Technology

Felicis Ventures has, in its roughly 13 years of existence, established a reputation in venture circles as a smart early-stage investment firm thatwilling to make bets almost anywhere in the world. Founded by ex-Googler Aydin Senkut, the San Francisco-based firm has also demonstrated a knack for attracting talented investors into the fold, including another former Google executive, Wesley Chan; Sundeep Peechu, who held various product roles at Intel before joining the firm in 2010; and Renata Quintini, an investor who Felicis eventually lost to Lux Capital (which more recently lost her to her own firm, Renegade Partners, which is reportedly raising a $300 million debut fund).

We talked this morning with yet another member of Felicis, Niki Pezeshki, who, following several promotions, has just became the youngest partner in the firmhistory. For aspiring VCs out there, we wondered how Pezeshki landed the role — and how hemanaging to win deals. Following is part of that conversation, edited lightly for length.

TC: Everyone wants to work in VC. How did you land this gig?

NP: Out of undergrad [at the University of Southern California], I went to work for [private equity firm] Vista Equity Partners.They hire, like, four people out of undergrad every year at USC. I was in Austin [where the firm is based] for three years. It was amazing. I didn&t know what I was getting into at the time — Vista has blossomed into this incredible fund — but it grounded me in the fundamentals of business and what is a good software investment. I think it made me more numbers-focused than a lot of other venture capitalists. I may get flamed for saying this, but I come to the world of venture with a much more numbers-driven and formulaic approach to understanding business that I think helps me pick good investments.

TC: How did you wind up in the Bay Area?

NP: My family is from LA so I came to California to work for Climate Corp. for a year; I worked in sales strategy and operations. I wanted a bit of operating experience. But I love investing so much; I wanted to go back to it. So I got a job with [PE firm] Summit Partners, where you&re doing hardcore outbound sourcing and learning how to reach out to people and get conversations started and figuring out [who you should be learning more about] out of hundreds of founders.

While there, Felicis randomly reached out to me through a friend of a friend, who said, ‘You should meet Sundeep,& and they told Sundeep, ‘Sundeep, you should meet Niki,& and though I hadn&t thought about venture, a lot of what they were doing really resonated with me. In many ways, I&m doing what I was doing at Summit, but with a much wider aperture.

TC: You were just promoted to partner from principal, up from senior associate, where you started in 2016. What does that mean on a practical level?

NP: A lot of the role won&t be much different than in the past year. I think from an external-facing perspective, it gives me more credibility with founders and investors. Itone more thing that I can use to win great deals.

TC: Whatone competitive deal that you&ve won already?

NP: Modus in Seattle. Ita [tech-driven] escrow startup that is to the title and brokerage industry what Compass is to real estate. I led the Series A deal for that company and I&m on the board and I got lot of credibility internally for that. I think they were thinking of promoting me next year or the year after, but they were like, ‘Dang, Niki just led a competitive Series A round. Letgive him ammunition.& [Laughs.]

TC: How did the deal come together, and what do you think won them over?

NP: I think three things: bonding with the founders, conviction about their company and speed. I&d heard that they were going to be in town for two weeks, fundraising, and I knew their goal was to leave the area with a term sheet. A lot of firms are fairly bureaucratic and ithard for them to spin up their team and do due diligence that quickly, but Felicis has a small team and I had conviction about the space already, so when they came through, I told them how excited I was to do something on their timeline.

We also bonded over [an up-and-coming] DJ. Italso about creating that human connection with founders. I have a bunch of friends who are founders who say it often feels very transactional, their relationship with investors. You want to support these people.

TC: You don&t have tons of operating experience. You aren&t alone in this, but plenty of VCs will argue that to founders that itcrucial. How do you counter this?

NP: Some founders do want more operational expertise, others don&t care that much unless the VC once ran a multibillion-dollar company. If you&re Martin Casado [of Andreessen Horowitz] and someone really loves Nicira, I&m probably not going to win against him.

But I&m relatively young compared with other partners, and I&m really passionate, and I think that comes across in the fundraising process. I think founders know that I will take a call any time, and help them build an amazing model for their business, and really help them prep for their next fundraising process, and help them with any VP recruits.

I&m still building my track record, so founders know that I care and that my incentives are aligned with theirs. If a founding team is successful, I&ll be successful versus someone who is already sitting on 15 boards and will show up once a quarter and try to own the room and who is less invested in whether or not the company does well because [that investor] has already been successful. I want every single portfolio company to do incredibly well. I want that to come across. And I think it does.

People win prestigious prizes in tech all the time, but there is something different about The Bold Prize. Unless you&ve been living under a literal or proverbial rock, you&ve probably heard something about the late Jeffrey Epstein, a notorious child molester and human trafficker who also happened to be a billionaire philanthropist and managed to become a ubiquitous figure in certain elite science and tech circles.

And if you&re involved in tech, the rock you&ve been living under would have had to be fully insulated from the internet to avoid reading about Epsteinconnections with MITMedia Lab, a leading destination for the worldmost brilliant technological minds, also known as &the future factory.&

This past week, conversations around the Media Lab were hotter than the fuel rods at Fukushima, as The New YorkerRonan Farrow, perhaps the most feared and famous investigative journalist in America today, blasted out what for some were new revelations that Bill Gates, among others, had given millions of dollars to the Media Lab at Jeffrey (no fucking relation, thank you very much!) Epsteinbehest. Hours after Farrowpiece was published, Joi Ito, the legendary but now embattled Media Lab director, resigned.

But well before before Farrow weighed in or Ito stepped away, students, faculty, and other leaders at MIT and far beyond were already on full alert about this story, thanks in large part to Arwa Michelle Mboya, a graduate student at the Media Lab, from Kenya by way of college at Yale, where she studied economics and filmmaking and learned to create virtual reality. Mboya, 25, was among the first public voices (arguably the very first) to forcefully and thoughtfully call on Ito to step down from his position.

Imagine: you&re heading into the second year of your first graduate degree, and you find yourself taking on a man who, when Barack Obama took over Wired magazine for an issue as guest editor, was one of just a couple of people the then sitting President of the United States asked to personally interview. And imagine that man was the director of your graduate program, and the reason you decided to study in it in the first place.

Imagine the pressure involved, the courage required. And imagine, soon thereafter, being completely vindicated and celebrated for your actions.

Arwa Mboya. Image via MIT Media Lab

That is precisely the journey that Arwa Mboya has been on these past few weeks, including when human rights technologist Sabrina Hersi Issa decided to crowd-fund the Bold Prize to honor Mboyacourage, which has now brought in over $10,000 to support her ongoing work (full disclosure: I am among the over 120 contributors to the prize).

Mboyaadvocacy was never about Joi Ito personally. If you get to know her through the interview below, in fact, you&ll see she doesn&t wish him ill.

As she wrote in MITThe Tech nine days before Farrowessay and ten before Itoresignation, &This is not an MIT issue, and this is not a Joi Ito issue. This is an international issue where a global network of powerful individuals have used their influence to secure their privilege at the expense of womenbodies and lives. The MIT Media Lab was nicknamed &The Future Factory& on CBS60 Minutes. We are supposed to reflect the future, not just of technology but of society. When I call for Itoresignation, I&m fighting for the future of women.&

From the moment I read it, I thought this was a beautiful and truly bold statement by a student leader who is an inspiring example of the extraordinary caliber of student that the Media Lab draws.

But in getting to know her a bit since reading it, I&ve learned that her message is also about even more. Itabout the fact that the women and men who called for a new direction in light of Jeffrey Epsteinabuses and other leaders& complicity did so in pursuit of their own inspiring dreams for a better world.

Arwa, as you&ll see below, spoke out at MIT because of her passion to use tech to inspire radical imagination among potentially millions of African youth. As she discusses both the Media Lab and her broader vision, I believe shealready beginning to provide that inspiration.

Greg Epstein: You have had a few of the most dramatic weeks of any student I&ve met in 15 years as a chaplain at two universities. How are you doing right now?

Arwa Mboya: I&m actually pretty good. I&m not saying that for the sake of saying. I have a great support network. I&m in a lab where everyone is amazing. I&m very tired, I&ll say that. I&ve been traveling a lot and dealing with this while still trying to focus on writing a thesis. If anything, itmore like overwhelmed and exhausted as opposed to not doing well in and of itself.

Epstein: Looking at your writing — you&ve got a great Medium blog that you started long before MIT and maintained while you&ve been here — it struck me that in speaking your mind and heart about this Media Lab issue, you&ve done exactly what you set out to do when you came here. You set out to be brave, to live life, as the Helen Keller quote on your website says, as either a great adventure or nothing.

Also, when you came to the Media Lab, you were the best-case scenario for anyone who works on publicizing this place. You spoke and wrote about the Lab as your absolute dream. When you were in Africa, or Australia, or at Yale, how did you come to see this as the best place in the world for you to express the creative and civic dreams that you had?

Mboya: Thata good question — what drew me here? The Media Lab is amazing. I read Whiplash, which is Joi Itobook about the nine principles of the Media Lab, and it really resonated with me. It was a place for misfits. It was a place for people who are curious and who just want to explore and experiment and mix different fields, which is exactly what I&ve been doing before.

From high school, I was very narrow in my focus; at Yale I did Econ and film, so that had a little more edge. After I graduated I insisted on not taking a more conventional path many students from Yale take, so [I] moved back to Kenya and worked on many different projects, got into adventure sports, got into travel more.

Epstein: Your website is full of pictures of you flipping over, skydiving, gymnastics — things that require both strength and courage.

Mboya: I&d always been an athlete, loved the outdoors.

I remember being in Vietnam; I&d never done a backflip. I was like, &Okay, I&m going to learn how to do this.& But itreally scary jumping backwards; the fear. Is, you can&t see where you&re going. I remember telling myself, & Okay, just jump over the fear. Just shut it off and do it. Your body will follow.& I did and I was like, &Oh, that was easy.& Itnot complicated. Most people could do it if they just said, &Okay, I&ll jump.&

It really stuck with me. A lot of decisions I&ve [since] made, that I&m scared of, I think, &Okay, just jump, and your body will follow.& The Media Lab was like that as well.

I really wanted to go there, I just didn&t think there was a place for me. It was like, I&m not techie enough, I&m not anything enough. Applying was, &just jump,& you never know what will happen.

Image from Arwa Mboya

Epstein: Back when you were applying, you wrote about experiencing what applicants to elite schools often call &imposter syndrome.& This is where I want to be, but will they want me?

Mboya: Exactly.

In 2014, I got in on the ground floor of what I thought was a rocket ship. Fling was the fastest-growing app in 2014, and I was pulled in as their chief growth officer, with a handsome compensation package — one that in retrospect should have given me pause. Within 24 hours of arriving in London, I was greeted at the door by a Fling-branded Humvee, which wouldn&t even turn out to be the worst use of the companymoney.

Flingmarketing team consisted of 20 people, or about 30% of the company. Skeptical that any startup needed a marketing team remotely close to that size, Isat down with each one of them to learn about each individualexpertise, role and what value they added. Each focused on a particular area — online user acquisition, brand, partnerships, metrics, to name a few. Surprisingly, I found myself impressed with their skill sets, at least on paper.

Nevertheless, my spidey sense was tingling. Itnot that they were lazy or shirked responsibilities; in fact, each seemed like they tried to create value in earnest. But everyone on the team lacked a sense of urgency — the one that drives truly great startups to be thoughtful and careful about understanding why and how things work.

And when resources are seemingly infinite, any expenditure — whether time, money or both — seems like a good idea, so long as the return is net positive. And in isolation, perhaps many (or all of them) yield a positive ROI. The result was a constant cash-burn, despite &doing everything right& — everything was working, but it wasn&t working in a sustainable, manageable way, and I&d ended up buying into the hype. I&d been concerned about marketing bloat, and I was right. The company would eventually go under after burning $21 million.

I knew I was part of it. I could have stopped the bleed. But everything I was doing had a positive outcome — not one I could necessarily quantify or describe, but I knew it was there. We had all the money and time in the world — right up until we didn&t.

Before Fling I&d been scrappy, constantly brushing arms with death running one of the most popular fitness apps in the world perpetually from the end of our runway. After Fling, I&d developed bad habits — by my own hand — and had to force myself through a series of less glamorous but more fulfilling jobs wherein all that really mattered was results.

For me — and I&d say for any marketer — to develop resourcefulness, I needed to have spent significant time in an environment of scarcity, not abundance. This environment is the difference between whether or not a marketer ends up cutting their teeth and growing in their abilities or forever sucking on the teat provided by your friendly neighborhood VC.

And the word &resourcefulness& is a misnomer, containing a beautiful irony of sorts: ita trait that only develops when resources are running on empty.

Ittime for you to understand a new term — vanity marketing.

Vanity marketing is a tempting investment for a company. Itgot some vague, ephemeral yet satisfying results — you&ve got a big party, you&ve got a wrapped Humvee, you&ve got something cool to point at, and perhaps you&ll achieve the mythical &virality& that gets a particular thing 10,000 shares or retweets.

You&re popular — a non-specific yet incredibly sexy thing that theoretically would mean that investors would talk to you, or reporters would speak to you, or that you&ve &made it.& Ita result of the fact that many markets don&t have the level of scrutiny of, say, a sales team applied to them — marketingthis big, powerful juggernaut where many people survive just by not getting fired.

If premature scaling is the leading killer of startups, marketing is the symptomless cancer that leads to its demise. Marketers with abundance ingrained into their mindset will spend until those resources are no longer there. Iteasyto succeed in marketing by burning capital to grow.

You know how there are some people who are entrepreneurs just so they can say they&re entrepreneurs? I&ve noticed a similar pattern in marketing. Everyone wants to call themselves a &growth hacker,& but no one wants to learn to write SQL or Python.

Why? Because itnot sexy. Neither is obsessing over metrics like CPM, Average Order Value and cost per unique &add to cart.& Whatis sexy, though, is spending (other people&s) money to reach new audiences, and pointing at increasingly bigger numbers. The problem is that unless you get your hands dirty, you won&t actually be able to understand whether your marketing efforts command a return. I&ve seen marketers waste hundreds of thousands of dollars with no repercussions. Could you imagine if a salesperson expensed that same amount in sales trips without landing a single client?

Almost every single major startup flameout you&ve seen has had some form of major Vanity Marketing Spend, one totally divorced from, say, the cost of acquiring a single user. If you&re reading this and saying that you&re not one of these marketers, then I&m proud, yet suspicious, of you. Itfine if you&ve dabbled — a happy hour here, a CES party there — and understood that those were brief attempts to get something thatunquantifiable. And iteven stupider if you&ve spent this money &just because everybody else is doing it.&

But the dark truth is that many, many marketing expenditures are totally unquantifiable — they have little to no grounding in reality beyond telling people you&ve spent money.

The boring, consistent marketing you can do — that you can analyze, that you can truly understand the effect of — is so much less interesting than the big, shiny objects. It might not look as impressive, but it&ll work. And it&ll teach you to succeed anywhere.