Margit Wennmachers is one of the few women and marketing executives at the partner level of a high-profile VC firm. After founding OutCast, a tech communication agency in Silicon Valley, she joined Andreessen Horowitz (a16z) in 2010.
Today a16z is considered one of Silicon Valley’s most influential VC firms, its portfolio runs the gamut from aspiring to high-level companies such as Facebook, Twitter, Skype, Airbnb and Instagram. Run by Marc Andreessen, co-founder of Netscape and long-time angel investor as well as Ben Horowitz, founder of HP-acquired Opsware, a16z is known for their focus on founders as entrepreneurs. Rather than appointing professional CEOs to lead the companies they have invested in, Andreessen Horowitz' philosophy has been to support the original founders to run and scale their company offering them a wide range of services and networks they can tap into - from recruiting to sales to public relations.
As marketing executive partner, Margit Wennmachers has built a16z's overall brand and marketing strategy and advises its portfolio companies on content and marketing strategies. In this interview, Margit speaks about emerging female founders, the ventures of risk-taking and the latest tech developments from 3-D printing to big data mining.
How do you find new talent? And what are the specific qualities you are looking for in a firm when you consider an investment?
It all starts with the entrepreneur. We look for two qualities, one is product genius – often a technical founder, someone with personal experience and a great idea that can lead to a big company. The other really important quality is personal courage. If you start a company, there are lots of headwinds coming from competition and if you are in a new category, you have to get people to adopt the category overall. So having the personal courage to run your company at any scale is going to be very important.
How do you evaluate the idea?
In any case, the investment means risk. We are in venture capital, we are not bankers. So we look at the idea and ask: If it works, does it have what we call untapped upside – an almost limitless opportunity of growing into a large independent company that can be in existence for decades to come. Pinterest is a good example. It has great engagement and lots of users. So if it works and the CEO figures out ways to monetize that, it could be a very large, independent venture comparable with Facebook or Google.
What are investments you are particularly proud of?
I am particularly proud of two investments I've recently brought to the firm that are both women-led. One is called uBeam. It has a female technical founder who has come up with a breakthrough in charging batteries wirelessly. The other one is called Tomfoolery run by Kakul Srivastava, an MIT graduate. She is creating a mobile and social workplace fun area. A third one I am equally excited about is DataGravity led by Paula Long, a computer storage company which is very significant because the amount of data we have, personal data, social data is just ever extending.
Kara Swisher, Brandee Barker, Brooke Hammerling and Margit Wennmachers at DLD11 (from left).
Any further trends or technical developments you are currently excited about?
Yes, there are many. One very mind bending thing that a lot of people in the United States are fascinated with is Bitcoin. It is technically interesting as a cryptocurrency and it is fascinating because it challenges all kinds of present norms around currencies and countries. So we are watching this very closely. The other thing I am super-excited about is 3-D printing, which means printing with other materials than ink such as metals and plastics. You can physically create a design and have small runs printed right away. That's going to upend the world of manufacturing.
Exactly. 3-D printing has also been widely picked up by the maker and open design scene in Europe. Andreessen Horowitz mainly invests in companies based in the US and Silicon Valley in particular. Is location still a factor?
Location is a factor. Although we make exceptions all the time, we probably will always be a single office firm that is based in Silicon Valley. For every Skype – which came out of Estonia and in which we actually invested – there are many more in Silicon Valley. Silicon Valley has a very interesting ecosystem that is set up to support entrepreneurs, give them the courage, the money and help them out. It is just such an easier spot to be in.
What is your take on the European start up scene?
The one advice I would have for the European start up market is: Think about the global market right away. We noticed that start-ups from very small European countries for instance Sweden think about the global expansion strategy from day one, because they are well aware of the limitations of just capturing their domestic market. On the other hand, companies with a significant domestic market often don't capture the larger global market because they don't have to right from the start. However, if a European start up does it right and thinks about the global market right away, they are possibly better set up than American companies because the stereotype is often true that these are fairly domestically focussed and the founders have not necessarily travelled around the globe and this is different in Europe as we know.
You are one of the few women at the partner level of a high-profile VC firm. Do you sense any difference in the way men and women are handling investments?
For one, people tend to socialize and network with people who are like them. I think it's not a coincidence that I brought in two deals that are run by female founders. So this is kind of the nature of the beast. And when we evaluate e-commerce companies or things like Pinterest, we always try to make sure there are women in the room, because those companies have a large amount of female users. Julep is a great example, it is an e-commerce company focussed on beauty. No offense to many of my male partners, they are very good at evaluating the numbers, but they are probably less experienced in buying beauty products or nail polish.
The Communication Difference: Kara Swisher, Brandee Barker, Brooke Hammerling and Margit Wennmachers at DLD11 (from left).
Why are there so few female venture capitalists, especially at a partner level?
For investment partners, our usual bar is to find someone who has started, run or scaled a technology company. And we do not have enough female founders or women in leadership positions in this field. This is also a global issue. We have not managed to get girls excited about computer science, coding and electrical engineering at an early age. For example in the United States, only 10% of high schools offer courses in computer science or coding. So we have a supply problem. We don't have enough women entering the computer science field and therefore we don't have enough female technical founders. So I hope, our government as well as having success stories will help to change that.
And there are already some success stories...
Absolutely, we have some big role models. One is Marissa Mayer who is running Yahoo. She is very technical and worked at Google on very important products. Another example we have as a business executive is Sheryl Sandberg who has done a tremendous job as COO at Facebook. She and Mark Zuckerberg have formed this highly productive partnership between a technical founder and a business executive and as a result are able to grow a much larger company. While the technical women are often the best suited to start a company and have the idea because they understand the technology sector front to back, it doesn't mean that only technical women can be successful in Silicon Valley and Sheryl is a very good example of that.
You could also be seen as an example of that. Has there been a point in your career when you knew you have made it?
No, I don't think I have made it or that I will ever have made it. I think it is important, particularly for an investor, to be hungry at all times and to be very curious about what's next. I personally grew up in a generation without smart phones. Think about that. You have to stay very curious and very much engaged with the next generation. And that's central in life and very important if you want to be a successful venture capitalist.
What do you expect of DLDwomen 13?
I am super-excited about it. There are all these people I want to see. Maria Furtwängler is great, Jaleh Bisharat, Ina Fried, Arianna Huffington and the list goes on. For as much as we all operate in an often male dominated environment, from time to time I like to get together with women and talk shop and I think we will have a great time doing that.
DLDwomen is taking place in Munich July 15 - 16, 2013. Apply for a ticket to this exclusive conference, tune in on the beat of our community on the DLDpulse and find regular updates on the DLDw13 programme and speakers here.