Doing Well and Doing Good

How much time do we have? I'm happy to. So, I'm a partner at Lux Capital. The journey starts a long time ago — this is not what I thought I'd be doing when I was growing up in the Bay Area, or even when I was in college or grad school. But at the same time, I can't imagine myself doing anything else now.

The journey begins even before I was born. My parents are both immigrants from Iraq who made their way to the States in the '70s for my dad and the early '80s for my mom. That was really a big part of my identity growing up — knowing, in the wake of war after war and sanctions and 9/11, just how fortunate I was. The serendipity of my existence, my birth in the Bay Area and not Baghdad. That drove a lot of my early ambitions and to this day is a driving force for me, in terms of thinking about my North Star of impact, and also why I work as hard as I do — just realizing the chance that I have and that I can't lose it.

So growing up, I really thought I was going to do something to prevent another 9/11, to help build bridges and use this hybrid identity I've had — which was always so natural to me — to bring these parts of the world closer together. At one point that looked like it might be as a journalist. At another point I thought it might be as a public servant, and I actually did both of those things for a little while. Eventually it became clear to me that tech was increasingly a way to achieve impact and to build bridges, perhaps in a way that would be more efficient and, in some cases, more equitable. And that was something I needed to learn how to do.

This was around 2010, 2011. At the time I was at the State Department. I'd joined State because I was covering a speech President Obama gave in Cairo in 2009, when I was interning with the BBC in DC, where he talked about a better way of doing development and diplomacy with the Muslim world — one grounded in technology and entrepreneurship. So I was working on public-private partnerships with big tech companies, and increasingly with startups. This was right when software started eating the world, the heyday of that era of innovation.

I was coming out to the Bay Area a lot — again, where I grew up and where I never thought I'd live again, because as a child there wasn't a lot to do if you weren't working on semiconductors or chips or the early days of software engineering. If you had global aspirations, you'd go to DC, New York, London, overseas. So coming back, I was really surprised: I sensed the center of gravity was shifting geographically out West. Tech wasn't just this separate, esoteric sector — it was actually a way of doing a lot of things better. At the same time the Arab Spring was getting started, and back then, as you may recall, we were all kind of hopeful about the prospects for democracy. I really felt like tech was playing a role in enabling change and revolutions and impact on the ground.

So I set my sights on joining a tech company — but not on the periphery in policy, or in marketing, which would have been the more natural fit, if one exists, for somebody with my background: I'd studied social studies and Near Eastern languages and civilizations and done my graduate work at the Georgetown School of Foreign Service. No, I wanted to work in product. And no one knew what to do with me. They had no idea why I had the audacity to apply for these roles. I got hundreds of rejections — I still have a lot of those emails. But eventually I got lucky and landed a great role in product partnerships, which is where I'd stay for the next five to seven years at Google.

I got to work on some really cool early-stage initiatives on a team that doesn't exist anymore, where I'd often be the first business person to come in whenever an ambitious PM or engineer had a moonshot idea. That's how I really got exposed to healthcare — beyond the fact that I come from a family of physicians, much to their chagrin. I never went down that path. For a hot minute I thought maybe I'd be pre-med, until I realized that required taking organic chemistry. Up until recently my dad was still telling me, "You could still go to medical school." And I'm like, "Baba, I'm in my mid-thirties, I've got a career. I love doing diligence on companies with you, but I don't think I'm going to go back and be a doctor myself." But I love working with doctors, funding doctors, working in health tech.

So I ended up helping to build what became Google Health 2.0 — not 3.0 or 1.0, but a little in between. And that's what led me to venture: getting exposed, around 2013, 2014, to the potential of technology and healthcare to improve lives, but also realizing that big tech was not going to be the source of innovation. I knew this because I tried — we had hundreds of engineers working on this product. At the same time I was meeting incredible entrepreneurs getting started with their companies, many of whom are now unicorns, some of which we've since invested in. At the time they were bootstrapped, with very few people and very few dollars behind them, but they were doing more than my team of hundreds of engineers. That's ultimately where I realized I wanted to be — helping to grow and scale those companies.

I ended up connecting some of them with people I knew in VC. I wish I'd thought to invest — I didn't even have the mentality of an investor at the time. What I had was the currency of my network, which is still kind of my greatest asset. A lot of those folks ended up making investments. So I got the itch to join VC and ended up joining GV.

I've always worked really hard. It's just what makes me happy. When you're working on things you love, you're loving what you work on, so it doesn't feel like something you resent or don't want to do. To this day it's usually a struggle between sleep and working for me, because I do love to sleep too — but I kind of want to keep doing what I'm doing. There are some things I had to study in school that I maybe didn't love too much, and that was a different story. But it's just part of my DNA. I don't really know how to be any other way.

I think I was able to punch above my weight class really early in my career, which in retrospect enabled me to build an incredible network and get exposure to ideas, insights and decision-making in ways that might otherwise have taken me decades. A lot of that had to do with the platforms and the rooms I was able to be in. Even before I could earn a seat at the table, I worked with people who had the seat at the table. So I could observe, watch, get insight into white spaces and ideas.

That was the case even in high school. I started a magazine that was sort of a counter to the school newspaper, and I was able to get interviews with people who might not have taken my call if I'd just wanted to grab a coffee and shoot the shit — or, God forbid, "pick their brain." I hate those words. In college I was financially independent; I paid for college myself. I won a bunch of merit awards, but I also always worked multiple jobs. Some weren't so glamorous, but others were pretty cool. I got to work at the Kennedy School and meet high-powered diplomats and business leaders as they came to speak.

I remember working on a scholarship I helped start for students from the Middle East. We had, at the time, Mohamed El-Erian — I think he was with the Harvard Management Company and then of course went off to PIMCO. I was the staff person literally printing the name tags and stuffing them and getting paper cuts. But I got to be with him in the green room, spend some time and ask him about his ideas. That was incredible. Even to this day, that'd be a really hard meeting to get.

Then when I was at the State Department, I was in the room where things were done — in the arena. Even at Google, being the person leading their healthcare efforts, I had a calling card and people took the meetings — the major decision-makers at some of the largest health systems, payers and pharma companies. I may have been in my mid-twenties, a name no one had heard of, but I got to take those meetings. And they not only enabled me to develop connections that literally are still valuable to a lot of my portfolio companies — they gave me insight into where the white space for innovation was. What were the customers looking for? What were they missing?

Because I have this natural connectivity desire — I just love bringing people together, it brings me joy, socially and professionally — that's what I did. I'd meet these folks, separately meet entrepreneurs, put them together, and deals would get done. That was actually my job when I was at GV. We'd track it, and we were able to track hundreds of millions of dollars of revenue opportunities created as a result of literally intros. Frankly, that's a lot of what a VC does.

Absolutely. This is something you can really only observe through osmosis — you're not going to get it necessarily through conversations. But if you can observe how decisions are made, how negotiations get done, if you're CC'd on the emails going back and forth facilitating partnerships — it's not like I was sitting there taking notes for a business book about what I learned being surrounded by leaders. These were things I was absorbing and adapting into my own ethos, my own way of doing things. And that continues to be the case. What an incredible privilege to be in this job where I get to spend all day meeting brilliant people who are literally putting their lives towards the work they're championing as founders, and to be able to observe and learn from them.

There's often this sense of the power dynamic — or the power law, as Sebastian Mallaby would call it — between VCs and founders. That may be the case sometimes, and may have been historically, but there's a hell of a lot I learn constantly from them, even as I'm coaching or guiding a lot of the founders. That guiding and coaching comes from the fact that we have this unique wide lens into companies at various stages, sectors and so on, and we can do that dot-connecting — which again is what sparks joy for me.

I wish I had a better strategy. I'm terrible at CRM — I've never been good at it. I know some people are very systematic, with calendar reminders to reach out to this person and that person. I have things on my to-do list that have been pushed for years. So a lot of it is just that it's our job as VCs to try to connect the dots. And we're not just meeting founders — we're meeting talented people who may end up being excellent board members, customers or hires for our companies. Being able to have these parallel streams in your mind and connect the dots is great. It doesn't really scale, and it's also really difficult. There are things I should do that I frankly forget because I'm in Zooms all day.

There is an element of productivity and task management that I'm sure would make this more efficient, but I don't think it's the kind of thing you can automate. I know, because I've been on the other end of somebody's auto-email saying "just checking in" — that's not the most effective way to do it. The best partnerships are ones where there's mutual value and benefit. Even when I'm doing diligence for a company — I'm looking at one right now — I'm very careful that if I'm asking them to take time to speak with someone, that person could actually be a potential customer for them, and could have a valuable partnership in return. Trying to make sure there's always that accretive value across the board.

You have no idea. That's the thing. It's a big challenge for anyone going from operating — especially if you've worked on building and launching things where you have quick feedback loops: you can gauge NPS, look at conversion, track so many things. When it comes to investing, a lot of what you think you can use to track early on isn't really meaningful. If you're looking at markups, that might look good in the short term, but you don't know what it looks like in the long term. We've seen plenty of things get marked up and valued — even in public markets — at incredible numbers, and then tank. So it's very difficult to know in the short term. When people say, "Oh, you're killing it, you're doing a great job," I'm like, "How do you know?" You don't.

There are softer, more non-quantitative ways to think about it. Are you getting access to the best deals? Do you even know about them? If we see announcements coming out of companies in areas we were interested in — done by competitors or top-tier firms — and we didn't even know it was happening, that's a failure on our part. We need to be able to get those meetings. That's one way to make sure you're at least onto something. But it really does take a long time.

I think it's both — I don't think it's a dichotomy. I actually taught a class at Stanford last quarter called Deconstructing Impact. Part of that came from my own personal journey — I've always been trying to seek a way to have impact. I've done it in the public sector, in the nonprofit and philanthropic sector, in international aid, even as a journalist, then as a technologist, and now as a VC. As a VC, I have the word "capitalist" in my title. It took me many, many years to realize that this Venn diagram between doing well and doing good does have an area of overlap, at least as I see it — that it's not as black and white as I may have seen earlier.

There are a couple of ways I think you achieve impact through this. Number one: who are your LPs? Who are you making money for? This was very important to me a few years ago when I was thinking about the next firm I'd be at. It's a big, heavy responsibility to be a steward of capital for major endowments, educational institutions, hospitals, philanthropies. That's a big deal, and I take it very seriously. So it's not only that you're investing in matter that matters, helping to propel industries forward — some working on very difficult things that take a long time, that may help make our planet and climate healthier, make human lives better, create more jobs, open up new channels for the economy — but also, in doing so, generating returns for our LPs. That's a nuanced way of understanding the role. Not to say I'm Mother Teresa, or that any of us are — obviously, at the end of the day, it's a capitalist function — but I do think it has the potential to do some real good in the world.

At the end of the day, we're not philanthropic by mission. What that means is that if there are things that are very capital-intensive and could make the world a wonderful place and should exist, that doesn't necessarily mean they're venture-backable businesses. There are many things that are venture-backable, or could be — that's our sweet spot, we love to see things before they're obvious. But there are also things we look at that we think are wonderful and should exist, but that aren't going to create the kind of value and returns we need for our LPs.

This is why I have some healthy skepticism around the notion of impact investing, or the hybrid social-innovation space. I worked in and around those areas for over a decade before coming into venture. It's really important to be absolutely crystal clear about what your mandate and role is — ultimately, as a steward of capital, to generate returns for your LP. You can and should ground yourself in values and avoid the types of things that could make a lot of money but are just bad for the world — certain types of energy, addictive substances, things that might push medication in a certain way. There are a lot of ways things could go awry. As long as you keep those values at your core, I think there's tremendous potential for good.

It's a science and an art. There are certainly quite a few firms who've either built their own or licensed different data services that claim to take publicly available inputs and analyze, or at least help source or filter. But frankly, if this is something that can be done quantitatively and algorithmically — why do we exist? It reminds me of speaking to physicians who are skeptical about the bots and algorithms out there that can diagnose. Ultimately this is a human business, and it's about people.

There are things you might look at retrospectively and say, "So-and-so graduated from these top schools and created these big companies," or "people who worked at McKinsey or went to HBS." But if I think about some of the top companies I've invested in, and the top co-investors I love to invest with, they don't fit any of those molds. I invested in a company called Mos, founded by Amira Yahyaoui, who was a human rights activist in Tunisia. She built a company initially intended to help college students pay for college — she never went to college herself. Now she's built a challenger bank that's helping students get their first debit card. She was stateless, a refugee who couldn't even open a bank account because she didn't have standing and a passport. I don't know how I could have realized algorithmically how incredibly special she was and how powerful that business would be. That's the case for a lot of folks, and it's part of why we love to invest before it's obvious. That's the edge you can get.

You're reading The Power Law, so it's interesting — there are very dichotomous views on this in venture today, and there's data to prove that both work. There are definitely some investors who are very hands-off; for them it's about the picking and the indexing, and then letting them do their thing. And there are others who are more closely involved. Fundamentally, you don't want to be operating as a co-founder. You don't want to be investing in companies where you need to be the one making those decisions. So it's really important when you pick that there's that level of trust.

That said, as VCs we have convening power, a certain network, and the ability to see challenges across companies that are very valuable insights to founders. So a lot of what we end up getting involved in is coaching them through difficult decisions, recognizing if someone may not be the fit they're looking for, using that network and convening power to facilitate partnerships. It's a very different conversation when a VC fund with a large portfolio talks to a major C-suite executive at a Fortune 10 or 50 company and helps them understand who to partner with, who to think about as they try to solve their key problems. That's not a sales conversation, but in doing so I can suggest things they might never have thought about, and create access for founders who may never have gotten a foot in the door at that level. That's really powerful, and it's something we do a lot of.

Again, one of those things people have very mixed views on. I honestly was skeptical myself. When I first started investing, I didn't really have a strong Twitter presence, I wasn't doing a bunch of podcasts. I've always loved public speaking — I was a nerd in high school who used to compete nationally, one of those weirdos who loves and gets energized by it rather than fearing it. But I never understood why VCs talk so much. Why are they on Twitter all the time? How do you even do your job and tweet like that?

Over time a couple of things became clear. First, by virtue and privilege of the job, we're seeing a lot and have access to incredible, brilliant minds working on really challenging problems, getting on boards and helping them work through it. Because we have that vantage point — not only across sectors but across stages, some of the boards I'm on range from literally a NewCo, one person and a deck, all the way through pre-IPO — that enables us to pick up on trends and patterns. That's why I've always loved reading some of the most prolific VCs' blog posts and tweets.

On podcasts, people joke, "Oh, you don't need a podcast just because you're a VC." But what some of us realized over time is: these are actually really interesting insights, and it'd be good to scale those conversations and get the message out. It's also really important to build a brand — because of what you asked earlier. If you haven't been doing this for 20 years, and you don't have 50 exits to point to, how can you be known — not for the sake of being known, but for the theses you have, the things you can bring to the table — in an increasingly competitive world where we're literally fighting to get into the best deals? It's a helpful input for founders.

My father is a psychiatrist. My grandfather — I miss him so much — was a pediatrician who lived in Iraq and worked for the World Health Organization. In the early '50s he came on a Fulbright and did his master's in public health at Harvard. Apparently there's still a device, an analog device called the Shakir strip, used to measure malnutrition — one that can be used easily in areas where there's no access to care. I've got an aunt who's an OBGYN, an uncle who's a cardiologist, my mom is a dentist. I was just always surrounded by it.

I think it's a noble profession, an incredibly difficult one, where you can touch humans literally, in a way that you're saving lives. It's amazing. I have so much respect, and it's a privilege to be able to work at the intersection of business, tech and healthcare. Some people would joke that MDs are not necessarily the best business people. I think it's hard to do both if you're classically trained in medicine. Now that MD-MBA thing is quite popular, and I know a lot of amazing people — some of whom we've invested in — who are brilliant scientist-physicians but also going to be incredible founder-CEOs. Those things aren't inconsistent with one another. But the active company-building and the challenges that come in that role aren't necessarily the types of challenges you encounter in classic clinical practice. They're not always overlapping from a skill-set perspective.

Oh, I've had plenty. I started a company in college that turned out to be a failure — depending on how you define it. It's really nice in retrospect to talk about how one experience led to another. This is something I talk about with my founders all the time: there will be failure points, inevitably. There's no way there won't be. In some cases you can't even learn without experiencing that. What can you learn and take to the next thing?

So I co-founded a company that we sold for parts. I dabbled in a few different industries. I went to grad school right away after undergrad, which I wouldn't recommend to anyone — luckily I had a scholarship and didn't pay for it, but still, there are a lot of things that, looking back, I don't think would have been the choices I'd make. I also never really had a ten-year plan. For me it was always about being in a place where I'm constantly learning — that's why I think this is the job for me for the rest of my life. Before, that wasn't the case, because I'd reach a point where I'd think, "Okay, I don't really think I'm going to learn anything new here, and I'm not challenged enough." I want to be in places where hard work and hustle are rewarded, not being a large cog in a machine where it doesn't matter if you go on vacation because somebody can totally take over. So I don't think those are failures per se, but perhaps I did some of those things earlier in my career when I should have taken more risk.

No, not at all. I mean, I don't like Zooming all day — I don't think anybody does. However, it has democratized a lot of things. I often have no idea where the people I'm Zooming with are. The friction that might have required someone to get on a plane and come to Silicon Valley and waste time driving between meetings — it doesn't matter. It doesn't matter where they are, and in many cases it doesn't even matter where the company is going to be, depending on the type of company. So that actually made it in some ways more fun, because it was a lot of people I wouldn't have met otherwise — even outside of founders, like co-investors and other folks. Rather than a big hullabaloo about when and where you're going to meet and how to set it up, there's just no friction. Jump on a Zoom or a call. In those ways, it's still really fun.

Now, who knows — I'm really trying hard not to look at the data too much, but it's not looking that good. Hopefully, at least for now, we're somewhat moving out of this. I was at South by Southwest the other day and got to meet so many people in person, and that was really fun and amazing. It was nice not to travel for a while, because I have little kids too. So we'll figure out what this looks like next. This morning I had coffee in person with someone, and now I'm here doing a virtual podcast with you. There are a lot of positives to it, actually.