Sramana: It is interesting that you used different financial strategies in each of your first three businesses. Was this maturation of you as an entrepreneur?
Ash Ashutosh: In each of these cases there was a method to the madness. Your business dictates the resources you bring to the table. Your business dictates the opportunity. If the opportunity small enough then you really don’t need too much money.
Sramana: I think some businesses should not have funding and others clearly should.
Ash Ashutosh: Exactly. AppIQ was a big enough opportunity and even today it dominates the market.
Sramana: What did you do after AppIQ?
Ash Ashutosh: First I went to India for three months and did nothing. Then I came back and became a VC. I became a partner at Greylock. I got very active in investments. For a while I was at Harvard Business School as an entrepreneur in resident teaching entrepreneurship. I still help out there quite a bit.
During that process we incubated Actifio. We were looking at the next big investment pieces and the big TAMs around virtualization. My job at Actifio was to come in for a few months, find a CEO and then continue investing. I think that the reality was that I truly love running companies.
Sramana: You don’t sound like a passive investor.
Ash Ashutosh: Unfortunately not.
Sramana: It is more rare to find great operating people as opposed to VCs. It is much harder to build and run companies than it is to be a passive investor, sitting on the sideline betting on things.
Ash Ashutosh: I have sat on the other side of the table. I do recognize how hard it is to find winners as an investor. Ultimately you are counting on people. That is all you know. You don’t know if the idea the person is coming up with has any merit. You can ask five different people and you will get five different opinions.
Sramana: People are important but I think the most important piece is the market. I have seen a lot of average teams do great in great markets. I have seen A+ teams fail because the market was not there. If the market takes off the way you think in your investment thesis, then you will likely do well.
Ash Ashutosh: No doubt. At Greylock we saw the FaceBook deal come by. What market was that? It looked like a lot of college kids wanting to connect and party. Sometimes you have to take a leap of faith because some of the biggest markets are really non-existent.
Sramana: Your expertise, and the kinds of projects that you have done, are unique. Those are hard core engineering solutions to complex problems. That is not the background to prepare to evaluate what teenage consumers are going to do.
Ash Ashutosh: Absolutely. Most investors in that market count on the fact that the startups can, with a small amount of money, demonstrate viability or not. They will spray 250,000 dollars at every company that comes around and see what happens. Maybe one of them will make it.