This series profiles the most prominent and influential venture capitalists in the country. They talk about how they broke into the industry, what drives them, and what they have their eyes on, among other topics.
In this episode, I sit down with Mark Fernandes, a Managing Director at Sierra Ventures.
Information about Mark:
The Interview:
CXO Program
Funding mostly companies that sell to enterprises, Sierra Ventures’ CXO Advisory Board is a substantial differentiating factor and asset of the firm, counting among its members heavy hitters like the CTOs of 21st Century Fox, AIG, Coca-Cola, Starbucks, and Johnson & Johnson, as well as the Chief Information Officers of Nike, GE, Merck, Facebook, T-Mobile, and a plethora of others notable organizations.
These titans of industry provide feedback to the burgeoning startups and later potentially become clients.
A significant chunk of their day is spent resolving matters at their companies, so when they get time to look at cutting edge technology in their field, they turn to Sierra.
Notable Enterprise Software Investments
Sierra invests in technology across the stack, from the chip-level (their companies have provided the technology behind the iPhone’s fingerprint and motion sensors) and infrastructure (Sourcefire was bought by Cisco for $2.7B) to the business applications.
Machine Learning and Artificial Intelligence
Mark provides an interesting perspective on AI and ML, believing that it is overhyped in the near term and undervalued in what it could do in the long-term
Consumer Companies
Sierra has invested in India’s largest online travel portal (Make My Trip) and Ximalaya (The SoundCloud of China) - it grew from a million users to 200 million in a few years.
Advice to Entrepreneurs
Mark echoes Andrew Jassy from AWS who says to focus on inputs (the team you select, product-market fit, etc.), and the outputs will follow.
“You have to put yourself in places so that when opportunity knocks, you’re ready to answer.”
Mark had just joined Sierra and was at the crowded RSA Security Show 15 years ago when he came across Marty Roesch, the founder of Sourcefire, who was signing autographs. Mark went up to him, started chatting, and soon after wrote Sourcefire’s first check. As the story goes, the startup soon after went public and had a multibillion dollar buyout from Cisco.
Mark also recounts another story of how he was roommates many years ago with Keerti Melkote, who founded Aruba Networks. Keerti would go out with just a notebook and a pencil, taking copious notes from customers, even up to 50 at a time. Aruba Networks was acquired by HP for $3B after going public. The lesson: you have to be insanely dedicated to the product and customers.
Notable Misses
Mark recalled the early days when he missed out on investing in AdMob, which Google bought for $750 million. He recounts talking to Omar Hamoui in 2005, who at the time was a MBA student at Wharton and wanted $300,000 to get started. Unfortunately, seed investing wasn’t popular at the time and Mark couldn’t get his team to write the check. Mark’s partners have missed out on Salesforce and Snapchat.
Differences in Silicon Valley - 15 yrs ago vs. Now
Noting that the rate of change in the venture community within the past 5 years has accelerated more dramatically than any other time in the past, Mark points to seed investing, incubators, programs like Y Combinator, and websites like AngelList as newcomers to the landscape.
Breaking Into the industry
Mark cites the need for having a passion for product, particularly for early-stage venture capitalists. Thus, he says he’s seeing more VCs with a background as product managers at consumer or enterprise companies.
Mark’s career path has been interesting, having worked as a product manager, then taking his skill set to Wall St., where he took a company public, which happened to be a Sierra Ventures portfolio company, leading to an intro to the firm.
In the end, Mark says the best ingredient to being successful is having a hyper-curious and hyper-competitive attitude.
Average Day
Mark says there is no typical day, but gives an insight into his deal flow, mentioning that his partners and he see 3,000 pitches a year, but end up investing in only about 15.
He splits 1/2 to 2/3 of his time supporting portfolio companies, with the rest spent on the endless hunt for new deals and the next unicorn :)
Mark answers rapid-fire questions, including “Whom should everyone be following right now?” and “What’s one thing you still have from college?”:
Mark lip-syncs a famous DJ Khaled line:
The entrance to the office. Quite stately, I must say.
You’re looking at their modern lobby. On the TV, they display portfolio companies and members of their CXO Advisory Board.
They have tiles displaying some of their portfolio companies. On the top right, you can spot Intuit. Every venture capitalist on Sand Hill Road turned down the founder Scott Cook. However, Sierra Ventures founder Peter Wendell personally invested $25K in the meager $225K seed round of the now-$35B financial software behemoth.
A shot of the hallway.
The firm is perched up on the 10th floor of the building. The view is breathtaking, allowing you to gaze out for miles.