where I'm like, I'm not that I'm like, I got changed something because I know I personally thrive when I'm constantly engaged in low. 

Evan: So the second was actually a really good question. Um, so, you know, what are some of the skill sets, right? Or things you basically can learn as an employee?

I have normal at a kind of series B stage where we're above 10 million in revenue or post-product market fit. You know, what are some of the most relevant things, right? That future entrepreneurs could really learn to go apply that to like their own [00:43:00] entrepreneurship and maybe what are some of the things that are less, less relevant or less important?

Venky: Yeah. So I th I think at this stage, right, you're going to really learn about product excellence. How do you make, because a really tricky part about product evolution is that there's this constant tension between let's say new features was this let's make our features really hard. And high performance.

And, and so there will be this constant tension because all of this, like a new set of features, new things we can do was this things I can just harden and get better or things that are not sexy, like integrations or configurations that enterprises need. And in my experience is what you're trying to learn is how do you manage those trade-offs and that's going to be important because it's an odd, nobody can tell you exactly how to do it, and you want to,

Evan: well, thank you a minute. Lost the audio,[00:44:00] 

where could just be me, but I think it's 

Venky: yeah, we, we lost audio.

Evan: It's not the zoom. It's maybe something I disconnected. Thank you. Or maybe we can switch the audio.

Venky: Evan. Yes, we can hear you now. Gotcha. I don't know what happened is so, so, so I think the, what I'm trying to say is that there's no, it's, it's an odd, because if you don't focus on new features, eventually, you know, you people, aren't going to stop buying it because you don't have, someone's going to displace you.

But if you don't make sure your features are rock solid, you're going to have performance issues and learning that, learning how to manage that is something you will see at the citizen of the stage, as important for you to do to one learning how to onboard people, bring people in learning how to both hire people.

And unfortunately, transition [00:45:00] people is, again, a skill you need to do and understanding how to make skills work. And so there's a lot, a a lot of this is just, you know, human dynamics, right? Like most people like they commented. The vast majority of a job is not that complicated. Most people are smart. It's like, I always say, show up on time, take good notes, follow up.

If you show up on time, take good notes. Let's pay attention and follow up. That's a 99% of business. Right. And invariably, and then if you have the discipline to keep doing it, even when you're tired and so learn, but learning the people part and getting the people part right, is I think much more complicated.

How do I get people together? How do I make sure it's a combination of skills that are complimentary to each other? How do I handle people's different Eagles and needs, but still create a trust-based culture, which psychological safety. So those are all things you only see when you get bigger and you also only [00:46:00] learn only in fast growth environments.

And so to me, that's the biggest benefit of, of learning from, and then, and then. And then you've got to have, like, what is the key insight you have? Because the point is, if you're going to go and become a founder, you need to have enough domain knowledge to know that you're the right product, find a fit.

And then you got to have some key insights, some secret that you know, that the rest of the universe does send that allows you to create it because you don't want to create, like, it's easy to create a crappy company. There are many crappy companies out there 

Evan: I've personally created many crappy companies.

So I can I'll agree with you there. 

Venky: If I can do I have funded few too, but I'm saying if you're going to leave, you got to make sure you leave because you're going to take your most important asset, just your tie, right? That's the most important asset and, and being a founder of a company that that's a Saudi Dawn to dusk siege, sounding to ADR as time away from your family, time away from the people you love.

It's what's doing. If you really feel like you understood why you're doing it, if you have product market fit and you understand, and you have a clear path of [00:47:00] knowing how to be successful at it. And so taking the time and doing it, starting a company, just for the sake of starting a company, That's that's just a waste of time.

Once you've brought all the skills and you have, then it's going to be, because now you're busy, you got to ask yourself the same question. How am I going to bring the first 10 people into my company and give them such a great experience that they are going to be founders of their companies four years from now, because you want to bring people in your company who have found a type four.

Evan: Well, one thing I'll add in Banky, right? And so say something guys know this is my fourth company, I've done three other companies, zero to one. Um, and probably one of the most formative formative experiences I had kind of starting out normal was re sorry, the most consequential thing that I did to help me start out normal is actually joining this company part of the series B.

Right? So I joined after they had already 10 million in revenue and I was there through about a hundred million in revenue. And there's kind of like three major lessons, right. That I learned got through that process. That totally transformed, right? How, you know, how we started the company today. So one was like, you know, really understand the pricing [00:48:00] model, right?

We had a very complicated pricing model, right? At TellApart. It took hours and hours to explain. It was hard to track, hard to measure hard for our customers to explain to their bosses, hard to budget for truly understanding how all that process worked caused us. Add Roma, say super simple budgetable, understandable communicatable pricing model.

Right. It seems like an obvious insight, but that, that took, you know, a year of pain at this company to really figure out the second one is really making a super painless integration, integration, integration, TellApart. You had to. 17 people from the company and mess with the whole e-commerce website. And so we said from day one, right, we gotta make it the super clean, super easy one-click integration.

That is the goal, right. Not affect a constant with a product strategy. And that's how part, right. Even though we made a lot of money, it wasn't very successful. And go to market side, we had like four salespeople and Noah could really sell the product other than the CEO. And so one of the things that, you know, just, you know, being in those sales meetings and seeing those sales processes, a product manager, um, that was really informative to like how we want to structure both the product and the go to market and all the marketing to make sure that we can [00:49:00] build a product that was, you know, where we can have like hundreds of people selling it in the future.

Right. So I think, I, it sounds, I know it sounds kind of like salesy to have like, uh, you know, uh, you know, uh Venki and I telling you what you should be at this time. I really think there's a L there's a lot of latent insights, right? That, um, everyone can learn, especially as entrepreneurs about what you want to build into, because some of the decisions you make early on don't come back to bite you until this phase.

Right? So seeing what's not working for abnormal, working for abnormal and how that could influence like early company and product decisions early on, that's going to be very powerful for many of you future entrepreneurs. 

Venky: I mean, look, I'll try a puzzle story, right? If we, a little bit of time. So I started a company in 99 December and the main reason I started the company was.

A lot of the, a lot of my peers, uh, I was, I was, uh, but I was an intern at Microsoft. I had a poker table. I do every Friday and on the poker table of five people, four of them, uh, Tony Shay Sanjay Martin [00:50:00] Galton put money. All of them started companies. Uh, Tony and Sanjay had started link exchange before Zappos and, and, uh, O'Neill and Galderma had started act Bev, advert, Seoul for Netscape and, uh, link exchange card souls with Microsoft.

So these are four people I used to play poker with. They're all like me now they're all millionaires. And I was like, well, I kind of started a company. And the thing is I didn't have any fricking clue about how to starting company. All I had was FOMO. I started a company with two other people, two really smart people.

Now the company was eventually successful, but we made so many mistakes. Right? I mean, I hired poorly. I didn't know what I was doing. I was very. Focused on my ego. Like I was worried about my title. I was focused on, uh, protecting my tub that I can go down the list of how many screw ups I did. And I looked back and I said, what's an idiot.

And I didn't, I was a bad manager. And the reality is that was a bad manager. And I would probably give myself a B minus rating. Now, eventually the company was successful. So [00:51:00] we sold it to IBM. So people don't see that from the outside. But if I was honest with myself, I wasn't prepared. I did it because I wanted to be a founder.

I saw all these other people do it, and I had full more than anything else. And I've learned from that mistake. And a lot of the things we do in Menlo that I feel like I'm very proud of the culture we have. I proud of how intentional we are and how we built the place. And that's because. I have done it wrong before.

And so, so to me, like, that's why I say do it. The more everybody is better off with great companies coming out of ethanol, but do it right. So there's, it's a great experience for you and all the people you hire and then you create both meaning and money for everybody.

Evan: Um, when I'm more time I'll, I'll, I'll share my version of that, but just, you know, totally. I went down the same exact path for, you know, probably two of my early companies and, you know, probably wasted decade in my career. Okay. We only got a couple minutes left, so we'll maybe we'll just go to like quick lightning round, maybe two more questions.

Um, so [00:52:00] thank you. What is biggest threat where reads it kind of double down or focus to make sure we don't, you know, right now we're at probably 250% to 300% year over year growth. How do you make sure we don't fall below that a hundred threshold, right. And become, stay on the market or screw things up?

Venky: Uh, our biggest threat is that we get distracted. Like it's it's to me all internal, it's not external. I'm not worried about anyone external now because as we get distracted and not laser focused on customer customer satisfaction and that all the, we let bureaucracy come in. And so bureaucracy come in and meeting cultures where like, you know, 20 people, like that's my first year at IBM.

I knew this was not a place for me because there were 25 people in every meeting and not one people, one person walked out saying I'm responsible for anything. Like when everybody is responsible for everything. Nobody. Yes. And so the biggest risk I can see is like, we lose our customer focus or will we become bureaucratic when nobody's accountable, find the thing and everything.

It's all consensus oriented. That's when [00:53:00] that happens, the seeds are sown or for your demo. 

Evan: And Becky may maybe a LA last question, like, you know, what are some of the main cultural values that are common across the most, um, successful hyper-growth companies that you've seen or worked with personally? 

Venky: Um, hi, culture of excellence.

That's everybody knows what excellence is and okay. There's no bullshit. Like they don't push it themselves. They don't pat themselves, but they know they didn't do a excellent job. Right. That's one, uh, there is a place of psychological safety where people can like, it's, it's a place where people can try something amazing and fail and still be celebrated for that.

Then signing up for something mediocre. Right. Cause some places like so risk is just sign up for a mediocre goal and then achieve it. And so you never try to do something amazing. Um, I think it's a place that has a growth mindset. There's a lot of trust in the psychological safety for people to be who they are.

And I think it's, it's a [00:54:00] place where people don't get. Um, people have a good sense of mission. So, so they know what the north star is and they don't chase fads like, like the best companies. I know that they never worry about competition. Not because competition is not important because they know that if they do everything that they control, they're going to be successful.

Right. So apple doesn't sit around thinking, oh, what is Google going to do? They're like, listen, we're going to spend our time understanding how the consumer and we're going to do and be deloading to make the best product. And what happened. Just don't focus, focus on the things you can control, ignore the things that you don't.

And, and so to me, um, everything we need to be successful is within our control. If it comes down to how to be come back to like, how fast do we move and how accountable are you? When, when someone says they're gonna do something that they actually do it, because that, that little thing about accountability is drives so many ripple effects.

And when you have speed and accountability. Oh my God. That's unbeatable. 

Evan: [00:55:00] Okay. Final one. We were going to squeeze in Mike Scott here. Cause I know he's had this question it for a while, but um, would Menlo be open to hosting networking sessions for specific, uh, functional groups like marketing leaders? Yes, 

Venky: we do.

Uh, Kayla already has. I mean, somebody should, I need to go and talk to Kayla to make sure people have access to our, we have these different mobilize groups and we definitely do look I'll philosophy is part of this. Like when you allow sessions like this is. Silicon valley. Do you have a culture of like, keep it open the open source, open knowledge, none of these things are we all benefit from sharing best practices and motivating ourselves to be better because that's, that's going to create better companies, which then create better societies because it creates jobs for people.

Well, and so I'm a big believer in like open sharing and learning. And frankly, I would want to learn if there are things I can do better. Someone email me, text me. My email is Vancouver, Menlo BC. If you have a tip, anyone who can give me a tip that they'll adopt, I'll send you a gift. So vain kid, mellow VC.

[00:56:00] One day, we can tell me if I accept it, I'll send you a gift. I'm constantly looking to launch. 

Evan: Um, cool. Thank you. Well, thank you so much for making the time to chat with us. I really appreciate you just, you know, kind of being really open the candidate with kind of your advice and mentorship. And, um, I know I really enjoyed work with you and excited for the team to spend more time with you in the future.

Venky: Yeah. And one last thing let's look at the pandemic has not been easy on anybody. And so I know the last 15 months have been tough. I do generally want to thank everybody at abnormal because this companies can have this success with if not for everyone's effort and so deeply. Thank you so much, uh, grateful to have you in the company.

And I'm excited to see what you're going to do at Abnormal or the next few years, and perhaps what are you going to do outside of that novel in the next few decades.

Evan: Thanks Venky okay, so your guys'.

Awesome. Thanks so much, everybody. Thanks. Thank you for joining. Uh, we're going to be sending out a feedback form. Uh, if you [00:57:00] guys wouldn't mind just filling that out and just, uh, letting us know what we can do to make our next event even better. And, uh, yeah. Thank you so much for joining the abnormal business school.

Fireside chat.

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