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Date Created: 10/27/14
Ann Miura Ko PERSONAL INFO gt On her Linkedln profile she describes herself as an investing ninja assassin gt She is one of the founding partners of Floodgate a super angel fund Her partner Mike Maples co founder of Floodgate formerly Maples Ventures says he s good at seeing the marketing and sales potential of the companies in which he invests but Ann can understand the technical details of what a startup is up to in a way that most investors can t gt Mike is well known He s one of the most successful angel investors in tech having taken an early stake in Twitter Digg and other successful startups gt Her first big hit at Maples came when she sourced its investment in ModCoth an unlikely sounding Pittsburgh retailer of vintage inspired clothing gt She used to work for a secretary when she was a student Her father gave her advice that she never forgot quotRemember to be world classquot 0 Today Miura Ko is a cofounding partner at Floodgate formerly Maples Ventures Her board seats include Modcloth Refinery29 Chloe and Isabel Wanelo Ayasdi Xamarin Rise and lnscopix She was formerly a board member and lead seed investor of TaskRabbit and Lyft And she credits her success to her father39s a NASA rocket scientist words quotCommit to excellence not only at things you think are important or things you think other people think are important but do something excellent with everything you doquot quotI don39t think I succeed all the time at that but knowing that that39s what I should be aspiring to that39s a really important force in my Iifequot gt She had planned on becoming an engineer then decided on medical school then law school But she decided she wanted business eventually working for McKinsey and Company WHAT SHE INVESTS IN gt Today she invests in e commerce as well as big data analytics companies They39re very different mindsets but she believes they intertwine quite well and she likes that seamlessness in life 0 quotIt39s really interesting because they bleed into one another My professional and personal interests are very mixedquot she said quotEven with e commerce my math background and data analytics background is used quite oftenquot 0 As a professor she pushes where they need to be pushed As an investor she wants to offer chances to entrepreneurs she truly believes have the ability to succeed quotIt39s my personal way of giving back I39ve been the beneficiary of lots of different kinds of mentorshipquot she said quotPeople gave me a chance when there was no reason for them to do that and I want to see myself doing thatquot QUESTIONS FROM VARIOUS INTERVIEWS gt What is some advice you would give your younger self 0 quotDo things you truly love in that moment and the satisfaction you feel carries you through and allows you to shinequot gt What do you look for in portfolio companies 0 3939I look for the authentic entrepreneur Not the notion that looking for a serial entrepreneur with 20 different ideas in their back pocket I39m looking for someone who has one and who can39t imagine doing anything other than that one thing Often times it looks like that person has been building up their entire career to do this one ideaquot gt What do most successful start ups have 0 Passionate leaders who complete the work if they have funding or not There is not one specific formula for creating a good start up Commitment and passion for a particular subject matter are what are most important gt When you look at an opportunity early on how do you determine whether a company really has an opportunity to be disruptive o I think first and foremost we are looking for an insight by the entrepreneur that is non consensus but right If they are wrong there is no hope If the idea is consensus since we are early stage investors the idea will not be unique and the market will already be crowded o The second is that we want the entrepreneur to be pursuing a really large market This seems obvious but we mean something very specific here We want the business model of the company to be such that they can capture a significant portion of that market It s not enough that the industry they are part of is a big one but the go to market model has to match up to why they will be able to capture a slice of that market Generally we say we want to be able to imagine a path to 100M in profitable revenue within 5 years 0 Lastly I would say that we like entrepreneurs to be authentic to the idea they are pursuing The narrative of why they got started with this business idea is just as important as the idea itself TRENDS IN ENTREPRENEURSHIP gt Mobile 0 I think that one of the big trends going forward is how mobile will really change the landscape of companies Miura Ko said The transition from offline to online really left a lot of companies in the dust The transition to mobile is just as significant 0 l ve seen in my e commerce investments that people are shopping on their mobile devices To date the experience is the online experience translated for mobile but I believe that mobile commerce as an interface will have to be different 0 On the phone it s about instant gratification or getting the shopping done quickly On the tablet it is about browsing images almost the way you would a catalog at home These experiences should translate into something different and interesting gt Mobile meets enterprise With mobile becoming pervasive within enterprises both as BYOD and company sanctioned devices the use of mobile to gather and disseminate information is potentially way more powerful than combining social with enterprise applications One of our portfolio companies DoubeDutch has shown the power of mobile particularly with sales organizations providing them with a mobie first CRM application Another of our portfolio companies Xamarin has had tremendous traction amongst C developers many of whom are within enterprise organizations by providing them with a way to create native applications on iOS and Android platforms gt Democratization of Entrepreneurship 0 Since 2008 the cost of starting a company has decreased significantly With coud services and open source software many more people are able to become entrepreneurs It used to be you had to have 5 million dollars to start a company but that is no longer the case gt The face of entrepreneurship 0 When we talk about what our future entrepreneur will look like we don t believe they will look like a hacker in a hoodie Miura Ko said We think there will be women who are the future Mark Zuckerbergs of the world ADVICE gt Get started and do it and find a mentor gt The best ideas are not ones that wait for funding they are the ones the entrepreneur just has to do If the idea is powerful enough it will carry through gt Her company looks for what she calls authentic entrepreneurs 0 An authentic entrepreneur as she defines it is one who is uniquely qualified to start a company and has an obsession with the particular industry To illustrate she told a story comparing some entrepreneurs who came in to pitch ideas to her The first set of entrepreneurs had an idea about a fashion app but who not only had no experience in the fashion industry but also came in dressed unfashionably She compared this to a woman who after having a long history and obsession with fashionable vintage clothing decided that she could make a business using her expertise in the field Concluding this idea she stated that while some firms love serial entrepreneurs she much preferred the authentic entrepreneurs What s the company that I can start she encouraged the crowd to ask themselves not to simply try and find the next big thing gt Investment strategy 0 The firm calls its strategy a unique fundraising model that bridges the gap between two types of funding initial seed money from angel investors and traditional venture capital funding for more established firms Floodgate s portfolio of more than 50 companies includes websites Digg and Twitter clothing retailer ModCoth and textbook rental site Chegg Floodgate fundraises by working with the incredible limited partners we have been fortunate enough to work with and our strategy has been built around those core relationships Miura Ko said BUSINESSES THAT ATTRACT MUlRA KO gt Internet technologies are accelerating startup innovation gt They re looking for F16 pilots who can observe and adapt to changing conditions gt What s Floodgate s basic investing philosophy 0 Sometimes it helps to start even before the beginning The Internet has a constellation of things that have developed around it offshore labor search engine marketing ubiquitous broadband penetration variabiized cost Web servers that have fundamentally democratized the process of innovation So what it costs to prove or disprove an idea has been fundamentally altered When you project forward what this really means we think it s as important as Eli Whitney and the cotton gin or Frederick Winslow Taylor and the birth of manufacturing or Alfred Sloan and the invention of the modern corporation with General Motors Our view is that the people who understand this shift are going to win in the next 20 to 25 years That is not just a statement about entrepreneurs That is a statement about the people who capitalize their companies The risks aren t really in the technology but in some unique insight the person has And often it s a market insight You may have heard of this guy Commander John Boyd His nickname was Forty Second Boyd He could defeat anybody in a simulated dogfight in 40 seconds or less He coined the phrase Observe Orient Decide Act or the OODA Loop His philosophy was that the winning fighter is the more agile fighter This was in a time when the Russians had more military might You weren t going to beat them by out scaling them Instead you get inside their decision making loop and you disorient them The F16 was designed not to be faster than a Russian MIG or to have more thrust but to change direction more quickly It was designed to be an agile fighting machine gt What s important about an F16 o The plane itself is important but the mindset of the pilot and how they fight is important too When we think about funding startups we are trying to apply some of that thinking to the early learning and discovery process of a startup We know when we invest in a company that the first strategy is almost always going to be wrong We say Iet s just take that as a given and the idea is to discover the winning strategy as quickly and at the lowest cost we can How do we pick these companies Part of what we look for is the entrepreneur who thinks like an F16 pilot gt Is there a general way to describe the kinds of business ideas that attract you 0 The thing we are fundamentally looking for is a unique insight that you have whether it s a market insight or a technology And the way we characterize that is it has to be non consensus but right There are tons of ideas that we find every day that are consensus and right The Groupon model everybody agrees that that is a lucrative model so you see tons of startups creating Groupon for aparticular niche But at the end of the day it s a consensus insight The place you make a tremendous return for an investor is when you find this one insight that no one else believes but you believe and it turns out to be right 0 In fact the more people who think you re wrong the better By the time the rest of the world catches up to you you ve made huge progress and created sustainable competitive barriers 0 We have also found that our success is almost inversely correlated to how many people want to jump into a deal If you really look back on it there aren t many hot deals where everybody is crowding around that end up being great companies There are hot deals that have modestly good outcomes but very few have the truly epic pate tectonic shifting outcomes Usually the ones that do really well are the ones that you have to defend for the first couple of years 0 The reason I love this sector of investing is that it s a privilege to work with these types of entrepreneurs who have that kind of belief in their vision Mike has had a longer career in investing than I have but I have even experienced this To have the opportunity to work with the Kogers from ModCoth or with Leah Busque from TaskRabbit or Gurjeet Singh from Ayasdi who are all disrupting their industries is just a privilege Mike has had similar experiences with Kevin Rose and Ev Williams They all took a chance on us Our belief is that we have to pay it forward gt There is a very thin line between the visionary entrepreneur and as we say the entrepreneur who is having visions o How do you know which is which When do you trust that the entrepreneur is right about something like the size of the potential market That is the hardest one to answer A potential market is like potential energy in physics You can t see it converting to mechanical energy If it was an obvious market big companies would go after it So it has to be a huge potential market and then you have to have a visionary entrepreneur who is better equipped to go at that market than anybody else through their proprietary insight As they explore they might make a lot of course corrections Christopher Columbus didn t land in the part of the New World that he thought he was landing in but he was going after a huge potential market so even though he was off course he landed somewhere compelling We are looking for markets that have such huge potential that we have a lot of opportunities to course correct It goes back to the F16 story If you spend all day flying B 52s you may understand that F16 pilots have a good business but that doesn t make you an F16 pilot You are going to get shot down against a real F16 pilot For the same reason we don t want to compete against Sand Hill Road We would just get crushed gt Entrepreneurship is democratized 0 So the question is what do you bring to the table in the learning and discovery mode What is the set of services that you uniquely provide Because we are purely focused on seed stage investments I think we are experts in that field
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