Episode Thumbnail
Episode 7  |  37:26 min

S2 Ep 7: Mackey Craven at OpenView

Episode 7  |  37:26 min  |  02.16.2021

S2 Ep 7: Mackey Craven at OpenView

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This is a podcast episode titled, S2 Ep 7: Mackey Craven at OpenView. The summary for this episode is: <p>Today we're bringing you my conversation with Mackey Craven, partner at OpenView. In this episode, we'll dive into Mackey's exploration mindset and how his academic experience impacted his work in venture capital. And the biggest theme that I want you to take away from this today is the concept made famous by Jeff Bezos called disagree and commit. It's something that's used often among partners in venture firms. Not everybody agrees with an investment idea, but once the investment's made everybody is pulling in the same direction. This is a concept that is very useful and helpful in any organizational setting, so I hope you can find some things to take away from this discussion.</p>
Takeaway 1 | 06:37 MIN
Education Exploration
Takeaway 2 | 04:30 MIN
Disagree and Commit
Takeaway 3 | 03:17 MIN
Fund Size & Fund Strategy
Takeaway 4 | 07:53 MIN
How does geography play a role?

Today we're bringing you my conversation with Mackey Craven, partner at OpenView. In this episode, we'll dive into Mackey's exploration mindset and how his academic experience impacted his work in venture capital. And the biggest theme that I want you to take away from this today is the concept made famous by Jeff Bezos called disagree and commit. It's something that's used often among partners in venture firms. Not everybody agrees with an investment idea, but once the investment's made everybody is pulling in the same direction. This is a concept that is very useful and helpful in any organizational setting, so I hope you can find some things to take away from this discussion.

Please click on any related resources below for more information about what we discuss in this episode.

Guest Thumbnail
Mackey Craven
Partner at OpenView
Mackey focuses on enterprise infrastructure and data-driven application software at OpenView. Prior to joining OpenView, Mackey was an associate at Bessemer Venture Partners focusing on investments in cloud computing, consumer internet, and data infrastructure. At Bessemer, Mackey was a board observer at Twitch, which was acquired by Amazon, Zapier, Xtime, acquired by Cox Automotive, and Apperian acquired by Arxan, and was involved with Bessemer's investments in Infinio, Liaison, and Antigua. Mackey began his career in research and teaching positions at the Sloan School of Management and in the departments of physics and biology at MIT where he co-founded BioVolt, a company focused on designing low cost microbial fuel cells for use in the developing world. He has also served as an independent scientific consultant to Continuum Energy Technologies and analyzed pipe and SPAC opportunities for Hudson Bay Capital Management. Mackey joined OpenView in 2013 and was named to the Forbes 30 Under 30 list in 2017.
Mackey's LinkedIn

Tim Schigel: Welcome to Fast Frontiers. I am your host, Tim Schigel, managing partner of Refinery Ventures. In this episode, we're bringing you my conversation with Mackey Craven, partner at OpenView. In this episode, we'll dive into Mackey's exploration mindset and how his academic experience impacted his work in venture capital. And the biggest theme that I want you to take away from this today is the concept made famous by Jeff Bezos called disagree and commit. It's something that's used often among partners in venture firms. Not everybody agrees with an investment idea, but once the investment's made everybody is pulling in the same direction. This is a concept that is very useful and helpful in any organizational setting, so I hope you can find some things to take away from this discussion. Mackey focuses on enterprise infrastructure and data-driven application software at OpenView. Prior to joining OpenView, Mackey was an associate at Bessemer Venture Partners focusing on investments in cloud computing, consumer internet, and data infrastructure. At Bessemer, Mackey was a board observer at Twitch, which was acquired by Amazon, Zapier, Xtime, acquired by Cox Automotive, and Apperian acquired by Arxan, and was involved with Bessemer's investments in Infinio, Liaison, and Antigua. Mackey began his career in research and teaching positions at the Sloan School of Management and in the departments of physics and biology at MIT where he co-founded BioVolt, a company focused on designing low cost microbial fuel cells for use in the developing world. He has also served as an independent scientific consultant to Continuum Energy Technologies and analyzed pipe and SPAC opportunities for Hudson Bay Capital Management. Mackey joined OpenView in 2013 and was named to the Forbes 30 Under 30 list in 2017. Please enjoy my conversation with Mackey Craven. All right, welcome Mackey Craven to Fast Frontiers.

Mackey Craven: Tim, thanks so much for having me. I'm really excited to be here.

Tim Schigel: So I'm super excited to have you on the show. And I actually want to start with your education. At MIT, and you got to explain some of this to me bachelor's in biological engineering, bachelor's in math, master's in technology and policy. I love the cross-pollinization of ideas and the different disciplines there. I'd love to hear more about just how that came together.

Mackey Craven: Yeah, Tim, I'm more than happy to talk about it. So I grew up, first on a university campus, in the University of Chicago. My mother is a professor, a medical school professor. Now she's at Northwestern. So I grew up in a very academic environment. So 17, not knowing anything about anything, I sort of show up at MIT's campus, was very fortunate to have the opportunity to do that. And I just wanted to explore. I thought I would be an academic. There were some areas of kind of core interest. When I was a young kid, I had been interested in animals, and thought I was going to be a herpetologist, sort of study reptiles. Eventually, when I first found out about sort of molecular biology in high school, became fascinated by that. So there was some pull in the biological thread, and I'd always liked the sort of combination of elegance and power of mathematics. And so, I was just really interested in those areas. But I had no idea, let alone what the academic universe offered, let alone the rest of the world. So I just started that, and rather than thinking at the beginning," Okay, this is what I want to be," or," This is kind of the goal," I just ended up early on, ended up taking or teaching classes in 23 out of, at the time, the 32 departments at MIT, just sort of following my curiosity and trying to understand the connections between disciplines.

Tim Schigel: And what triggered that? Where did that interest come from?

Mackey Craven: So as I was sort of finishing up in two-and-a-half, three years, the sort of core undergraduate and some graduate work in mathematics, core engineering, and in biology, I was having a lot of fun at MIT. For, I think, someone who's intellectually curious, quite kind of geeky, I'm a lover of those things, it can be a playground. And I was 20, 21, not wanting to graduate in two-and-a-half or three years, wanting to be able to stay in this sort of intellectual playground. And so, I started looking at what I could do, and what I could do to sort of expand on some of the horizons and the frontiers that I'd built technical understanding and kind of scientific understanding in, but how does it apply? What's actually happening with this work out in the world? And I found this really interesting small program at MIT called the Technology and Policy Program. And I was fortunate enough to be able to enter the program while I was still there and was always very interested in how this technology would actually apply and how ownership would be structured and how organizations would make decisions about how they communicated, really communicated with the world about the technology that they had and that they were using and the language in our sort of society and legal system in a structural sense, that an organization communicates with the world about what technology they've built and how they're using it, aside from what's represented in their products.

Tim Schigel: What's interesting to me is there's this thread of exploration. For any of the younger listeners out there, they should listen and pay attention to what you did there, which I think is often lost because there's so much pressure on young kids when they're going to school to be like," What are you going to do?" With our kids or with any kids that ask me for my opinion, I'm like," Just go learn something." So the fact that, must have come from your parents, I would imagine, that kind of created this sense of curiosity and exploration and hopefully relieve the pressure to like," How am I going to apply this someday?" You don't know that answer until you go through the exploration, right?

Mackey Craven: Yeah. I agree. I mean, I wouldn't call MIT a liberal arts education in any sense of the content, but you can absolutely treat the institution that way, and I did, is that way within sort of the STEM and the broader domain. And I think there are folks, as you said, that will kind of go to school, whether medical school's on their mind or law school or a certain profession or getting a certain job after and like," Okay, I'm going to learn these things to get that outcome." As opposed to, "I'm going to build up a base. I'm going to explore what I'm interested in. I'm certainly going to prove my ability to think, learn, and to communicate." And then with that, as I start thinking about the next phase, I'll put myself in a position more informed and more capable to make that decision then.

Tim Schigel: Yeah. So your role as explorer here and as it relates to the topics that we're trying to cover here at Fast Frontiers about how innovation is accelerating in unexpected places, it's hard to anticipate that. We don't know the future. But you've developed over the course of your career kind of the tools to be that explorer, right? So how has that exploration thread played out now through your career as a venture capital investor?

Mackey Craven: Yeah, it's a great question, Tim. And for me, when we look at the lens of explorer, and for me, the sort of the curiosity and the intellectual curiosity that comes behind it, really has been sort of a thread that has played out through my career, and I'd say is really the key reason why I hypothesized that I might have an interest and then might have an opportunity to be successful and have been sort of excited to be in venture capital for as long as I have. So we talked about some of the academic experience. And I remember at the end of that, when I was trying to answer the question that we were talking about, folks asking themselves of, "Well, what is next?" Or, "What does one want to do?" I got up on my whiteboard in my room, and I wrote down everything I liked to doing while I was awake, and everything, eating, so the whole list, and then everything I wouldn't do no matter sort of what the situation or compensation or prestige was. And how do you do none of B and as much of A as possible? And that's the beauty of, in my mind, venture capital. Because on the one hand, you have the opportunity to meet an incredibly diverse array of people, of people building things that they have deep knowledge about, that they are incredibly passionate about. And in those conversations, to me, it's, perhaps, the best learning opportunity that I've ever encountered. And that's just a core part of it. No matter where they live, what their background has been, what market they're interested in, what product or service they're building, brilliant individuals who are highly motivated and an opportunity to learn.

Tim Schigel: Yeah. So you have a front row seat with the leaders that are actually creating the future.

Mackey Craven: Right.

Tim Schigel: Which is pretty darn cool. I agree with you. That's part of what I love. In your early days, so you initially when you got into venture was with Bessemer, right?

Mackey Craven: Yeah.

Tim Schigel: So which of those rocket ship experiences that exploration kind of typified and gave you that most kind of learning and satisfaction?

Mackey Craven: I was fortunate to have joined Bessemer, full-stop an incredible kind of group of people, a great place to learn. And I was fortunate in, although, one never knows this as it's happening, but in hindsight, in the moment I joined... Because I remember the first investment memo, I think it was my first week at the firm that I saw come through was their initial sort of lead of Twilio, and then Shopify was right after. And I didn't know, obviously none of us did, what those businesses would become or what that story would be. But I remember sort of the opportunity in those two to read, and then to see that play out. And as I sort of started to learn in my own journey, I think the business that I worked with there that probably had the greatest impact on me and tied to exploration was a business called Twitch. So at the time it was called Justintv.gaming. It was actually still part of a previous entity. And it was really different than most businesses or business models that we had encountered. It didn't fit the mold of a classic consumer internet sort of social network. It didn't fit the mold of a classic SaaS business. It didn't fit the mold of kind of classic infrastructure for biotech. And what was so interesting about it was that despite all of those things, and despite, I think, all the work that venture capitalists and moguls and others try to do to predict the future, it aligned with some of the underlying trends that were kind of happening in the world and in sort of consumer technology, much stronger than many other businesses at the time. And so, getting to meet Emmett and getting to meet the rest of that group and understanding why they believed that at the time, inaudible that individuals watching other people play video games was entertainment. I remember bringing that up in the partnership meeting. There's a big question, it's like, "Really?" And then, you'd look at the numbers, and even back in 2012, which is early 2012 when we were thinking about this, more people in the United States had played just the single most popular video game franchise for the time was Call of Duty than had played all other sports combined physically: basketball, soccer, baseball, football, hockey, tennis, golf.

Tim Schigel: Wow.

Mackey Craven: You think about why people watch sports, you either grew up watching it, it's in your community, it's in your blood, your city, your family's a fan, or you grew up, in the US, if someone loves cricket or rugby or squash or water polo, it's because they played it. And we had this generational transition where we were going from physical sports to e-sports, to digital sports, in a general generational transition in entertainment, combined with some fundamentally different economics and ability to stream media. And all of a sudden, you have this phenomenon, which for a consumer internet business at that scale being profitable, it was, growing at the rate that it was, because it was innovating around video ads, and it built infrastructure that cost Hulu $80 million to build on a venture budget, there was something there. And so, learning about that, getting to work with that team, was exceptional.

Tim Schigel : So if we could dive into that a little bit because you're hitting on a couple of things that you learned as a VC that I think a lot of other entrepreneurs and early-stage and angel investors need to understand, which is, you always start with kind of the market, understanding what the market environment is. And in that situation, what I found interesting is you said," Okay, do people do this? Is this interesting?" And there was data underlying it. You saw it. But oftentimes, the data is not something that traditional kind of sources are paying attention to, so it's data that maybe isn't even being measured accurately because nobody's thought to measure it, right?

Mackey Craven: That's right.

Tim Schigel: That's kind of what you're describing. There's a situation where there's actually a lot of data there, but you're not going to find it in a Gartner report, you have to dig a bit. But the best founders are the ones that have that insight, and they have this market knowledge that they can bring to the table that nobody else is really focused on. Would you agree with that?

Mackey Craven: I would. I think one of the incredible things about the context that a founder often brings to their business and brings to the founding journey is founding a company is an incredibly challenging, obviously, incredibly rewarding exercise, but it's incredibly hard. So if a brilliant person is making the risk/ reward decision for themselves to go do this incredibly hard, high-probability of failure, risky thing, there's often a very high conviction reason that many times has interesting data behind it from their experience and someone's inaudible of why. And I think one of the great things we have the opportunity to do to explore as venture capitalists is to understand that why? And in some cases, validate, bring new data to the table or rebuild that conviction that the founder has. And so, in this case, there was ample data about how folks were using and engaging in sort of the video or the video game inaudible system there. There was ample data about supports, all of it was out there. There was ample data about users that were engaging in this specific medium. But it's the insight to put it together that the founder has, and the way to see the world of, okay, sure, it's there, but it's not information yet. It's just data. And so, when you put it together with the right question, with the right framing, it becomes information that then is valuable. And I think go for it.

Tim Schigel: Yeah. No, very well said. And so, when you think about some of the other investments you've made, how many times has it been that the entrepreneur has all that information versus they've made some of the intuitive leads, they have pieces of it, and you as an investor have helped them pull it out or shape it or gather it?

Mackey Craven: Yeah, I would say the majority of the time, I wish I had a precise percentage for you, but majority of the time it's been intuitive. It's through life experience. They could, in some of the cases, go collect the data, but they'd seen it or lived it. And so, they don't need that to justify it to themselves. And there's so much to do that building that data set is often not, in my experience, part of an entrepreneur's process to found. But as someone who's a venture investor, who's getting to know the person, getting to know the market, getting to know the business, we've got a lot of catching up to do. And, unfortunately, we don't have the 20 years of, or 10 years, or five years of experience in this domain to get that in context and build that intuition, which is where the data becomes incredibly helpful. And so, as we understand the missions, as we understand the framing, then we can go out and look for the individual pieces of data and relate them to create that information.

Tim Schigel: I think a helpful investor can play that role and help entrepreneurs, and that's a good partnership. The other thing, and Twitch maybe helps illustrate it, Reid Hoffman has talked about this with Greylock and his Masters of Scale, that some of the best ideas you do not have unanimous decision amongst the partners.

Mackey Craven: Yeah.

Tim Schigel: Right? Because if it's a new idea, it's like, "Hey..." Like Bill Gurley and Uber, "Hey, this is a great idea, ride hailing." And you could just imagine the partners going, "Let's talk about the risks here. Government's not going to let you do it. There's no licensing," blah, blah, blah, blah, blah. How have you navigated that? What's been your experience with some of those companies that really have been disruptive in terms of that decision-making on behalf of the investor group?

Mackey Craven: Yeah. I think this is where sort of the dynamic of a partnership, relationships with partners, and how you decide to work together as a group is so important. Every firm is a little bit different in this, just because you look at it in any group that kind of has to work together to achieve something, you've got your own norms and your own expectations of each other and you build trust over time. I completely agree with your statement that many of the most innovative and disruptive companies on one dimension, but in others, sometimes just many of the most successful businesses, when you're in an investment committee, when you're discussing it with your partners, there's a really diverse set of views. And I've found over time that sometimes the most polarizing, as you said, can be the absolute best. And the way I'd characterize why, and then I'll talk a little bit about how to navigate it, both because it's new or it's different, but it's not just if someone's interested, but if someone is interested to push through as a venture partner to sponsor this entrepreneur, to have gotten that conviction, you don't just do well when you're right, you do very well when you're sort of right and unique or right and different. And so, it's the magnitude of the difference that where someone gets it, but most don't that give the company market the opportunity to build that leadership position. And if everyone already did, the light was... Yes, I get worried when we go around the table, and everyone's pounding the table to make the investment. It's like what are we missing? So how do you navigate that?

Tim Schigel: Yeah, so if you all agree with it, that means there's a lot of people outside that room that have already figured that out as well.

Mackey Craven: Exactly.

Tim Schigel: You're not-

Mackey Craven: That's right. And so, I found having a culture of being able to disagree and commit, you get value as partners if you're bringing different perspectives to the table. If we all looked at each person, each company, with the same lens, as opposed to appreciating the diversity, yeah, you get more capacity, sure. You have the opportunity to make more investments with more businesses, but you don't get any extra value out of having other investors to talk to. And so, it's the balance between understanding, not intuitively, because one doesn't think that way, but how your partner thinks, what they see, and then doing the best to make sure you help them think through the other parameters. But following their conviction, not holding it back as a group, I've found leads to the ability to make those investments, to take those leaps, and ultimately together build the best portfolio and work with the best entrepreneurs.

Tim Schigel: Well, I'm so glad you mentioned... Yeah, I was going to say it, so you beat me to it, the disagree and commit. So for people that don't know this, I remember when I discovered, this was a Jeff Bezos, Amazon principle, I guess, right? When in meetings, it's okay to disagree and commit. So I may not think that the Twitch thing is really going to be a big idea, I think there's a number of risks to it, but you know what? If we're going to make this investment, I'm all in, we're doing it. I'm supportive. I'm not trying to work against you, right?

Mackey Craven: I think that's critical. In our partnership, everyone needs to be at least at that point. We work together with every business. We're highly collaborative. And I think in any partnership to build trust and to have a healthy dynamic, if a year later or three years later or 10 years later, someone's going back and saying, "No, I always thought that was a bad idea from the beginning. We never should have done it," or you're just trying to think about where you're spending your time. At the end of the day, if your firm's made an investment, if your partner is building that company, you're building that company, or at least you should be. And I think a culture of being able to disagree and commit, and really commit, not lip service, but an action, is critical to enabling that diversity of thought and the value that comes from it.

Tim Schigel: Yeah, it's such an important concept. And my guess is it's rare. It doesn't exist in many organizations because it takes certain type of leaders to allow that tension to exist.

Mackey Craven: Absolutely.

Tim Schigel: So kind of let's shift to what you've been doing at OpenView. You've been there coming on eight years, right?

Mackey Craven: That's right. Yeah,

Tim Schigel : A lot has changed there, I would imagine. And I've known OpenView as really being the metrics people that really understand SaaS metrics and product-led growth companies, which I think a lot of other entrepreneurs are familiar with as well. But yeah, can you share with us just kind of how that's changed and evolved over time since you've gotten involved at OpenView?

Mackey Craven: Yeah, absolutely. It's a great question. It's evolved a lot. So I joined in 2013, the firm was founded in 2006. We were sort of in the middle of investing our third fund. And I remember when I pick up the phone and talked to entrepreneurs, and I'd say, "I'm from OpenView," and the first question out of someone's mouth would be like, "Why are you trying to sell me an HP infrastructure software product?" Right?

Tim Schigel: Right. I had that confusion.

Mackey Craven: Exactly, right? Many listeners at this point might be like, "What was that?" But no, HP had a fairly substantial product with the same name. We were kind of not on the map, and we also didn't have a sense of what product-led growth was. We didn't even have a word for it yet. And so, fortunately, it's funny, the reason I ended up joining the firm was really about the philosophy of, one, focus on many dimensions. I had grown to really fall in love with business software. But for me, infrastructure and software that is kind of more technical end users going back to maybe those geekier roots of mine, and that focus and the stage focus allowed us to build a team that was a mix of investors and operators to really work with these companies at that phase. And so, we're fortunate in the way to have worked with some fantastic entrepreneurs. Those at Workfront, which was acquired by Adobe for a little over a billion last year. Datadog was the first investment that I made after joining the firm, wonderful to work with that team sort of up to and through the IPO. But over that time, and Datadog is a great first example of this, we started unpacking a different way that software companies could be built. And in many cases it could be built to much higher consistency of growth, greater efficiency, and ultimately, more valuable businesses at the end of the day. And those early ideas, which really Datadog helped us start thinking about, became the core nexus of the work that we've done, and the thinking and writing that we do around product-led growth. And so, they're just snapshots. When I joined, again, people thought I was trying to sell them some infrastructure software. And now, we're having sort of wonderful conversations with entrepreneurs and working with them and building product-led businesses and non-product-led businesses of scale.

Tim Schigel : I think you've written about or it's been discussed in terms of your latest fund and the increase in size. And as somebody who is an LP in a number of different funds, and I've run a fund of funds, there's definitely a potential for some strategy creep or under-appreciating how different it is raising a fund of one smaller size to a bigger size. So can you fill us in a little bit about that in terms of how you think about that as a team?

Mackey Craven: Yeah, absolutely. The approach that we took was from a bottoms up. And the reason we ended up raising the larger fund is that the strategy that we were executing for our fifth fund, and even executing in our fourth, we realized the fund was actually under-sized for that and why we ended up picking the number that we did. But, first, our philosophy, I mentioned focus, is focused on a number of dimensions. One of those dimensions, the number of companies that we work with. So in a given fund, we'll have up to 15 businesses in the whole fund. We'll make four to six investments a year as a firm, partner, we'll make one, maybe two investments per year. And then, we certainly will, but often double down, and we'll lead subsequent rounds in portfolio companies. So we build that concentration even from across the portfolio more deeply over time. And as we were looking at kind of round sizes and capital needs of companies coming into our fifth fundraise, so thinking about these things in 2016, starting to think about them in 2016, kind of raising the funding in 2017, said, "Okay, we're going to invest in 15 companies. And we're going to execute this strategy. At the stage that we invest, $300 million feels like the right number." And as we got into it, started working with companies like Calendly or Atonius, all businesses with tremendous potential and many others, so that actually were having to make a choice earlier in the fund's life than we expected between doubling down, fully executing that strategy, which we've done at Datadog and a number of companies before, who have been quite successful, or getting to sort of the full 15 or 15-plus companies that we would ideally like to have in the fund from a diversification perspective. And we made the choice to have fewer businesses and double down and continue that strategy. And so, when we thought about raising fund six, which is $450 million, 50% larger, what we did is the same type of analysis, but maybe with a little bit of a longer time horizon in mind saying, "Well, strategy is not changing. We're still going to invest in this number of companies. We're going to invest at the same stage. But we want to be able to fully lean into and on these... but step up in these businesses over time." And so, rather than raising an opportunity fund, or rather than saying, "We're going to make twice as many investments and double the fund size," which I think really gets into some of the dynamics that you were describing before, it's a different beast, a different set of problems, it was about the capital that we needed to execute the strategy that we were executing. And that's how we got to the sign.

Tim Schigel: Obviously, it takes the right amount of thought. I don't know that everybody appreciates that. They just kind of assume, oh, funds are successful and they get bigger. But you really need to think it through, and obviously, you did, and you've done it in a way that allows you to be consistent in your strategy, which is the key. What about the role of, given that we're talking about fast frontiers, the role of geography in terms of where the companies are located and how you think about geography?

Mackey Craven: Yeah, I'm happy to. So geography is an area, if you think about focus in many dimensions, where companies are founded for us is, actually, it's expanding and will continue to do over time, which we can talk about. But the geographic focus for us tends to be on businesses that are looking to build a core part of their market in North America. And certainly, for business software, you can say this about consumer internet, you can't say this about a number of industries, but for business software, North America and the United States within it, still the single largest homogenous market in the world. And so, whether a company is founded in the Valley, next door to me in Boston, in New York City, in Seattle, in Tel Aviv, in Sydney, in Indianapolis, in Columbus, those businesses, as they get to scale, will all be going to the same market. And so, if you look at the founding locations and headquarters of OpenView's portfolio companies, it really does look like a heat map or an index of software activity in the US and abroad. And so, our largest concentrations, which are still sub-10% of locations are in New York and in Seattle, and then the Bay Area and Tel Aviv and Toronto and Sydney, close behind, and companies in Chicago, in Indianapolis, and in Austin, and in Atlanta, and Salt Lake. And so, for us, as we look at the world, I think we're on, I don't know exactly the number of years, but certainly more than a half-century transition from company location and founding location, if we think about the sort of middle or second half of the 1900s was constrained by where capital was and where they could go to seek that capital. And I think we're in the middle of a long journey where it's... but it's only constrained by folks' abilities to operate, and then where talent is, and I think particularly technical talents. And so, as a result, as we've seen, you don't need to be in a watering hole in kind of Silicon Valley, or New York now, or Boston to get the knowledge that you might need to go zero to one through podcasts like this, and frankly, just access to the internet with, particularly English-speaking internet, for kind of this part of the world, you can get some of that initial knowledge now through technologies like Zoom and Slack. It's much easier to deliver products and services and to engage with customers and prospects over great distance. And ultimately, through things like product-led- growth, the ability for individual users to discover and experience products and services, bring them in for themselves or for their organizations, it's easier to sell over distance. And so, again, for all those reasons, our portfolio is quite geographically distributed, and we think will be increasingly geographically distributed over the span of time.

Tim Schigel : And what sort of patterns have you seen in terms of the entrepreneurs and companies working in some of these non-obvious locations, or not the traditional hubs, in terms of how they leverage their strategic advantages, not the weaknesses, but how do they use it, the judo move, right?

Mackey Craven: Exactly. Well, there's certain things, and I attribute this line of thinking, it may go farther back, but to Warren Buffet, if you live outside of the noise, you can have a very clear picture of the world. And one of the best ways that I've seen companies who are not founded in one of the higher density areas, whether or not someone takes the opinion that it's an echo chamber, you can at least look at kind of... You may not know the minutiae or the details of the day-to-day, these little things going on, but you can see the big picture, and you can see it really, really clearly. And so, I think product direction, market understanding are a big part of it. Another is talent and is community. We've seen businesses be able to, whether in Durango, Colorado... So I led a series A of a business called GitPrime, which at the time, I think still is, the largest series A in any town of less than 25,000 people. It's a wonderful story there. The owner, Scott Maxwell, put investments at Exact Target. I know you and Noel had a great conversation with Scott Dorsey here on the program and seeing that community be built in Indianapolis, is that having great talent, great vision, and a great product, and great company, in some of these geographies, you get to build new ecosystems. And having that type of loyalty and having the type of commitment and community, is just a harder thing to do in the hubs or in the sort of historical hubs, and it's a real competitive advantage. As I look across the US today, I think like the Salt Lake ecosystem, sort of the various social and business connections that exist in that ecosystem have created a tremendous amount of equity value and of a sort of self-fulfilling positive feedback loop with respect to innovation and the founding of companies. We've been fortunate to have made two investments in the area. Both have exited for over a billion dollars. But there's much greater opportunity and there will be going forward there. Those, to me, are some of the advantages in terms of vision and people.

Tim Schigel: Yeah. As I've been saying, it's time to flip the script a little bit when you're in any of these towns. And when somebody comes and asks me like, "Oh, can you really hire the technical talent you need in..." Name the city, Cincinnati. I say, "Can you hire people in Silicon Valley?" Because I've done it, and it's really hard, and you're competing with Facebook and Google and LinkedIn and Salesforce and everybody else. And so, it's actually, thinking in a different way, it's a strategic advantage. How do you leverage that as a strategic advantage? As well as you kind of mentioned the judo move, I talked to, and I think you've invested with Blackbird out of Australia.

Mackey Craven: Yeah.

Tim Schigel: Yeah, I talked to Niki Scevak there, and they have a couple of prominent, obviously, product-led growth companies. It was interesting because when I asked him kind of why those exist in Australia, it was, you'd appreciate, it it was constraint-based engineering, right?

Mackey Craven: Exactly right.

Tim Schigel : It was because they were in Australia, because they could not physically get to the US market, and because their time zones were terrible, they had to figure out how to sell their product into corporations with all those constraints. And by doing so, they became great product-led growth companies.

Mackey Craven: I couldn't agree more. And I think you and I may have even talked a little bit about this in the past, which is, Australia, from its geographic position, but otherwise being a common, an English-speaking sort of commonwealth country, as with an economy, has a bunch of these constraints. And so, all of the businesses that we've seen, that we believe have the opportunity to be a business or have already been on that journey out of Australia, are product-led by necessity. If you can get to $5 million in ARR there, people have to be able to discover that product. They have to be able to serve that product. They have to be able to use it. And groups like Blackbird are doing an incredible job of starting to provide a capital ecosystem in Australia that wasn't there, though, if you go back 10 years. But funding the actual constraints also contributed to that. Product-led businesses are often much more capital efficient upfront, and so if there isn't a local venture capital community, or even a national venture capital community for you to pull from, all of those together through sort of the necessity of evolution, if you get to a reasonable startup scale, you've had to be built that way. And our two investments in Australia also have that form factor.

Tim Schigel: So what else would you like people to know and entrepreneurs to know about you and OpenView that maybe isn't obvious, that they're not going to find online? What would you like them to know?

Mackey Craven: Yeah, so I think there's a couple things, and I'll focus on OpenView, on just a piece of that puzzle. I think the most common misconception, I'd say, about the firm is that we're sort of late-stage or traditionally the growth stage investors. We use the word expansion stage. And I think certainly if I heard that right off the street or when I first started, it's like, "I don't know what that means. How do I unpack that? What's that all about?" And it's because we don't think about companies and our sort of investments with respect to a specific revenue scale or a letter on a round, or an amount of capital someone might be raising, but we really look at businesses in terms of where they are in bringing their products to market, starting to build their team, thinking about how to scale. And so, for us, I think a common misconception is that a business needs to be at $10 million or $5 million of annual recurring revenue. 80% of our investments to businesses are between $1 and $5 million, right there. And there's things earlier, and the majority of those are on the very early side of that. And so, what we look for is less to do with kind of what is the number? But much more to do with are customers excited about it, and do you feel as a business, do you feel as an entrepreneur that you're ready to start putting the foundations and the systems in place to go on the journey to be that large and enduring company, to go through the scaling process? For some businesses, that happens in their first dollars of revenue. For some businesses that happens later on. And so, that's one of the things that I think is just critical about us and about how we think about the world that I'm not sure is well understood.

Tim Schigel: Thank you for sharing that. It's been great to learn about your background and sharing your thoughts on this space. And I hope a lot of our listeners, I know they will, get a lot of value from it. And look forward to collaborating more with you in the future.

Mackey Craven: I'm looking forward to it. And again, Tim, thank you so much for having me. It's been a real pleasure.

Tim Schigel: Awesome. Thanks for listening to Fast Frontiers. If you like our show and want to know more, check out our website, fastfrontiers.com. If you enjoyed this episode, please share it with others and give us a rating and review on your favorite podcast platform. Join us next week when we bring you my conversation with Kevin Maney, advisor of Category Design and author of Play Bigger.

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