Diversity is the key to innovation
Anarghya Vardhana is a Partner at Maveron, a consumer-only venture capital firm. In this interview, the young executive shares some insight into her remarkable professional journey, the role her Indian heritage has played in the same as well as pointers for budding entrepreneurs.
Does Maveron’s direct-to-consumer model offer a template for venture capitalists eyeing tech investments?
We believe that there will be a number of billion-dollar direct to consumer companies created every year. Our definition of consumer is broad, it’s everything from FinTech, to HealthTech, to social apps, to e-commerce and more. We invest in companies that are building products, services, and apps for regular people and wrapping that in a brand that resonates and that inspires loyalty and value for the consumer. We also believe that the current generation of consumer companies will combine profit and purpose (one of our values at Maveron) and that consumers are more aware than ever of the brands they associate with. Our template is, in theory, straightforward: identify the people who will build breakout consumer tech brands that withstand the test of time, and that integrate into the lives of regular people. These are businesses from eBay (20+ years ago) to current ones like Allbirds, Everlane, General Assembly, Imperfect Produce, and more.
What are some of the lessons learnt from some of the ventures you have seed-funded?
People people people! The market may shift, the product may change, the competition may emerge or die out — but at the end of the day, we have to bet on the right people to navigate the ups and downs of running, growing, and scaling a business.
What are the key innovative elements you look for in any new tech investment?
We try to understand the “why now” for the business. As in, what are the technological, business, or social changes that have occurred that make it possible for this business to exist and grow? For example, the advent of mobile technology spurred immense business growth. The infrastructural change in delivery (with the likes of FedEx, UPS, DHL, etc.) allows or e-commerce in unprecedented ways. Social media has entirely flipped customer acquisition on its head, allowing brands to propagate their message and to learn in a faster, more efficient manner. Like these, we look for macro changes and the right founders who navigate those to build big businesses. We want to find start-ups that see consumer pain points and how to solve them in meaningful ways.
What are your top tips for the NextGen of entrepreneurs seeking their first round of funds?
- Surround yourself with the right people, could be co-founders, teammates, advisors, investors, or mentors.
- People talk a lot about product-market fit, but often forget product-founder fit. Answer the question, why are you the right person to build this?
- Not every business is a venture scale business and that is okay! The venture capital asset class is structured such that we need huge returns in a relatively short period of time. Not all businesses will grow at that pace and not all people want to grow their business at that pace, and that is fine. I recommend new entrepreneurs to investigate different financing options.
- A relationship with a VC is hopefully a long one. Find a VC and a partner that you connect with and want to work with. Not just someone who will give you money. What else can they add in terms of connections or advice? Most importantly, find someone who will not just support you in good times, but who will thoughtfully add value during the bad times as well.
Being a good innovator doesn’t necessarily mean someone will be a good entrepreneur. Do you agree?
Correct. Being able to build a business versus innovate on an idea or product are two different things. I would argue that the best entrepreneurs can both innovate and be business minded. Or, they will have a co-founder who is more business minded, which also works.
Do you feel Indians accept failure well?
This is a tough question and I hesitate to make a grand sweeping comment on all Indians, as I know the diversity of experience is rich and therefore, reactions to things like failure can be extremely varied. Speaking for my own community of Hindu, Brahmins, I would say that our relationship with failure is nuanced. We are loathe to accept failure and hold each other to high standards in all aspects of life. Yet, we are not afraid to venture out of our comfort zones, whether that is in starting businesses (all my uncles are entrepreneurs), moving to new, unknown places (my own parents immigrated to the US in the early 90s, after I was born), or pursuing fields of work previously unbeknownst to our family (such as myself as a venture capitalist, my sister as an artist, or my cousin as a notable film director in Bangalore). Stepping away from just my family and community, my experience and perspective has been that failure is not regarded as an opportunity to learn but is rather viewed as a negative scar upon the person who failed. I would encourage everyone to step away from that narrative and realise that we cannot experience true success without failures along the way.
India is going through national elections; what are your expectations from the new government?
I have been following the Indian elections closely and was in India for 10 days in January and was able to see some of the activity and conversation on the ground. I hope that whoever is in power will appreciate and embrace India’s diversity of religion, caste, gender identities, life views, and socioeconomic status. As India continues to emerge as a global power and thought leader, it needs leadership that enables all her voices to be heard. The marginalised and disadvantaged cannot keep getting pushed to the corners of society, or worse, treated with violence and humiliation. The diversity of thought in India can truly be India’s superpower if the new government will allow it. Communities that have historically been ostracised have developed cultures of entrepreneurship as a means to survive, why not elevate those communities and have them teach the rest, instead of continuing to oppress them? I understand that India is incredibly complex, that is what I love about it. But at the same time, there are basic humanitarian challenges that need to be addressed by any new regime. The welfare of the most vulnerable should be a top priority.
Why is diversity in technology important; and is it easy to achieve?
Diversity allows for a breadth of thought and ideas that contribute to innovation, which is core to technological advancement. If everyone thinks alike, we remain stagnant and progress suffers. Diversity of life experiences, thought, upbringing, world view, and perspective in any group challenges the status quo and spurs innovation. A simple example is that women control 83 per cent of consumer spending dollars in the US, yet women founders are underinvested in, and businesses targeting women consumers struggle to raise money compared to other types of businesses. With more women on the investing side (such as myself), we can hopefully find and understand these businesses in a way that our male counterparts could not. We can allocate capital to these companies, and match a market need for products and services that are targeting women. Groups like All Raise in the US are working on changing the percentage of diverse funders and founders for this very reason. My investment team at Maveron is split 50-50, men and women, because as consumer investors, we see the importance of having diversity around the table. In fact, we are proud that over 60 per cent of our CEOs are women, a staggering statistic compared to the overall state of the venture capital industry. Indeed, it seems obvious that the same ideas and homogeneity in thought thwarts innovation, yet diversity in tech continues to be an intimidating problem. Diversity is tough to achieve if those in positions of power are too comfortable or insecure. Building truly diverse teams takes intentionality and thoughtfulness. It has to be an example set by the leaders of the organisation, and all aspects of the company need to be in agreement around diversity goals. I think it is 100 per cent achievable, but too often see half-hearted, ill-measured, and deprioritised efforts.
Does being named among the ’30 Under 30′ in venture capital by ‘Forbes’ come with its own role model pressures?
I think I have always assumed the role model role from a young age. I am the oldest grandchild on my mother’s side in my family, have a younger sister, and have a lot of younger, close family friends who I consider my extended younger siblings. My parents have instilled the role model thought characteristic in me since day one! I think that things like Forbes 30 under 30 are great honours and I appreciate the recognition and all that organisations like Forbes have done for me. But I think that in venture capital, those types of titles can also be false indicators of success. This is a long-term business, ambition, and career for me. It’s hard to know early on if you’re any good at it. I lean on people like my partner Dan Levitan, who founded Maveron, to coach me through the ups and downs of venture and to both give me praise and feedback as appropriate. I spend a lot of time thinking about focus, how to get more of it, and how to not be distracted by the small ups and downs along the way. But pressure, yes, there is a lot of it! But gratitude, yes, there is a lot of that too. I am incredibly grateful to do what I do with the people I do it with, at my firm and beyond. I can only hope that my work ethic, skill set, passion for the craft, and desire to create a big impact will carry me far in this role.
Tell us more about the Math theorem you published at the age of 17 and how it set the course for your future career?
I went very deep down the path of number theory as a teenager and young adult! It was my passion, my father’s passion, and even my grandfather’s passion, so this was a family affair. I was convinced I would be a number theorist for my professional life. Needless to say, I am not. Working on independent research (which is what led to the publishing of the math theorem) as a teenager was life changing for me. Seeing that one could spend enough time, energy, brain power, and resources on something and take it from ideas and concepts to a meaningful piece of work was powerful and continues to stay with me today. In venture capital, I see founders do the exact same thing. They take their ideas, sometimes on scraps of paper, and create them into world-changing companies. That was a theme in my life at age 17 and still is today.
As a Global Indian how do you deal with straddling different cultures?
I believe that one of my superpowers is straddling different cultures. I grew up in Beaverton, Oregon, a suburb of Portland, in a very Indian (Kannadiga) family, a very Indian community, but a very white-American world beyond that (school and more). I was able to straddle those two worlds and be my authentic self in both, though it wasn’t always easy. My parents gave me the confidence and pride in who I was and my heritage, and as I’ve become older, I think I’ve also become better at expressing that without constantly feeling different or like “the other”. It’s not easy growing up as a brown kid in a largely white school. And I had my share of ups and downs, from having trouble making friends to not having the social tools to navigate mainstream American culture. But I believe that those challenges have made me who I am today. I like to think that I am more empathetic because of it. More diversity-minded because of it. And more open to other people who might also feel like they don’t entirely belong. All my cultures are incredibly important to me and make me who I am. I am lucky to be surrounded by people who allow me to express that and who enable me to learn about other cultures. I am a devoted Bharatanatyam dancer, and formed a small dance company in San Francisco with my sister and two other women to keep up our love for dancing. We perform four to five times a year and choreograph all of our pieces. I am married to someone who is not Indian and have been welcome into his upbringing and culture, generously. As a student of culture and as a citizen of the world, I am constantly trying to increase my knowledge in my own culture and in my ability to share it with others in a meaningful way, while remaining open to exploring and learning from others.