Success through IT & VC

At the end of the last millennium, technology companies were fleetingly the darlings of Wall street and the City. the entrepreneurs behind them were a new breed: young, smart and literate in an industry barely understood by the traditional business community.

Not all of their ideas flew, but over the next decade or so, from the mother ship in silicon Valley, California, this and subsequent generations of technology entrepreneurs built the multi-billion dollar businesses that revolutionised the way billions of human beings live. the way they communicate, socialise, shop, consume news, watch films and listen to music.

Even the way they choose life partners, today’s technology monoliths, those household names that dominate the popular consciousness, were once start-ups with entrepreneurs at their heart. Three London Business school alumni – Hussein Kanji MBA2007, John Henderson MBA2013 and Mitali Pattnaik MBA2005 – have worked in senior roles at some of the biggest of them of all.

Now, all three have taken their experience into venture capital, identifying and backing, and still looking to set up, nascent businesses at the forefront of technological innovation.

Hussein, formerly of Microsoft and recently named by The Telegraph as Europe’s most influential technology investor, has launched his new venture capital fund Hoxton Ventures, which has raised US$40m to invest in European early stage startups.

John – via a major law firm and management consultancy, Facebook and Summly, a new business that boiled down web content for smartphones – has joined White star Capital, a new venture fund backing early stage tech companies and the entrepreneurs who are building them.

Mitali, who has also worked for Microsoft, as well as Electronic Arts, Yahoo!, Google and Twitter, among others, is Entrepreneur in Residence at Foundation Capital, a venture capital house in Silicon Valley.
What sort of business ideas interest you at the moment?

Hussein: We’re looking for companies we think can become very large, billion-dollar-plus businesses.

Many of these will be inventing a new industry. They are the pioneers. Think back – there was no social media industry before Myspace or Facebook.

These industries looked murky at formation. We recently invested $1.6m on just a slide deck. We all have anti-virus programs on our PCs, but there’s nothing like this in the data centre. We think this is going to be a brand new industry category!

John: Personally, I’m fascinated by the digital-currency space and its potential [at the time of writing, John was closely following the FBI shutdown of Silk Road and confident that the value of BitCoin would bounce back]. One of my frst angel investments was in a BitCoin company called CoinDesk, a news site for digital currency.

At White Star we invest in teams and products that have the potential to disrupt existing industries. We’ve invested in a bunch of awesome companies. Betaworks, one of our bigger investments, has churned out great products and spin-offs like and Dots. Another of our investments, Bloglovin’, is disrupting the way people consume content online by making great blogs discoverable. Some of our more recent investments include BusBud, which is making it super easy to book intercity travel and mxHero, which is changing the way we use email by allowing developers to build in functionality that wouldn’t otherwise be there.

Mitali: My background has always been consumer internet products and that’s where I’ll continue to focus. In my career, I always put my hand up to do the uncharted, unbuilt products. I have always believed in mobile and social. I was part of the team making early Facebook and mobile games at Electronic Arts when most of the company thought we were crazy. That’s still what I’m doing now at Foundation Capital,except without the safety net of a Facebook or Twitter. ‘Entrepreneur in Residence’ roles were created by VCs back in the 80s. The idea is to have someone in place that a VC firm believes will do something interesting and they want first dibs on it. It’s a call option on what I come up with. What is the frontier of technology at the moment?

Where is it taking us?

Hussein: The migration from PC to mobile is the largest shift in the industry. There’s also this new industry of ‘quantifiable self’. You are going to see many more companies trying to understand what’s going on in your body in a much more precise and granular fashion. And you will be able to action these insights, and do things with the data to make yourself much more healthy. This is a big growth industry. Heaven knows what it is going to look like in ten years.

John: Wearable technology will be omnipresent. Smartphones, watches and wristbands are just the beginning. We’ll learn more and more about ourselves as the data accumulates. The insights derived from that data will transform the way we live our lives (think healthcare and energy consumption as examples).

I’m also particularly interested in developments in artificial intelligence and natural language processing. Machines and algorithms will help people wade through loads of content on the internet.

What we did at Summly was just the start. New algorithms will enable tailor-made content for you, when and where you want it, without any humans being involved. Machines are learning to decipher what’s interesting in an article, what’s relevant, and extracting content that will be interesting to someone, based on what the machine knows about that person. Hyper-personalised content is almost upon us.

Mitali: The kind of thing I find interesting is collaborative consumption. What a lot of new start-ups are doing is disintermediating markets by directly connecting the consumer with the seller. That’s happening across every industry. I’m diving deep, business school-style, into what other markets are out there that could be disintermediated in the same way. Even finance is getting opened up in this manner with crowdfunding. It’s going to happen in pretty much every industry you can think of.

Who are the ones to watch?

Hussein: As we consume more and more services at work, if you’re the manager you might want more intelligence in your network to block some of this trafc and allow others. Some of the companies providing the technology behind this to make networks smarter are doing incredibly well. These are billion-dollar industries. One of the best IPOs in 2012 was a company doing precisely that, Palo Alto Networks. FireEye, another one in the same vein,went public recently. But the hard part for us as investors is to find not today’s categories but tomorrow’s categories.

John: My former boss at Summly, Nick D’Aloisio, has just turned 18. Who knows what he might be able to achieve as an adult. He hasn’t even finished school yet!

Mitali: Airbnb and Uber are the poster children of the new marketplace economies. The idea of renting a room to a stranger or getting rides in a stranger’s car would have been inconceivable just a few years ago. Now they are commonplace. Both of these companies will be very big which countries are interesting?

Hussein: The geography that does this better than anywhere else in the world is San Francisco and Palo Alto. Still.Which are distinct geographies. New York has grown up. A lot. Chicago has come out of nowhere. London and Berlin are interesting.

John Silicon Valley remains the epicentre of tech. At White Star Capital, we’re interested ina bunch of other geographies tooI’m excited about what’s happening in London, Berlin and Scandinavia. Tel Aviv continues to churn out great technology.

Mitali: There’s really no comparison to Silicon Valley, but there are hubs of innovation cropping up in other countries. There are interesting things happening in Sweden, Finland and Norway in Europe. Israel is a pretty big tech hub. A lot of interesting companies that made it big have come out of Tel Aviv.

What are you most proud of?

Hussein: I don’t think I’ve had any great achievements. I’m just an average guy who’s gone into an interesting industry. I’ve had some early success, but success by our definition is success on the Facebook, Twitter or Apple level. I’m nowhere near in that league. I’d love to write the cheque for one of these guys who turns into the next Steve Jobs or Bill Gates. That would be a huge achievement. Maybe I’ve done that already, but only history will tell.

John: I love my work, but I’m most proud of more personal things. I’ve convinced my fiancée to spend the rest of her life with me and we got married on New Year’s Eve in Sydney – it was amazing.

Mitali: I have been extremely fortunate to work on products that impact on hundreds of millions of people globally. I am particularly proud of my work at Twitter, where I contributed to the company’s revenue products, which were critical to its recent IPO.”