Q&A - Venture Capital Works Exactly Like Hollywood | Ubiquity 6 Co-founder Anjney Midha

When you need venture capital the least is when you get it the most. There's a common phrase that I think is really true, which is in venture, especially in tech, when you ask for money, you get advice, and when you ask for advice, you get money. So if I was you and I was being introduced to investors and angel investors, I would not ask for money in my first meetings. I would ask for advice and genuinely ask for learning. The best folks will see your passion and ask, hey, are you raising money? Is that one thing?

There's a all of a sudden everyone forgets about you and you're coming like from a different country into Silicon Valley, but you have all the knowledge you have gathered being a VC and being a founder, but nobody knows about you. I mean, it's all in your head. And doing the 3 points that you just told us, what would be like the the strategy you will take in order to get funding for your Ubiquiti 6 startup? And like, what if you can be like as specific as so we can understand the mindset you're trying to teach us?

Yep, it's a great question. It sounds easy coming from me now after I've raised $40+ million, right? But the mindset that I found helped me most early on was to assume that we could never raise any venture money. So for the first 6 months of our company's lifetime, I just quit my job. I was working on it with my co-founder, and we didn't raise any money. Now we were privileged enough that there were people who were interested enough in our space. At the time, AR was pretty hot, continues to be, that there was some interest, but we didn't actually feel that interest, and we are pretty heads down because one of the realities of venture capital that I learned is investors are really fickle, right? So something that's really trendy and hot this month could be completely out of fashion by next quarter. The venture industry actually, even though everyone tries to pretend like it's much more analytical and scientific than other industries, it works exactly the way as Hollywood. It is just as trend and fashion driven as Hollywood and fashion and entertainment. And that's a good way to think about it. So if your mindset is investors are really fickle, they're really unpredictable, and they're driven by fashion, then the only way to address that as an entrepreneur is to distance yourself from those people and from their judgment on you and ask, well, what is my strategy if I cannot rely on these really unpredictable people? And what you end up doing then is prioritizing features and customers that can prove value and stand on their own and don't require an investor showing up and magically writing your term sheet because the space that you're working on got them conviction. What happens is when you need venture capital, it's really funny in the Valley, but like when you need venture capital the least is when you get it the most. There's a common phrase that I think is really true, which is in venture, especially in tech, when you ask for money, you get advice, and when you ask for advice, you get money. So if I was you and I was being introduced to investors and angel investors, I would not ask for money. In my first meetings, I would ask for advice and genuinely ask for learning. Usually what happens is in that moment of building a relationship with them and when they get a chance to see that you're actually committed to building a valuable business, you're not that focused on the investment part, the best folks will see your passion and ask, hey, are you raising money? Is that one way I can help? It is. It, it, it, I know it's counterintuitive and it sounds privileged, but there was a lot of bias we were fighting in 2017, which is that venture capitalists don't actually like to fund game studios. Game studios are seen as hits-driven businesses. And when we started, we looked like a multiplayer AR game studio because that was the product we thought would land the most value. We wanted to build a set of games that would bring people like us together in a physical space where you could actually look through your camera and play together. And most VCs wanted to pass on that because the conventional wisdom is games are unpredictable. Studios take a long time to build out games that then don't— if they don't end up being hits, you lose your money on. So we just assumed we wouldn't be able to raise that money. And because that forced us to prioritize other independent value-driving features, The investors showed up when they did and we weren't hinged to them. So the one mindset I would tell you as somebody coming from outside is the best way to get investors is to not need them and focus on what are other revenue-generating or customer-generating opportunities that allow you to prove that you're working on something valuable that don't need some hotshot VC thinking that you're the next big thing.

Trend. So you mentioned you did your master's degree and then spent a bit in investment focusing on AR and gaming, or VR and gaming, and then jumped into this. This is something I think we might all struggle with, but I struggle with personally. Should we define our domain of expertise before jumping in, or does the domain of expertise come as you run through. Like, as a person who's wanting to set up a startup or is even in the middle of the process, I notice a lot of things that I know that I don't have a domain expertise on because I'm a generalist. But how do we— would— or had you gone back in time, would you have jumped in directly or would you have spent some time building your domain expertise?

It was always weird to me when I got to the Bay Area that there was this like thing called a founder, like it was a job. And there was a job called investor because they're both very generalist roles, right?

Yeah.

And especially in the Bay Area, it's so fashionable to become a founder that there was a ton of peer pressure. I mean, I think Evan Spiegel, who started Snapchat, was 2 doors down from me in my freshman dorm, you know, so it was like, The social milieu was, oh, you need to start a company. But that never really made sense to me because it's kind of weird to start a startup for the sake of starting a startup. Like, it always made sense to me to start a startup to build a business, and businesses need a domain to be in. So I don't— there were several points at which people were like, oh, so are you working on a startup? And I was like, no, I'm not. And there was a— I think there was a switch that flipped at some point, which is like, oh, there is a problem that matters to me more than anything else. And the only way— the best way to solve this is to create a business. So to answer your question, I think picking the domain is actually really important. And I would actually argue that the right domain for you is something you've already picked. Now, some— it's counterintuitive, but sometimes people don't think of domains as the way they should be, which is just something you care about. So when I got to Stanford, like, I didn't think gaming was a domain because it was just something I did in my free time. It took a couple of other people to tell me, hey, you're like an expert in this because you've spent 2 to 4 hours every day of your life since you were 13 years old understanding this space. And that's— That you've already picked a domain. But I, you know, I didn't think it was serious enough. I thought it was a hobby and so on. But it turns out that was the domain, and there's a lot of problems to solve in that domain. So people tend to describe domains as something serious, tend to be in the enterprise space with paying customers. But often a domain is just something you care about enough to go learn everything about in that space and care about solving a problem in. It could be as simple as like food delivery. Like one of the companies that came out of the year above me at Stanford was DoorDash. And I think Stanley, the founder, his parents had run a restaurant. But the guy studied like, I forget what he studied, but he did not study catering and he did not study the food industry, but he just cared about it a lot and saw some of the inefficiencies in that. So I think it's weird for me when people say, I wanna start a startup. I don't know what it's going to be, but I'm in search of a problem. I think a more productive question to ask is like, what is something I know really, really well, either because of my hobbies or my past job experiences? The problems start to become pretty clear to you when you ask that line of questioning. What are some of the most important lessons you've learned