David Pakman

David Pakman

Partner at Venrock

THIS CHAT HAPPENED ON December 04, 2015

Discussion

David Pakman
David Pakman@pakman · Partner, Venrock
Hi, I’m David Pakman, a VC at Venrock, investing in early stage internet companies. I used to be the CEO of eMusic and before that, co-founded MyPlay (sold to Bertelsmann) and Apple’s Music Group. I'm happy to answer your questions about disruptive innovation, investing in early stage startups, and growing companies successfully -- ask me anything!
Arpit Gupta
Arpit Gupta@arpitgupta · Product Manager
@pakman What kind of information/detail you most often missing from the pitch decks or pitches?
David Pakman
David Pakman@pakman · Partner, Venrock
@arpitgupta Hmm, that's a good question. Most entrepreneurs get the basics: market, product, team, competition, projections, capital needs. Very few offer their take on "what could go wrong?" It's a helpful way to think about the challenges you are up against and shows the team is self-aware. At the stage where we invest, Series A mostly, tons of stuff can and will go wrong. So thinking about those things and how you work around them is very useful and honest. Also, it helps to frame the conversation around the real hard things you are hoping to overcome.
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What's the biggest thing you changed your mind about in the last year?
David Pakman
David Pakman@pakman · Partner, Venrock
@jacqvon I'm having a hard time with this question, and that bothers me, because I love having my mind changed! I would say I used to believe self-driving cars were 7-15 years out and now I believe they are essentially here and will appear meaningfully over the next 3 years. By that I mean that they will appear in stages of ADAS technology and culminate in full automation. It's a progression not a step function.
Arpit Gupta
Arpit Gupta@arpitgupta · Product Manager
@pakman What are some of the software tools/apps you use every day?
David Pakman
David Pakman@pakman · Partner, Venrock
@arpitgupta Twitter, Nuzzel, Spotify, Slack, GApps, Medium, YouNow, SnapChat, Instagram, Amino, Pitchbook
Jack Smith
Jack Smith@_jacksmith · Serial Entrepreneur & Startup Adviser
Hi David. Were you involved in the fundraising process of pitching LPs for Venrock's latest fund? If so, how was that experience compared to your expectations?
David Pakman
David Pakman@pakman · Partner, Venrock
@_jacksmith Hi, thanks for the the question. Yes, I have been involved in our last two fund raises. It is a great and important experience for a VC -- singing for your supper. You quickly learn what your expectations are!
Kingsong Chen
Kingsong Chen@kingsongchen · Dev
@pakman What are some boring/old industries where you see the potential for disruptive innovation?
David Pakman
David Pakman@pakman · Partner, Venrock
@kingsongchen Plenty! I am spending a lot of time looking at legacy physical products industries likely to be pressured by software innovations like autos, CPG, home products, building materials.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
@pakman thanks for joining us today. During your career to date, what is the best piece of advice you've ever been given? Flip side - what's the worst?
David Pakman
David Pakman@pakman · Partner, Venrock
@ems_hodge Best is "be comfortable being uncomfortable". It has become a defining focus of mine. Worst is just the general notion that you need to be a jerk to people to get your way in life.
Justin F Harris
Justin F Harris@justinfharris · Co-Founder, Beehive
@pakman Thanks for doing this AMA & really enjoyed your post on the "Currency of the Media Business", it was insightful and data driven. A few quick questions: Do you think a startup taking the opposite approach of Klout by working with brands first vs consumers has an opportunity to innovate in space? What stage do you like companies to connect with you and introduce themselves? Any best practices for teams to optimize everyones skill sets as they grow? Thanks!
David Pakman
David Pakman@pakman · Partner, Venrock
@justinfharris Thanks for being here! In some ways, Klout achieved success in that it created a standard for measuring influence on the web (no longer used, however.) In other ways, it was not successful because it never created a scaleable business. So I would think different approaches to this problem are warranted. Starting with brands may be able to work, but without consumer benefit, it is hard to see it working. I love meeting entrepreneurs well before their Series A round. Always hire people smarter than you.
Justin F Harris
Justin F Harris@justinfharris · Co-Founder, Beehive
Ali Afridi
Ali Afridi@alikafridi · Building Products
@pakman Hi David. If you were graduating from college now, what role would you want for your first job?
David Pakman
David Pakman@pakman · Partner, Venrock
@alikafridi Kinda similar to my first job out of college...I was a product manager at Apple and I would encourage people interested in tech to absolutely try to gain experience on the product side of things at an important and successful company who hires great people. It is hard to really understand tech markets without having a strong product bias and an understanding of what technology is capable of doing and where it is going. You are also more likely to be in demand to other companies if your last job was at a company experiencing high growth and deemed to be successful!
Vikas Malhotra
Vikas Malhotra@vikasmalhotra08 · Grad Student, Prod Innovator
@pakman Hello, Thank you for answering questions here. I wanted to ask you about product management. How important is the role of a product manager in a startup vs big firms like FB, Google. Also, from a VC's perspective, what's your take on startup's bringing in experienced PM's vs zero experienced product managers (New Grads).
David Pakman
David Pakman@pakman · Partner, Venrock
@vikasmalhotra08 Current Silicon Valley best practice is to create small teams of 3-5 people to own individual features of a product. Usually that is a product manager, 2 engineers and a designer, or some variation of that. The goal is for this small team to run hundreds of experiments to reach full optimization. In most cases, the PM acts as a leader of that team, but I have seen those teams be led by an engineer and designer too. Great PMs help these teams understand the requirements of the market and the minimum product attributes that must be present for the product to succeed. So, I believe strongly in the PM model and encourage our companies to build execution teams this way.
David Pakman
David Pakman@pakman · Partner, Venrock
@vikasmalhotra08 I was a PM at Apple with very little experience at first. But Apple has very strong programs to train PMs to become good. So, I don't believe all PMs must have lots of experience. However, at a startup, training resources are often scarce, so finding PMs with some experience is helpful and encouraged.
Felix Do
Felix Do@felixwdo · Graphic Designer, Apttus
@pakman Thank you for doing this. I am currently working on a web app involving Non-profits/ Charities and athletes (whether that be professional or amateur). It has been difficult to reach out and get a response from decision makers of non-profits (only few have responded to my LinkedIn messages), do you have an idea of how and which form of contact is appropriate? Thanks in advance.
David Pakman
David Pakman@pakman · Partner, Venrock
@felixwdo Hi Felix. I don't have a great answer for you here, as I have not been involved in a startup selling into not-for-profits. I would think the best thing to do is to ask other CEOs who have sold successfully into these markets, such as Blackbaud and Evertrue.
Felix Do
Felix Do@felixwdo · Graphic Designer, Apttus
@pakman do you know if LinkedIn is the best way to reach these individuals?
David Pakman
David Pakman@pakman · Partner, Venrock
@felixwdo Good way to start, but finding a connected introduction is much better.
Felix Do
Felix Do@felixwdo · Graphic Designer, Apttus
@pakman Thanks for the responses. Would love to connect with you via LinkedIn :) Would you happen to know Mike Gianoni (CEO of Blackbaud); Brent Grinna (CEO of Evertrue) or anyone on the strategy side of things?
Tami Trost
Tami Trost@copacetictami
Hi David - with all the technology developing at such a rapid pace, how does the average person with only basic tech savvy, keep up? How do we know which technologies we should learn and invest in and which are only for people with a real passion for new toys?
David Pakman
David Pakman@pakman · Partner, Venrock
@copacetictami Hi Tami! What a sweet surprise. (Hey everyone, Tami was generously my "campaign manager" when I ran for Treasurer of the school in 8th grade. Thanks to her, I won!) I appreciate this question because, in my view, tech is invading every part of our lives these days. How does one keep up? On the one hand, if you have a passion for it, there are plenty of places to read about new developments (Techmeme, TechCrunch, ReCode, etc.) I find Twitter to be the best source for information on tech. But if you don't have much of a passion for it, it must feel like a giant morass of confusion. So, I'd find a geeky friend and ask them what you should pay attention to! Know any? ;)
Tami Trost
Tami Trost@copacetictami
@pakman @copacetictami David, You will live to regret that offer because I will be e-mailing you all the time!! P.S. I also like to take credit for introducing you to Apple products, since I had one of the first Macintosh computers and you always wanted to play with it.
David Pakman
David Pakman@pakman · Partner, Venrock
@copacetictami SO true!!!!
Ali Afridi
Ali Afridi@alikafridi · Building Products
What channels (besides introductions) do you use to source new investment opportunities?
David Pakman
David Pakman@pakman · Partner, Venrock
@alikafridi Well, you have put to the side the most important one. Warm, qualified introductions are the single most-meaningful signal a VC can get, so I would encourage all entrepreneurs to find the closest, warmest intro to the VCs who are interested and investing in spaces like yours. Beyond that, I find social media (where people's points of view, reputation and activity are quickly validated) to be a great way to "meet" new entrepreneurs. I still love to read something written by the person, like a blog or Medium post, so I can understand the way this person thinks. Helpful?
Arpit Gupta
Arpit Gupta@arpitgupta · Product Manager
@pakman Working on a music-tech product focusing on building brands for DJs. Any recommendations on building partnerships with the music distribution and publishing companies so artists have access to songs?
David Pakman
David Pakman@pakman · Partner, Venrock
@arpitgupta Hi Arpit, unfortunately, as with many other ex-music entrepreneurs, I am no longer focused on startups in the music sector. I don't believe venture returns are possible in this space. My advice is to stay away from businesses requiring licenses from monopoly/oligopoly rights holders.
Phil Nguyen
Phil Nguyen@p_ngu · The Daily Water Cooler + Vettery
@pakman: Thanks for taking the time! What service or technology do you think is too far ahead of its time for mass adoption, but could be successful later on? And what might be the missing factor needed for its future success? For example, people sometimes point to on-demand courier services as having failed in the previous internet boom but have now (arguably) found their market and stride largely because the proliferation of smartphones. Personally, I might guess things like Bitcoin or iBeacons as examples that just aren't quite there yet.
David Pakman
David Pakman@pakman · Partner, Venrock
@p_ngu Hi Phil, this is a very important question, since entrepreneurs not only have to be right that something *will* happen, but also be right about *when* it will happen. With the caveat that I do not know, here are some guesses... - I suspect VR is very close but will need another year to 18 months until the right killer app/content is created for it to drive large-scale adoption. - There are signs that some applications of AI are working really well (predictive sales business analytics, programmatic ad targeting, predicting brand affinities, image recognition) and there are other examples of where parts of AI just don't work really well (broad speech understanding, language translation, etc.) - I think autonomous vehicles are much closer than people think (more on that here: https://medium.com/backchannel/t...)
David Pakman
David Pakman@pakman · Partner, Venrock
@p_ngu I think the blockchain might be one of the most significant tech innovations of the last decade, but has about 8 - 15 more years of tech maturity and adoption left before we all see how significant it is.
Phil Nguyen
Phil Nguyen@p_ngu · The Daily Water Cooler + Vettery
@pakman Thanks for the thorough answer! Re: artificial intelligence, loved the insight. Would also add that a trend I've noticed on PH lately is that users are becoming more skeptical of the term, along with machine learning, as it quickly approaches "pitch buzzword" status similar to "cloud" had previously. Likely a sign that people will be disappointed with AI offerings in the short-term until more "real" AI services mature. Appreciate your time again!
itsbillyboy
itsbillyboy@mrbillny · Life enthusiast
@p_ngu designed and implemented correctly there are some good examples of functioning private machine learning n possibly AI active today.
neeharika sinha
neeharika sinha@neeeharika · Google, Threadchannel
@pakman Thanks for being here for the AMA session. Is there a particular vertical you are excited about? What is one thing that stands out to you in an early stage startup?
David Pakman
David Pakman@pakman · Partner, Venrock
@neeeharika Yes, there are many! I love everything happening in video right now (check out our portfolio company YouNow). I am very excited about the inevitable disruptions in automotive. And I have been looking into business workflow applications of AI. The one thing that always stands out the most in an early stage startup is the *team*. We invest quite early in a company's life...it will usually take 6-10 years for the company to reach giant success. Given that, many things will go wrong and the one mitigating factor for setbacks is a great team. We spend the most amount of time thinking about the founders and the early team before investing.
Theoharis Dimarhos
Theoharis Dimarhos@theo_dimarhos · Marketing+Biz Dev at AngelouEconomics
Thanks for taking the time! What is your take on online schools/education? What is the one component missing that will make them grow exponentially?
David Pakman
David Pakman@pakman · Partner, Venrock
@theo_dimarhos Well, the one thing holding *back* most schools is their dependence on physical space. Trying to crack elements of distance learning/virtual instruction holds the most promise for education scaleability.
Terena Bell
Terena Bell@terenabell · Cofounder & CEO, TVRunway
Hi, David. As much of VC is relationship building (no one ever gives anyone money if they just met yesterday), how far in advance of A (since that's Venrock's typical round) do you prefer to start getting to know a team? I know the stock answer is when you close seed, but I'm interested in hearing your personal take, thanks.
David Pakman
David Pakman@pakman · Partner, Venrock
@terenabell There is nothing more exciting to a VC than "hi, I'm building something really exciting with a great team in a space you seem to love. We aren't raising right now but I'd just like to get to know you..." Personally, I love starting early getting to know a founding team, the way they think, see them make some traction, etc. There is no hard and fast rule, but I would say something like 3-4 months before you expect to raise your next round would make sense. What are you working on? ;)
Terena Bell
Terena Bell@terenabell · Cofounder & CEO, TVRunway
@pakman @terenabell Good question! Since you asked, we aren't raising right now--ha ha--but, TVRunway is the first shoppable video solution to NOT operate with pins, tags, or video editing of any type. We are an API that streaming video players (such as Hulu, ABC.com, etc) integrate so viewers can click on an item inside any program (even old ones like "Cheers" or "Seinfeld") and buy the closest thing to it currently for sale without leaving the SVP. We just finished beta with a 72% engagement rate and launch on our first network in January. Thanks for asking.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
@pakman During your career to date, what has been your a) most challenging moment and how did you overcome it? b) proudest moment and why? c) most surprising moment?
David Pakman
David Pakman@pakman · Partner, Venrock
@ems_hodge oooh, hard questions! Most challenging moment was probably laying people off, which I have had to do twice. It is something most people don't train for and it takes patience and empathy in bigger doses than most people bring to work each day. Proudest moment as a VC has probably been seeing the teams and startups I have backed do incredible things (like watching Dollar Shave Club grow from 7000 subs when I invested to more than 2.4M now and growing...). As to why, it's because it is a validating moment. It provides a sense of "hey, I knew this team would do amazing things, and I am right!" and to be a successful VC, you need to be both right and lucky!
David Pakman
David Pakman@pakman · Partner, Venrock
@pakman @ems_hodge Most surprising moment...I can't pick just one, but I would say that I have been troubled by the amount of negative sentiment there is towards VCs. It is so different than when I was an entrepreneur. Something has changed and it is unnerving.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
@pakman @ems_hodge what do you think it is that's changes? Can you pin point a trend?
David Pakman
David Pakman@pakman · Partner, Venrock
@ems_hodge Well, as a group, we VCs have said some pretty silly stuff in public over the past few years and that has probably shaped perception. I personally just try to be authentic, available, helpful, present and to create value at the most pivotal company moments.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Do you have any recommended readings for founders?
David Pakman
David Pakman@pakman · Partner, Venrock
@ems_hodge My two favorite books right now are "Mindset" by Carol Dweck because I think this way of thinking unlocks our potential and helps us reach greatness and "The End Of Power" by Moises Naim (which was the first book Zuck chose in his bookclub this year). I love that book because I think it explains exactly why incumbent companies cannot defend themselves well against distributed forces like the internet. It also highlights the power of online communities and helps explain my interest in platforms like YouNow and Amino.
David Pakman
David Pakman@pakman · Partner, Venrock
Well, you guys have all been kind to share your valuable time and attention with me. Thanks for your interest and great questions. Please reach out if I can ever be helpful to you and of course, I'd love to hear about your next great startup! You can read my blog at www.pakman.com and find me on Twitter @pakman.