Lesa Mitchell @ Techstars and Karen Page @ B Capital Group
Startup Grad School Stage
Ascent Conference 2020
Lesa Mitchelle [00:00:05] Hi, I’m Lesa Mitchell, managing director with TechStars, and I’m super excited to interview Karen Page today. Karen is a partner at B Capital, a firm that just congratulations close to your second very large round in here. And Karen, the title of our our panel. The discussion is supporting SAS companies through growth during covid post, covid, whatever covid we’re in. And so I’d love to get the frame of reference of B capital. You guys talk about yourself as a Zoome first company. So you’ve obviously learned things that the rest of the SAS CEOs that are listening to this need to learn, talk about. What does that mean?
Karen Page [00:00:54] Yeah, absolutely. Great to be here. Thanks, Lisa. We’re a global fund. We have offices in Singapore, L.A., San Francisco, in New York, which means that we’re operating from different time zones all the time. We have been a global first company since day one, which I think does give us a little bit of an advantage in this crazy time, just simply because we’ve been doing Zoom’s for every single one of our team meetings and every single one of our offices for five years now. And and I think that one of the difficult things about Zoome is that you lose some context, you lose some of the emotional side. Is someone distracted or are they upset about something that you’re talking about and being able to pick up on nonverbal cues is something that we’ve been working on for five years. So it does give us a little bit of an advantage. And and for for others, I think you just have to be cognizant that we we have to look at all of the context, not just the voice, not just the the person, but the body language and everything else.
Lesa Mitchelle [00:02:03] And so obviously is a global firm. You’re in you’ve invested in companies in lots of different locations. What how are you advising them to grow as a Zoome only company right now?
Karen Page [00:02:19] That’s a great question. There’s there’s been not only has there been differences in the in the companies and what they do, of course, but naturally there are all different types of entrepreneurs that we’ve backed and running their companies in different ways. I think primarily we’ve taken a lot of our cues from our partner, BCG, as they operate and scale their massive global corporations. And and so there’s been some great learnings just from that relationship that we can pass on to our people. I think first and foremost, people are at the heart of everything that we do as a firm and that we pass along to our entrepreneurs. So we want to we want to pass along to everyone different ways and ideas around how do you keep your employees connected? How do you weather a storm that has never been weather before? What tools do you need? What additional types of communications do you need? How do you keep your employees engaged? How do you hire employees when you can’t meet them in person? And we’re facing it as a fund and our companies are facing it as they try to scale in these crazy times.
Lesa Mitchelle [00:03:26] And much of what happens, I know when firms like yours is that you use the opportunity to bring your portfolio companies together on an ongoing basis to learn from each other. And you, especially as a former operator yourself, can impart knowledge on them. How are you doing that in a corporate world?
Karen Page [00:03:45] Yes, it is quite difficult when planes are not what they used to be in terms of getting business done. One thing that we did was we conducted our annual general meeting as per normal with a few twists. It was conducted over Zoome. But we use the same format that our our entrepreneurs and our LPs have gotten used to. We had an incredible array of speakers and we brought in, of course, some of our CEOs to have conversations about, for example, the future of health care, the future of fintech. And it went over quite well. I think people are adjusting. And regardless of the fact that we can’t share a meal or have serendipitous conversations, I think that we were able to be sensitive to the fact that people do still want to connect and they certainly want to know what’s happening in the portfolios of the funds they’ve invested in. So that was one way we did that.
Lesa Mitchelle [00:04:45] That’s awesome. And are you almost pretending like we’re together but we’re apart at facilitating it? That’s great. And you your firm has investments in companies around the world in different verticals. What’s I mean, if there are SAS CEOs that are going through significant growth right now, what’s your advice for them? If I’m a US focused company and I’m selling into the US, but I was ready to go to China or Singapore. What’s your advice for those companies in Copa? Are there certain parts of the world where you would say, don’t go there, go slow, go faster here?
Karen Page [00:05:25] I think they’re all individual conversations that you have based on the business that that founder, that CEO is in. I mean, we’re seeing cloud spend is going up. Businesses are are not slowing down necessarily. There may be a small dip in global I.T. spend, but collaboration technology has seen an incredible boom, naturally due to the work from home measures that are in place today. And a lot of those collaboration technologies are seeing massive, massive increases. So there’s a tailwind for a lot of a lot of businesses in the space. We, of course, in those situations want to make sure that we are enabling those companies to continue to grow. You’ve got an entirely different sales approach, so you have to step that back. Whereas previously you may have had an outbound kind of a sales effort. Today, you might need to focus more on using white papers and webinars to generate inbound conversations. And so as for just the day to day business and how people are selling today, I think it’s a one off. I don’t think that when you’re growing this this companies that are benefiting from the tailwinds, I don’t think you want to take your foot off the gas. And I don’t want I don’t think you want to say no to various geographies. But I do think you want to pay attention not only to the to today’s need, but what’s going to happen in six months or eight months when perhaps we migrate to rather than one hundred percent work from home environment to a hybrid environment. Will that change your business? Will that change how you sell and go to market and just kind of keep in mind that we’re going to be in a period of change for a while? And and while many of the SAS products that are benefiting from the tailwinds are resilient to harsh macroeconomic times, you still want to be considerate. What will happen to some of those tools when people are back in a at least a hybrid working environment?
Lesa Mitchelle [00:07:26] And has that changed the comments that you just made? Have that changed what you guys are looking for vertically focused, or are you more interested in topics that maybe you weren’t interested in before that are now future of work or future health care or whatever?
Karen Page [00:07:44] Yeah, I mean, certainly our our aperture has been opened. There’s no doubt about it. You have to be in order to be a good investor, you have to be responsive to what’s happening to the greater trends in the world. You have to be open to seeing what what types of opportunities are there that weren’t there before. That’s the nature of the business. But we’re paying a lot of attention to those industries and companies that are providing the infrastructure for this new normal, particularly in enterprise, financial services, logistics, supply chain management. They’re all very attractive for us. And we’ve seen strong usage of tools that are useful for distributed teams. So that’s one of the things that I was just sort of alluding to. Will that be sustained or is that going to evolve as our working habits change due to covid? So at the end of the day, I mean, we’re interested in backing solid companies that are capable of weathering any storm that’s thrown at them. And I think this is just a great test of those companies here.
Lesa Mitchelle [00:08:46] Karen, I think I mentioned to you earlier that as a super early stage investor, we coach our founders to look for later stage investors that are unbelievably smart and if at all possible, have operational experience. Can you obviously had executive experience at both Apple and Box. Can you talk about how that your experience growing those companies has informed how you’re talking to founders today?
Karen Page [00:09:22] I love these conversations because I had such an incredible experience at both Fox and Apple and at Fox in particular, where we started out as a very early employee, we scaled up to fifteen hundred employees, went public before I moved on to Apple. And the the the patterns that become ingrained in you are so valuable as an investor because you can take them and apply them to so many different situations. And whether it is, you know, how to set scalable goals for the company, how to hire and fire accordingly, how to structure teams, what things work and what can you just look at at one of your founders in the eye and just say, you know what I can tell you that’s probably could use a little bit of improvement. And here’s why. Based on my experience, and at least it gives the the founder a little bit of an idea of at least alternatives. So I think that having been an operator, it gives me a little bit of pattern recognition and a little bit of ability to see around corners. And I think that’s what that’s what we’re here for, is to help the help founders get through those situations.
Lesa Mitchelle [00:10:36] And obviously, this is a very, very unique situation. Well, but nobody’s really necessarily I mean, you saw it in 2008, but not what we’re seeing today. And and you just talked about macro trends and then you talked about super granular kinds of issues. And do you think that’s kind of your strategic advantage?
Karen Page [00:11:04] I do, I mean, I do I think it’s super helpful to bring that to the table. I mean, I’m hoping that by the founders that I work with see it the same way. But, yeah, generally, I think as a founder, you’re often in a position where you feel like nobody’s ever been through this before, nobody’s ever seen this problem. And having having the experience to come in and say, you know what, this happens all the time and here’s what we’re going to do a lot of times. I’ll give you one great example. I sit on the committee of a couple, a couple of companies. And what happens when covid stripped away a lot of the revenue opportunities that were expected in that particular quarter. How do you how do you bonus your people? You know, it’s not their fault. So you need to you need to draw on what you’ve seen in the past to help talk through those situations, to come to a solution that makes everyone feel like, you know, they’re winning now.
Lesa Mitchelle [00:12:01] And you made the comment that one of the things that we lose in covid is the serendipity of just the sideline conversations, et cetera, et cetera, which obviously is the same thing that founders lose. Even though they came to your conference virtually, they’re not having the late night. How do we how to founders find that? How do they find, like the partners that can help them think things through yourself as well as other people in your portfolio? How do you how are you making that happen?
Karen Page [00:12:33] Yeah, I think that’s one of the one of the interesting things that has resulted when when I think about what my life was like prior to covid, it included dinners out and walking from one meeting to the next in downtown San Francisco and grabbing a coffee and seeing somebody, you know, and saying, hi, how are you? And those those times are gone and we’ll never know what what doors closed or opened as a result of not having those moments. I in particular do miss those being a high extrovert. But, you know, I think people generally miss the fact that they these to spontaneously connect with coworkers to discuss an issue or, you know, the social gatherings at work. And I think it’s critical for companies to recreate the connectivity regardless of where their employees are. I think we’re going to be in this for a while longer, at least, and potentially in a hybrid environment for a lot longer than that. So it’s important for founders and teams to think about giving their employees ways to connect, whether it’s a standing kind of happy hour, whether it’s I was I was telling you earlier, Lesa, that I’m part of an all raised cohort. And we did a a zoom mystery room and it was super fun. I’ve done I’ve done some cheese tastings and some sangria tastings. And, you know, I think there are ways to create that connectivity. And I think it’s super important to keep that high on the list of things to get done.
Lesa Mitchelle [00:14:10] How do you do it, though, when you’re when you’re a CEO trying to get into maybe new sales targets, et cetera, and you aren’t able to run into people across the street or on the airplane or whatever anymore from a sales perspective and a really granular like what’s your advice to founders? Rethink how they’re selling?
Karen Page [00:14:31] You have to rethink how you’re selling. There’s no doubt about that. And I do think that the that the that the approach is going to be figuring out ways to get people to engage with you and whether that is through through webinars, through smaller forums. A lot of folks have advisory boards. You can bring together small groups of people there. Perhaps there are new techniques that you could deploy, bring a friend, you know, try to gather some folks along. But I do think that connecting one on one, there’s there there is a new openness and a new appetite for it because everyone has seen there’s no there’s no alternative at the moment. So figuring out creative ways to engage is important. I’ve seen a lot lately and I think it’s an interesting thing to think about the difference between warm intros versus cold intros. I don’t think there’s as big a difference today. I think a cold intro constructively created will have the same impact today there’s greater openness to connecting.
Lesa Mitchelle [00:15:40] As you’re looking for opportunities at big capital to find new investments. You’re again, not like on the streets. How are you guys managing your own network of intros to like the latest in the greatest up and coming companies wherever they are in the world? How are you managing that not travelling?
Karen Page [00:16:05] A lot of it is done through my existing networks, my my comrades, at at other venture firms, my colleagues at at the office, we are we’re working together. We follow pretty closely some of those thesis areas that we were discussing earlier. And we work super hard to keep those theses areas updated and to create informed responses on our side for how we’re thinking about things. And then we know which companies we’re super interested in. I also really believe in what I was saying earlier and outreach. I will do my best to get back to every company. I would look at almost every company that comes across my desk. I want to see founders. We are later stage fund. So that does a lot of times I see companies that are looking for their first money. That’s a little too early for us. But other companies, I’m super interested and will often be proactive in reaching out to those companies myself if I’m interested in talking. But I do think we’re going to see the next 10 years. We’re going to see a major shift in innovation as entrepreneurs are looking at industries and practices from different angles. And we want to accelerate that connectivity between, you know, between between the systems, the companies and the people.
Lesa Mitchelle [00:17:22] Yeah, and and are you I mean, there is obviously headwinds and tailwinds for entrepreneurs today. How would you think about those if you were talking to an earlier stage entrepreneur, maybe not quite ready for you. Why take all this money laying around on the street? Should I not? What about these crazy valuations in health care? I mean, talk to talk to the earlier stage CEOs out there that want you later. What should they do now?
Karen Page [00:17:56] Well, I mean, you know, this is this is a little anecdotal, but a lot of companies are certainly taking advantage of the fact that there’s a lot of money available today and when when there’s already so much uncertainty in the world and you don’t know what the next year will bring, it is attractive to to kind of bolster your your cash reserves. We certainly, as we went into covid, made sure that all of our portfolio companies were well equipped to weather the storm. And I think a lot of companies are have already done that work. How are we going to be safe for the next 12 to 18 months? Companies that are way and companies that have money in the bank and are weighing the decision to take money now most often are looking at valuations based on next year’s multiples. And in that case, everybody’s making a bet. The company is making a bet in advance saying we’re going to do this. And that’s that’s what we’re striving for. And the venture funds are trying to drum up their diligence to make sure that they believe that. Yes, indeed, that’s what we believe is going to happen as well.
Lesa Mitchelle [00:19:11] Yeah. And so you’re saying if there’s money laying around, you should take it.
Karen Page [00:19:17] It may be a good idea, but but then you’re committing to hitting those numbers that you’re promising.
Lesa Mitchelle [00:19:26] Yeah, and that depends. And and are you guys thinking about investments around the world? Have you changed your thinking about investing in companies that are in different parts of the world based upon what the long tail of covid might mean?
Karen Page [00:19:49] You know, big capital as a firm, we’re outsiders and immigrants, and we know that the next generation of entrepreneurs and most and most of the exciting opportunities are going to come from outside the valley. We certainly value the the the role that Silicon Valley plays in innovation and technology and dreams and entrepreneurship. And we love that. I live in the Valley, but we like to back entrepreneurs who aren’t like the typical entrepreneur that motivates us and drives us. And so, yeah, we’re looking we’re looking all over the world. We just made our first investment in Latin America.
Lesa Mitchelle [00:20:28] Oh, is that right? Can you tell us a little bit about it?
Karen Page [00:20:31] Yeah, it is. It’s called Yaloke Chat. It’s a B2B platform that enables consumer sorry I’m sorry, enables companies to communicate with each other about stocking shelves and making sure CPG companies sorry. That was the word I was looking for to make sure that that their buyers and sellers are communicating effectively over WhatsApp and other sorts of chat tools.
Lesa Mitchelle [00:20:59] So obviously, you don’t have any concern about the next the next stage of what happens in COGAT in Latin America. If you’re going to make that investment.
Karen Page [00:21:08] We’re buying into the entrepreneurs for sure.
Lesa Mitchelle [00:21:11] Yeah, that’s really amazing and great to hear. So any obviously parting thoughts for you? I know we only have five minutes left parting thought for you know, we’ve talked a little bit about what B Capital is interested in, but talk to us about, you know, when you’re looking, especially since this is SACE covid life, has it changed your thought process and what kind of metrics companies have to achieve to come in your door, or are you still thinking about the things the same way you did as previously?
Karen Page [00:21:49] Honestly, I don’t think it’s possible to think about things in the exact same way we did before. We’re not the same as we were before. But at the end of the day, as I mentioned, it’s critically important for us to work with great founders and to find the great companies. And part of what I would say has changed is the way that we engage with the people. When you can’t meet someone face to face, you’ve got to work really hard to make sure that you know them. I think that we’ve done a really, really good job of instituting a set of practices around how do you engage, how do you get to know people when it’s challenging to do so? And so I would say that’s probably the most different thing. The numbers we look at the numbers in a very similar way that we did in the past. We might look at companies a little bit earlier today. In fact, we might even look at companies a little bit later today. So I would say we’ve widened our approach a bit. But in general, I would say that it really comes right back down to the fact that we want to invest in great teams and great people and great technologies and we’ll do whatever we can to meet those folks.
Lesa Mitchelle [00:22:57] And I’m assuming you’re giving the same advice to your founders and.
Karen Page [00:23:01] Absolutely, absolutely. Everybody is still hiring. It’s it’s a whole new way of doing business from the people perspective.
Lesa Mitchelle [00:23:10] And and do you think are many of your companies virtual now that we’re all sitting in one place before? And do they think they’re going to stay that way? And are they recruiting with that assumption?
Karen Page [00:23:22] I think that today there is the anticipation that over the next six to eight months, there will be some return to a hybrid situation. But we’re all preparing. All of us are preparing for continuing to be remote for a long period of time. And we’re all working on the best way to hire people and continue to build our teams. And all of the things we’ve talked about today, can creating connectivity, achieving the goals that you’ve set out for yourself, making sure that your product is ready for this changing world. And all of those things, I think are critical for us to keep in mind and for us to work with our founders on.
Lesa Mitchelle [00:24:02] That’s that’s amazing. And Karen, I’m so impressed with you. Your depth of expertize must be an amazing thing for the founders that get to work with you as an investor. And your advice is amazing at both a meta level as well as a granular level, both which are really, really important right now. You can’t think about one without the other.
Karen Page [00:24:28] Thank you so much I appreciate that.
Lesa Mitchelle [00:24:29] Thanks for joining. I hope my advice to all CEOs, if you’re on a rocket ship, you need to get Karen to join you on your ship because it will help you scale your company to a big degree. So thank you so much, Karen. Really appreciate you.
Karen Page [00:24:47] Really appreciated it. Thank you.
Lesa Mitchelle [00:24:49] OK.