INSUBCONTINENT EXCLUSIVE:
earlier this year, but the firm also brought on Sarah Cannon from CapitalG as one of their recent big hires
Index has also promoted former Dropboxer Mark Goldberg to partner
Prior to joining Index, Cannon led investments in companies like Looker, MultiPlan, Oscar and Care.com
Cannon will primarily be focusing on growth stage, and is also now a board observer for Slack
Goldberg has been at the firm for around three years and worked on deals like Nova Credit and CoverWallet.We sat down with the two new
partners to discuss some of their plans, as well as some broader parts of the venture ecosystem
daysMark Goldberg: In the last stage, we have a partner presentation, where the entrepreneur presents and we debrief
This feels like a constructive debate, we operate as one team
the end user and building something people actually want to use
Regardless the paradigm, [we ask], are you building a product where at the end of the day is the end customer happy user.Sarah Cannon: In
the board room so much of where we can help is focus
is often most helpful to connect them to another portfolio company
At CapitalG, we were investors in Lyft and Stripe, and a lot of learning would be between those companies
We would say, let me connect you to the head of product at Lyft
I think historically Index had really built a brand in Europe
We would have loved to see the Series A on many of these companies, but we were new it was harder to proactively get to these great deals at
Maybe 7 of the last 10 deals have been [series] A for us
The challenge is, how do we find these great founding teams and category winners at that stage
Those are the two things I focus on
They are transformative businesses
seeing wild adoption or a differentiated technology.TC: How do you think about the state of how we talk about mental health in Silicon
Valley right now How do you help your founders in this respectGoldberg: I think being a founder is an extremely lonely job
I think one of the things that a strong venture partner can do is be a really good sounding board
The emotional fluctuations in these businesses are extreme
additional optionality for a lot of our portfolio companies
Before SoftBank a lot of times your option is [just going public]
You need to believe that founder is capable of bringing on that high quality team
To move earlier stage, you have to have a lot more conviction
Do they know their own strengths and weaknesses, do they know the strengths and weaknesses of their existing members.TC: How do you think
about diversity going forwardCannon: The major focus is how do I address this challenge
The numbers speak for themselves in terms of diversity of all types
My view on that is we should do a much better job in venture and companies in screening for the specific attributes you need in the job
We want to push people, rather than going to pools that are easy, such as just to banking, and say the attributes important to an investor
is high emotional intelligence, analytical thinking, and such
At the last 4-5 meetings, this is now a topic on par with the KPIs of the business
People are just begging for an idea, something I can commit to changing my funnel
Changing my process to be more fair, founders I think are very more open to it.TC: How do you manage expectations with your base of LPs,
To the extent the companies continue to build value, the returns are gonna look good enough
We have not felt the urgency to try and realize gains faster, and part of that is our broader philosophy and ethos around investing
Doing large secondaries in early companies can be detrimental
executives or for the whole team].Cannon: You do want to think about the employees who have made significant contributions
In a market where companies are staying private much longer, for the employees, I do want us to find a way to have some liquidity
The key is how you structure it
get from businesses there and how they will be different in the US
If you look at live video, a lot fo companies have taken off there
world has inverted, I used to do a lot of cleantech where we were worried China would copy the IP
In fintech, the most innovative companies are coming out of China
rest of the feature rich companies into larger platforms
You imagine what else can you cross-sell once you have that engagement and brand affinity
The two areas are really around blockchain and AI
actively trying to build our knowledge set
transaction without the regulatory infrastructure like know your customer
As long as we have nation states we certainly will not see all transactions on blockchain
Regulators will have a way to regulate these transactions since at some point you are going to have to transfer your bitcoin into dollars or
some other currency at some point.Goldberg: I have had a challenge to find a [high-potential] Dapp
You get people who have the skillsets.TC: What are you looking for in startups that say they specifically focus on machine learningSarah:
The way I thought about investing in AI is three buckets
One was on the generalized AI, and what would replace a human
services are most interesting
The third bucket is what I call machine learning for everybody else or democratizing access to ML
vision and the applications of that with an immediate business context
[We look at] how many engineers and data scientists you have, what are the top 5 applications of your technology
talk about machine lerning
What I look for is proprietary data
You have access to some data pool, and the data is ultimately what sets it apart
A way to test that is to look at the technical DNA in the team
right nowGoldberg: There are massive segments of the economy coming online right now
Agriculture, construction, logistics, we look at where the data has been locked up in offline form like on paper or excel
As software brings it online, a lot of those industries are ripe for machine learning.Cannon: I am focused on consumer and the
consumerization of the enterprise
On the consumer side I cover marketplaces, millennial purchasing behaviors and what we can learn from China
you looking for in consumer startupsCannon: I always think chance favors the prepared mind
I do want to do thesis work in consumer, and think about areas where I see patterns
When I see the monthly active users data, [I ask], does it conform to the world
