All Segments
#52: CXOTalk featuring Mark Suster
26 segments available
CXO-Talk brings you live conversations on leadership, innovation, and transformation with people shaping the future. Your hosts are Michael Krigsman and Vala Afshar. Learn more at http://cxo-talk.com ------------------ Check out all the CXOTALK episodes: https://cxotalk.com/episodes ------------------ Follow us on Twitter: https://twitter.com/cxotalk ------------------
Segments Timeline
Welcome to CXOTalk
In this opening segment, Michael Krigsman introduces episode 52 of CXOTalk, highlighting the absence of co-host Vala Afshar due to illness. The hosts set the stage for a conversation with Mark Suster, a well-known venture capitalist, emphasizing the show's focus on leadership and innovation.
"hello welcome to episode number 52 of cxo talk i am michael krigsman and unfortunately my co-host vala offshore is sick in bed with the flu valla is sick as a dog and you know vala i owe you an apolog..."
Mark Suster's Entrepreneurial Journey
Mark Suster shares his background as a software developer and entrepreneur, detailing his journey from starting his first company in 1999 to becoming a venture capitalist in 2007. He discusses the challenges and successes he faced, including selling two SaaS companies, and how these experiences shape his perspective as a VC.
"apology okay here can you can you hear me i can hear you i keep having to drop off and come back off last time you just mid sentence i could stop hearing you don't you love technology uh well this is ..."
Empathy in Venture Capital
Suster explains how his experience as an entrepreneur gives him empathy for the struggles faced by startup founders. He contrasts the glamorous perception of entrepreneurship with the reality of long hours, stress, and uncertainty, emphasizing that venture capitalists also face significant challenges in their roles.
"capitalist since 2007. so as as a vc obviously your experiences in an entre as being as an entrepreneur come into play so tell us about tell us about that how does how does being an entrepreneur play ..."
The Reality of VC Life
Mark Suster discusses the misconceptions about venture capitalists, highlighting the competitive nature of the industry and the challenges of fundraising. He draws parallels between the experiences of entrepreneurs and VCs, illustrating the pressures both face in securing funding and managing expectations.
"reality is three years we're on the and what i would say is when you're an entrepreneur you can go to one city and you can in that one city talk to let's say 50 people who might fund your company as a..."
Selecting Investments: The Entrepreneur Factor
In this segment, Suster shares his investment philosophy, emphasizing that 70% of his decision-making is based on the entrepreneur rather than the opportunity. He outlines the key traits he looks for in entrepreneurs, including tenacity, domain knowledge, and leadership ability, and stresses the importance of team dynamics.
"think about the parallels which is you end up telling all your friends now you're a vc everyone's rooting for you but you have no idea if you're going to raise your next fund and if you don't raise yo..."
Building Relationships for Deal Flow
Mark Suster explains how he sources deals, emphasizing the importance of relationships over cold pitches. He highlights that referrals from trusted entrepreneurs and lawyers are his primary sources of deal flow, and he discusses the long-term nature of building these connections to identify promising investment opportunities.
"build a company not an individual so these these are difficult characteristics to find in one place so what is your source you know i'm assuming people must send you business plans constantly but when..."
Challenges Entrepreneurs Face
Suster begins to address the unique challenges faced by entrepreneurs, particularly CEOs, and hints at the complexities involved in leading a startup. He sets the stage for a deeper discussion on the difficulties that arise in the entrepreneurial journey.
"time ago you so you're not you're an entrepreneur and now you work with lots of entrepreneurs what are the what are the what are the most difficult challenges that an entrepreneur faces i realize it's..."
Decisiveness in Entrepreneurship
Suster highlights the critical need for decisiveness in entrepreneurship. He contrasts the rapid decision-making required in startups with the slower processes in larger companies. He stresses that entrepreneurs must make quick decisions, often with incomplete information, and that a willingness to accept mistakes is essential for success.
"failure there's at least a chance of that and all of those people that you convinced to quit their jobs whether they worked at sap or oracle or google or just even other startups those people put thei..."
Building a Strong Team
In this segment, Suster discusses the importance of hiring talented individuals who can challenge the status quo. He emphasizes that a successful CEO must have a clear vision and be open to feedback from their team, fostering an environment where constructive criticism is welcomed to drive the company forward.
"out even though you have no idea whether it is or isn't what about okay so then what about the relationship between the ceo and the people working at the company i've seen founders hire hire a person ..."
The Role of a VC as a Coach
Mark Suster shares his perspective on the role of a venture capitalist, likening it to that of a coach. He explains that VCs should be deeply involved in guiding entrepreneurs through challenges, providing both tough love and support as needed. Suster emphasizes the psychological aspect of leadership and the importance of maintaining a positive mindset.
"will tell you if they think you're wrong and i always say as ceo you have to have like that strong true north and know what your own direction is and have you know it's on my on my blog i i wrote uh t..."
Navigating Entrepreneurial Challenges
Suster reflects on the challenges entrepreneurs face, particularly in decision-making and team dynamics. He discusses the need for CEOs to balance decisiveness with the ability to adapt based on team feedback, highlighting the complexities of leading a startup and the importance of emotional intelligence.
"problem in big companies and where this is all going michael is your team needs to constantly be giving feedback and you yourself have got to have the self-confidence to admit when your decision was w..."
The Chief Psychologist Role
In this segment, Suster discusses the dual role of a CEO and a venture capitalist as chief psychologists. He explains how both must manage the emotional well-being of their teams, addressing concerns and conflicts while fostering a supportive environment. This role is crucial for maintaining morale and productivity within a startup.
"a buzzer beater to win the game like that's what we're all in it for but one day you wake up and you realize okay i can't run quite as fast as the young kids anymore and i don't have the same vision a..."
Impact of the JOBS Act on VC
Mark Suster addresses a question about the JOBS Act of 2013 and its impact on the venture capital landscape. He expresses skepticism about the act's potential to change the funding dynamics for startups, drawing parallels to past market bubbles and emphasizing the risks of crowd-sourced funding without proper investor education.
"them and i can do that too i say that the job of a venture capitalist is chief psychologist because you've really just got to help with the headspace of ceos by the way i always say the job of a great..."
Traits of Successful Entrepreneurs
Suster concludes by discussing the traits of successful entrepreneurs, referencing his blog post on the subject. He invites viewers to engage with him on Twitter for further insights, emphasizing the importance of understanding the characteristics that contribute to entrepreneurial success.
"it at that listen there's a lot of hype about what that what that entails um you know when people thought it would affect the bc landscape what everybody said is oh you're going to have crowd funding ..."
The Importance of Reference Customers
In this segment, Suster discusses the necessity of securing reference customers for startups. He explains that these early adopters help validate the product and create a ripple effect in the market, as potential buyers often seek reassurance from existing users before making a commitment.
"i will and uh vala has a question vala how are you are you sick i hope you're uh are you playing hooky there we have so valla is asking uh mark can you name a company that you did not invest in but sh..."
Navigating Product-Market Fit
Mark Suster elaborates on the concept of product-market fit, emphasizing that entrepreneurs must align their solutions with market needs. He highlights the importance of founders engaging directly with customers to understand their problems and ensure that their offerings address real pain points.
"of uber and that's where they raised their first million dollars and i passed why did i pass um it was a very young team travis was not yet ceo um i instinctively thought the concept would work incred..."
The Role of CIOs in Startup Partnerships
Suster concludes by discussing the perspective of Chief Information Officers (CIOs) when considering partnerships with startups. He notes that CIOs seek stability and reliability in startups to ensure that they can deliver valuable solutions, which is crucial for building trust and long-term relationships.
"places like la which don't have big taxi cultures um i thought that the taxi guilds that are formed to protect their jobs and wages uh would prevail um and that it would be hard for them to operate in..."
The Importance of Reference Customers
Mark Suster discusses the critical role of reference customers in the sales process. He explains that to gain traction, entrepreneurs must identify early adopters who are willing to take risks and advocate for their innovative solutions. These 'egg breakers' help establish credibility and pave the way for broader market acceptance, emphasizing the need for product-market fit before scaling sales efforts.
"solution to get people to buy so no matter how interested you are and what you're creating unless you get that right that what you offer solves enough pain you're not going to get enough people to buy..."
Demonstrating Stability as a Startup
In this segment, Suster addresses the challenges entrepreneurs face in demonstrating stability to potential corporate clients. He highlights the importance of having a strong vision and the 'X factor' that compels talented individuals to join a startup, even in the face of financial uncertainty. This discussion underscores the need for entrepreneurs to convey confidence and reliability to attract partnerships.
"and if you hire sales people traditional sales people before you have reference ability most likely you're wasting money so what what uh venture capitalists call that is they call it product market fi..."
The X Factor in Entrepreneurship
Mark Suster elaborates on the 'X factor' that drives entrepreneurs to succeed despite financial challenges. He shares a compelling story about an entrepreneur who left a stable job to pursue a startup opportunity, emphasizing that belief in the vision and the team is crucial. This segment illustrates the emotional and psychological aspects of entrepreneurship that can influence hiring and investment decisions.
"willing to take the risk michael that's a great quest question and that's why 99.99 of entrepreneurs will fail uh to be an entrepreneur is to have no money no money in your company and persuade people..."
Passion vs. Profit in Entrepreneurship
Suster discusses the balance between passion and profit in entrepreneurship. He argues that while making money is important, successful entrepreneurs are often driven by a desire to solve meaningful problems. He reflects on his own experiences and stresses the significance of being genuinely interested in the industry and challenges faced, which ultimately leads to greater commitment and innovation.
"address your direct question which is eventually when you move beyond egg breakers into more conservative buyers they're going to care about things like do you have capital uh are what are what's your..."
Understanding Competition and Market Fit
In this insightful segment, Suster emphasizes the necessity for entrepreneurs to understand their competition and market dynamics. He critiques the tendency of some startups to launch without adequate research and stresses the importance of aiming to be significantly better than competitors. This discussion highlights the need for a solid business model and a clear understanding of customer needs to achieve long-term success.
"those make great entrepreneurs i'm not saying great entrepreneurs don't want to make money but people who do extraordinary things are usually hugely driven by the problem that they're solving and i al..."
Investing in Innovative Startups
Mark Suster shares insights into his investment strategy, focusing on innovative companies like Epoxy and MakeSpace. He explains how he identifies opportunities in the digital media landscape and the importance of having the right tools for content distribution. This segment provides a glimpse into the criteria he uses to evaluate potential investments and the evolving nature of the startup ecosystem.
"trying to understand the competition i see people who launch businesses all the time and never even look at what the competition is like i can't imagine going to battle without really understanding wh..."
Makespace: Revolutionizing Storage Solutions
Suster introduces Makespace, a company he views as a 'reverse Amazon' that transforms physical storage into a cloud-based service. He explains how Makespace simplifies the storage process by providing convenient pickup and delivery, allowing users to manage their belongings through a mobile app, thus enhancing the customer experience in urban environments.
"in a world where you create video just for youtube you know youtube's going to solve all the tools but in a world where people are in um increasingly watching videos on facebook on twitter on vine on ..."
Tangible Play: Merging Physical and Digital Learning
Mark Suster shares insights about Tangible Play, a company that combines physical toys with digital interaction to engage children in learning. He describes how their innovative use of computer vision technology encourages kids to play with physical objects while interacting with digital content, aiming to foster creativity and learning in a fun way.
"okay and uh wanted to want to briefly describe one more uh sure what else have i done recently okay i'll i'll talk about one that i haven't publicly talked about uh so i invested in a company called t..."
Closing Thoughts and Future Conversations
In the closing segment, Mark Suster reflects on his experiences and the importance of product testing, sharing anecdotes about using Tangible Play's products with his own children. He expresses enthusiasm for future discussions and insights, encouraging entrepreneurs to revisit the conversation for valuable wisdom.
"company did you see them did you try it out with any kids oh yeah i tried it out with my own kids are you kidding i have a eight-year-old and a 10 year old at home and i put the tangram on the table a..."