Intro: [00:00:00] From Silicon Valley, the heart of startup land, it's Getting2Alpha. The show about creating innovative, compelling experiences that people love. And now, here's your host, game designer, entrepreneur, and startup coach, Amy Jo Kim.
Amy Jo: Mark Jacobstein is co-founder of Near Horizon ventures, a VC firm with an unusual approach. They don't just invest in startups. They join them as co-founders.
In this interview, you'll learn about Mark's journey as a serial entrepreneur and find out why he decided to pioneer a new investing model with Near Horizon.
Stay to the end to hear what Mark looks for in a startup when he's investing and the red flags to watch out for that can kill your pitch.
I'm incredibly excited to be here with Mark Jacobstein, somebody that I've known as a colleague for years, but Mark and I have [00:01:00] never really gotten to sit down and go deep into his philosophy, his experiences, what he's learned from this amazing walk through the gaming and tech universe.
So thank you so much, Mark, for being here and welcome.
Mark: No, thank you, Amy Jo. I'm excited for the conversation today.
Amy Jo: Me too. So one of the things that most interests me in your background is the choices you've made and the path you've carved that included both tech and gaming. You've moved pretty fluidly in those worlds, it seems.
Mark: Yeah, peripatetic is the word I've used sometimes. Games and gaming tech, which included consumer internet, wireless, mobile. And then actually for the last 10 or 12 years, an awful lot of work in biotech, tech bio, molecular diagnostics, omics. In some ways, it's easy to look at it and think sort of all over the map.
There are certainly some common threads I could pull through, but I think it is a [00:02:00] reflection of a couple of things I'm curious. I enjoy a lot of different things and I'm a generalist. I don't know many things, maybe nothing all the way down. But I know a little bit about a lot of things and that's how my mind works and that's what I enjoy.
And so I think I've tried to create a career that reflects that.
Amy Jo: So, I read, but I don't know the story of how you co-founded Digital Chocolate.
Mark: Yes. So Digital Chocolate for those that don't remember, Digital Chocolate was a high flyer of a mobile game business we founded in 2003. And I co-founded the business with Trip Hawkins and we had six other co founders as well.
But so Trip was the founding CEO and I was the founding president. For those who don't know, Trip's a legend. Trip was the founding CEO of Electronic Arts and of 3DO. And I think the second person ever inducted into the Video Game Hall of Fame and one of my first real mentors. And I was very reluctant to start the business.
So I started my career as an entrepreneur in New York in 1994 and built two businesses in what we used to call [00:03:00] Silicon Alley and love New York city. And it was happily ensconced in Brooklyn and before it was cool and host.com crash. Got a call from Trip that he was trying to put something together and he wanted me to move out to California and be his co founder and sort of run the business, you know, Trip would sort of set strategy and I would report to Trip and everyone else would report to me and we would build this great game business.
It was obvious to me that mobile was going to be a very big deal. I'd been to Japan. I'd actually tried to build mobile fantasy sports on DoCoMo phones in 1999, believe it or not. In fact, maybe even earlier than that, I'd been going to Japan, which was, for those that don't remember, where sort of the mobile revolution started.
And I used to talk about mobile as the one, mobile was the one device to rule them all. This was like 2001, I was saying this. Anyways, so I believed in the vision, but I didn't want to move from New York. So anyways, Trip worked me over for a while and he finally hit me with, [00:04:00] look, I've got Sequoia and Kleiner are putting in 8 million.
Mike Moritz, who's the greatest venture capitalist in history, is sitting on the board. I will introduce you to everyone in Silicon Valley. You are crazy to turn this down. And he was right. So I packed up my bags and I moved to California in late 2003 and have never looked back.
Amy Jo: So you prioritize relationships and exposure to greatness and learning.
Mark: Yeah. I mean, I think that's right. I would say If there are a few things, first of all, I would sort of recommend this for anybody who's early career, which I certainly still was at the time. That the things that matter most are, are you working with great people on big problems and what's your learning curve going to look like?
I knew this was going to be hard and challenging but interesting. But it was difficult. I mean, my family's on the East coast and I love New York city and I had, you know, great friends there and all the rest of it, but the Bay Area is all right too, so, it worked out.
Amy Jo: Wow. So what made Trip go after you?
Mark: That's a good question. I mean, Trip used to say he thought we [00:05:00] had an awful lot in common. There were certain things we did have in common. We both sound like the sounds of our own voices. We both can talk about almost anything, even things we don't know an awful lot about.
We both built game businesses in our early twenties. So he was the first business employee at Apple. And then he founded EA when he was 24 or 25, and I'd done the same thing. So I founded Small World Sports in my living room when I was 24, which was the first online fantasy sports business in the world.
So I had a claim to fame. It was inventing online fantasy sports. Trip had invented many things in the console gaming business. Arguably, it kind of really made the console gaming business world. And so, we'd both gone to Harvard, had sort of I think, didn't love working in a traditional corporate structure and that was reflected by starting things when we were very young.
We had a lot of other things that were, we have different personalities. I think I'm a little more easygoing, which was the other piece I think Trip actually recognized that I would help smooth over some of the things that were difficult inside of Digital Chocolate.
Amy Jo: You took the [00:06:00] words out of my mouth.
Different leadership styles.
And apparently you also were the grown up in the room working with Sam Altman at Loops. Is that true?
Mark: That is true. So that was actually immediately following Digital Chocolate. So in 2005, maybe 2006, Sam was the 19 year old wonder kind who had just raised from Sequoia and NEA.
And I was introduced to him actually originally by David White because we had such similar views with mobile. And it's hard to imagine, but if you go back to 2005, 2006, people were thinking mobile is you made phone calls. That was cool. And maybe you played games on your phones. That's what we've done in Digital Chocolate and what I wanted to do a Digital Chocolate in place where trip and I clashed was to build more interesting applications.
And I don't think I hadn't conceived of Uber, but we were thinking of lots of things you could do with mobile that went way beyond and were much more important to the world than just games. Not that games aren't great, but [00:07:00] I and Sam was building a company called Looped. Looped was find your friends on your phone using the location based services.
It wasn't even a GPS yet and was exactly the kind of application I was interested in deeply important social problem of like, interconnectedness. Sam was obviously brilliant and he was also 19. The way I always describe it is like, I think, you know, Sequoia wanted me to be Cheryl to his Zuck. Although Facebook didn't really exist yet.
The problem was that Loop never scaled. And so having this experienced gray haired, I don't think I actually had gray hair, but a gray haired number two, who was there to help with all of the operational challenges didn't make sense when the company frankly never really succeeded, despite having an incredible team.
There were Sam Yam who started Patreon and Evan Tana and all kinds of very talented people went on to do great things inside the company, but we had a fundamental, several fundamental problems with the product we were actually building.
Amy Jo: Such a valuable [00:08:00] learning experience, you know, looking back on it that you can see it clearly now probably at the time It wasn't as clear.
Mark: No, hindsight, of course. Being right.
Amy Jo: But that's the thing about having done what you've done and carved your path is that kind of insight. You have the perspective to do that, which is very cool. So, tell us about what you're doing now. I know a little about it. I know that you've transitioned into venture builder after being a long time operator.
Mark: Yeah. So after 30 years being an entrepreneur and helping to build siz or seven companies that mattered not all of which succeeded, but many of which did. And sometimes as a founder, sometimes not sometimes as a CEO, sometimes as a CP or CMO, I decided about a year ago, I want to solve for a few things.
One was, I liked working on multiple projects with great people. But
I didn't want to be a pure venture capitalist because although [00:09:00] meeting great entrepreneurs and picking the right companies is interesting. I still like to build.
So I wanted to still build, but I wanted to work on more than one project at a time.
And along with my partner, Sean and Mike, and I'll mention them and a little bit more about them in a minute, we identified a hole in the market that we thought that there was a great need for talented entrepreneurs, particularly solo founders at Company Inception to get help building their businesses from zero to one.
Amy Jo 2023-10-19: And because of the experiences that I had from 30 years
Mark: all over the place many different successes and many different failures and different lessons from all that. And similarly for Sean and Mike,
Amy Jo 2023-10-19: we felt like we could accelerate people past some of the problems they might have, give them access to things that they might not have access to and de risk.
Mark: Great entrepreneurs working on important problems. We're not a venture studio. So we built a company, the firm is called Near Horizon. You can find it nearhorizon.pc. And our goal is to work with great entrepreneurs at company inception [00:10:00] and help get them from zero to one. It is not a studio.
We are not trying to make our own stuff. And then find a CEO after the fact and sort of bolt them on that model can work. Certainly it worked for flagship pioneering. I mean, they made Moderna and it's worked for IAC and others, but it has its challenges and are what we're trying to do is find people who already know the problem area they want to work on, already have some unfair competitive advantage, know something that no one else knows, including us.
Like they have to be venture backable on their own without our help, but where they recognize that with our help, their odds of success are going to go up, their chances of moving quickly are going to go up.
And the piece of equity that we're going to ask for in exchange is fair and not usurous. And so that they get to control, it's their company. They still control the majority of the equity by the time they're done with us. But when they're done with us, they're sort of at one, they know where they're headed.
They've hopefully got the [00:11:00] first bits of product market fit. They've raised some money, they've built their team and they kind of know where they're headed, it doesn't mean they're going to succeed, but it certainly means they're in better position, hopefully, than when they started. And so that's Near Horizon.
We've been doing it for about a year now. For the first 10 months or so self funded, did it semi stealthily with entrepreneurs. We already knew to make sure that the model worked. And it has. And I think our entrepreneurs would say that they've loved the experience. They are much further along than they would be.
They're probably in a different place than they would be. We've enjoyed it. And what's interesting is I think we started out trying to solve for something we wanted to do. And we discovered along the way that we seem to be solving a very important problem for the ecosystem in general. I mean, not to overstate it, but I read The Power Law last year.
It was a phenomenal book. I recommend it to anyone who hasn't read it yet. Incredible sort of history of venture capital and the way it has changed entrepreneurship in the U. S. and around the world, starting with Arthur Rock all the way through [00:12:00] to, you know, YC and what Accelerators did, etc. And it's interesting to me, like the grandest version of what we're trying to do with Near Horizon is to change the way venture works and the way new businesses get built, where even very talented entrepreneurs who've done this before, who could build a team on their own that don't need us, would still want to work with us because we're going to de risk things for them. We're going to help them to think bigger. We're going to accelerate their time horizon if they're in a competitive environment. And so far it's working. So we're excited. We'll see.
Amy Jo: Well, you have a long history of being ahead of your time, so I'm paying attention.
Mark: Thank you. the goal here is to be right on time. So it's an interesting thing with startups, right? You actually want to, you don't want to be too far ahead. Luke was too far ahead with Sam, right? We were doing services to find your friends on your phone before smartphones existed.
And we're literally doing the fancy math, [00:13:00] you know, TVOs, time distance of arrival, triangulation off a cell towers to like figure out where an individual phone was, if you're building that much infrastructure to solve a downstream problem, you're probably too early. Anyways, I'm hoping that we are just at the right time.
Amy Jo: So I want to go deeper into how you see the tech landscape and how you evaluate startups, because what you're describing is a really interesting perspective. And if you think of the mindset of any investor, whether you're investing money and time and grit or just money, right? You're going to be making yes, no choices all the time.
Before we get into that, I want to follow up on learning from mistakes. Earlier today, somebody challenged me and said, you know, you talk about learning from mistakes and leading into failure and squeezing all the learning juice out of it. Give me an example. When does that really happen?
And so you mentioned looped [00:14:00] and big lesson there about market timing, right? And just not just the startup in the idea, but the way it's embedded in the market. What are some other moments or mistakes or like insights that you've gleaned from watching when things didn't work?
Mark: So I'll tell you one of my favorite stories.
So I was at Garden Health. Helping to run the business of the business garden health is I think the second largest molecular diagnostics company in the world and builds circulating tumor DNA assays to help people Choose the right therapy for cancer treatment and then moved into early detection and a variety of other things one of the Really interesting conversations.
I had early on in my tenure with our chief medical officer was garden health. Assay was actually better than the standard of care because it was able to it was a blood based test. You could figure out what was going on with somebody's metastases, not just with their primary tumors and metastases are what will kill you.
And so you want to treat the Mets, not the primary. And we [00:15:00] published this very interesting paper in a high impact journal from a University of Chicago professor who was famous about how garden health assay found things that were not found by the traditional tissue based biopsies. And our medical affairs team was so excited about this.
It was amazing science and the KOLs we talked to, key opinion leaders, loved it. And they wanted us to market the heck out of it. And what we figured out in talking to sort of your ordinary garden variety oncologists. was what they wanted for our, from our assay was for it to be exactly the same as the tissue based assays that they already knew and understood and that, except that it was easier to use because all you had to do was draw blood instead of doing like a lung biopsy on somebody.
And so I told Rick this was amazing science. I loved what he was working on, but there was no way in heck we were going to push this as the marketing message because it was exactly opposite to what people wanted to hear. We're better than the standard of care means we're different than the standard of care.
That is not what they wanted to [00:16:00] hear. What they wanted to hear was we were going to produce exactly the same results, only we were easier to use and the results would come back in seven days. Those were the winning marketing messages. And anyways, it was eye opening for me because one of the things if you work In Silicon Valley, like you always want to work the things that make things better, right?
And Garden Health was doing that. I mean, the assay was amazing and the technology and science were incredible, but we weren't selling science. Actually, what we were selling, even in a molecular diagnostics with oncologists, the smartest people in the world, the thing we were selling was ease of use. And so for me it was I'd seen this before to sort of mind blowing right to have this this basic marketing lesson that was very difficult to drive home with even very smart people because it's so counterintuitive.
Don't tell them about the thing that makes it better. Anyways, there's a lot of those along the way that I think are important and counterintuitive and even a great entrepreneur might look past in
the [00:17:00] same way that Sam Altman looked past the fact in 2005 that was going to be too hard to implement a location based service when most phones didn't actually have GPS.
Amy Jo: Yep. Market timing.
Mark: It's huge.
Amy Jo: So, some of the things you've learned from your successes?
Mark: I think one of the things that I would say is that even as a company succeeding there's always the startup remains startup challenges like there's another step to take. Right. You have to sort of relentlessly innovate. It's just perhaps you're innovating on different things. I mean, garden's an interesting example because garden is a huge success.
It's, it has helped millions of cancer patients. It's a multi billion dollar business. And Helmi El Touki and Amir Ali Talassaz who built it are geniuses and deserve enormous amount of credit for making it happen. They started with scientific innovation. And then there was innovation around the IP and IP protection in a very litigious space.
And then there was innovation around the initial commercialization. And then there was innovation around [00:18:00] the the medical affairs and the outreach to getting all the KOLs using it. And it was like step by step by step. And for me, it being inside that while it was happening, it was very interesting to watch, especially in healthcare, actually.
There are certain types of businesses where you've only got to nail one thing, and then the whole thing works. My favorite example of that in the history of the world is probably WhatsApp. Right? Like it's just like it's solved one problem. SMS is too expensive. They nailed it. They only have like 15 employees and whatever. It was a 20, 30 billion business because they, but that is the exception to the rule.
Almost all great businesses require you to like. Get that one thing right. Once you've got that right, now you're succeeding. You've got to get that next thing right, and then you've got to get that next thing right. And Trip used to say that you have to put the emphasis on the right syllable.
I think for a great entrepreneur, even as you're succeeding, you have to continue to figure out, like, what's the thing that is going to really unlock the next part of the business. And stay laser [00:19:00] focused on that. And it means in part, like, what's Not doing certain things. And then once you've cracked that nut, now you got to, now you find the next thing and garden just nailed that.
I mean, it, we included everything from like, Oh, how do we get reimbursement? Or how do we build a giant, they have a multi a hundred million dollar biopharma business that was built from zero by an internal consultant Daniel Simon, who went on to run that whole business line. Anyways, step by step.
And I think that's a really important lesson for every great startup.
Amy Jo: It's so true. And I think it's particularly challenging to go from the messy, scrappy 15 people in a room, throwing it together to the next level where you have to say no to things.
Mark: Yeah.
Amy Jo: Right. And I've worked with a lot of startups that have struggled through that transition, but the ones that make it, it opens up the next level, just like you say.
Mark: Yeah, there's also, certainly lots has been written about the cultural transition that occurs, [00:20:00] particularly, I think there's a big one at like 15 or 20 people and there's another big one at like 120 ish people, whatever, where we're maintaining the values and culture of a business become harder.
And, you know, I'd say one of the things for entrepreneurs is, and this is hopefully where, like, my gray hair helps.
Understanding who you are and what your intrinsic strengths are and also what your weaknesses are is a really important part of the entrepreneurial journey so that you can I think the goal generally is not to become, try to become good at the things you're not intrinsically good at. I don't think that works, but it's to understand where the weaknesses are and fill those gaps in around you and also to like lean into the strengths.
And so, you know, one of the things I think I helped with at Garden was as the company got bigger, making sure that the culture was one, Helmy and Amiralee were high ethics, very nice people, but they weren't like effusive communicators sort of naturally. And so one of the things. I think I helped with inside a carton was as the company got larger Making sure that like who we are [00:21:00] what we stood for why we were doing what we were doing Which you think would be easy, right?
We're helping cancer patients But even still like lots of biotech every biotech on earth is Helping people, but a lot of them don't actually feel that way. Anyways, making sure that, that was pulled through in the culture, because that was a strength of mine was something that I leaned into. And I think that's for every entrepreneur, I think trying to figure out your authentic self, building companies that feel and look like your authentic self, but also then complimenting yourself with people who are different.
But I think that's why Trip recruited me to help build Digital Chocolate.
Amy Jo: Right. Yeah, circling back to that. So there's a thread I want to pull here of communication because you're talking about effective communication leading to culture, you know, to cultural transmission, which it does. And different leadership styles.
And I know personally from working with you that [00:22:00] when you pitch something to me, I'm spellbound. I mean, you're amazing at that. And I know that's a lot of skill and thinking that goes behind that. How did you develop these communication skills?
Mark: I'm not sure I actually really know the answer to that, to be honest.
I'll say a few things. One like I was in debate club. And I wasn't certainly a particularly comfortable public speaker for the 1st, Five, six years of my career. In fact, I was pretty anxious getting up on stage.
What have you like anything I think practice helps. I will say this, first of all, you can't articulate something you don't understand full stop. And so I I use that as an important measure, by the way, when I meet an entrepreneur and they describe a problem to me and I can't describe it back to my partners or somebody else, what that means to me, I don't understand it.
And maybe that's on me because I wasn't an active enough listener. Maybe it's on the entrepreneur who's trying to convey the story to me. Somehow it got lost in translation. And I think that's an [00:23:00] important thing to take note of. I think, you know, there's other pieces. I'm not sure I, if I practice this, but that are useful.
Right. Pitching is, it's storytelling, right? Humans respond to stories, metaphors are super effective. I think one thing I try to use frequently, it's not conscious, but I think it's developed over time is sort of micro examples to prove macro points. So when I was at Gardens. I could talk. I have to tell you, like, I don't know the science all the way down.
Not a chance. My wife is a world famous geneticist. I understand what that actually looks like. That is not me. But I know just enough about a few examples where I could speak to them and it would make very clear what it was that our, say, assays were doing. blood based tests that would allow you to figure out the genomic drivers of your cancer tumors and pick the right therapies.
EGFR is a gene that drives a lot of lung cancers. I could talk about EGFR [00:24:00] mutations and what that would mean and what therapy you should be on. And that one example was enough so that if I was talking to some Hardened skeptical, KOL from, you know, mass General or MD Anderson who didn't think that the kid who didn't have an MD or a PhD knew what he was talking about.
I could tell that example by the time we're done, she or she knew that they were talking to somebody who wasn't a clown, and then we could actually get about the business of talking about what we needed to talk about. I think it's very useful to have an arsenal. Of stories where you can kind of press play like I know this story and I can modify it for my audience and by the time I'm done, there's a very specific example that I can then project across in some sort of.
macro sense to the larger problem I'm trying to solve. So I think, that's an important part of it. You gotta be able to reach your audience which is very hard in the era [00:25:00] of zoom. I will say like, This was easier, giving great pitch in person is much easier.
It's much harder to read a room in Zoom and to sort of make the uncomfortable people comfortable or to make a light joke that sort of pulls the conversation back to where you need it to go. I guess if there's only one, here's one other hot tip, which is I suppose Ronald Reagan was the best I've ever seen at this, which is talk about what you want to talk about.
Right? Like, I still remember people would ask Reagan some policy question and he would talk about a city on a hill because that was the message, right? I think as an entrepreneur, your job is not to make everyone happy, nor is it to answer all the questions. Your job is to solve a really important problem.
And that usually requires focus on a few things and getting a few dedicated people focused on that thing. All else is noise. think. Yank it back from the distraction is another piece that's really important.
Amy Jo: [00:26:00] Yep. All right. So let's do red flag, green flag.
Mark: Yeah.
Amy Jo: So you meet with a lot of teams, right? And you've worked with a lot of teams now in your new position, you're meeting with teams considering working with them. What are the green flags? When you see it, you kind of lean forward, you want to know more. You've mentioned some things already, I think, but, you know, what are the things that really get you excited about working with the team?
Mark: I mean, some of them are obvious. It's sort of like the combination of like energy, passion and like raw intellect that sort of jumps off the page with some great entrepreneurs. I mean, there's people you meet where like, by the time you're done with that conversation, you're like, I just want to work with this. This is amazing, right? I, there's an entrepreneur in Kazakhstan right now that I've been going back and forth with for a month who just jumps off the page in terms of like energy and I'm gonna, I will knock down walls and, you know, but also so sharp and [00:27:00] passionate about the things he's been working on for quite a long time.
You know, I think the sort of less obvious piece, but at least is important for building a successful business is do you have some sort of unfair competitive advantage? I mean, the first. Entrepreneur. We worked with it near Verizon is Andrew Panu is an old colleague of mine who started out life as a hedge fund analyst in biotech.
Andrew identified an important problem that the tools for analysis in the bioeconomy were not nearly as It's ML driven as they should be. They're like banging two rocks together is the way you would describe it. And he was his own customer. So that was useful. But way more useful is that Andrew had become a extremely important influencer in the world of biotech nerds.
So Andrew's got like 20, 000 followers on Twitter and on LinkedIn. And every one of them is like a C level executive at a biotech or pharma company. Like nobody follows Andrew unless they're like a Deep biotech nerd. And then we would post things the beautiful landscape analyses, like what's happening with GLP ones and whatever.[00:28:00]
And like you get a million reads. That's a big deal. From our perspective, what that meant was when he wanted to build his company, he was going to have a huge distribution advantage. So he could get to his customers. It's a very obvious thing. Most Silicon Valley entrepreneurs are product driven, including me.
Like, I get excited about products. What people forget is that with very few exceptions, your product must have a distribution. Like, And it could be traditional marketing, or whatever, however it is. It depends if you're selling, or if you're doing marketing, or if it's consumer ish and needs to be viral, whatever.
But you need to have a way to get in front of people. And this was something that, like, Andrew had in spades. He could post something. He does this now. You know, you go look at his LinkedIn profile. He'll say, like, DM me if you're interested in this thing I'm building. And he'll get The CEOs of big biotechs and pharmas pinging him, which is an amazing advantage.
So, so that's the other thing that we really want is something, you know, nobody else knows that gives you some kind of [00:29:00] intrinsic advantage as you go after, after a problem.
Amy Jo: Love it. That's such a great insight. So let's play red flags.
Mark: Yeah.
Amy Jo: What are some of the things that if you see them during a pitch with a team, it's a red flag?
Mark: There's some obvious ones in terms of like, low ethics you know, bad reputation, you're working on a problem that we don't actually want to see solved. Et cetera, like forget it. Like we're not going to work on anything that isn't going to make the world a better place. And if you can't get me excited about what you're working on, we do see people occasionally, I'm like that person be a great member of an early team, but they're not the CEO because he or she just being a C part of being a CEO is you have to be able to get people excited.
I don't think a great CEO ever who couldn't inspire their investors, their customers and their employees, because I don't think you can build an innovation business without having that. There are certain types of businesses that are [00:30:00] slow growth, et cetera, or maybe that's different, but kind of stuff I worked on in Silicon Valley, if you can't get me excited, it's not going to work.
I think the other thing for us, we do see a lot of people who are sort of in the minus one to zero phase. And that we like them. We want to stay in touch with them, but we don't want to work with them yet. So South Park Commons, for example, says that they work on minus one to one and I love it.
I think that's great. They can do that. And but minus one to zero is like, I'm not even sure which problem I'm working on. I'm just a talented entrepreneur. It's sort of like an E. I. R. ship thing. We admire that, but it's not the part of the It's not the phase that we want to be involved with, frankly, because we sort of can't afford it.
We don't have the time to do that work. We really need to find people who, they don't have the answer to the problem, but they at least have the thesis figured out for like, here's the problem space. I'm going after why I'm the right person to work on it. And, but probably don't have, The exact solution.
There's still customer discovery work to do, etc. We [00:31:00] want to catch them at inception. We want to catch them at zero. Not at point five as it were but but that's important for us. I mean, I guess the final thing I'd ask you, Joe,
arrogance is a killer. And I also say it's pretty rare. I think you hear a lot of Silicon Valley, people are so arrogant, like I don't know, not many of the ones I talk to, I mean, most people out here actually have kind of a radical humility, like the scale and scope of the things you're trying to fix or work on are so hard, or the people around you are so much more talented than you are, know so many things you don't know, or especially your experience you realize like, You know nothing, you know a tiny fraction of what there is to know.
And that's just sort of how it goes. And we encounter somebody who thinks they've got it all figured out that won't work either.
Amy Jo: And yet you worked with Trip. Well, he's a, you know, there's always the exception that proves the rule, right? Yeah.
Mark: Yeah.
Have many good things to say about Trip.
Amy Jo: Me too. I mean, he's a legend. I don't feel like humble would be one of them. But
Mark: [00:32:00] probably not the first word that would come to mind. But I will say this here. So here's a different way of thinking about it. Here's my, I'm an optimist. Here's my positive spin.
He knew how to surround himself with people who were really good. I mean, Trip once told me, and this was 20 years ago, that he had 70 people who'd worked for him, who'd gone on to be venture backed CEOs. And so he certainly wasn't shy about bringing in talented people who knew things that he didn't know, and making them part of the team.
That certainly reflects a certain kind of humility. He wasn't always the best at making them feel great about themselves along the way, but that's for another day.
Amy Jo: Well, that's actually true, and in my most vivid head butting with Trip, which a meeting I think you might have been in, trying to get a game shipped, right, like, we're like about to ship this game, trying to tie up the loose ends, there was some friction.
I thought I was going to get fired because I, it was fiery, it was a fiery meeting. Guess what? [00:33:00] We made changes and shipped the game after the meeting. I wasn't fired. So. That told me, Oh, this is somebody who can take a strong argument.
Mark: Yeah, for sure he could. And I mean, I guess one of the things I'd say for entrepreneurs is like, you do have to build your companies with a culture.
I think that is authentic to who you are. It's a problem if who you are is deeply unethical, but putting that aside, there are different personality types and there are people who sort of rule through fear and through love and through, right?
I think that the best way to lead is by having a vision that everybody can get very excited about. and having enough structure so that people know what they're doing. I'm, this is, I'm not a, you know, it's not a com, I'm not a communist. This isn't like a egalitarian sort of thing. There needs, people like to be led actually, but like where great people feel like they can They have the tools they need to do their work on an admission that matters.
And like for me, the, and then we treat each other with respect and the rest of it is [00:34:00] follows from that there, there are different ways to run great businesses though. I don't think anybody would say that about Elon Musk. I'm not a fan of him personally, but you can't argue at least with the success.
Yeah, obviously his style can work. I just wouldn't want to work for one of the companies.
Amy Jo: Is there a leader you've worked with who embodied a lot of these qualities, who springs to mind?
Mark: Sure, Ilka Pananen is the first one that jumps off the page. So Ilka worked for me at Digital Chocolate. He was the founder of a tiny little game studio in Helsinki called Sumeya that we acquired in 2004. Because every wireless operator in the world, Vodafone, they all told us, like, Ilka makes the best games. He's amazing. Go talk to Ilka. And so we went over there. You know, we've been backed by Sequoia and Kleiner. We had Trip and anyways, we were able to acquire his already terrific little company, roll it into Digital Chocolate.
I would give Ilka most of the credit for most of the [00:35:00] success that Digital Chocolate had and his team grew. The business anyways eventually Ilka had enough and went and started a little company. You may have heard of called Supercell.
Amy Jo: Which is still one of the great line.
Mark: Yeah. The punchline.
So, so, you know, Ilka and his three co founders, I think are the four wealthiest people in Finland. And they run a company where everyone loves to work there. And he said what he meant and meant what he said. I remember Ilka used to talk about like celebrating failures, right?
It's a thing people talk about in Silicon Valley You can go read his blogs about Supercell people will build a game for a year and if they decide it is not good enough to represent the brand, not worth the effort. They will kill the project, but they will have a giant party to celebrate all the hard work that went into it.
And those people all get promoted and go work on the next one. And like people love a
Amy Jo: great story.
Mark: People love Ilka. I mean, I told him this when I decided to leave Digital Chocolate, um, it was hard. It was emotional for me. And I flew over to Helsinki. To say goodbye to the team because they'd [00:36:00] all worked for me and I really sort of led the acquisition and all the rest of it.
And I told Ilka in front of his whole team that I thought Ilka was the best leader I'd ever met. And he was only 27 or something at the time and I meant it. And. Honestly, I think he'll probably be prime minister of Finland someday. I mean, he's really he's a pretty special talent. So there's one example.
Amy Jo: I love that. What a great story. Right now, Mark, you're building Near Horizon with your partner.
You're, you know, talking to and developing relationships with all these different founding teams. In the larger world, what are you paying attention to? What trends are you following? What are you noticing? What's on your mind that's shaping sort of how you know, navigate?
Mark: It's a great question. I mean, some of them are sort of obvious and cliched.
I mean, what's happening in AI is incredible and miraculous. And mean, the funny thing, so I have a two year old, I have an eight year old and a two year old. The two year old is still in like language acquisition phase and like, you know, still in the like trying things and falling down and [00:37:00] figuring out this is how you don't fall down.
And this is how you and you know, we, a bilingual home. So she's learning English, but also learning some Spanish and you watch the whole thing happen. And then to watch what's happening with generative AI. And like, it's a similar sort of This is miraculous. And actually having a small child.
Actually, I think it gives me even more perspective on it. Like, wow, the human brain is also miraculous, but this is incredible, but that's also it's also sort of obvious.
I'm very interested in some of the larger sort of social challenges and how technology can help to solve them.
Dis and misinformation, loneliness, fear mental illness. I think There's a lot that plagues our country and the world that among other things, generative AI is going to make worse but also can help be part of the solution. I mean, this is the thing about tech is right. It's almost always a double edged sword.
Mobile phones have made the world indescribably better and are also a dopamine machine in our pocket that have made everybody anxious and are a huge problem, [00:38:00] both. And I think. I'm sort of paying close attention to what that means AI. I'll give you a concrete example. Our second portfolio company, we worked with near Verizon is a company called Sanctum that's building cognitive automation tools to help busy prosumers, sort of improve their digital communications.
But where it started and actually still a core part of the product offering is the founding CEO's mother got scammed. It was an online scam. She was taken for 10, 000. This is the kind of thing that happens every day. The erosion of trust, like without trust, I've always thought the veneer of civilization is like this.
It's really much thinner than we would like human beings. And our limbic brain is not far from the surface. And so without trust, bad things happen. And online scams are a great way to erode trust. And Oh, by the way, also, most of them have been driven by basically like. farms of slaves. I mean, the, other than [00:39:00] sex slavery, the biggest form of enslavement on earth is like people who are forced into like these horrible places where they are scamming people all day long.
It's a terrible problem. Anyways, if you think you technology can help to solve this problem, that feels very important to me. And. If you think about what Gen AI is going to do, it's also going to make creating things like scams that much easier too. And so it's an arms race, right? Between the bad guys and the good guys.
And so we want to be involved with building the tools that are going to help with human, socio psychological problems. Things that range from loneliness, to mental illness, to scams and trust, etc. That are being exacerbated by the rise of things like AI and mobile, but also can be solved by the same technologies.
That's an area I'm really fascinated by.
Amy Jo: Me too. Wow. That's really interesting. You know, I learned that lesson in my first job in tech, which was at Sun Microsystems [00:40:00] back in the day. And in one week, our group had visits from a huge hospital network who was going to install our computers and the databases I worked on to solve all kinds of problems and treat people better and the NSA. And I was like, Oh, okay, these powerful tools go both ways.
Mark: Always.
Amy Jo: And that's a, it's a good lesson because Then you don't spend your time wishing it wasn't so you just spend your time fighting for the white hat rather than the black hat.
Mark, I can't thank you enough for sharing your stories and your wisdom and things you've learned.
I love hearing about what you're trying to do at Near Horizon, and you are not afraid of a challenge.
Mark: It makes things interesting. There, there is great value in doing something you've done before. You are a subject matter expert. You become very good at the thing.
There's also value in variety. And if you happen to be a generalist as I [00:41:00] am, and you can pull lessons from one thing to the other, that's what makes me get excited in the morning.
Amy Jo: Awesome. Thank you so much. I look forward to seeing you soon. And have a wonderful day.
Outro: Thanks for listening to Getting2Alpha with Amy Jo Kim, the shows that help you innovate faster and smarter. Be sure to check out our website, getting2alpha.com. That's getting[number]2alpha.com for more great resources and podcast episodes.
Amy Jo: Mark Jacobstein is co-founder of Near Horizon ventures, a VC firm with an unusual approach. They don't just invest in startups. They join them as co-founders.
In this interview, you'll learn about Mark's journey as a serial entrepreneur and find out why he decided to pioneer a new investing model with Near Horizon.
Stay to the end to hear what Mark looks for in a startup when he's investing and the red flags to watch out for that can kill your pitch.
I'm incredibly excited to be here with Mark Jacobstein, somebody that I've known as a colleague for years, but Mark and I have [00:01:00] never really gotten to sit down and go deep into his philosophy, his experiences, what he's learned from this amazing walk through the gaming and tech universe.
So thank you so much, Mark, for being here and welcome.
Mark: No, thank you, Amy Jo. I'm excited for the conversation today.
Amy Jo: Me too. So one of the things that most interests me in your background is the choices you've made and the path you've carved that included both tech and gaming. You've moved pretty fluidly in those worlds, it seems.
Mark: Yeah, peripatetic is the word I've used sometimes. Games and gaming tech, which included consumer internet, wireless, mobile. And then actually for the last 10 or 12 years, an awful lot of work in biotech, tech bio, molecular diagnostics, omics. In some ways, it's easy to look at it and think sort of all over the map.
There are certainly some common threads I could pull through, but I think it is a [00:02:00] reflection of a couple of things I'm curious. I enjoy a lot of different things and I'm a generalist. I don't know many things, maybe nothing all the way down. But I know a little bit about a lot of things and that's how my mind works and that's what I enjoy.
And so I think I've tried to create a career that reflects that.
Amy Jo: So, I read, but I don't know the story of how you co-founded Digital Chocolate.
Mark: Yes. So Digital Chocolate for those that don't remember, Digital Chocolate was a high flyer of a mobile game business we founded in 2003. And I co-founded the business with Trip Hawkins and we had six other co founders as well.
But so Trip was the founding CEO and I was the founding president. For those who don't know, Trip's a legend. Trip was the founding CEO of Electronic Arts and of 3DO. And I think the second person ever inducted into the Video Game Hall of Fame and one of my first real mentors. And I was very reluctant to start the business.
So I started my career as an entrepreneur in New York in 1994 and built two businesses in what we used to call [00:03:00] Silicon Alley and love New York city. And it was happily ensconced in Brooklyn and before it was cool and host.com crash. Got a call from Trip that he was trying to put something together and he wanted me to move out to California and be his co founder and sort of run the business, you know, Trip would sort of set strategy and I would report to Trip and everyone else would report to me and we would build this great game business.
It was obvious to me that mobile was going to be a very big deal. I'd been to Japan. I'd actually tried to build mobile fantasy sports on DoCoMo phones in 1999, believe it or not. In fact, maybe even earlier than that, I'd been going to Japan, which was, for those that don't remember, where sort of the mobile revolution started.
And I used to talk about mobile as the one, mobile was the one device to rule them all. This was like 2001, I was saying this. Anyways, so I believed in the vision, but I didn't want to move from New York. So anyways, Trip worked me over for a while and he finally hit me with, [00:04:00] look, I've got Sequoia and Kleiner are putting in 8 million.
Mike Moritz, who's the greatest venture capitalist in history, is sitting on the board. I will introduce you to everyone in Silicon Valley. You are crazy to turn this down. And he was right. So I packed up my bags and I moved to California in late 2003 and have never looked back.
Amy Jo: So you prioritize relationships and exposure to greatness and learning.
Mark: Yeah. I mean, I think that's right. I would say If there are a few things, first of all, I would sort of recommend this for anybody who's early career, which I certainly still was at the time. That the things that matter most are, are you working with great people on big problems and what's your learning curve going to look like?
I knew this was going to be hard and challenging but interesting. But it was difficult. I mean, my family's on the East coast and I love New York city and I had, you know, great friends there and all the rest of it, but the Bay Area is all right too, so, it worked out.
Amy Jo: Wow. So what made Trip go after you?
Mark: That's a good question. I mean, Trip used to say he thought we [00:05:00] had an awful lot in common. There were certain things we did have in common. We both sound like the sounds of our own voices. We both can talk about almost anything, even things we don't know an awful lot about.
We both built game businesses in our early twenties. So he was the first business employee at Apple. And then he founded EA when he was 24 or 25, and I'd done the same thing. So I founded Small World Sports in my living room when I was 24, which was the first online fantasy sports business in the world.
So I had a claim to fame. It was inventing online fantasy sports. Trip had invented many things in the console gaming business. Arguably, it kind of really made the console gaming business world. And so, we'd both gone to Harvard, had sort of I think, didn't love working in a traditional corporate structure and that was reflected by starting things when we were very young.
We had a lot of other things that were, we have different personalities. I think I'm a little more easygoing, which was the other piece I think Trip actually recognized that I would help smooth over some of the things that were difficult inside of Digital Chocolate.
Amy Jo: You took the [00:06:00] words out of my mouth.
Different leadership styles.
And apparently you also were the grown up in the room working with Sam Altman at Loops. Is that true?
Mark: That is true. So that was actually immediately following Digital Chocolate. So in 2005, maybe 2006, Sam was the 19 year old wonder kind who had just raised from Sequoia and NEA.
And I was introduced to him actually originally by David White because we had such similar views with mobile. And it's hard to imagine, but if you go back to 2005, 2006, people were thinking mobile is you made phone calls. That was cool. And maybe you played games on your phones. That's what we've done in Digital Chocolate and what I wanted to do a Digital Chocolate in place where trip and I clashed was to build more interesting applications.
And I don't think I hadn't conceived of Uber, but we were thinking of lots of things you could do with mobile that went way beyond and were much more important to the world than just games. Not that games aren't great, but [00:07:00] I and Sam was building a company called Looped. Looped was find your friends on your phone using the location based services.
It wasn't even a GPS yet and was exactly the kind of application I was interested in deeply important social problem of like, interconnectedness. Sam was obviously brilliant and he was also 19. The way I always describe it is like, I think, you know, Sequoia wanted me to be Cheryl to his Zuck. Although Facebook didn't really exist yet.
The problem was that Loop never scaled. And so having this experienced gray haired, I don't think I actually had gray hair, but a gray haired number two, who was there to help with all of the operational challenges didn't make sense when the company frankly never really succeeded, despite having an incredible team.
There were Sam Yam who started Patreon and Evan Tana and all kinds of very talented people went on to do great things inside the company, but we had a fundamental, several fundamental problems with the product we were actually building.
Amy Jo: Such a valuable [00:08:00] learning experience, you know, looking back on it that you can see it clearly now probably at the time It wasn't as clear.
Mark: No, hindsight, of course. Being right.
Amy Jo: But that's the thing about having done what you've done and carved your path is that kind of insight. You have the perspective to do that, which is very cool. So, tell us about what you're doing now. I know a little about it. I know that you've transitioned into venture builder after being a long time operator.
Mark: Yeah. So after 30 years being an entrepreneur and helping to build siz or seven companies that mattered not all of which succeeded, but many of which did. And sometimes as a founder, sometimes not sometimes as a CEO, sometimes as a CP or CMO, I decided about a year ago, I want to solve for a few things.
One was, I liked working on multiple projects with great people. But
I didn't want to be a pure venture capitalist because although [00:09:00] meeting great entrepreneurs and picking the right companies is interesting. I still like to build.
So I wanted to still build, but I wanted to work on more than one project at a time.
And along with my partner, Sean and Mike, and I'll mention them and a little bit more about them in a minute, we identified a hole in the market that we thought that there was a great need for talented entrepreneurs, particularly solo founders at Company Inception to get help building their businesses from zero to one.
Amy Jo 2023-10-19: And because of the experiences that I had from 30 years
Mark: all over the place many different successes and many different failures and different lessons from all that. And similarly for Sean and Mike,
Amy Jo 2023-10-19: we felt like we could accelerate people past some of the problems they might have, give them access to things that they might not have access to and de risk.
Mark: Great entrepreneurs working on important problems. We're not a venture studio. So we built a company, the firm is called Near Horizon. You can find it nearhorizon.pc. And our goal is to work with great entrepreneurs at company inception [00:10:00] and help get them from zero to one. It is not a studio.
We are not trying to make our own stuff. And then find a CEO after the fact and sort of bolt them on that model can work. Certainly it worked for flagship pioneering. I mean, they made Moderna and it's worked for IAC and others, but it has its challenges and are what we're trying to do is find people who already know the problem area they want to work on, already have some unfair competitive advantage, know something that no one else knows, including us.
Like they have to be venture backable on their own without our help, but where they recognize that with our help, their odds of success are going to go up, their chances of moving quickly are going to go up.
And the piece of equity that we're going to ask for in exchange is fair and not usurous. And so that they get to control, it's their company. They still control the majority of the equity by the time they're done with us. But when they're done with us, they're sort of at one, they know where they're headed.
They've hopefully got the [00:11:00] first bits of product market fit. They've raised some money, they've built their team and they kind of know where they're headed, it doesn't mean they're going to succeed, but it certainly means they're in better position, hopefully, than when they started. And so that's Near Horizon.
We've been doing it for about a year now. For the first 10 months or so self funded, did it semi stealthily with entrepreneurs. We already knew to make sure that the model worked. And it has. And I think our entrepreneurs would say that they've loved the experience. They are much further along than they would be.
They're probably in a different place than they would be. We've enjoyed it. And what's interesting is I think we started out trying to solve for something we wanted to do. And we discovered along the way that we seem to be solving a very important problem for the ecosystem in general. I mean, not to overstate it, but I read The Power Law last year.
It was a phenomenal book. I recommend it to anyone who hasn't read it yet. Incredible sort of history of venture capital and the way it has changed entrepreneurship in the U. S. and around the world, starting with Arthur Rock all the way through [00:12:00] to, you know, YC and what Accelerators did, etc. And it's interesting to me, like the grandest version of what we're trying to do with Near Horizon is to change the way venture works and the way new businesses get built, where even very talented entrepreneurs who've done this before, who could build a team on their own that don't need us, would still want to work with us because we're going to de risk things for them. We're going to help them to think bigger. We're going to accelerate their time horizon if they're in a competitive environment. And so far it's working. So we're excited. We'll see.
Amy Jo: Well, you have a long history of being ahead of your time, so I'm paying attention.
Mark: Thank you. the goal here is to be right on time. So it's an interesting thing with startups, right? You actually want to, you don't want to be too far ahead. Luke was too far ahead with Sam, right? We were doing services to find your friends on your phone before smartphones existed.
And we're literally doing the fancy math, [00:13:00] you know, TVOs, time distance of arrival, triangulation off a cell towers to like figure out where an individual phone was, if you're building that much infrastructure to solve a downstream problem, you're probably too early. Anyways, I'm hoping that we are just at the right time.
Amy Jo: So I want to go deeper into how you see the tech landscape and how you evaluate startups, because what you're describing is a really interesting perspective. And if you think of the mindset of any investor, whether you're investing money and time and grit or just money, right? You're going to be making yes, no choices all the time.
Before we get into that, I want to follow up on learning from mistakes. Earlier today, somebody challenged me and said, you know, you talk about learning from mistakes and leading into failure and squeezing all the learning juice out of it. Give me an example. When does that really happen?
And so you mentioned looped [00:14:00] and big lesson there about market timing, right? And just not just the startup in the idea, but the way it's embedded in the market. What are some other moments or mistakes or like insights that you've gleaned from watching when things didn't work?
Mark: So I'll tell you one of my favorite stories.
So I was at Garden Health. Helping to run the business of the business garden health is I think the second largest molecular diagnostics company in the world and builds circulating tumor DNA assays to help people Choose the right therapy for cancer treatment and then moved into early detection and a variety of other things one of the Really interesting conversations.
I had early on in my tenure with our chief medical officer was garden health. Assay was actually better than the standard of care because it was able to it was a blood based test. You could figure out what was going on with somebody's metastases, not just with their primary tumors and metastases are what will kill you.
And so you want to treat the Mets, not the primary. And we [00:15:00] published this very interesting paper in a high impact journal from a University of Chicago professor who was famous about how garden health assay found things that were not found by the traditional tissue based biopsies. And our medical affairs team was so excited about this.
It was amazing science and the KOLs we talked to, key opinion leaders, loved it. And they wanted us to market the heck out of it. And what we figured out in talking to sort of your ordinary garden variety oncologists. was what they wanted for our, from our assay was for it to be exactly the same as the tissue based assays that they already knew and understood and that, except that it was easier to use because all you had to do was draw blood instead of doing like a lung biopsy on somebody.
And so I told Rick this was amazing science. I loved what he was working on, but there was no way in heck we were going to push this as the marketing message because it was exactly opposite to what people wanted to hear. We're better than the standard of care means we're different than the standard of care.
That is not what they wanted to [00:16:00] hear. What they wanted to hear was we were going to produce exactly the same results, only we were easier to use and the results would come back in seven days. Those were the winning marketing messages. And anyways, it was eye opening for me because one of the things if you work In Silicon Valley, like you always want to work the things that make things better, right?
And Garden Health was doing that. I mean, the assay was amazing and the technology and science were incredible, but we weren't selling science. Actually, what we were selling, even in a molecular diagnostics with oncologists, the smartest people in the world, the thing we were selling was ease of use. And so for me it was I'd seen this before to sort of mind blowing right to have this this basic marketing lesson that was very difficult to drive home with even very smart people because it's so counterintuitive.
Don't tell them about the thing that makes it better. Anyways, there's a lot of those along the way that I think are important and counterintuitive and even a great entrepreneur might look past in
the [00:17:00] same way that Sam Altman looked past the fact in 2005 that was going to be too hard to implement a location based service when most phones didn't actually have GPS.
Amy Jo: Yep. Market timing.
Mark: It's huge.
Amy Jo: So, some of the things you've learned from your successes?
Mark: I think one of the things that I would say is that even as a company succeeding there's always the startup remains startup challenges like there's another step to take. Right. You have to sort of relentlessly innovate. It's just perhaps you're innovating on different things. I mean, garden's an interesting example because garden is a huge success.
It's, it has helped millions of cancer patients. It's a multi billion dollar business. And Helmi El Touki and Amir Ali Talassaz who built it are geniuses and deserve enormous amount of credit for making it happen. They started with scientific innovation. And then there was innovation around the IP and IP protection in a very litigious space.
And then there was innovation around the initial commercialization. And then there was innovation around [00:18:00] the the medical affairs and the outreach to getting all the KOLs using it. And it was like step by step by step. And for me, it being inside that while it was happening, it was very interesting to watch, especially in healthcare, actually.
There are certain types of businesses where you've only got to nail one thing, and then the whole thing works. My favorite example of that in the history of the world is probably WhatsApp. Right? Like it's just like it's solved one problem. SMS is too expensive. They nailed it. They only have like 15 employees and whatever. It was a 20, 30 billion business because they, but that is the exception to the rule.
Almost all great businesses require you to like. Get that one thing right. Once you've got that right, now you're succeeding. You've got to get that next thing right, and then you've got to get that next thing right. And Trip used to say that you have to put the emphasis on the right syllable.
I think for a great entrepreneur, even as you're succeeding, you have to continue to figure out, like, what's the thing that is going to really unlock the next part of the business. And stay laser [00:19:00] focused on that. And it means in part, like, what's Not doing certain things. And then once you've cracked that nut, now you got to, now you find the next thing and garden just nailed that.
I mean, it, we included everything from like, Oh, how do we get reimbursement? Or how do we build a giant, they have a multi a hundred million dollar biopharma business that was built from zero by an internal consultant Daniel Simon, who went on to run that whole business line. Anyways, step by step.
And I think that's a really important lesson for every great startup.
Amy Jo: It's so true. And I think it's particularly challenging to go from the messy, scrappy 15 people in a room, throwing it together to the next level where you have to say no to things.
Mark: Yeah.
Amy Jo: Right. And I've worked with a lot of startups that have struggled through that transition, but the ones that make it, it opens up the next level, just like you say.
Mark: Yeah, there's also, certainly lots has been written about the cultural transition that occurs, [00:20:00] particularly, I think there's a big one at like 15 or 20 people and there's another big one at like 120 ish people, whatever, where we're maintaining the values and culture of a business become harder.
And, you know, I'd say one of the things for entrepreneurs is, and this is hopefully where, like, my gray hair helps.
Understanding who you are and what your intrinsic strengths are and also what your weaknesses are is a really important part of the entrepreneurial journey so that you can I think the goal generally is not to become, try to become good at the things you're not intrinsically good at. I don't think that works, but it's to understand where the weaknesses are and fill those gaps in around you and also to like lean into the strengths.
And so, you know, one of the things I think I helped with at Garden was as the company got bigger, making sure that the culture was one, Helmy and Amiralee were high ethics, very nice people, but they weren't like effusive communicators sort of naturally. And so one of the things. I think I helped with inside a carton was as the company got larger Making sure that like who we are [00:21:00] what we stood for why we were doing what we were doing Which you think would be easy, right?
We're helping cancer patients But even still like lots of biotech every biotech on earth is Helping people, but a lot of them don't actually feel that way. Anyways, making sure that, that was pulled through in the culture, because that was a strength of mine was something that I leaned into. And I think that's for every entrepreneur, I think trying to figure out your authentic self, building companies that feel and look like your authentic self, but also then complimenting yourself with people who are different.
But I think that's why Trip recruited me to help build Digital Chocolate.
Amy Jo: Right. Yeah, circling back to that. So there's a thread I want to pull here of communication because you're talking about effective communication leading to culture, you know, to cultural transmission, which it does. And different leadership styles.
And I know personally from working with you that [00:22:00] when you pitch something to me, I'm spellbound. I mean, you're amazing at that. And I know that's a lot of skill and thinking that goes behind that. How did you develop these communication skills?
Mark: I'm not sure I actually really know the answer to that, to be honest.
I'll say a few things. One like I was in debate club. And I wasn't certainly a particularly comfortable public speaker for the 1st, Five, six years of my career. In fact, I was pretty anxious getting up on stage.
What have you like anything I think practice helps. I will say this, first of all, you can't articulate something you don't understand full stop. And so I I use that as an important measure, by the way, when I meet an entrepreneur and they describe a problem to me and I can't describe it back to my partners or somebody else, what that means to me, I don't understand it.
And maybe that's on me because I wasn't an active enough listener. Maybe it's on the entrepreneur who's trying to convey the story to me. Somehow it got lost in translation. And I think that's an [00:23:00] important thing to take note of. I think, you know, there's other pieces. I'm not sure I, if I practice this, but that are useful.
Right. Pitching is, it's storytelling, right? Humans respond to stories, metaphors are super effective. I think one thing I try to use frequently, it's not conscious, but I think it's developed over time is sort of micro examples to prove macro points. So when I was at Gardens. I could talk. I have to tell you, like, I don't know the science all the way down.
Not a chance. My wife is a world famous geneticist. I understand what that actually looks like. That is not me. But I know just enough about a few examples where I could speak to them and it would make very clear what it was that our, say, assays were doing. blood based tests that would allow you to figure out the genomic drivers of your cancer tumors and pick the right therapies.
EGFR is a gene that drives a lot of lung cancers. I could talk about EGFR [00:24:00] mutations and what that would mean and what therapy you should be on. And that one example was enough so that if I was talking to some Hardened skeptical, KOL from, you know, mass General or MD Anderson who didn't think that the kid who didn't have an MD or a PhD knew what he was talking about.
I could tell that example by the time we're done, she or she knew that they were talking to somebody who wasn't a clown, and then we could actually get about the business of talking about what we needed to talk about. I think it's very useful to have an arsenal. Of stories where you can kind of press play like I know this story and I can modify it for my audience and by the time I'm done, there's a very specific example that I can then project across in some sort of.
macro sense to the larger problem I'm trying to solve. So I think, that's an important part of it. You gotta be able to reach your audience which is very hard in the era [00:25:00] of zoom. I will say like, This was easier, giving great pitch in person is much easier.
It's much harder to read a room in Zoom and to sort of make the uncomfortable people comfortable or to make a light joke that sort of pulls the conversation back to where you need it to go. I guess if there's only one, here's one other hot tip, which is I suppose Ronald Reagan was the best I've ever seen at this, which is talk about what you want to talk about.
Right? Like, I still remember people would ask Reagan some policy question and he would talk about a city on a hill because that was the message, right? I think as an entrepreneur, your job is not to make everyone happy, nor is it to answer all the questions. Your job is to solve a really important problem.
And that usually requires focus on a few things and getting a few dedicated people focused on that thing. All else is noise. think. Yank it back from the distraction is another piece that's really important.
Amy Jo: [00:26:00] Yep. All right. So let's do red flag, green flag.
Mark: Yeah.
Amy Jo: So you meet with a lot of teams, right? And you've worked with a lot of teams now in your new position, you're meeting with teams considering working with them. What are the green flags? When you see it, you kind of lean forward, you want to know more. You've mentioned some things already, I think, but, you know, what are the things that really get you excited about working with the team?
Mark: I mean, some of them are obvious. It's sort of like the combination of like energy, passion and like raw intellect that sort of jumps off the page with some great entrepreneurs. I mean, there's people you meet where like, by the time you're done with that conversation, you're like, I just want to work with this. This is amazing, right? I, there's an entrepreneur in Kazakhstan right now that I've been going back and forth with for a month who just jumps off the page in terms of like energy and I'm gonna, I will knock down walls and, you know, but also so sharp and [00:27:00] passionate about the things he's been working on for quite a long time.
You know, I think the sort of less obvious piece, but at least is important for building a successful business is do you have some sort of unfair competitive advantage? I mean, the first. Entrepreneur. We worked with it near Verizon is Andrew Panu is an old colleague of mine who started out life as a hedge fund analyst in biotech.
Andrew identified an important problem that the tools for analysis in the bioeconomy were not nearly as It's ML driven as they should be. They're like banging two rocks together is the way you would describe it. And he was his own customer. So that was useful. But way more useful is that Andrew had become a extremely important influencer in the world of biotech nerds.
So Andrew's got like 20, 000 followers on Twitter and on LinkedIn. And every one of them is like a C level executive at a biotech or pharma company. Like nobody follows Andrew unless they're like a Deep biotech nerd. And then we would post things the beautiful landscape analyses, like what's happening with GLP ones and whatever.[00:28:00]
And like you get a million reads. That's a big deal. From our perspective, what that meant was when he wanted to build his company, he was going to have a huge distribution advantage. So he could get to his customers. It's a very obvious thing. Most Silicon Valley entrepreneurs are product driven, including me.
Like, I get excited about products. What people forget is that with very few exceptions, your product must have a distribution. Like, And it could be traditional marketing, or whatever, however it is. It depends if you're selling, or if you're doing marketing, or if it's consumer ish and needs to be viral, whatever.
But you need to have a way to get in front of people. And this was something that, like, Andrew had in spades. He could post something. He does this now. You know, you go look at his LinkedIn profile. He'll say, like, DM me if you're interested in this thing I'm building. And he'll get The CEOs of big biotechs and pharmas pinging him, which is an amazing advantage.
So, so that's the other thing that we really want is something, you know, nobody else knows that gives you some kind of [00:29:00] intrinsic advantage as you go after, after a problem.
Amy Jo: Love it. That's such a great insight. So let's play red flags.
Mark: Yeah.
Amy Jo: What are some of the things that if you see them during a pitch with a team, it's a red flag?
Mark: There's some obvious ones in terms of like, low ethics you know, bad reputation, you're working on a problem that we don't actually want to see solved. Et cetera, like forget it. Like we're not going to work on anything that isn't going to make the world a better place. And if you can't get me excited about what you're working on, we do see people occasionally, I'm like that person be a great member of an early team, but they're not the CEO because he or she just being a C part of being a CEO is you have to be able to get people excited.
I don't think a great CEO ever who couldn't inspire their investors, their customers and their employees, because I don't think you can build an innovation business without having that. There are certain types of businesses that are [00:30:00] slow growth, et cetera, or maybe that's different, but kind of stuff I worked on in Silicon Valley, if you can't get me excited, it's not going to work.
I think the other thing for us, we do see a lot of people who are sort of in the minus one to zero phase. And that we like them. We want to stay in touch with them, but we don't want to work with them yet. So South Park Commons, for example, says that they work on minus one to one and I love it.
I think that's great. They can do that. And but minus one to zero is like, I'm not even sure which problem I'm working on. I'm just a talented entrepreneur. It's sort of like an E. I. R. ship thing. We admire that, but it's not the part of the It's not the phase that we want to be involved with, frankly, because we sort of can't afford it.
We don't have the time to do that work. We really need to find people who, they don't have the answer to the problem, but they at least have the thesis figured out for like, here's the problem space. I'm going after why I'm the right person to work on it. And, but probably don't have, The exact solution.
There's still customer discovery work to do, etc. We [00:31:00] want to catch them at inception. We want to catch them at zero. Not at point five as it were but but that's important for us. I mean, I guess the final thing I'd ask you, Joe,
arrogance is a killer. And I also say it's pretty rare. I think you hear a lot of Silicon Valley, people are so arrogant, like I don't know, not many of the ones I talk to, I mean, most people out here actually have kind of a radical humility, like the scale and scope of the things you're trying to fix or work on are so hard, or the people around you are so much more talented than you are, know so many things you don't know, or especially your experience you realize like, You know nothing, you know a tiny fraction of what there is to know.
And that's just sort of how it goes. And we encounter somebody who thinks they've got it all figured out that won't work either.
Amy Jo: And yet you worked with Trip. Well, he's a, you know, there's always the exception that proves the rule, right? Yeah.
Mark: Yeah.
Have many good things to say about Trip.
Amy Jo: Me too. I mean, he's a legend. I don't feel like humble would be one of them. But
Mark: [00:32:00] probably not the first word that would come to mind. But I will say this here. So here's a different way of thinking about it. Here's my, I'm an optimist. Here's my positive spin.
He knew how to surround himself with people who were really good. I mean, Trip once told me, and this was 20 years ago, that he had 70 people who'd worked for him, who'd gone on to be venture backed CEOs. And so he certainly wasn't shy about bringing in talented people who knew things that he didn't know, and making them part of the team.
That certainly reflects a certain kind of humility. He wasn't always the best at making them feel great about themselves along the way, but that's for another day.
Amy Jo: Well, that's actually true, and in my most vivid head butting with Trip, which a meeting I think you might have been in, trying to get a game shipped, right, like, we're like about to ship this game, trying to tie up the loose ends, there was some friction.
I thought I was going to get fired because I, it was fiery, it was a fiery meeting. Guess what? [00:33:00] We made changes and shipped the game after the meeting. I wasn't fired. So. That told me, Oh, this is somebody who can take a strong argument.
Mark: Yeah, for sure he could. And I mean, I guess one of the things I'd say for entrepreneurs is like, you do have to build your companies with a culture.
I think that is authentic to who you are. It's a problem if who you are is deeply unethical, but putting that aside, there are different personality types and there are people who sort of rule through fear and through love and through, right?
I think that the best way to lead is by having a vision that everybody can get very excited about. and having enough structure so that people know what they're doing. I'm, this is, I'm not a, you know, it's not a com, I'm not a communist. This isn't like a egalitarian sort of thing. There needs, people like to be led actually, but like where great people feel like they can They have the tools they need to do their work on an admission that matters.
And like for me, the, and then we treat each other with respect and the rest of it is [00:34:00] follows from that there, there are different ways to run great businesses though. I don't think anybody would say that about Elon Musk. I'm not a fan of him personally, but you can't argue at least with the success.
Yeah, obviously his style can work. I just wouldn't want to work for one of the companies.
Amy Jo: Is there a leader you've worked with who embodied a lot of these qualities, who springs to mind?
Mark: Sure, Ilka Pananen is the first one that jumps off the page. So Ilka worked for me at Digital Chocolate. He was the founder of a tiny little game studio in Helsinki called Sumeya that we acquired in 2004. Because every wireless operator in the world, Vodafone, they all told us, like, Ilka makes the best games. He's amazing. Go talk to Ilka. And so we went over there. You know, we've been backed by Sequoia and Kleiner. We had Trip and anyways, we were able to acquire his already terrific little company, roll it into Digital Chocolate.
I would give Ilka most of the credit for most of the [00:35:00] success that Digital Chocolate had and his team grew. The business anyways eventually Ilka had enough and went and started a little company. You may have heard of called Supercell.
Amy Jo: Which is still one of the great line.
Mark: Yeah. The punchline.
So, so, you know, Ilka and his three co founders, I think are the four wealthiest people in Finland. And they run a company where everyone loves to work there. And he said what he meant and meant what he said. I remember Ilka used to talk about like celebrating failures, right?
It's a thing people talk about in Silicon Valley You can go read his blogs about Supercell people will build a game for a year and if they decide it is not good enough to represent the brand, not worth the effort. They will kill the project, but they will have a giant party to celebrate all the hard work that went into it.
And those people all get promoted and go work on the next one. And like people love a
Amy Jo: great story.
Mark: People love Ilka. I mean, I told him this when I decided to leave Digital Chocolate, um, it was hard. It was emotional for me. And I flew over to Helsinki. To say goodbye to the team because they'd [00:36:00] all worked for me and I really sort of led the acquisition and all the rest of it.
And I told Ilka in front of his whole team that I thought Ilka was the best leader I'd ever met. And he was only 27 or something at the time and I meant it. And. Honestly, I think he'll probably be prime minister of Finland someday. I mean, he's really he's a pretty special talent. So there's one example.
Amy Jo: I love that. What a great story. Right now, Mark, you're building Near Horizon with your partner.
You're, you know, talking to and developing relationships with all these different founding teams. In the larger world, what are you paying attention to? What trends are you following? What are you noticing? What's on your mind that's shaping sort of how you know, navigate?
Mark: It's a great question. I mean, some of them are sort of obvious and cliched.
I mean, what's happening in AI is incredible and miraculous. And mean, the funny thing, so I have a two year old, I have an eight year old and a two year old. The two year old is still in like language acquisition phase and like, you know, still in the like trying things and falling down and [00:37:00] figuring out this is how you don't fall down.
And this is how you and you know, we, a bilingual home. So she's learning English, but also learning some Spanish and you watch the whole thing happen. And then to watch what's happening with generative AI. And like, it's a similar sort of This is miraculous. And actually having a small child.
Actually, I think it gives me even more perspective on it. Like, wow, the human brain is also miraculous, but this is incredible, but that's also it's also sort of obvious.
I'm very interested in some of the larger sort of social challenges and how technology can help to solve them.
Dis and misinformation, loneliness, fear mental illness. I think There's a lot that plagues our country and the world that among other things, generative AI is going to make worse but also can help be part of the solution. I mean, this is the thing about tech is right. It's almost always a double edged sword.
Mobile phones have made the world indescribably better and are also a dopamine machine in our pocket that have made everybody anxious and are a huge problem, [00:38:00] both. And I think. I'm sort of paying close attention to what that means AI. I'll give you a concrete example. Our second portfolio company, we worked with near Verizon is a company called Sanctum that's building cognitive automation tools to help busy prosumers, sort of improve their digital communications.
But where it started and actually still a core part of the product offering is the founding CEO's mother got scammed. It was an online scam. She was taken for 10, 000. This is the kind of thing that happens every day. The erosion of trust, like without trust, I've always thought the veneer of civilization is like this.
It's really much thinner than we would like human beings. And our limbic brain is not far from the surface. And so without trust, bad things happen. And online scams are a great way to erode trust. And Oh, by the way, also, most of them have been driven by basically like. farms of slaves. I mean, the, other than [00:39:00] sex slavery, the biggest form of enslavement on earth is like people who are forced into like these horrible places where they are scamming people all day long.
It's a terrible problem. Anyways, if you think you technology can help to solve this problem, that feels very important to me. And. If you think about what Gen AI is going to do, it's also going to make creating things like scams that much easier too. And so it's an arms race, right? Between the bad guys and the good guys.
And so we want to be involved with building the tools that are going to help with human, socio psychological problems. Things that range from loneliness, to mental illness, to scams and trust, etc. That are being exacerbated by the rise of things like AI and mobile, but also can be solved by the same technologies.
That's an area I'm really fascinated by.
Amy Jo: Me too. Wow. That's really interesting. You know, I learned that lesson in my first job in tech, which was at Sun Microsystems [00:40:00] back in the day. And in one week, our group had visits from a huge hospital network who was going to install our computers and the databases I worked on to solve all kinds of problems and treat people better and the NSA. And I was like, Oh, okay, these powerful tools go both ways.
Mark: Always.
Amy Jo: And that's a, it's a good lesson because Then you don't spend your time wishing it wasn't so you just spend your time fighting for the white hat rather than the black hat.
Mark, I can't thank you enough for sharing your stories and your wisdom and things you've learned.
I love hearing about what you're trying to do at Near Horizon, and you are not afraid of a challenge.
Mark: It makes things interesting. There, there is great value in doing something you've done before. You are a subject matter expert. You become very good at the thing.
There's also value in variety. And if you happen to be a generalist as I [00:41:00] am, and you can pull lessons from one thing to the other, that's what makes me get excited in the morning.
Amy Jo: Awesome. Thank you so much. I look forward to seeing you soon. And have a wonderful day.
Outro: Thanks for listening to Getting2Alpha with Amy Jo Kim, the shows that help you innovate faster and smarter. Be sure to check out our website, getting2alpha.com. That's getting[number]2alpha.com for more great resources and podcast episodes.
