For the past couple of years, this blog has been about me and my journey at Chicago Ventures. But the truth is that almost any good (or bad) idea represents a convergence of a lot of learning and inputs along the way. In my four years in the venture industry, I’ve worked diligently to study more experienced investors and entrepreneurs alike – and I felt this blog deserved an outlet to highlight some of the individuals I learn from, both directly and indirectly. “Breaking The Mold” is a new project to reflect that (you’ll see the link in the nav bar) and I’m honored to have Hunter Walk, co-founder of Homebrew as the first guest. In a mere three years, he has become one of the most referenced voices in the early stage venture ecosystem and his blog, HunterWalk.com has been extremely influential on my approach to venture. He’s also active on Twitter and can be followed @HunterWalk. My deepest gratitude to Hunter for participating and a special thanks to our mutual friend Jonathan Triest for setting up the interview.
Ezra: When I look across the VC ecosystem I typically see a lot of hungry, smart, ambitious people. That’s to be expected. What’s unexpected is when someone is clearly having more fun, and being more playful than the rest of the pack – and I feel like that’s you. Between Twitter, your blog, panels, you seem to just roll along loving your job, your fund, your partners and frankly, it seems, life. Have you always been this way? Is it more of a digital caricature of yourself? And how do you think your unique ability to communicate that playfulness has affected others desire to partner with you?
Hunter: I’m like a mullet – fun outside, seething churning jealous rage on the inside. Ok, now that I’ve admitted my neurosis to the world… I guess the healthiest thing for me came about 15 years ago during grad school when I decided to not separate “personal Hunter” and “professional Hunter.” So I commit fully to projects I care about and don’t worry about hiding any part of who I am.
With Homebrew in particular there’s a joy which comes from learning a new profession in public, working hard in service of founders we’ve backed and ultimately trying to exceed expectations for a very clear set of outcomes. The last ten years have seen a tremendous amount of transparency brought to startup building; I’d like to try and help do the same for the investment side. There’s no bs in being a new fund – you just gotta work. So you also need to go 0 to 100 real quick if someone isn’t treating one of our founders fairly or turn owhen humor isn’t appropriate to the situation.
Ezra: Thanks Hunter. Underneath it all, it seems like you’re really an old soul of sorts. It’s hard to miss in your bio that you spent nearly a decade at Google – in an era of 2 years and out job switchers, that’s certainly an anomaly. I saw you once note: “finish your work. What I mean is: Don’t just evaluate every job by the question ‘am I learning as much now as I was in Day One.’ I see many people leave jobs prematurely because they’ve optimized for what they think is skill acquisition.” How did that approach help you? Is it a mantra you held early on or was it a realization in stages? And does it impact the way you evaluate founders or teams?
Hunter: I tend to believe it takes 3-5 years to actually build and scale a product. And that as a product leader you are trying to go from Point A to Point B (or B to C, etc) before it’s time for the next lead to bring their new vision for the next big bet. That’s why my 12 years of product experience is chunked as; the first three years of virtual world Second Life; three years on AdSense; and six at YouTube (of which 4.5 were a leadership role). In each one I felt there was a natural start and end point for what I wanted to accomplish — and that finish point was tied to product milestones not just my own personal needs.
The way this mentality has impacted my investing is even at the seed stage, when a founding team is raising just 12-18 months of capital, I ask “why do you want to work on this problem for 10 years?” As in, let’s assume this is successful enough to be around for a while, is this problem big enough to take that long to solve? Do you want to commit yourself to that? Because that’s what taking venture money means.
Ezra: That’s a good segue. Let’s talk due diligence. You once described the process by which your Homebrew institutional LPs researched you and Satya as: “DO DILIGENCE” – meaning they dug deeply into your backgrounds and your personalities. Maybe I’ve missed it, but I haven’t seen you break down your own approach to diligence. Besides the questions you mentioned above, what is your due diligence process like? Do you go to a company’s office? Take the team to dinner? Take the CEO’s mom to dinner? Call their college roommate? Do you have a checklist or is it more aligning on vision?
Hunter: Great question! In fact, i’ve been tumbling a blog post around in my head about diligence at seed stage. Obviously when you are familiar already with a founder(s) and/or a market, it makes the process easier but rarely do you get both of those together in the same opportunity. I see seed stage diligence as “the minimum amount of information you need to get conviction about the people you’re backing, you’re ability to work well with them towards shared goals and validating the minimum number of assumptions/hypotheses about their vision that, if team is incorrect, would prove fatal, or severely limiting, to their success.” It’s not about answering every unknown. Or making the founders jump through a dozen hoops. Or becoming an expert in their market.
I was a history major in undergrad while an editor on my college paper, and I find diligence to be very similar. You’re using primary source material and analysis to try and construct a narrative. I love learning about a new person or new industry. It’s fascinating. I always do diligence hoping not just to make the investment but be able to hit the ground running because I better understand the founders and what makes them tick (offsheet references baby!).
Ezra: Look forward to that blog! You know, in a mere 2.5 years, you and Satya have made quite the names for yourselves in the seed world. That would be impressive in its own right, but is compounded by your doing so in an era marked by an unprecedented level of noise, aka number of seed/microVC funds launching (Samir Kaji recently pegged that # around 250 active seed funds, up 500% from 2011). So I gotta ask: when you launched the fund, what was your gameplan as you opened for business? And looking back, what worked really really well? Any spots where you called an audible, where you and Satya realized you’d misjudged what it would take to win?
Hunter: Ultimately we’ll be judged by our financial returns, not our retweets, but we’ve been fortunate to be well-received by founders and co-investors. Satya and I did outline three goals for our first two years: 1) Get Homebrew operations up and running, 2) Close awareness gap between ourselves and our friends’ funds that have been around for a longer time and 3) Overdeliver against our commitments to founders. #3 is the most important – ultimately what founders say to other founders about us will determine the quality of companies we have the chance to work with.
If indeed we’ve been able to cut through the noise, I don’t think there’s a single reason. It wasn’t a cold start because we’ve been working in the industry for a while. We have a clear true north for Homebrew – be the type of fund we would have wanted to take money from by being their partners of conviction for their first few years. And we’ve been lucky enough to back some companies out of the gate which have generated early heat.
One thing I do want to address – the “250 active seed funds.” I don’t believe seed funding has been commoditized and the majority of those funds are very different than Homebrew. Of those 250, how many will lead a seed round with a meaningful check, even before other investors have committed? How many of those 250 have the capital to continue supporting their companies beyond the seed round? How many of those 250 are comprised of two partners with meaningful operating experience, including most recently running product teams for Twitter and YouTube? How many of those 250 take money out of their pocket to hire a Head of Talent and a trusted set of advisors with whom we share carry in the fund? And so on. This doesn’t mean Homebrew is right for every founder and there are certainly other seed funds who we think are wonderful investors, but I generally care about a single question: are we getting better each month at being great backers of seed stage entrepreneurs. I don’t worry about much else.
Ezra: Thanks Hunter, definitely a thoughtful approach we can all learn from. I feel like we’re nearing the end here…maybe a couple more questions if you’re not too bored. One thing that’s been bugging me late at night: when you Google yourself, do you ever curse Torii Hunter for getting so many walks and surging up the page ranks, or even the state of Tennessee for its upper middle class neighborhood in your namesake? Or is that all part of the Hunter Walk master plan?
Hunter: Funny you should ask because in 2004 I wrote a post about baby naming in the age of search engines for the Google Blog. I’ve got pretty good PageRank for “hunter walk” and, even better, I’m usually able to get username “hunterwalk” on most services. That said, I do get Google News Alerts when “Tori ‘hunter walk’ off home run” occurs so I’m rooting for him to wrap up his career.
Ezra: Important to note that he does have 260k followers to your 100k so probably best to play nice with Torii, yknow? 🙂
So let’s wrap this up…Recently you’ve been pretty vocal that working dads/dads in tech are unfortunately being shut out of conversations around parenting, work/life balance, etc. #Microaggression. In that vein I figured we should close with a dad focused Q so you can show the world your daddy skills.
Hunter: Thanks for asking about me as a dad – it’s a topic i care a lot about. one thing i do want to clear up first: i definitely was not complaining about dads being shut out of the parenting conversation. Rather my POV is that we should be treating fathers and mothers in tech equally with regards to the type of questions we ask in the realms of parenting, work/life balance. Today the industry seems inclined to only ask women these sorts of questions, which is an unfair bias against women. Rather than solve that bias solely by not asking these questions at all, we should ask appropriate questions of both genders when it makes sense.
Now me as a dad. I have one kid – a funny, brave, strong and passionate 3.5 year old daughter. I love seeing the world through her eyes. I love knowing that my job isn’t to script her life but help her be the best version of what she can become. I love the idea of raising a strong girl and future woman who will know that any and every path is open to her. Every phase so far has had its wonders and its challenges. I expect that to continue and am thankful I’ve got a great wife alongside me. And I’m glad we’re through the Kaiyu phase and more into Peppa Pig these days.”