1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan of Emergent Ventures (Part 5)

Sramana Mitra: When they started Observe.ai and when you wrote your first check, they did not have yet a product?

Alok Nandan: They were building something else when they met us. Over the course of the next six months, they iterated and pivoted and eventually arrived at this idea. Initially, we wrote them a small check and then we doubled-down over the course of a year. It was an extended dating period. At the same time, we were actively helping them ideate.

Sramana Mitra: So you invested in the team really.

Alok Nandan: Yes. At the stage that we come in, the team is super important. That is one of the key criteria we look for. We look for people who are on this trajectory of personal growth in terms of what they have done in the past, in terms of how they interact with people, in terms of their balance in difficult circumstances.

We observe that. It’s difficult to do it in one meeting, so we do it over the course of two or three meetings. We try to form a view of the person. That is supercritical.

Sramana Mitra: How many deals have you done that have this characteristic of investing in a team that doesn’t yet have positioning figured out?

Alok Nandan: I would say one in four. 

Sramana Mitra: Can you talk about another example where the team was in place, and they also had more of an idea about what they were building and the positioning is further along?

Alok Nandan: It’s a company called Blitzz.io. The founder is a pretty senior guy. He used to work in Oracle in the Bay Area. He has been in the database space for 12 plus years. He is a domain expert. He joined a startup in San Francisco called MemSQL. MemSQL is a cloud-native database.

They used to go to accounts and say, “Buy our product.” They had to show proof of concept. Proof of concept was, can you run this application that was already running on Oracle on MemSQL database. To show that was hard for MemSQL. It would take them six months to do this.

This guy had an idea. He left MemSQL and started a company. The idea was how to make this migration and replication of data from a traditional Oracle or SAP database to this new age cloud-native database? He built a product for that specific use case.

Then he came to us. It was a very well-formed idea. He knew what he was doing. It was a completely different case. The market was well-defined. 

Sramana Mitra: That’s great. What you’re highlighting is the tremendous desirability of investors for domain experts.

Alok Nandan: Absolutely. There is an advantage of being an outsider. As a startup, being an outsider is difficult. It’s not all the founders. At least one of the founders needs to be from that industry. 

Sramana Mitra: Honestly, I hear from lots of investors that if they do find real domain experts, the fundability goes up tremendously.

Alok Nandan: Absolutely.

Sramana Mitra: That was a fascinating conversation. Thank you for all your input.

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Alok Nandan of Emergent Ventures
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