On the podcast: VC's New York story

Interplay managing partner Mark Peter Davis joins the podcast to discuss the advantages and disadvantages of being a VC in New York, the ins and outs of entrepreneurship, and how Interplay approaches investments in the blockchain space—while avoiding the crypto hype. Plus, PitchBook senior news editor James Thorne shares insights from his reporting on the exodus of executive leadership at SoftBank.

In this episode of Sapphire Ventures' series "GameChangers," Sapphire partner and Head of Revenue Excellence Karan Singh speaks with Figma VP of Growth Marketing Jesus Requena about how to define and redefine your ICP to unlock the revenue engine. As a proven marketer at Algolia, Unity and now Figma, Requena walks through steps of how he has achieved highly prioritized ABM motions at each of the companies.

Listen to all of Season 6, presented by Sapphire Ventures, and subscribe to get future episodes of "In Visible Capital" on Apple Podcasts, Spotify, Google Podcasts or wherever you listen. For inquiries, please contact us at podcast@pitchbook.com. Transcript Andrew Woodman: Today we've got with us Mark Peter Davis. Mark Peter Davis is the managing partner of Interplay. Mark, you've got actually quite an extensive CV. You're a serial entrepreneur and founder. I think in one of your profiles, you describe yourself as somebody who breathes startups, which definitely speaks to your dedication and background in this industry. Tell me a bit more about you. You went to Columbia University, so you're based in New York. You're from New York, I understand, or you only studied there?

Mark Peter Davis: No, I just studied. I'll give you a quick background. I'm a middle-class kid from Los Angeles, and I've been an entrepreneur since I was young, just starting stuff in elementary all the way through. Ended up being ranked in California, good grades, went to Duke undergrad, tried to start five companies there. Really no idea what I was doing. Met my wife, so that was good, but came out and decided I was going to dedicate my life to innovation.

Did a consulting thing, did Bain & Company, and then commercial diligence at KPMG and about 68 transactions. MBA at Columbia, and then worked at two different venture funds in New York. And then, about almost 11 years ago now, started Interplay. Now all along the way I was starting companies and starting startup communities. I started the largest startup community for Columbia, a large one for Duke, a large one for New York that's since gone sideways.

I just love this stuff, like you said. I started producing content to help other entrepreneurs, started blogging a long, long time ago that led to being a contributor at Inc and Insider. That led to a book. As you know, I also run a podcast now where I interview VCs and entrepreneurs mainly to keep learning. I'm knee-deep in this and don't plan to ever stop. This is what I do for fun.

Andrew: Excellent. That's great. As they say do what you love and you never work a day in your life.

Mark: That's how I feel.

Andrew: Excellent. You're living the life. I wanted to speak to you today actually a bit about, not just about you, obviously I want to speak about you and what you do at Interplay and what you guys are doing, but also broadly about where you are. You were based in New York as we know. You mentioned you actually are originally from the West Coast. Was it school that brought you to the East Coast initially? Was that how it started?

Mark: Yes, I met a Jersey girl in college, and now we compromise and I live in Jersey and work in New York City. It's been a good fit for me too and that took me a while to get my head around personally. New York has a lot to offer for people who it's a fit for. I'm happy to dive into the New York story. I've been out here for more than half my life now.

Andrew: Wow. Interplay, itself, has been going for about 10 years.

Mark: Yes, just coming up on 11 years. Our birthday is in October. I started it a long time ago because I thought there was a different way to approach venture capital. I'll give you an overview of Interplay, if that works for you, so people at least know what we're talking about. Interplay is a startup ecosystem. We have a venture capital arm, but I use the phrase "startup ecosystem" very intentionally because we have really six divisions of what we do, and everything we do is centered around a mission.

We are a for-profit organization, single bottom line, but we're mission-driven in the sense that we have a belief and that motivates a lot of our activity. The belief is that entrepreneurs are the primary driver of social change in many cases, more so than non-profits and governments. Everything we do is designed to help entrepreneurs be more successful. Our ambition is to build a 100-year firm, that will be here long after I die, continuing to help founders do what they do best, which is advance society.

Now, that's manifested in six divisions currently. Our core, the keystone of Interplay, is our capital arm. We've got an early-stage venture capital fund where we invest primarily in North American tech software companies, with the concentration in the United States. We've been investing out of the vehicles under the different vintages of that strategy for just over a decade and have had some really, really strong performance. We got a bit of a mouse trap for that.

We've got an opportunity fund we're raising now, which is designed to double down on the unicorns. About one in five of the companies we back at the early-stage fund, historically has become a unicorn, and so we're positioning ourselves to put more money into those companies. We have a blockchain fund we're raising for as well right now. We think there's an intelligent adult way to be playing in the blockchain space where you can harness and get exposure to the market without having to take unnecessary risks.

That's the capital arm. We've also got a services division. We've co-founded seven companies that provide core operating services to entrepreneurs. These are things like commercial and health insurance, marketing, leadership training, accounting tax, CFO, software development and design, law, and, I think I got all of them, oh, business process outsourcing. We have a lot of talent working in and around the Philippines providing really good service from data science to data entry for startups.

Those companies employ well over 500 people, and we provide services to a pretty significant percentage of venture-backed startups in America. I want to say double-digit percentage, I would say 10%, maybe 15% or more, of all startups in the United States use at least one of those services. In addition to that, we've got a incubator where we coach about 15 pre- or post-seed companies a year on their operations to help them get aligned to scale and be successful. We take an equity position in those companies and also get a right to invest so it serves as deal flow for the venture fund, which is very important.

We have a foundry where we launch five to 10 of our own companies a year, that's the mandate. These are literally Interplay-generated ideas, things that we can think can be venture-backable, scalable tech companies. We'll hire in management, put a little of our own money in and launch the companies, and it creates another proprietary type of deal flow for the fund.

Then we have a multifamily office that's managing partner capital and the capital of other entrepreneurs, to not only do the estate and tax stuff, but to generate outsize yield and to make sure, which is the key part that's on mission for us, that people are keeping their money in the hands of the next generation of innovators, folks who are going to continue to push society forward, whether it's through space tech, software, life sciences, pharma, you name it.

The sixth is education. We produce a lot of content to help coach entrepreneurs and teach them. All of these things are on mission for us of helping founders, but they're also all synergistic. They all make all of the other dimensions of the business stronger, and that's why we call it Interplay.

Andrew: Oh, excellent. That's a great summary of a very obviously expansive business. I definitely want to touch on a lot of those things you've actually raised, especially blockchain and coming back to the incubator. Just going back a bit, just talking about, again, the choice of geography, you are from Los Angeles. Obviously, just up the coast, you've got San Francisco. What was the thinking behind building your business in New York versus, say, the West Coast where, obviously, you have the traditional heart of the VC industry? What have been the draws for New York as a city of innovation for yourself? What are the advantages for you for being there?

Mark: To be very honest, I chose New York because wife and family in the area was a personal decision, but it ended up being an incredibly good choice. I entered the venture capital market in '06, and I've been around this business for a while. I wasn't one of the first people in, there's a couple generations of VCs that are often overlooked in the New York ecosystem that were here paving the way. But when I joined it, maybe it was a second or third lap, it was still pretty small. There were five, maybe 10 firms in New York, and it has absolutely exploded. So I happened to be in a pretty good place to have landed during a period of massive growth.

New York is a fantastic place to be starting companies. I get excited about this. I'm not just longing New York. I'm very passionate about the democratization of innovation. I want every major city in the world to be pumping out innovation and technology to raise a standard of living and advance mankind. Having it happen in New York is a bellwether of what's happening globally, and it's very meaningful to me.

I can give you a little color in New York. I believe we're the second most robust startup ecosystem in the world now behind Silicon Valley. I got some fun stats that I keep on hand. In the 18 months of second half of '19 and '21, New York deployed about $14 billion of early-stage capital, and to give you a sense of scale, the Valley did about $25 billion. So this is a major gap closing from when I started. When I started it was probably 10 times bigger in the Valley.

It's not a parody, the Valley is bigger, but I think what we're seeing is not a New York story, it's more of a story that innovation can increasingly happen in a lot of places. It's no longer beholden to one specific geography, especially given the advent of modern internet and technology, and it's growing rapidly. The startups in New York raised about $52 billion in 2021, which was double what we saw the year before. Now, '21 was a pretty crazy year, so that's part of it, but it's all part of this bigger trend.

The number of VCs is up. When I started in this business, there were five to 10 VCs really who were significant and focused on the New York area. There's over 200 venture firms represented in the New York metro now, including people from a16z, Sequoia, you name it. I feel like every major firm has at least got a person here. And there's a reason. It's become the corridor to the East Coast venture opportunities, and it's also become the access point for a lot of European companies and Israeli companies that are looking to tap into a bigger market with one language and one legal system. We'll see a lot of those companies come over, and we find ourselves to be a pretty good partner for them because we've got all these service platform companies. It's kind of a one-stop shop.

It's been a great and growing ecosystem for quite a long time. I think it's a very intelligent place to be as an investor. The rounds are about 30% less expensive than you see in the Valley for a Series A round, and engineering talent's about 15% less than what you would get in the Valley. Those are both advantages.

Now, there's other cities that I think are great out there like Miami and Austin and LA and Chicago and Boston. There's all these other great towns that are really bolstering. You got Seattle, you got a lot of things happening, and there's probably other places where there's good arbitrage. What I think is true for New York right now, and I'm hoping this changes, is it's one of the few geographies where you have full critical mass, where there's no disadvantage to starting a company, but there are some pricing advantages and some structural advantages. We're seeing a lot of that.

Everyone's moving to New York right now. It's one of the biggest destinations, leaving Silicon Valley during the pandemic. Rent prices are through the roof in New York, and I think what's happening is you're seeing a lot of people who work at Silicon Valley companies that are young, they want to have a bigger dating scene, they want to have fun, a nightlife, and so they live in New York and work for the Valley. That's driving rent through the roof, which is creating its own problems, but it's thriving in a way that we weren't sure was going to happen during the pandemic. It got pretty quiet for a while there.

Andrew: It's very interesting what say about the international aspect of it ... Obviously, I'm in London, and I predominantly cover the European market and what's going on over here, and it's interesting to me because New York is always seen as the closest part of the US to London.

Mark: Sure. It is.

Andrew: In fact, there are a lot of parallels between the cities, and it doesn't surprise me that New York is a kind of gateway to Europe as much as I'd imagined for its relationship with London and the parallels it has with London. One, actually, sector that comes to mind, and one sector where you've been particularly active, and you've already brought it up, is financial technology and fintech. You guys backed Coinbase, which had its IPO. Correct me if I'm wrong. It's from our records.

Mark: No, that's correct.

Andrew: You guys have been active in fintech-related investments, and now it's really interesting to hear you got this blockchain fund. I think that thing, what you said actually really resonated, this idea of a grown-up mature way of looking at blockchain beyond the crypto hype.

Mark: Thinking about risk in the blockchain space and diversification and portfolio construction, we really think our fund is a unique opportunity for people who want exposure to the space. Maybe if they don't speak blockchain—there's a lot of lingo and jargon in there—we're a good partner to invest in and to get access to this space without having to spend a hundred hours a week trying to figure what the heck is going on. There's a lot going on. But also knowing you've got a set of capable hands who going to make sure there's thought about risk and exposure and downside production built into the portfolio construction.

I think the market is maturing. Our entry into it, I think, is part of that story. I think it's ready for that type of behavior. That's one of the reasons we kicked off the blockchain fund. It's frankly, self-interested. I wanted to put more of my money to work in the space. To do anything beyond buying bitcoin and ethereum, it's a full-time job. There's just too much knowledge and complexity in that market right now.

So we brought in a partner who managed $100 million P&L in a prior life. He's a quant research trader. What I love about him actually, he was quite skeptical of blockchain until about three years ago, and then woke up and saw opportunities to start capitalizing on it, and started trading in it with his personal book, his family book, and then some friends as well. We've partnered up with him.

We've got great blockchain opportunity deal flow by virtue of our broader network and his know-how combined with we've been in this space for a long time. We had the opportunity to put some money into Coinbase, a Series A, which we're grateful for. We started a mining company early on. I bought into crypto in 2011, personally. One of our companies we co-founded, built one of the first insurance products, like an FDIC for the crypto space.

We've been in this world for a long time, but never dove all the way in because of the increasing complexity. It was simple enough to go along with bitcoin, ethereum. But now as we're seeing real operating businesses being developed, and we're seeing a litany of these opportunities come across our desk, it made sense to level up so we could start diving into those opportunities too rather than just pass them on other firms.

Andrew: You've got this blockchain fund. Blockchain—now, this is probably a bit of a hackneyed term now. I've heard a lot of people say it, but I'm sure you agree. When we talk about the maturity of the blockchain ecosystem, the blockchain space, a lot of people talk about crypto, and that's obviously the hype and the noise. But when we look at what's happening in the crypto market, it's like looking at what was happening to the early dot-com companies, the crash. You see those go by the wayside.

But the fundamental technology is important. It's blockchain. It's same as the internet was in 2000. It's going to change the world, basically. Essentially, that's what a lot of people are saying. Is that something you subscribe to? What do you think are the big opportunities for you when we look at things like Web3 and DeFi? What is the future vision you have? I'm curious to know.

Mark: Yes, look, I think it is a revolutionary technology. At the highest level, in 2015, everyone in venture was talking about, "Oh, I have an AI company this, an AI company that." It's software. AI was the fancy component of software at that point. NFTs, I think, are membership reward programs that have a very particularly use-relevant application. I think they're going to be used a lot for ticketing in a lot of spaces.

I think blockchain is essentially a very sophisticated database infrastructure that's going to advance our capabilities around security and ability to transact, that's going to enable us to move forward in financial markets, and a whole lot of other things that the internet isn't safe enough to do yet. So it is a big deal.

Now, the crypto hype and speculation, it's hard to know always within that what's real. A lot of it probably isn't, but there is real substance in parts of it. Our approach to this market is a little different. We're all people who have been in this space for over a decade now, watching it with a bit of skepticism. I would say the technology is like computers in the '60s or '70s right now. It's really early. But there's real infrastructure opportunities and real value to be created.

We haven't seen a lot of consumer-facing applications out of the Web3 space yet. How many iPhone apps do you have that are based on Web3, that you use right now? None. It's all on the come. We know that. Our view on the way to approach this market is we're developing a fund where we're going to invest in a handful of other funds that we think are very promising, where we like the GPs, and alongside them, with our direct Web3 deal flow, we're going to be collaborating with those funds to evaluate investment opportunities.

It's a great co-investment platform. It's a great investment platform for the direct deals we're doing. I think it's the right way for people who don't have blockchain exposure, who can't tell the difference between fund manager A and fund manager B and everything they're saying, to get into this market, to get diversified exposure beyond just going along bitcoin and ethereum, to tap into some of the more talented managers, and to proprietary deal flow, and to buy into the real future promise of the technology by investing in the infrastructure. That's where the opportunities are right now.

This is a little bit of a different game. This isn't, "Hey, we're trading crypto, whatever." We are seeing this as a layer of the tech infrastructure of the future, and we're participating in a very careful and risk-appropriate way to go tap into that and sharing the upside. I think this is a really good product for people who don't have exposure to crypto and blockchain. It's a way to get in without gambling on the next coin or token that you don't know what's really behind it.

Andrew: Would you say that that's another kind of parallel that New York has with London? I definitely know that this city where I am—I'm here recording from London—is definitely been very heavy on fintech, not just in Europe but just globally as well, by being a financial center. Do you find, because of New York's status as a financial center as well, that there tend to be more people within that kind of fintech ecosystem, as well, and more opportunities as such?

Mark: Yes, London and New York are sister cities when it comes to financial infrastructure before the software market even showed up. It's a known thing. Those are two of the major hubs globally if not, the two preeminent hubs. I'm a little bit of a history nerd. The UK was the dominant power and the US took it for a little bit. We'll see what happens soon and next with China. It's no surprise that those two countries are financial destinations.

It's not just Wall Street-type stocks and bonds that everyone thinks about. London is the center of the insurance industry. We've started some companies in the insurance space, and there's a sister city dynamic going on with that. We had teams flying out to London frequently to meet with people who are really at the center of the insurance universe. There's a tremendous amount of financial know-how and experience in both these cities, and that's what gives way to entrepreneurship.

I was on another podcast recently and someone's like, "Well, how do you come up with ideas?" I'm like, "No, no, no." On the venture side, we invest in other people's ideas, because the reality is someone's living a pain point that I'm not living. We're all in different journeys. And when they're living that pain point, that's when they decide, "Hey, there's an opportunity to do something." It's no surprise, in two financial centers, that you've got people living pain points in the financial space stepping out to solve it with technology, and that gives you fintech.

Andrew: Also I'm curious to know as well, what other sectors do you feel are predominantly in the New York ecosystem as well, for example, media? Are there any other areas that you're focused on?

Mark: Yes, I think when we were coming up, I remember in 2007, 2008 when I was a junior guy at another firm, we had to spend a lot of time trying to sell people on the idea that New York was a reasonable place to make a venture bet, to become an LP, invest in a fund. That's tipped. The LPs generally know New York is a viable market at this point.

One of the things we used to talk about was Madison Avenue, center of the advertising industry. Look, media, adtech, those are all things, fintech, that are naturally part of the New York ecosystem given the existing industries that were here before tech even showed up. But New York's tech scene has really morphed. It's gone much beyond that. I would say pretty much everything, every sector is thriving here now. You're seeing blockchain, big data, SaaS marketplaces. Everything that you think you're seeing nationally is showing up in the New York space.

The only thing that I think New York really has a material deficit relative to the Valley—this is a big deal. For entrepreneurs who are playing in this space, they need to know there is a geographical concentration of capital for them—is for companies that are basically doing extremely capital-intensive endeavors, things where you've got to burn $10 million, $20 million just to get the product figured out.

These big science projects which make big companies, these might be space technology or other, these are plays that right now there's not a lot of funds in the New York area that are capitalized to hit. You don't have a ton of multibillion-dollar-AUM funds per vintage, not just in aggregate. You need that type of capital to justify making a high-risk bet on a company that needs $10 million or $20 million to start.

That was a lot more common and it has roots in the Valley. When you think about the semiconductor industry, that was the profile of venture long before the capital requirements of starting a company plummeted. They really plummeted with the internet. Even think back in 2001, 2002, you wanted to start a website—which today is trivial, you can get done on tens of thousands of dollars if it's a static site, not even an app or a light app—that would cost millions of dollars to do back then just 20 years ago, because you had to buy all the servers and hardware to actually sit in the office with the company. You needed a system administrator to deal with that.

Well, the different cost structures like that have all been put in the cloud: Amazon Web Services, Microsoft Azure and so on, Google's got a cloud solution. They're all great solutions now. For hundreds if not low-thousands of dollars, that entire part of the cost structure is gone. What's happening is the capital required to start a company is asymptotically approaching the cost of labor on the software side.

While most VCs in the modern game have tooled themselves up to play in software, things that are hardware, physical products or extremely complicated software solutions that require years and years of development, the VCs are not typically as well tooled and they're not designed to put those in their portfolio, those heavy science lifts, in the New York area. That's my opinion.

I think if you're out in the Valley, you're going to find more firms that are capitalized for that, geared for that, and are willing to bite. That said, I think the companies that are in that category of capital intensity are a tiny, tiny percentage of the overall innovation that's happening by volume of companies. Vast majority, I would say 98%, 99% of what's coming out today is almost tech-light. It's building using information and what the internet's best at: collecting information and spitting it back out to create connective tissue and solve different types of problems, whether it's in fintech, food, you name the industry.

It's that communication layer that the internet is really doing, and it's happening through a lot of these SaaS solutions. All of those I would consider tech-light relative to these companies that would have this huge capital intensity. Pretty much everything else you're going to see in New York, but I think you're not going to see really big science projects here just yet. I think we need a little bit more capital development.

Andrew: How do you see that capital development coming about? What's needed to happen? What's going to be the catalyst if we are going to see more investment in more capital-intensive innovations?

Mark: I think it's happening already. You've got those big funds in the Valley now—that have those deep pockets—with partners in the New York ecosystem. There is a way to tap into those pockets from here. That's happening. I think there's also been a culture shift across the entire startup ecosystem, particularly on the venture side, where VCs have retooled their perspective that companies don't have to be in a particular location to raise capital.

Now, the reality is I think investors are a little bit careful to invest in geographies that are not developed. I had a gentleman on who started a venture fund in New Orleans, which is in Louisiana, and it is not a robust startup ecosystem. We talked about that. There's a lot of money that will not go to that geography, because there's fear that those companies can't garner talent, they can't tap into business development relationships, they may not be able to build as many relationships with other VCs, VCs in far away geographies may not want to travel there for board meetings or may see the companies as risky.

I think there is some center of gravity around the hubs, but there's a lot of hubs to choose from. What that means is you've got the traditional deep pockets in the Valley covering the entire territory. They're going to five, six, seven, different cities around the US now to write checks. With that, and given that New York is really the second hub, you've got a lot of Silicon Valley money represented here.

What will happen is some of those companies will start. Some entrepreneurs are coming out, they're going to start companies, they are going to want to be where their family is, they're going to want to be in a certain cultural environment. New York and Silicon Valley have very different cultural styles in terms of the experience of living there. When you put these pieces together, I think we're going to see a trend of more and more of those companies breaking through. As more show up, it'll garner more capital, local funds will start raising larger funds to support. I think we're halfway through that evolution already. I think it's already going.

Andrew: Of course, capital is just one part of the puzzle. Talent is another big part of it. You obviously mentioned some of the challenges some places outside the hubs have with talent or perceived perception of getting talent. In New York, it seems to me that there would be a deep pool of talent to draw from. That must be one of its advantages. You've got the Ivy League schools on the East Coast and you've got the fact that it is just a large city with a big population and a lot of talent to draw from there.

Is this the thinking behind the foundry? Because I really like this idea that you are talking about getting somebody who is just a raw talent, I think is the term you actually use on your website, and funding that, and actually, not even having an idea and just bringing an idea. How does that process work? Where do you find these people? Is that a part of the story of where you are and the kind of talent that's available to you?

Mark: Yes, there a tremendous talent pool in New York. You've got the Ivy's. A lot of our team at Interplay is from Columbia and from NYU. You've got a lot of resources here. The schools have all shifted to increasingly focus on creating awareness within their student bodies about the entrepreneurial pathway. I think if you showed up at any of those schools 20 years ago, there was one narrative and it was Wall Street. There's a lot of entrepreneurship coming top-down through the administration, the class, the curriculum. It's much more part of the cultural narrative of what's normal. There's a lot of smart people and wonderful people in New York.

The other thing you have going for New York and a lot of the other bigger cities in the States is that the talent's relatively mobile between them. People in the Valley, it's not a big, big decision, unless there's family roots, to move from the Valley or Los Angeles or Chicago to New York or vice versa for the right opportunity. Moving's always a pain in the butt and there's family decisions but it happens all the time. It's not unusual to meet transplants from those areas of the country to the other.

With mobile talent, huge pipelines of pools of people are coming out, a generally very large population,the center hub for headquarters for most industries that were dominant before the tech sector popped, there's just a lot of gravity to build against. On our foundry side, I've always been very entrepreneurial, always been a bit of an idea guy, os are my partners, we get a lot of information. We get trained from being in this business and we stumble onto ideas that no one's doing, we haven't heard of anyone doing, and we'll put those down on a list.

And when we find the opportunity, what we'll do is we do recruit through a talent pipeline of all these people coming out. There's a lot of folks out there who know about entrepreneurship because of friends, it's becoming the reinvigorated American dream. They want to change the quality of life. Maybe they've got a great job at a big firm and they're miserable. They can knock on our door and we'll match them with an idea that we think is sound, we have a very high success rate, and some capital and most importantly, mentorship.

When you stir all that together, people who are afraid of the concept of even being founders are going from, "Hey, I'm terrified about the idea, let alone knowing what to do with it, let alone knowing what kind of company to start," they kind of accelerate all the way to the point where they wake up one day and they've got a viable company. We think this is a really interesting opportunity way to play.

It's a byproduct of our backgrounds as a team. There's a lot of VCs out there that haven't been entrepreneurs. There's a lot of entrepreneurs that choose not to be VCs. The fact that we sit in the middle has really helped us bridge that divide. This creates a really unique dynamic because it gives us the opportunity to create proprietary deal flow for the venture fund. It's a real unique value creator, I think, for what we're doing.

Andrew: How diverse are these candidates for these startups that you are shaping?

Mark: Diverse from cultural and ethnic is diverse as the American population.

Andrew: Diverse as a professional background as well. Sorry.

Mark: Professional backgrounds we are seeing, they have all walks of life with people who have been in the tech space, people who have been employees in startups, people who have been founders and have failed. We've got other folks who have come through and said, "Hey, I've been a banker or consultant or lawyer, something in professional services for a long time."

The common thread is they've got the traits that we think make for good founders: humility, a really good work ethic and they're organized. You get those three things together, those trump Ivy League educations in my mind. We get plenty of people coming through with Ivy League educations, but those are the three things we look for. That's the combination that we think makes for really good entrepreneurship.

If you're not humble, you don't keep learning. You got to keep learning because you never know it all. When you're an entrepreneur, every day is a new day. You got to be driven because it's hard and there's peaks and valleys. And when you're in those valleys, you got to climb back up that hill to get back on the peak. And you got to be organized, because otherwise you just can't juggle all the plates that are involved in entrepreneurship.

Those are the three gold star ingredients, in my mind, for entrepreneurship. We look for those. When candidates come through and there's plenty of them that match against that, we have some interesting conversations about starting companies.

Andrew: That's really interesting. Looking at the current macroeconomic environment we're in right now and the kind of volatility we've seen in the tech stocks and the broader situation we see with the world economy—interest rates going up, inflation across the board, a lot of this is happening right on your doorstep, obviously in Wall Street—what are your thoughts now about how to best make sure the early-stage investment opportunities are tapped into in this current environment and the startups that are coming up now are getting the support they need? How are you changing tack in what you are doing? Where are you focusing your energies now in this environment?

Mark: A couple of answers, and I'll give you a full thread on how I got to these bits. The market's contracting. We are not changing our investment pace. We want to buy low as the other folks contract, and I'll explain that. We think that by virtue of the way we invest generally our existing portfolio and the new companies we're investing in are really predisposed to navigate these downturns well. They're certainly affected, everyone is, but they're not likely to be the companies that die.

I think the prospects for VCs coming into this downturn are really a function of their prior portfolio construction. If their prior pre-existing portfolios were comprised of companies that hadn't figured out a positive gross margin yet, didn't have an LTV/CAC ratio that was exciting, didn't have the core fundamentals in the economic engine, they're really at risk. What happens in these downturns is—this is my third downturn, I was a VC during the '08 one—there's a flight to quality. It's not that every VC's wallet completely closes and zero deals are done. What happens is people wake up and say, "We're not doing the hype deals. We're not overpaying for something because we're worried about missing out. We're going to take our time and start doing diligence. We're going to look under the hood of the car and make sure there's a real business, not just something that could be that we think should be exciting and we don't even know what it is."

When that happens, all the companies that were a little bit more promise than substance have a real hard time raising money. If they did wacky valuations before they've got down rounds ahead, and they're going to have a hard time raising money. If people got out of their skis doing crazy valuations or companies that raised a lot more capital than really the economic viability supported, from their risk profile, I think those portfolios are going to be in trouble.

Now for us, we're a fundamentals investor. We like investing in companies that we would say are real businesses and generally default-alive, meaning if they had to retool, they could be profitable. We don't want them to do that. We want them to reinvest profits and growth because there's a better ROI on that than distributing capital or anything else. We've got a lot of companies in which what we call real economic engines: real revenue, real growth rates, real margins, LTV/CAC ratio, unit economics are strong. I think our portfolio is very well positioned to continue to endure.

What we're advising folks who are in the portfolio, and it's a lot of what other VCs are saying too, I think VCs all know what's happening, macro is interest rates are up, market's down. There's a denominator effect felt upstream by the LPs. Their net asset value of their overall portfolio has dropped and they're suddenly overweighted venture, because ventures' portfolio marks don't change as quickly as the public portfolios. VCs know they're not going to be able to raise as much capital and they start clamming up. Instead of doing 10 deals this year, they'll do five or three to extend their funds so they can raise in better days.

Everyone's telling the entrepreneurs, "Do inside rounds now if you can. Ask your existing investors if they want to put a little more money in to give you more runway through the market." We're seeing a lot of that. The companies that need to go out and raise externally, they just had bad timing, it's unfortunate luck, are recalibrating valuations. Valuations are arguably down 30% to 50% in a lot of the companies we're seeing.

I don't know that they're low. I would say they look a lot more like 2019 valuations. I would argue maybe the startup market got in the seventh year and it's downshifted back to fifth or fourth. I'm not saying it's not going to keep going down more, but business is being done and the pricing in valuations do not seem draconian to me yet, in most cases. I'm not seeing too much ugly business, which we saw some of in '08.

We're telling entrepreneurs, raise inside capital if you can, do not spend on growth at any cost—which was a little bit of a mantra—spend on profitable growth, understand your numbers, your internet economics, optimize CAC/LTV. There's better discipline and company health being injected into the existing marketplace.

For us as a VC, we think this market is a big opportunity. Private equity, venture capital tends to outperform in vintages when the market crashes, and it's pretty obvious why. You get to buy low, hold it, and for a long-term asset, you get to sell it in a future market when the market's high. We all want to buy low and sell high, but then when it's the opportunity to buy low, we're all scared, a lot of people chicken out. That's not us.

We're about to do our fifth deal this year. We generally do close to a deal a month. We'd like to continue that pace, keeping our same standards for quality and business fundamentals. We're seeing the same great types of companies we were seeing before that we can believe in, that have taken us on a path of success in the past, where we're able to get in at lower prices.

It's going to be a win for LPs right now. We're very excited on the GP side. We also want to put the flag out there. If you're an entrepreneur and you're running a great company, no reason to panic. You just got to find the VCs that are leading into this market, and we're one of them.

Andrew: Right. Do you feel that, generally speaking, not just as a result of the current economic climate, but just generally as a structural change, that there is definitely a trend for companies to stay private for longer. Obviously, we've already seen that to a massive extent. Do you see that extending? Do you see more secondaries as exits ... ? Also your opportunities fund, is that a part of the idea that there are now longer roads of value creation with startups that you want to invest in?

Mark: Our opportunity fund is not really part of that broader narrative. It's simply this, we've had a really good hit rate at the Series A. About one in five of those companies we've invested in historically has become a unicorn. When they come back to us and say, "Hey, we like you guys, will you just do our whole Series B?" we haven't been capitalized for that. We've given those companies on a silver platter to our friendly firms, and we're very happy for them because they've all done quite well with that, but we would like to capitalize on those opportunities on our own, because we're already doing the hard work getting all the founders. We're already inside monitoring these companies and helping them, it's really obvious.

The broader exit environment, I would say is an interesting dynamic. It's funny, a lot of people don't know where the vesting construct for early-stage startup comes from. Standard vesting, if you get a job at a startup, is four years with a one-year cliff. You're an employee somewhere, that's the typical deal. The history on that is actually it took, on average, about four years for companies to IPO back during the boom, and before. A company would start, four years later they'd be doing $5 million to $10 million in revenue, and they would go public. That was the exit horizon.

Now, after the bust happened in '01, there was a lot of legislation passed in the states that made it very expensive and complicated to pursue an IPO. The path to going public really elongated. It's all the way up to about nine, 10 years now. Big shift from four years to nine, 10 years. What we're seeing is a lot of opportunities to continue to play in those companies as they move forward. I don't think that change is really novel to this current environment. I think that change was really catalyzed 15-odd years ago with the legislative change.

Just to come back to the secondaries bit, there's a little bit of caveat. In the teens, '15, '16, '17, '18, we weren't seeing a lot of liquidity for IPO stage companies. For whatever reason, Wall Street was not open to taking tech companies public at the same rate that it had been happening in the past. There was a bit of a glut. You had a lot of companies that were this new unicorn status. I think public markets didn't know if private companies were wildly overvalued, and they weren't being taken out to market and marketed.

In that period, we saw a lot of secondary activity, a lot of VCs saying, "Hey, I've been in this business for 10 years. It's not clear if the public markets are ever going to open up to them. Let's transact and sell out, or at least take some chips off the table if not all of it." As we all know, the public markets really opened up in the last two, three years. A whole backlog of companies flooded in. Some of them were overvalued, no question about it.

But the public markets appear to be open now. Yes, we're in a downturn. No, a lot of companies are not going to want to go public during this downturn right now. They might be holding their breath for 12 to 18 months. But my perception of the situation is that the public markets are open again. When the market picks back up, companies are going to be opportunistic about taking advantage of them.

Our view on secondaries is they're an important ripcord to be able to pull when you think the company is becoming overvalued, or there's real risk inherent to the business. We're a long-term capital player. Generally, one of the best ways to extract value for LPs is to hold through an acquisition or an IPO.

Andrew: Moving from the short-term to medium-term, to the long-term, looking at where you are as well, again, in New York and the ecosystem there and the opportunities there, that's where your based, that's where you're operating. Do you think in the long-term, the Big Apple, as it were, would always be giving you a big enough bite? Or do you see yourself extending more in terms of your geographical focus?

You've mentioned, obviously, we've got Europe there with London. We met in Berlin, so obviously, you have been abroad. I'd love to know a bit more about what your long-term futures are for your business.

Mark: We currently invest across North America. We're hubbed in New York, but most of our investments happen across the United States. We have a disproportionate deal flow on the East Coast, given geography and networks. So there's some weighting there. We have plenty of investments we've made in California, Chicago. We got some players in Colorado. We've also tapped into some of the deals happening in Canada. Canada is awake. There's a lot happening in Toronto.

We're also tapping into Latin America. Latin America is now awake. We're seeing a lot of really talented people waking up and doing what I think we saw in Europe about 15 years ago. They're looking and saying, "Hey, there's a bunch of established business models that are already understood. They've played out in a bunch of other geographies. ... I can make $1 billion dollars if I go start the company." And it's happening.

We're seeing a little bit of Colombia, Brazil, Mexico, Chile play, where companies are popping up, and they're spreading into those four markets, creating important infrastructure that we've all become accustomed to, from ride-sharing services to delivery services to logistics, you name it, all tech-enabled. There's going to be a surge of unicorns coming out of Latin America, and we've started to invest in that.

Now, our fund's primary focus is the United States. We do, within the United States, end up doing more on the East Coast. But yes, I would say to you longer term, you never know what the future holds, but I would very much like to be investing in geographies where we have a structural advantage so we could play in an effective way to generate yield for the LPs, and where we think innovation is going to happen.

Now, my hope is that that's the entire world, because I think there's a few things that will be better for society, civil unrest, mankind, social issues, poverty, than more entrepreneurship in a lot of geographies, to create wealth, increase the standard of living.

Andrew: How about investors in terms of their geography? The LP universe is expanding. Obviously, more funds outside the US are looking to get more private capital exposure—VC, PE—and a lot of it is in the US. Are you seeing more Asian, European investors looking to get more exposure to VC?

Mark: We are, yes. There's a general awakening, that's a trend that's continued to happen in the LP community around tech and venture. Yes, we're seeing more in Europe. Yes, we're seeing more in Asia. Yes, we're seeing more in LatAm. We're seeing more everywhere.

What's also happening, there's a lot of pools of capital in the United States that have not woken up to it yet. They're reading Wall Street Journal articles about how some of the really thoughtfully run endowments, people like the folks at Duke's endowment or Penn's endowment, Harvard's endowment, a lot of other smaller universities, are waking up and saying, "Hey, let's hire in teams that can think about alternative assets as part of the portfolio, and let's go get exposure to private equity and venture capital."

Now, the problem they faced, I think, historically, is the safest most obvious brand name deals, firms, are pretty well oversubscribed. So if they're a newcomer, and all they want to do is dump money in the Sequoia, well, get in line. It can be a big challenge. The newcomers now are coming out. This is actually a really big moment for them, in my opinion. The market's down, VCs are going to have fewer places to go to find capital. Some of their existing LP partners aren't going to be able to re-up because they've got a denominator effect, a cash crunch. Who knows?

For the institutions that are trying to start, and really start developing a serious alternative assets program, now is a wonderful time because they can wedge their way into great firms, build long-term relationships, develop loyalty, and have that relationship for 20, 30, 50 years. I think this is a moment where it's happening in a lot of places. Now, not every institution has made that move yet, some are still very conservative. The cost of that is their endowments aren't growing very fast. There's a big cost to that long-term of compounding. There are other folks who are eyes wide open now and are aggressive, and we're seeing them.

I think there is a broader awareness. I think a lot of the driver of it is luck. We've been through these cycles. There's been an educational program. In 1995, you go around and ask an average citizen what they know about technology, and it's like, "Huh?" It's a shrug. "Oh, you mean a personal computer?" There were semiconductors and personal computers. Now I can talk to my mom, who is a retired teacher who doesn't really use tech too aggressively about portfolio companies we invest in because she's already heard about them. She's read about them in the newspaper. They're on the TV segments.

There's this broad indoctrination happening where people across a lot of sectors are now aware of tech as part of their life, and that's made it more palatable and accessible as an investment opportunity. A trend here, I think we're going to see everybody increasingly playing in the space, deeper in the US, and obviously expanding in other geographies.

Andrew: Thank you again, Mark. You've been very generous with your time. It's been a really interesting chat. We've covered all of the ground. Thank you very much.

Mark: Thanks for having me on. In this episode

Mark Peter Davis
Managing Partner, Interplay

Mark Peter Davis is a venture capitalist, serial entrepreneur, author, podcaster and community organizer.

MPD is the managing partner of Interplay, a startup ecosystem based in New York City that includes offerings for entrepreneurs at every stage of their journey and is underpinned by a venture capital fund. As part of Interplay, MPD has built a 500-person platform of service companies that provide support to 15% of all venture-backed companies in the US, creating material synergy for portfolio companies.

Through Interplay he also manages his multifamily office and is an active LP/investor in innovation technologies.

He's also an active podcaster, the author of "The Fundraising Rules," and the founder of both the Columbia Venture Community and the Duke Venture Community.

You can follow his tweets at @mpd.

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Karan Singh: Welcome to our segment of the program that we're calling Game Changers, where we'll explore how the best revenue leaders have transformed their company's growth trajectory. I'm your host, Karan Singh partner and leader of the revenue excellence function at Sapphire Ventures.

Joining me today is Jesus Requena, VP of Growth Marketing at Figma, a design platform for teams who built products together. Of course, Figma has recently been acquired by Adobe as well. So what great timing, Jesus, to have you joining us. Welcome.

Jesus Requena: Thank you Karan. Really excited about being here and talking to you about all things growth marketing.

Karan: I'd love for our listeners to learn a little bit more about your background as well as well, Jesus. So I love hearing about the aha moment that led you to realize, hey, growth marketing, this is a really meaningful discipline within a revenue organization. And certainly look, it's a hot button, hot topic, hot principle already, but love to hear what was your aha moment. Tell us a little bit about that.

Jesus: Almost like I fall into it, I didn't have a determination. I want to be in growth marketing. It happens that I was really tech savvy. I actually started a lot of my early career was a lot of centering operations, so I learned a lot about how things work, systems, processes-wise, reporting and I got my grasp into understanding data and data drove me to understand how can we make an impact and where I think I fall into this revenue growth marketing because I had an interest into how do things differently through data insight. I think my aha moment was like, well I can add value to companies by bringing strategies or go to market strategies that are driven by insights that maybe we didn't know before.

Karan: I love that. Let's get into the meat of it. Jesus, obviously with your background I'm super curious about what was that big game changer that you've seen and what was that one initiative that one best practice that you've implemented that really frankly changed the trajectory of your revenue organization?

Jesus: I used to work for a company called Falcon.io, which was a social media management platform. It was acquired by Cision, it was early days of social media and we were trying to figure it out, hey, we know there's a bunch of companies out there that fits the profile that they might have a social profile. So we have our classic firmographic demographic. We had a bit of technographic from technology like you using a social media platform, but the technographics weren't super accurate. It was like how can we find accounts that we know are in the cycle to literally they need to buy a social media platform. Back in the days you could scrape Facebook. So we started scraping all the companies out there that either weren't posting through a social media management tool or we're posting from a competitor. We track bugging history when they starting posting through our competitor.

So we knew when the renewal contract will come into place. And that was a total game changer. I think that that was me working with ops, how do we figure this out? And it was incredible. All of a sudden we had not only the accounts that we could sell to but the ones that they were in time in market to buy and back in the days Bombora didn't exist or any of the 6Sense or any of these stuff.

Karan: It's not sales, right? It's revenue as I like to say it. We have to come together in a coordinated attempt to go after the right prospects, the right customers at the right time. I do find, I mean again, now everybody gets it, this notion of growth, marketing, understanding how to sort of meet your customers where they are. I will say in past lives part of this was you have to make an investment case. You have to explain why and what. I'm curious, how did you do that early days? How did you explain to folks what you were trying to accomplish?

Jesus: Well I think the first two, I mean Falcon.io, definitely Unity was, that's where I got to maybe evolve this a bit more. I think the pattern was those two main core problems that I found in most of the companies. One is are sales happy with the accounts that they have in the book of accounts? Meaning do they truly know that they could ring all of their accounts and most of them will say, yes, I'll buy this thing or it would be a matter of timing. I think the answer is no. We all know how many accounts. I mean you can give me feedback, but my experience would be no to some degree, maybe. And then the second one is like, hey marketing sometimes generate leads or NQLS or account ready to talk to sales or upgrade users to pay subscriptions that might not be the best fit.

So those ended up churning or not expanding that rapidly or maybe they don't convert in the sales funnel as fast as they should. So you see those conversion rates dropping your classic NQL to SAO dropping or they're like, why is that happening? And most of the time my answer was like, well, because the accounts are not the right ones and then obviously we are not treating the accounts in the right way. So we don't have enough insights to go into an account and say hey, this is why based on where you are in your whole process of figuring this out. So I think to me that is what drove me personally to say I need to get way better at this. Because then if we do, then all your marketing programs are going to be spot on. Imagine a team, imagine the scenario where you say, Hey sales team, we know these accounts are better because X, Y, Z, I'm going to bring just MQL from those accounts. I think there's a game changer, all of a sudden you're speaking a different language with sales.

Karan: I like it. So share a little bit more with me. So our audience is unsurprisingly interested in the how just as much as the why. So let's say, and you have, you've gotten the green light from the organization that this is a vision we want to implement, we want you to lead the charge. What do you do first, second, last, how do you actually sequence this out?

Jesus: Today I think the way I would do it is first of all understanding what accounts currently have traction in your sales funnel. So I think normally you're going to get a sales ops team that already have done this and they have some really tangible insights on what are the thermographics or what are the industries, the sizes, the revenue size by geo want to know that hey, these accounts normally perform very well in our funnel. Not only that, they actually retain and expand very nicely. That's just starting points. So I think as a growth marketeer or anyone interested in revenue, you should know that by heart. You should know that very clearly what it is. Also what kind of personas the sales are talking to within those accounts. So what are the personas they start talking to and then what are the ones that they actually adding the opportunity as key decision makers.

And you're going to start seeing a difference between segments. Some companies have like SMB maybe market enterprise and companies are only enterprise. Learn your stuff in there and you can get more complex by if you have by industry or whatnot. But that's the first thing I do. Learn that by heart. Have a really good sense, I think I know everything we know. The second thing I will do is now that you've done that, I will talk to sales to start understanding when you have account in your book of accounts allocated to you or you go and do some prospecting, beyond the data that you have available today, because any company has that in the Salesforce, they might have the demographic firmographics, some companies have product there in there. What do you look at? What are the top three or four signals that you look at to figure it out?

I'm going to go after this account today versus this one. For example, at Algolia we did have our classic thermographic demographic. We have a bit of technology like number of visitors per month in a website. So Algolia for those, that is a search engine and API that you can usually create search and discovery experiences on web really upped the game, an API for developers. So the team was looking for sites with a bit of traffic that had a search part maybe, or applications that have some sort of search functionality. And then I start digging and you start talking to them. It's like what else do you look for? And then you start recognizing that there's some patterns. So they might look at specific things that they're above block. For example, at Algolia, we knew that there has to be enough number of products or items in a website to search for them.

We start putting some hypothesis, okay, well it feels like more than 10,000, at least more than 50,000 items, which are looking at the search actually is not aggregated or have a proper search result fast enough or whatever. So we started collecting three or four things that truly there's a pattern where the top sellers go and investigate by themselves. I think the second thing that I do is that I go and figure out, okay, well if they're doing this by hand and they've been really effective, obviously I look at the sellers, have they been effective doing this? Then I go and find data providers that might give me that data. With the sample big enough we did a machine learning regression model to understand are those signals truly doing something? So the goal was to see, hey, within those signals can impact, and we look at three things, can impact velocity or conversion rate in the funnel or deal size.

And then literally you confirm you're going to need a data scientist team or a data science or someone that can crunch the numbers. And we confirm, yes. Oh my god, yes, those signals actually, I mean you filtered those signals actually that signal doesn't add much difference, but this ones do. So that's the step number three. And then once you have that, what you want to do is literally get those signals and present it into your sales team with the narrative that we have proven that they might increase the velocity, the deal size or the conversion rate.

And the most critical part, have a way to deploy this to the sales reps in a way that they're understanding and know what to do with the signals. I've seen so many companies out there that they might have nailed this, but then they don't explain to the sales rep how you do it. So have your classic playbooks. I'm a fan of starting with a small group, maybe take your five to 10 top sales champion and literally roll it out to those for a quarter and learn and optimize how they're using it. And when those guys are seeing, Oh my god, this is a life changer, then roll it out to the rest of the floor.

Karan: Early in this process, you brought your sellers in, you asked them their anecdotes, what works, what doesn't work, later on when you're actually showing them the machine learning algorithm, and, and, and. It's all about building that trust and credibility with the sellers. And if they've been involved in the process early, I think that probably unlocks your ability to do more later too, which I think a lot of people miss out on that. It's a co-creation exercise. Everything we do is co-creation, especially as operator supporting revenue organizations and sales teams. So that's right on the money. Now you have all this great data, what do you do next?

Jesus: I want to double click on the fact that I think prototyping these with this a few reps is one of the most critical steps. So one of the things that I've done both at Unity, we did our Algolia, I think at Figma we're doing very, very well. Get that group of super champions, the ones that are the great sellers and they have an appetite to innovate and do something different. And you get in the journey with them to say, well now we have the signals we put them in. You can start it on a spreadsheet, but we can put it in Salesforce and I'll talk about some tools that we've been using in my last couple of companies. But then the iteration is like, now you have the signals, let's sync every week to see how you are using the signals, how we think you should use it.

So you're going to present some first narrative. So for example, at Unity we crawl a lot of the data around a game, a studio, what kind of platform we're developing for how many true artists and designers they had. When did they deploy the game, so we knew the game cycle. How many users internally they had that they're not paying, that they could be paying how many teams they had. So a bunch of data points. And we created narratives around each of those for the seller to say, well now you know when the game is coming and they're deploying a new mobile game, they might need a specific services. So we started tightening it up the data inside with a narrative for selling to each of the persona. So then you deploy that to a little group and then you start learning, you start working, what are you seeing?

And then they give you a bunch of feedback. The data signal is blah, it will be more impact if you give me the other this way. The narrative is not resonating I think I found a better way to do it. And you run that for three months, six months, whatever you need until you feel we nailed it. Now the sequences that they're using with the data, it's truly working. They're getting new deals that they didn't get before. They finding new accounts that they didn't do before. I think that is critical. So once you do that, you want to roll that to the floor. But what you want to do, as in my case growth marketer, all of these was for me to have good alignment with sales.

So then I get those signals on those accounts and I segment my audience to do my account based marketing or my demand programs based on where they are in the kind of mature process. So I'm going to have accounts that have no signals, so I know what I have to get them to do. I'm going to have accounts that have a bunch of signals I know how to market to them. So you literally create playbooks with sales on how to engage accounts based on the learnings that you have working with sales.

Karan: How have you leveraged the PLG model when it comes to the work you do around defining and operationalizing that ideal customer profile and ABM motion?

Jesus: That's a very good question and one of the key thing is like, well, how do you serve data to sell to understand what account actually have the signals that tells you that they might have the intent, not just the fit, to buy any of your enterprise solutions or upgrade them. And normally most of the product companies have a freemium or a trial and a sales serve sort of product here. At Unity we had obviously a product paid tier, and one of the things that we wanted to understand was, hey, which one of these self-serve companies have enough designers or developers to be in an enterprise tier? Because they might need the services around that, like the security, the hosting, literally the fundamental thing is similar to the intent that we said before by just finding the product signals that translate into those upgrade. So you can do a data model to understand what are the three or four data signals that really correlate to these people very likely converting into a enterprise motion or a sales motion.

So two critical things that I've learned in bottom up funnels are, one, put some guidance or business rule into what accounts they should talk to. So literally create a book of accounts that they don't have access to all their accounts, only the ones that we think there's a fit. And the second rule is that get them engaged when we think the account is ready.

Karan: This is incredible stuff, Jesus. I'm glad you're leading from the front on the same and I'm excited to see how this thing evolves for you, my friend.

Well, I'm going to ask you three, four or five questions. Give me one sentence answers for each of them. That's how you should think about it. So lightning round, don't think too hard about any of these. Just react and respond. And again, it's a way to know a little bit more about Jesus and these should be fun. These are a little bit more generic on purpose.

Jesus: Let's do it.

Karan: Great leaders, pick great companies. Jesus, you have picked some really good companies. How have you pressure tested where you're going next? What do you think about?

Jesus: I think I look at products that can make a substantial impact into how users do something. So companies that change how users do something, whether user or companies and they have a big footprint impact in the market. The rest follows that.

Karan: Yeah, you bring the rest. I like it. Next one. How did you make the transition to leadership and what would you share with others on that journey?

Jesus: I think being helpful. I'm bringing insights to leaders that they didn't have.

Karan: This one's my favorite. What's the biggest misconception about your discipline, growth, marketing? What do people get wrong?

Jesus: When they think it's just about bringing leads or they think about just bringing signups or doing just paid channels or things like that?

Karan: What's your big prediction for the future of growth Marketing

Jesus: Data. I think we are going through a transformation where we have way more data to play with, but we haven't figured out how to operationalize the data. So I think that there's a real time sense of real time chat, real time usage of things. I think data's going to become your key lever in the future because companies are going to figure it out how to, again, in real time action the data. And I think the second one, AI, I'm super interested to see where machine learning and AI get us. I think there's going to be a lot of things that we had to think or have a lot of assumptions on, trial and error. I think AI is going to help us literally figure it out. This is the one or at least narrow down things that our assumptions which ones to pick.

Karan: Appreciate the time, my friend.

Jesus: Appreciate it, Karan. Thank you everyone.

Karan: I'm Karan Singh and this has been the Game Changers podcast by Sapphire Ventures. To stay up to date with company news and announcements, be sure to follow Sapphire Ventures on LinkedIn and @SapphireVC on Twitter.

To get all the latest trends, best practices and resources from revenue operations experts for startup growth, subscribe to our RevOps newsletter, info.sapphireventures.com/subscribe.

All opinions expressed by Sapphire and podcast guests are solely their own opinions and do not reflect the opinions or views of Sapphire Ventures llc. This podcast is produced solely for informational purposes and should not be construed as investment recommendation or otherwise relied upon as the basis for investment decisions.

This article originally appeared on PitchBook News