What do we look for in a founder and their product at Yes VC? Jyri answers this question, among many others, on Investor Connect.
by caterina
I was horrified to learn that we all eat about a credit card’s worth of microplastics every week. We have been working hard to reduce the amount of waste we produce at home, which gets into landfill or is dumped in the oceans, and then gets into the water we drink, where most of the plastic that ends up in our bodies comes from. Plastic wrap from food isn’t recyclable, and is used all the time. So I love this new product, the beeswax wrap from Public Goods! In this photo you can see the new beeswax wrap from Public Goods that arrived this week in my delivery.
The plastic-replacing beeswax cloth can be wiped down with cold water and reused. We keep it in the fridge so the wax doesn’t melt off, and warm it with our hands to mold it around the dishes. It cleans off easily and eliminates the need for plastic wrap. It lasts for about a year, and all of it is biodegradable.
What’s the fastest growing segment of retail in the U.S.? Dollar stores. There are a lot of reasons this isn’t great: the gutting of any remaining local retail; the poor quality of the food, clothes and other essentials they provide; and their negative ecological and social impact.
Enter Kids on 45th, a startup that sells boxes of pre-loved clothes for an average of $3.29 per item—a competitive price with the dollar store. The founders Elise and Bookis Worthy are engineers who bought one of the oldest consignment stores in Seattle and turned it into an online operation with national scale.
Their innovation is simple: they realized parents are happy not having to pick and choose each shirt, each pair of shorts and leggings for their kids. Kids on 45th asks for your kid’s size and a few other parameters (girl, boy or gender neutral, sporty or not) and how many of each item you need—and that’s it. You find out what you get when the box arrives.
Our kids call it the “surprise box” and they love it. There may be a few items from Patagonia, The Gap, or other easy-to-recognize brands. Everything is lightly used but pristine, some still had tags.
Creating a product everyone can afford seems obvious, but as Connie Loizos notes on TechCrunch, many entrepreneurs overlook this vast market:
A seemingly endless number of startups has attracted funding in recent years to make life easier for people with money to spend. Overlooked in the process is the overwhelming majority of Americans. Most families aren’t spending money on making life easier or more glamorous for themselves because they can’t afford it. More, they’re often too busy to think much about it.
We’re proud to be investors in Kids on 45th. We love their mission, the founders, and the business.
The most interesting deals we look at here at Yes VC almost always have an AI component. AI is a huge part of the conversation at Yes VC, and we have done some deep thinking about what it can and can’t do–and what it should and shouldn’t do. Human-impersonating AI is a particular area of great potential but it comes with many possible outcomes, good and bad, that should be thought through. Some of these have been discussed in the most recent episode of Should This Exist? which involves a discussion of an app-based human-impersonating therapy AI intended to alleviate depression.
The first question was ask a founder is why they’re building the companies they’re building. We’re early stage investors, and so much of what we invest in is the ability, smarts and character of our founders. AI, with its tremendous transformative power, is a particular area where the founder’s character and motivation is of utmost importance. Listen to Should This Exist? and join us in thinking through AI and its implications.
Welcome to our latest team member David Pickerell, who joins as an Associate. David has played many roles in Silicon Valley and brings a wealth of financial, investing and fundraising experience to Yes VC. Some highlights from David’s background:
- Grew up in Hong Kong
- Was President of the China Club at Harvard
- Set up Uber’s Las Vegas operation
- Helped Nauto raise $159M from Greylock and Softbank
- Worked as Analyst at Primavera, a Chinese private equity firm
- Joined Yes VC as an Associate on Jan 1st, 2019
Welcome!
We recently held our very first Yes VC Creative Director’s Summit, co-hosted by Pearlfisher, bringing together a remarkable group of creative directors who worked–or recently worked–at companies such as AirBnB, Apple, Facebook and others, who presented some of their projects, talked about major trends in human behavior and cultural change, and shared some of the challenges of being a creative person working in an engineering-dominated industry such as tech.
Caterina Fake of Yes VC–once a Creative Director herself!–presented on the idea of “scenius“, a term coined by Brian Eno. She talked about how scenes, specific to certain geographies, have created fantastic flowerings of creativity, and how the internet has dissipated the growth and flourishing of scenes. How can we recreate the Scenius of, say, Paris in the 20s, San Francisco in the 60s or Downtown New York in the 70s–but in a digital age? Insulating yourself from outside influence turns out to be important, working in a tightknit group, and delaying the release of your creations outside of the scene turn out to be instrumental in creating and maintaining a scene.
Hamish Campbell of Pearlfisher shared his creative process while working on the branding and launch of Seedlip, a distilled beverage company that creates a non-alcoholic drink based on an ancient recipe from a book published in 1651. Incredibly beautiful and strong work as you can see from this image:
There’s a great story behind the founding of Seedlip:
Over three hundred years ago, it was common for physicians to distil herbal remedies using copper stills, harnessing the power of nature & alchemy to solve medical maladies. In 1651, one such physician, John French, published The Art of Distillation documenting these non-alcoholic recipes. At that same time, a family in Lincolnshire had started farming, hand sowing seeds using baskets called ‘seedlips’.
Centuries later, Ben, Seedlip’s founder, stumbled across John French’s recipes & began experimenting with them in his kitchen, using a small copper still & herbs from his garden. That might have been the end of the story, if he hadn’t been given a sickly sweet pink mocktail one Monday evening in a restaurant. The result was the beginning of an idea to combine his farming heritage, love of nature, his copper still & forgotten recipes with the need for proper non-alcoholic options; a name inspired by the seed baskets carried by his family centuries before & a process of Seed to Lip: and so Seedlip was born.
Teemu Suviala, Creative Director at Facebook, using Malcolm Mclaren’s career as a model, presented a fascinating look at the connections between different stages in a person’s career, their seeming disconnection from each other, and how life, which is lived forwards, can only be understood backwards. Teemu explained how different stages of play, from constructive play to role play moves into stages of integration and building. Then the person (or team, or company) begins again with a new idea or project or product and the same thing happens again. Over a long career you can see these seemingly disparate projects merging miraculously into a cohesive whole and a magical, sustained career is created. Here’s Teemu’s diagram of the process:
There were many other presentations, too numerous and even too profound to adumbrate here. But it is always stimulating to thought, to creativity and to productivity to have these events and create a small scene for scenius to flower, no matter how brief.
How many varieties of yogurt do they have at Safeway? 107! Everybody wants to simplify their lives, save their cognition for things other than processing the incessant assaults of marketing and endless choice. Thus, we led the seed round in Public Goods, a company that mails you household necessities such as cleaning supplies and personal hygiene products, all free of cruelty, toxic ingredients and the need to blare their message at you. Their growth is strong! Watch for new product announcements–i.e. food!–coming soon. Get your lifetime membership from Public Goods’ Kickstarter campaign before it’s over.
After 8 amazing years investing with my brilliant colleagues, the fun, funny and genius investors at Founder Collective, and after Jyri’s two years working with the great, brilliant, soulful and amazing team at True Ventures, we — Jyri Engeström and Caterina Fake– are busting loose, breaking out, getting down and starting up our very own fund, yes indeed, it’s Yes VC.
We’re doing Pre-Seed, as it’s called these days, and Seed investing — investing in great, visionary, early stage companies. We’ll be raising up to $50 million. We’ve got some amazing LPs already and are seeking a few more. We’ll invest in about 20–30 companies over the next several years. We’ll roll in our investments in Orchid, Spell and Gaze. And we’ll be continuing to look for world-changing companies like the ones we’ve invested in in the past, like Etsy, Kickstarter, Stack Overflow, and Cloudera. We’ve made over 40 investments as angel investors and with our respective firms, but it’s just a start. The opportunities we’ve missed because of not being able to put in bigger checks, and follow on, were giving us a feeling of No.
Years ago, I gave an interview on Inc. magazine about the struggles of getting my first company off the ground, as an unknown and fledgling entrepreneur, and the amazing breakthrough we had, getting into PC Forum, and getting Esther Dyson on board as an investor. At the end of that interview I had said something that later became one of those Pinterest graphics:
“When the world says No No No No No, and you hear a Yes, go towards that Yes as hard as you can.”
I have swum in The Sea of No, which is an inevitable part of the entrepreneurial journey. Sometimes the No means “you’re on the wrong track”. Sometimes the No means: “no one wants this product or service”. Sometimes the No means: “pick something else to work on”. And sometimes the No means, “you’re just not cut out for this”. If you’re a startup that’s only heard Yes, who’s never been rejected, who raised money with no effort, who slid easily into the warm waters of infinite funding, free lunch, foosball and no discipline, you either got it just right–which almost never happens!–or it’s a cause for concern. But when The Beach of Yes appears on the horizon of The Sea of No, where you, the spent swimmer, has been struggling to stay afloat, you might just be–finally, finally, finally–on The True Path.
So. We’re excited about this. Major changes are afoot in the workings of the internet and in society and culture at large. Suppressed voices are finally being heard. We are looking at the end of cars. And though we once believed the internet was about the equitable distribution of power, we have lived through a massive consolidation of power. If people like you don’t get involved in disrupting the new power and building the future, rapacious trolls, megacorps and mercenaries will have their way with all of us.
Is the internet once again reinventing itself as a free and open place where users own their words, and voices and identities? Will we be able to live free of businesses that lure us in to harvest and sell our data? Is it safe to wade back into the water? Is now the time to enter the fray? We think so, yes.
All the things we love–humanity, community, possibility, opportunity–are once again ascendant. Let’s make the future, let’s do great things.
Yes? Yes.