How To Pitch To An Investor With Minnie Ingersoll

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TSP Minnie Ingersoll | Hiring The Right People

 

Episode Summary:

In the world of entrepreneurship, investing in people is crucial. Today, John Livesay interviews Minnie Ingersoll, the Co-founder of Shift Technologies Inc., host of LA Venture Podcast, and a Partner at TenOneTen Ventures. Minnie had an amazing career at Google and now works for a venture capital company in Los Angeles. She reveals how she looks at things and decide on which startup she’s going to fund. She also shares some insights on how you can keep going even in times when you don’t feel like it. Learn more about how you can pitch your ideas to an investor in this fascinating episode.

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How To Pitch To An Investor With Minnie Ingersoll

Our guest is Minnie Ingersoll, who’s a partner at TenOneTen Ventures and the COO and Co-Founder of Shift. She’s also the host of her podcast called La Venture. Shift is an online marketplace for used cars. Minnie started her career as an early product manager at Google, where she founded the access team across functional product, policy, and engineering team that spun off Google Fiber. After more than a decade, she made her exit from Google to begin her entrepreneurial journey with Shift, a company she co-founded and scaled to over $100 million. She is a longtime Silicon Valley product leader and operations executive with experience building and scaling impact through elegant technical solutions and great teams. She’s moved back to Los Angeles after twenty-plus years in the Bay Area and we couldn’t be happier to have her on the show and in Southern California. Minnie, welcome to the show.

Thanks, John.

I would love you to tell us your own story of origin. You can go back to childhood, college, wherever you want, where you started thinking, “I like technology,” “I want to get into the startup world,” or when Google got on your radar. How did that happen?

I grew up in Southern California. I grew up in Pasadena. My parents are both academics and I was a nerdy kid but it was before it was cool to be nerdy. It was nerdy to be nerdy. I went to Stanford thinking I had studied math, but this is in the ‘90s. There was much going on in the computer science department. It was at the forefront of society and the changes that were happening. I studied computer science, which was a good move. In retrospect, I’m glad I did that. I joined a company in the IPO in March of 2000. Right before everything burst, so went to business school. We IPOed but weren’t profitable. That was a challenge.

I went to business school and I wanted to go back to startup life. I was sure after business school that I was not meant to be in the banking world or something. I was looking for a small startup. I ended up joining Google when they were 500 people. I thought it was huge at the time, but I joined when it was 500 and I stayed for several years. I stayed from 500 to 60,000 people. It was a crazy ride. The quick version of it is that’s how I got deep in Silicon Valley. It seems like a straight trajectory from Stanford computer science, but to me, it felt like a bumpy journey, but that’s how I got going before I started my own company.

What lessons did you learn watching Google grow from 500 to 60,000 to help people who want to scale like that? You’ve got growing pains, obviously.

I’ll give you the formula and you too can go to a $60,000 trillion company. There were many lessons. It sometimes depends when I zoom out and zoom in. The macro thing that a lot about is what our company’s role in society. That’s a challenge you have on your 60,000 or 100,000 people. I’m increasingly a believer that you have to build something that’s good in the world and you have to think about what’s best for the user. It’s become a trite expression but I do think that’s how you build things with long-term impact. It’s also one of the things that I look for now that I’m a VC.

Are we making something good in society? Click To Tweet

Fast-forwarding a bit, one of the things I look for is, “Are we building something good in society?” On the more practical side of things, I learned all sorts about operationally how do you hire well? How do you do 360-reviews well? How do you set up your HR department or OKRs? All of those things were valuable when I started my own company. I said, “I’m not going to try to think about how we should do OKRs, write snippets or do 360 reviews. Google had a whole infrastructure of people who analyze this and we’re going to copy from them.” That was on the tactical side, useful.

What are some of your insights? I know, as an investor, you’re always looking at the team. You got to see the importance of building a good team at Google scale and they have an in-depth process. I read once that it’s harder to get in Google than it is and Harvard, there are many people wanting to go in. Do you have any big picture tips for founders where they’re building a team or what you look for in a team?

I spend a ton of my time interviewing people both at Google and at Shift. Unfortunately, the biggest thing that I take away from that is that it takes a ton of time. Everyone says they want to build great teams and you should. It’s worth the investment, but realize that building great teams might be a third of your time or something. Think about that. It’s not an hour a day. It’s multiple hours every day to do it right. The other thing I believe is there’s no way of shortcutting the time but the time also needs to be spent upfront. There are times when you’re hiring twenty people like software developers and it’s all the same role but a lot of times, especially at a startup, you’re hiring twenty people into twenty different roles. Each role is a different role.

Having all of that alignment on what you’re looking for upfront and spending a lot of time more than you think identifying what success looks like in the role, and therefore what are the qualities that someone would have that would lead them to be successful in the role. Now, you know the qualities. You know what success looks like and thinking about what are the personas and going after identifying those people. A lot of times, in a startup, you’re being proactive, you’re not sorting through the resumes that come to you but you’re proactively seeking out the best engineering director for a company that meets your criteria. It’s someone who’s gone through hyper-growth that has a similar stage startup. It’s those things and going after those people proactively and relentlessly. There’s a lot of that that is all the upfront stuff.

I spoke at the Coca-Cola CMO Summit, which was connected to Google and Silicon Valley, who did the summit. The next day we went to Google because Google and Coca-Cola are extremely close and partnered together. One of the things that impressed me is the culture of Google. They said that they had someone come to speak about the importance of food and the quality of the food. “You feed the people you love,” was a line that was stuck with me. I thought, “What a great culture to create that you’re caring about the people enough to not only feed them free food, but we feed them quality food. The amount of time and effort that goes into feeding all those people around the world with different cultures and different needs.” That’s an interesting insight that it’s no longer a perk, but also part of a cultural mindset. Since we have you with your expertise there. Everyone’s heard KPI, Key Performance Indicators and OKR, Objective Key Results that Google uses. Are they the same or are there some differences for people to have in their heads?

I can’t say I’m the expert here. When I think about KPIs, I’m thinking about what are the key performance indicators that I need to measure on an hourly, daily, weekly, monthly, quarterly, or yearly basis. There are different things and they’re usually measurable metrics. They might be things that you do want to measure on a daily basis but there may be things you want to measure on a monthly basis, but you don’t want to measure on a daily basis. Figuring all of that out is an amazing skill but you don’t want to measure things too much at times.

You don’t want to measure things too little, but you also don’t want to measure things too much and figuring out all of that structure. The KPI doesn’t encapsulate the objective. The key thing about an OKR, which is an objective and key results is it’s about tying those OKRs, the key results back to an objective. The objective might improve our users’ happiness or something. I don’t know if that’s a great example, but figuring out what the key results are to tie back there. That’s usually done on a quarterly basis. Whereas your KPIs might have KPI dashboards that are measuring things on an hourly basis.

Since you now have your own investment company, what is it that you look for? Are there specific industries that you’d to invest in? What are you looking for within those industries besides a great team and making as we said something good in the world?

TSP Minnie Ingersoll | Hiring The Right People

Hiring The Right People: One of the goals in having a first meeting is to get to a second meeting.

 

Google stuff is interesting. For every VC, the thing that I have heard the most is you look for people to invest in people, product and markets. We’re no different from that. It’s interesting to dig deeper into all of those and think about what do those mean. When I’m looking at people for me, there are a variety of different things. The meta thing that runs throughout it is I want people to think for themselves. I’m going to tell you what I’m looking for but what I care about is people who are thinking for themselves and not trying to reverse engineer the VC.

I’ll tell you what I’m looking for. When people come to me and tell me, “Here’s my TAM SAM SOM slide.” The little bubbles. There’s a bubble here a bubble there. I can’t remember what SOM stands for. The Total Addressable Market I know is the TAM. If they come to me because they’ve been told that that’s what they’re expected to do and they put that slide up front, I want someone who looks me in the eye and explains to me why this is an amazing opportunity. What this is a big opportunity. That’s what the TAM SAM SOM is supposed to be. This is a big opportunity. Explaining to me how big the industries are in a way that’s educating me, that’s interesting like putting it on a bubble that’s not.

You’re singing my song. Tell a story that turns the numbers into a story.

For me, I’m interested when I’m being educated that engages me. I’m a little less of an entertain me storyteller as much as educate me. That’s interesting to me if you’re educating me but be authentic. Figure out what it is that is authentically why you believe this is a big market and tell me that story. Make me believe this is a big market but don’t put it on some TAM bubble because someone has told you to. That’s one of the big things. One of your goals of having a meeting is to have me want to have a second meeting. That’s not necessarily educating me on everything you’re doing.

There’s a personal connection. I sit on panels all the time and people come up. They’re eager and they stand in line and they have 1 to 2 minutes to make some elevator pitch. They try to cram everything it is about their businesses as if I’m going to remember it in 2 minutes. Their goal should be finding another time to sit down and discuss things. It’s making that personal connection. There are times that I’m not all that interested in the investment but I want to make an investment in the person. I genuinely want to be helpful.

Introductions are everything. It reminds me of someone asking somebody to marry them on a coffee date. You don’t jump in like that.

In terms of the people side of things, I’ll use an example, I’ve got three kids and they all go to the same daycare and I can see that the daycare doesn’t have any technology that’s serving them in terms of their CRM or their marketing tools. I’m a developer, I know how I can build a better system for the daycare versus someone who tells me, “I run ten daycare franchises. I built up my software myself for my own business. I know exactly what is needed. I’ve been creating this for myself and this is what I’m going to do with the rest of my life whether or not you give me money.”

There’s a subtle difference there or maybe not that subtle. I’m looking for someone who deeply knows the business that they are building and not only came up with the idea of observing the world. They had one poor experience and they decided to solve it but this is their life work. They run ten daycares. They’re going to be continuing to build software for daycares because that’s what they’re going to be doing, regardless of whether this venture gets funded. They’re going to keep at it for the rest of their lives because this is their business and their thing.

Investors want someone who looks them in the eye and explains to them why investing in them is an amazing opportunity. Click To Tweet

What you said reminds me of the difference between casually looking at something and going, “Maybe I can fix that,” versus, “I’m immersed in this. It’s my life and I’m on the inside. I’m working with lots of different people and this isn’t a casual observation but more of an immersive experience. My perspective is different as a founder from that difference.”

We like big markets but we were looking for someone who’s spent their career in that market and had a unique insight. Sometimes in terms of a pitch, it’s less a pitch and more of maybe it’s educating us on the market. I don’t mean that to be exploitative, “I’m taking the meeting so I can be educated.”

I look at anybody who’s invested trying to get an investor like you and one of the things I always tell people is, “Do your homework. Look at the other companies that this venture capitalist has invested in to try and see some through-line,” I’m going to take a stab, I would say, “It’s not rocket science but, company’s name, data science and Interviewing.io. I would imagine that you like to invest in things and not only have a big market but also have a lot of technology behind it from looking at your portfolio.” Would that be accurate?

Yes. I was giving you a piece of generic advice about how I like to think about a pitch. At TenOneTen we tend to invest in engineers turned entrepreneurs or companies with deep engineering DNA to them. Software and data being our focus as opposed to hardware. There are other difficult things. I also host a podcast where I interview VCs and I asked one of my VC friends what he likes to invest in and he said, “A company that he feels that he could run.” I thought that was an interesting lens. That probably takes it further. I don’t feel that I could run someone else’s company. I’m investing in early-stage so into seed-stage companies. Most of them don’t have them fully built out executive teams. A lot of times there’s gaps and things they’re still looking for advice on. I want to invest in companies that I feel that I have some expertise in. For us at TenOneTen, I have two partners. We all have built software and data companies and gone through that hyper-growth of building software companies. That’s what tends to be what we look for where we feel kindred.

What a fascination that you and your partners you’re immersed in this. You know this business you’ve and you’ve been in the trenches. As a speaker, when I can speak to an audience, which is typically salespeople whether they’re tech salespeople or whatever it is they happen to be selling. I’ve been in their shoes and I know what they’re going through, whether healthcare or technology. That sales, mindset and objections. That gives you completely different credibility than, “We would imagine what it would to be in your shoes as a software person or a data person.” You’re like, “All three of us have done it.” Which I find completely fascinating.

To your point also, one of the reasons I do a podcast, one of the things I love about your show is there is something about doing your homework, which is what you’re saying. When you listen or when you read people’s blog posts, it’s a much easier way to improve approach someone intelligently if you’ve done your homework on what their investment theses are. Things like podcasts and reading their Twitter wherever someone is active. Read all of that allows you to do a much better pitch.

The customization or comment on the posts you make all that good stuff, you also have wonderful insights into what it’s like to scale an idea and turn it into a series D company. For those who may not be familiar with that alphabet dollar amount, would you share with us? People who have a sense of seed may be up to a million and series A is $3 million to $4 million. People don’t hear that much about series D. What is D? Let’s answer that first and talk about what it takes to scale an idea to get to that level.

I’ve been located in the Bay Area and seed, A, and everything’s gotten bigger. TenOneTen we’re in LA, we invest across the country, but are the typical size round that we’re investing into as a $2 million seed. As are more 10 on 40 or something, meaning a $10 million raise on a $40 million pre-money valuation. At Shift we raised $3.2 million seed, we raised a $20 million A, a $50 million B, a $30 million C and $120 million, depends how you counted something D. It’s something like that. I’m not sure I did exactly right.

TSP Minnie Ingersoll | Hiring The Right People

Hiring The Right People: Podcasting is an easier way to approach someone intelligently.

 

That’s helpful. Thank you.

I left after we’d raised about $100 million. It was after our seed. Hopefully, my math there adds up approximately correctly. Since then we raised this other $100 million-plus D. It’s the grand total of about $200 million raised.

The biggest difference is seed because you don’t have any real revenue. By the time you get to a series A, you’ve got revenue coming in the pitch is quite different. It’s no longer, “We think this will work, we have some proof of concept, but not a lot.” As they go up in dollar value, do the pitches change dramatically once you’ve got revenue coming in between A and B? Does it stay fairly consistent in terms of more and more proof?

It definitely changes. It’s different things that different investors will be looking at. Even now that most people are doing a pre-seed, even at seed, most of the companies we invest in have revenue. Even at seed. There are still different lenses. Do you know what the rule of 40 is? If I get it correctly, but it’s a balancing act between your speed of growth and your profitability. To some degree, later-stage investors will be looking for that balance. If you’re not profitable, that’s okay because there’s a story that can be why you’re not profitable because you are launching many new markets and expanding so quickly. Each market takes you eighteen months to get to profitability but there’s a repeatable model. People will be looking at different things. It doesn’t have to be profits, but it has to be rocket ship growth. There are a lot of people who are sophisticated about what metrics to expect in different industries in different models.

You talked about when you were with Google and other companies the importance of spending time getting the right team and interviewing them. Now as a venture capitalist, you’re competing with other venture capitalists because everyone has their brand like a company does, to get the right deals as opposed to necessarily to get the right, “Team,” is still connected to a team. Are there certain strategies and tactics that entrepreneurs can use and learn that you’re doing as a venture capitalist to get your name aware and get to be people’s first stop, if you will?

It’s challenging because I want entrepreneurs who are not spending their time necessarily only going to conferences, meetups and having their name known. There is some of that but I want people who are building businesses. It’s the same thing with VC. I want to be building my business and helping my companies. Doing a raise is a tricky thing where you want to be hot as it when you’re raising. Some of that does have to do with timing. You want people to be aware of you, but you don’t want them to be aware that you’re raising and that you get stale. Build a great business and everyone will want to invest is the answer. I do see people who have been raising for 6 and 8 months.

They get a stale feeling and I don’t necessarily think that’s a good thing but I do think that investors will start to question, “You’ve been raising for six months and no one else has invested. Am I the sucker who’s investing after everyone else has passed?” I hope we can maintain our independent thought and deals on the face of them. If an entrepreneur can go out and say, “Let me get you excited about what I’m building but I’m not raising it.” You can’t get in now. Here I am I’m not raising money but I’m building something incredible and I can get excited but I still have to be patient. Be patient for three months and get excited to be like, “I hope he comes back to me and wants to raise money from us.” It starts to be a little too much. Let’s play the game too hard but there’s some reality to it.

It’s almost like selling a house and getting multiple offers versus a house that’s been on the market a long time and no one’s making an offer. It’s either priced too high, not in a great location and there’s something wrong. I like this concept of starting relationships before you start to raise and not being in such a needy place. That’s where it all comes down to. I’m also curious to ask your perception of being a woman in a traditionally male world. How do you navigate that? How can anybody who might feel an outsider for one reason or another that doesn’t fit this traditional, we went to Stanford, but you’re not a man. There are lots of different variations on not being that. Whether it is race, religion, different schools, sexuality choices, all those different diversity things all have a commonality. How did you navigate that? How can that maybe help us?

Build a great business and everyone will want to invest. Click To Tweet

It’s a tricky one. I have an insider background in terms of computer science. I wear hoodies myself. I do. There’s one aspect which is I can’t say enough, which is the thing for yourself aspect which is I don’t want people to feel that they have to know the system, figure out the system and worry, “I don’t know exactly what it is you want to hear from me because I wasn’t part of the system,” or something. Therefore, they try to be someone they’re not. There are people who think that if you’re not part of the system, you feel that you’re missing the secret formula to how to build the slide deck that gets you a million dollars versus building something incredible that you know is the incredible thing that you were meant to build. It’s an easy thing for me to say, which is, I have two pet peeves. I have many, but one is people who tell me I’m not technical enough. I don’t have a degree in computer science. My degree in computer science was before the internet existed. It was. We didn’t have email. There was no client-server interaction. We were building programs in Pascal that ran on computers not on the internet.

I remember those cards you had to type.

I wasn’t typing cards, but my point is there are no aspects of what I learned in school now. There were no blockchains, product management, and daily stand-ups. To be relevant in tech, you have to be constantly reinventing yourself and learning what’s new. Don’t feel that because you didn’t have a degree in computer science, you can’t understand someone said, “I don’t know what an API is?” You can figure it out. There are inputs and outputs. Similarly, I went to business school, so I can say this with people who told me, “I can’t build a forecast. I don’t know what a model is.” I didn’t go to business school or learn this. Let’s say you’re some smart technical person who can figure out what an Excel spreadsheet does it. Don’t feel that you’re missing something because you’re not.

We have to be empowered that you may not have this specific training but get somebody on your team who does or figure it out yourself.

I’ll go one step further. I didn’t learn that much in either of those schools so you miss out on that.

Are there any last thoughts, quotes or a book you want to leave us with?

I have all these quotes that all come from my mother.

Besides, “Clean your room?”

She would say, “Chop wood, carry water.” Chop wood, carry water comes back to another one of hers which is, “Show up, tell the truth, and hope for the best.” Both of those come from the aspects of you don’t always have to enjoy doing the thing that you’re doing and many times you don’t enjoy it. From the outside have this lovely career and people are like, “Isn’t Google the greatest place to work?” The truth is it sucked at times. At times, I didn’t want to get out of bed. In multiple times my life, I’ve not felt like it. Now, I love what I’m doing. I love where I am but that has come from having to get up and put one foot in front of the other. It’s eighteen different expressions all in one but there are times you have to keep going because it is better on the other side at times. I like to remind people you have to do the thing and tell the truth and hope for the best.

What a great way to end. Thanks to your mom for that great wisdom that gets passed down, which is what we all hope for in some shape or form is some legacy. Thanks for being a great guest.

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John Livesay, The Pitch Whisperer

 

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