ITV #7 Kanyi Maqubela #Kindred Ventures

Bonjour les amis, aujourd'hui nous sommes très heureux d'être au centre de San Francisco, dans le centre financier. Et avec Antoine, nous allons interviewer Kanyi Maqubela, cofondateur et partenaire à Kindred Ventures.

Juste après Adam Draper à San Mateo et Eric Benhamou à Menlo Park, We are pleased to welcome in Santi TV Kanyi, who has invested in lots of success stories: Uber, Coinbase.

He invested in Faircraft, a Parisian French company.

So that's the third episode of Santi TV in Silicon Valley.

Welcome to Santi TV, Kanyi. It's a real pleasure to be here today in Kindred Ventures office in San Francisco. And basically we are going to interview the co-founder of Kindred, Kanyi Maqubela. Maybe you can give us a few words about Kanyi's background? For sure.

Originally you came from Soweto in South Africa. You've moved to the US as a refugee. You studied philosophy at Stanford University. And you are part of two really interesting companies. The first one is Doostang and One Black Off the Grid. Both were acquired. So it's a real pleasure to do the interview with you, Kanyi, today. So let's get started directly.

Yes.

This podcast video will be divided into two parts. The first one will be focused on your background and the second one on venture capital.

Sounds good.

Sounds really good. First question for me, Kanyi, I saw on LinkedIn that you dropped out of Stanford. What motivated you to do that?

Well, this was 2006, 2005, so it was before it was very popular to drop out. It was before it was a meme. And I did to work on a startup. And I went to work on a startup because I was caught up with the idea of technology, the emergence of the sort of rebirth of the internet, Web 2.0 is what we called it. And I just saw so many of my most dynamic, nerdy, creative friends wanting to tinker around with, you know, with new software. And so I ended up went going to join a startup, Doostang. I was the second hire at the company right before the seed round. And it was a little bit of a startup boot camp that made me fall in love with startups. I unfortunately ended up going back to Stanford. And so it's not quite as glamorous as the kids these days look for. But I do think that the post-bubble wave had so much cultural change. And a big part of it was technology change, but another part of it was What does it mean to go out and be successful as, you know, as a young person? Like, that was when Y Combinator was founded. That's when Facebook was founded, when social started to emerge. So it was really the beginning of a new era in the technology ecosystem.

And what drew you into venture capital?

Venture capital, there's a joke, and it's a joke because, you know, I come from a family of teachers, and I cherish the power of teaching, but those who can't do, teach. And so entrepreneurship is like teaching. No, but on a serious level, I love startups. I love being involved with them. And I realized that I was probably a better coach than player. So, you know, I was more of a José Mourinho type coach than a Zidane type of coach. And so I love the tactics of the game. I love the strategy of the game. And I could recognize talent and I wanted to nurture it. And so when I had an opportunity to advise companies, I was happy to do it. And when that morphed into becoming part of a fledgling venture capital firm, you know, I jumped at the opportunity and then a decade plus happened.

We don't want to be intrusive, but we're going to ask you a very simple question. Can you tell us about your greatest success professionally and personally?

I would say my greatest— of course I accept. My greatest success. Well, there's a thin way of talking about greatest success, which is probably, you know, investment that I'm most proud of. And I've been very lucky, you know, over the course of the last decade to have been lucky to be part of some amazing startup journeys. At my prior firm, we were in the Series A of Reddit, and we were in the Series A of Lyft, and the seed round of Upstart, and so we've seen a number of companies come public. And since I've been working with Steve, we've seen some really interesting companies in the AI space and the crypto space that have changed culture. And so I've been lucky to have had some professional success from an investment standpoint. But the truth is, I'd say that my greatest professional accomplishment on some level mirrors my greatest personal accomplishment, which is finding a really great business partner. Nice. And it's, you know, finding somebody who complements you, pushes you, challenges you in just the right way, and where 1 1 3 is one of the greatest things you can do as a business person. And personally, I would say the same too. It's my wife. Finding somebody who challenges you, enriches you, and where 1 1 doesn't equal 2, but it equals 3.

Nice. We know that venture capital is a very interesting job, and we work a lot. How do you manage personal and professional life to manage both? Because I'm pretty sure that I can call you on Sunday if I am an entrepreneur of your portfolio. I'm pretty sure about that.

You can't manage it. Work-life balance is not a real concept. There's work-life integration, which is can you figure out how to fit work into your life? And some work-life integration is people become friends with their professional community and, you know, they break the wall down entirely. Some work-life integration is more tactical, so you figure out how to, you know, do calls during halftime of your kid's soccer game. You know, you figure out how to, you know, you figure out how to do a lot more email and asynchronous work. You figure out how to do it in the evenings, you know, when people have gone to sleep. But I think that work-life integration is really important because for this type of work, you know, venture capital, yes, and startups, certainly, it's all-consuming. And it kind of has to be all-consuming because it's both so competitive, but also because you're forging as a founder and supporting as an investor the creation of something from nothing. That's really hard. You can't just come in at 9, punch in, do it for a little bit, and then go have some wine at 4. Like, you got to do that all in, right?

You talked about success, but with François, we also like to hear about anti-portfolio, as we we call it in French. I'm sure in the US it's the same. What kind of company passed and later became a real success, but unfortunately you missed it?

Oh man, I was pitched a company where a guy was saying he was going to build a platform where he was going to take the bid-ask spread between— and basically the bid-ask spread in general and partner with a hedge fund and market it as as a fee-free transaction, but really just monetize the bid-ask spread and sell that to consumers. And I thought it was a terrible idea. And he said, "I'm gonna call it Robinhood." And I was like, "That's never gonna work." That was a big one. Yeah, that was a big one. The truth is, and there's others like that, the thing I'll note about anti-portfolio is a lot of the companies that we haven't invested in are companies that it's hard for me to know if I had tried to invest if I would've been been able to. So that's another thing about anti-portfolio is it's not in every case. Even if I passed, somebody else funded it, right? So it's not like I passed and nobody funded it. And so if I had tried to pursue it, would I have been successful? I don't know. So there's two levels of anti. Did I make the bad judgment? And if I had made the right judgment, would I have had a chance? And that's hard to know. And that list is also quite long.

You're one of the few VC, American VC, that invests in France. We invested in Faircraft at together. That's how we get to know each other. So we are very interested with Antoine to understand what's your opinion to— of the European market, especially the French one, and what are the differences you see in entrepreneurs between France and the U.S.?

Well, I have a lot of compliments actually for the French entrepreneurial market, particularly at a technical level. I've been very impressed with the quality of research research, scientific research, engineering research, so applied science. Some of the most compelling AI researchers in the world, from founders of Mistral to Yann LeCun to some of the ones at DeepMind, are French. And that's not an accident. I think French actually has a really strong and persuasive AI engineering culture in particular right now. And it has a rich legacy of biotech, culture that's really compelling, you know, and a manufacturing culture that's interesting, and then obviously the stuff that it's known for, you know, in the consumer market. So from a technical standpoint, I think it's great. The entrepreneurs, I don't think, are necessarily any better or worse than any part of the world, but some cultures are more aligned for acceleration than others, I would argue.. And some of that is, you know, at the continental, so maybe like European, and some of it is micro, so at the city level and the regional level. And that's even true in the United States. In the United States, not all entrepreneurial pockets of the United States are equally dynamic, right? Like San Francisco, even compared to San Francisco 25 years ago, it used to be Palo Alto was actually where all the dynamism was and San Francisco was just like, the creative hippie first town. But that culture has changed, right? So there's some nuance. That said, to address your question in where I see the difference between Silicon Valley culture as it's currently constructed and some of the other cultures in other parts of the world, I think the risk tolerance is actually the biggest noted difference.

You're the third person to tell us this.

Yeah, it's true. It's true. Here, one of the most famous quotations, and I think Bruce Dunleavy from Benchmark Capital was the one who framed it, was, "We're not in the business of asking what could go wrong," because the answer is everything. We're in the business of asking what could go right. And if you are in the business of asking what could go right, you're really understanding Pareto, you're really understanding the power law, and you're really understanding that if it goes really, really, really, really, really right, Nothing else matters.

If you had to give just one advice to an entrepreneur, French entrepreneur, who is raising and trying to raise funds in the US, what could be the advice?

The main advice, which honestly has to do with some of, you know, where we've had, you know, to do some extra work, is a lot of finding a good partner is being able to communicate things about your context that give me evidence of your intelligence, of your resilience, of your determination, and of your like resource magnetism. So how well are you going to attract other talent? How well are you going to attract capital? And if I don't have that context about your university, about the prior companies that you worked at, about some of the evidence that's emerging in your early commercial traction, it's going to be hard for me to develop an intuition about those things. And ultimately, that intuition is such an important cornerstone to my making a good investment judgment. And so the main piece of advice is I would provide more context.

Okay. Maybe a last practical question, and after we'll move to the second part that is very, very quick too. About Kindred, how does the investment committee work? We are very— we see that we're interviewing a lot of European and American VCs, and we see that it's very different. So are you okay to give us maybe the rules, or how does it work?

Absolutely. Our investment committee has to be unanimous to make an investment. Okay. We— our investment committee members have to meet the team. Each of our investment committee members has to meet at least the CEO of a company before we make an investment. And ideally, we will have spoken to at least 3 or so references on a given founder, whether it's customer references or personal references, before we make an investment. Our investment committee is 2 people. We have an investment meeting every day.

Every day?

Effectively. Okay. Yeah, there's— because if there isn't an informal meeting, I'll say, hey Steve, can you come in here? And then we're having an investment committee meeting.

It's easier when you are too.

Because, well, here's the thing is like here's the most important difference and risk tolerance is I think the most important cultural difference, but the most important tactical difference is speed. Yeah. And the truth is, My favorite definition of a startup is it can move faster than anybody else. It can make decisions faster. It can make mistakes faster. It can learn faster. It's speed. And so if we, as people who are trying to be shareholders and who are trying to, you know, who are trying to shape and participate in that ecosystem, can't operate with commensurate speed, we're going to get left behind. And so how do we have rigor and thoroughness and diligence, as I'm addressing in the structure of our investment committee, but have speed.

And when you have a venture U.S. competitor, how do you win the deal?

Does speed make you win the deal sometimes?

It makes us win the deal all the time. It's not the only reason, but it is always a good reason. Okay. And if it's a company that— there have been plenty of companies we've invested in where there wasn't competition, where speed still mattered. 'Cause in those cases, there's not competition yet. And the sooner I can come to conviction, the sooner I can do my diligence, the sooner I can do my work, the sooner I can come to understand the value of a potential opportunity, the better, universally, of course. And this is a little counterintuitive, 'cause a lot of investors will say the more time you can spend with it, the better the investment decision is gonna be. I generally don't think that's true, especially at the early stage. I generally think at the early stage it's a lot easier to talk yourself out of interesting investments if you spend more time, uh, and then following your intuition so long as you're rigorous and so long as you're diligent. But the reason why we're competitive besides speed is because we choose what we pursue with a great deal of intention. And because of that intention, when we show up to a conversation with a founder, We're not just asking them, "What's your ARR? What's your month-over-month growth? Cool, we'll get back to you," because we have no context. If we show up to a founder and we say, "Hey, we've been thinking about this space. Here's where we disagree with your thesis," and then just have a debate with them and have a discussion with them, be able to tackle how the shape of, you know, the generative media movement or what's, you know, what's happening with retrieval augmented generation that was wrong, why is context so important for memory, being able to really get into it with a company today is persuasive to them. That's when they think, "Oh, this is somebody who's acting like my partner already." If you do that and you do it fast, then you can be competitive.

Do you know sometimes— I understand perfectly, but sometimes French people think that when you position very early with all the VCs, you are kind of— I don't know the English quotation, but you're the rabbits. You're putting the first evaluation, and sometimes it can be seen as not the best move. What's your opinion on that?

Is that from the perspective of the company or from the perspective of who?

From the perspective of the— of the founder.

Of the founder.

Okay, I got a term sheet, great, in 10 days, so I'm going to use that term sheet to shop others. Do you see that?

That happens. And that happens here too. Usually if that happens, it's because it wasn't a good offer. And if it's a good offer, then the founder is going to be persuaded by it. And a good offer, by the way, doesn't always mean a good price or like a good valuation or a big check. It can be a reasonable price from a good partner. So if I make you an offer today and you're like, "Ooh, I could work with you," then that night you're gonna think, "Well, shoot, maybe I should work with you." Gosh, like, you're not gonna think, "Gosh, is there anyone in the universe that's better?" 'Cause if you think that, then I kinda suck, right? And so you gotta do your work and you gotta show up really compelling and you have to make a really strong pitch, right?

Let's do it.

Let's move to the next part.

Yeah. So the second part is more about Kindred, all your investment techniques. You invest in in seed or pre-seed, the early stage, and you're mainly agnostic, so in your portfolio every type of vertical. So, um, the first question would be, what's your perspective on France and Europe as markets for innovation, and particularly in venture capital?

I think that US venture capitalists are, uh, the best in the world because of a lot of the cultural stuff I was just I was telling you about. I'm not afraid to be the rabbit. I'm okay, you know, taking a little bit more risk. I am— I think I need to do the work up front and not wait and not stretch the work out over a long period of time. But I think that that culture is rapidly changing. And I think that a lot of the most competitive firms globally are expressing that perspective. Aggressive and proactive. I think that, you know, the firms like Peak 15 in India and Hongshan in China and firms like, you know, EQNX in France and, you know, and Accel in London, like these are firms that are like really going for it. And they recognize that, you know, it's almost gauche to say, but aggression is a quality unto itself. And the U.S. investor is the most aggressive in the world. And so I think that as that becomes more of a globally understood trend because we work in service of founders. Like, we're not the masters of industry because we have the money. The founders are the masters because they own the future. And so we're trying to act in service of them. And so we have to be aggressive because we're earning the right to be in the room with them. Right? And I think that that culture is starting to change, but I think that's where there's some ecosystem difference.

Can you wear now your founder's hat? Founder of Kindred Hats. And what is the— very, very schematic question— but what is the plan and what is the strategy for Kindred to grow?

Kindred is in some ways not growing as a feature. And by not growing, I mean we're going to make more investments, we're going to raise new funds, but we're not trying to become a multi-stage firm. We're not trying to become a firm with that does, you know, every investment up and down the alphabet, you know, everywhere in the world with 50 different offices. We like being a speedboat. We like being a small concentrated team with, you know, 3 or 4 partners that can have investment committee with a conversation that can move quickly and be dynamic. That said, we continue to have ambitions, and we have global ambitions, and part of expressing those ambitions is finding great partners in other geographies who we can co-invest with. It's finding great companies wherever they show up in the world and being able to productively invest in those. And it's having some of our early successes, companies like Uber, companies like Coinbase, some of our more recent successes, companies like Perplexity and Tala, continue to grow, become enduring companies in the public markets, and have those founders represent to the market that, you know, we were their rabbit. That's ultimately where I think the growth should come, is if the most iconic founders of the future are the ones that are speaking about our contribution to them in the early days, even when they don't have to anymore. That's, I think, gonna be the best input on our growth.

Makes sense. One last question, but not least. Back the time you were— you supported Barack Obama, and we discussed a bit of before the interview. Today things have changed and there are lots of founders and VC partners who actually are supporting Trump and particularly in the Bay. What's your view of that?

The first view is I personally think there have been 3 major political eras. Maybe 4, but 3 in the United States in the last 40 years. The Reagan era, the Obama era, and the Trump era. I think that Bush and even Clinton were more of the Reagan era, and I think Obama was his own era in some sense, and of course Trump is his own era. If you were 22 in 1980, Reagan was the most interesting thing in the world. Kennedy in 1960, like the Kennedy era, right? And obviously that one was cut short. But if you were the right age at that time, it was just so interesting and so different and magnetic and in some ways even risky and fresh. Trump represents that to a lot of people. And there's something about that that has caught the zeitgeist. I think, like with all prior eras, And just like with anything that touches the broad market, these things cycle in and out. And I think these things cycle in and out. And, you know, there are certain things that remain true. And the principles that remain true are the ones that, you know, I'm always attracted to protecting. And in the United States, there are certain sets of foundational principles that I'm very, very interested in that have attracted me to this country. And I think that those principles are true in in and as the cycles evolve, and hopefully are resilient. And so while the current administration operates in a way that's quite different and maybe even polar opposite to how the Barack Obama era reacted, America is still America. And for some people, that's always been a complicated thing, and for some people, that's a simple thing. And for me, it's a simple thing.

small, short questions. Could you name one book you appreciate? Can you name one person that is an inspiration for you? And then, as a conclusion, can you name someone we should definitely interview, a VC in the US? So book, inspiration, and VC.

Uh, book: Doing Capitalism in the Innovation Economy by Bill Janeway. He is an economist at Cambridge University and was vice chairman at Warburg Pincus. He talks about the value of bubbles. And, you know, the famous saying is a crisis is a terrible thing to waste. A bubble is a terrible thing to waste. The dot-com bubble brought us Amazon and Google. And, you know, speculative bubbles have a lot of productive value to them. And so when you're in a bubble and as that bubble's playing out, trying to sort of understand what the inputs on that bubble are that are going to stand the test of time and what that's planting the seeds for, which part of the future is being pulled forward. He has some really fascinating theories about that that are sort of worth understanding better. With respect to a person that I admire, gosh, I'm lucky to have so many people in my life that I so deeply admire. I'd say in the professional world, I— It's gonna be a strange one, but I have a deep admiration for Mark Zuckerberg. Okay. I think that somebody who has the willingness and courage to consistently reinvent their business and can somehow keep true to the values that animated them originally is somebody who truly understands the dynamic and chaotic nature of the real world.. And so I think that from News Feed to the pivot to mobile to the acquisitions of Instagram and WhatsApp to the pivot to Meta, that's a, to the purchase of hundreds of H100s, thousands of H100s. This is a person who's not afraid of the future. And that's an admirable quality. With respect to which VC you should interview next, My partner Steve Jiang. He's way smarter and more interesting than me. But if I had to say outside of our four walls, I might say that it'd be interesting to interview friends down at Chemistry Ventures, Christina Shen and Ethan Kurzweil and Mark Goldberg. They're a fabulous new firm that we're really excited for and rooting for.

Thanks.

Fantastic. Thank you very much for your time, Kanyi.

Thanks.

Thank you.