Meet Bala Kamallakharan, managing director at Iceland Venture Studio

The fund invests in decentralizing technologies across verticals like healthtech and fintech

Venture capital used to be a cottage industry, with very few investing in tomorrow's products and services. Oh, how times have changed!

While there are more startups than ever, there's also more money chasing them. In this series, we look at the new (or relatively new) VCs in the early stages: seed and Series A.

But just who are these funds and venture capitalists that run them? What kinds of investments do they like making, and how do they see themselves in the VC landscape?

We're highlighting key members of the community to find out.

 Bala Kamallakharan is the Managing Director at Iceland Venture Studio, as well as the Founder and CEO of Startup Iceland.

Kamallakharan has served as an executive board member for Guide to Iceland and TravelShift. Over the years, he has invested, mentored, and served as Chairman of the Board at CLARA, the Icelandic Community Analytics company, which was acquired by Jive Software in 2013. Kamallakharan has invested in various early stage ventures, including Buuteeq, Mattermark, and Genome Compiler. 

VatorNews: What is your investment philosophy or methodology?

Bala Kamallakharan: We invest in early stage companies, seed and pre-seed companies. What we do that’s maybe different is we spend an inordinate amount of time with the founders, working with them, trying to build companies that we really want to exist in the world. What has happened in the venture world is that it has all become a numbers and math problem rather than really trying to solve some major challenges that the world has and trying to build it and work with founders who are already thinking that way. 

We started with that hypothesis and I've been building companies that way in Iceland since the financial collapse in 2008 or 2009. I'm an accidental venture investor, because I wasn't trained to be a venture investor, I didn't go to any venture firm, I didn't learn the skill the way that the typical VCs do. I happened to be in Iceland, I used to work for an Icelandic bank, and have been part of a number of transactions and mergers and acquisitions, and I was part of the CEO’s office. When the financial collapse happened, I just decided to build something in Iceland and I looked around and said, 'Who are these builders?' I started meeting these founders, and there were some interesting tech companies being built in the rumble of Iceland. I picked one team, I helped them raise some money and, by the way, I say this  tongue in cheek, but I'd raised money before for the bank but when I wanted to do it on my own nobody wanted to give me any money. So, it was a rude awakening, and I did what any triple master's degree from the US would do: I ran to my family and friends back in India, I begged them and I said, ‘Can you give me some money? I'm going to do this investor thing.’  They did and I invested in this one company and started working with the founders and I just wanted to learn how this process of building companies happened. I invested and I worked with the company day in and day out and after three years that company was acquired by a NASDAQ-listed company. When that happened, it was kind of like a watershed epiphany for me because in the 1,000 year history of Iceland this was the first company to be acquired by Silicon Valley. So, Silicon Valley was oblivious to what was going on in Iceland until this company went and did something there. 

On the back of that, I started this initiative called Startup Iceland to bring awareness about venture investing and building early stage tech companies out of Iceland, and to build an ecosystem and community that embraces that. I realized very quickly while I was building this company that it doesn't matter whether you're building one company, if you don't have a company that believes in that hypothesis, you'll have a tough time. So, I'm 10 years in and I've been doing that ever since. After the first company got acquired, the second one I invested in got acquired and the third one just blew up and did 100x on my money. So, finally, in 2016 or 2017 some of my friends who had been watching me reached out to me and said, ‘Hey, why don't you do this like a fund?’ I said, ‘Sure,’ and we raised a little bit of money. 

By the way, at the very early stage there are lots of these different models in play; for example accelerators like TechStars or Y Combinator, where they take a bunch of teams, they write very small checks and then run a boot camp for like three months, and then, at the end of the day, there's a demo day and so on and so forth. I've always found that to be useful only if you have a network of investors who are willing to write that follow-on check. In a country, or a community, like Iceland, that's not the case. There's a handful of investors, they all have their own views about doing things. So, the model that I launched was to say, ‘You know what? We don't know if in three months we’ll be able to raise money but why don't we try to build a great company with a good team that is solving a global problem? We’ll build it out of Iceland and then take it globally, and then we will progressively build it the way companies typically used to be built.’ You know, this whole venture funding model is only, I don't know, maybe 30 or 40 years old, really. Before that, entrepreneurs built companies with a pittance of capital, they basically bootstrapped and raised money from their customers to build products that the world wanted. They went door-to-door and sold it. I still think that those principles are valid, and I basically said, ‘Why don't we apply that to this new world and see if we can build companies with very little capital?’ And that's why the venture studio, although I had the opportunity to raise more money, I didn't want to do that because I didn't need more money. My big idea was to invest in the early stage, seed, pre-seed stage and once you get the team's out of the valley of death there's plenty of people willing to write the Series A check, because you’ve validated the model, you’ve proven that there’s traction, there's revenue and lots of the risks that have been taken out.

What is even more exciting is that when you go from the seed to that point, maximum value is created. I wanted to basically optimize on every dollar we invested and wanted to say, ‘You know what? If we can do a 20x or 30x on each of these teams, we will pay a lot of money back to our investors, although they put in less money.’ So, that's the model that I brought. We've invested in about 10 companies now and we’re at the end of Fund I, we're actually launching Fund II, and that might be a little bit bigger than the first one but still with the same principles, which is actually working with founders and building companies, irrespective of what percentage that we own. So, that's what that's what I do. 

VN: Tell me what was exciting about Iceland in particular when you started this and what's unique about that particular market.

BK: At least in 2009 or 2010, this whole idea of startup and venture investing was new in Iceland. It was a novelty. I lived in the US, I was in Cupertino, I used to work in management consulting so I knew about venture investing and all that, and I said, ‘You know, this is not new, why the hell is nothing happening in Iceland?’ So, I basically brought awareness to that.

What is unique about Iceland is that almost everybody knows everybody, so access to great people is very easy. If you're building a startup, if you want to connect with the right person, it's very easy to do. Also, what I noticed was that almost all the kids that I was meeting were all extremely good at programming, I was like, ‘How do they all write the code and all of them are good designers?’ I could not understand. Of course, Iceland is a very wealthy country, almost all the kids grew up with computers and all of them played games and then, when you play games, you want to write games and then you have to learn computer programming. It started that way, so there is a very strong gaming community in Iceland and lots of founders from Iceland and production designers went on to work for big game companies like Riot and the Star Wars franchise and so on and so forth. So, it was actually quite an interesting revelation for me, but taking those computer programming skills and applying it to all the other things that were happening in net 2.0 was what I thought was exciting to do, and, sure enough, it turned out to be the right thing.

There were a number of companies, like the ones that I invested in, that have been acquired out of Iceland. And, actually just today the government sponsored venture fund of funds, sort of like the Israeli Yozma fund, was just announced today and they are going to invest in VC funds. So, the government just allocated I think about $75 million as the first tranche to invest in VC funds. I think there’s about four or five new venture funds. So, lots of exciting things are happening in the ecosystem, a lot of great founders are building very deep tech aligned with the new world.

VN: What are your categories of interest?

BK: The venture studio that I run has a thesis that's basically around decentralized things. The investment thesis is that lots of things are going to move closer to the user. For example, I wear this Oura Ring and it captures more data about my health than my doctor will ever know so it is logical to think that, using supercomputers that we carry with us, we would see more algorithms that will help us live better lives. So, decentralization of data and algorithms is the big thesis that we've been investing in.

Of course, within Iceland, there's just a plethora of companies that are building lots of other things as well, but I focus primarily through the venture studio on decentralizing technologies. One example is a company called RetinaRisk. This was an algorithm that was built in Iceland by dietitians and ophthalmologists to predict the risk of diabetic blindness. We just built it into an app and we set it so that anyone in the world would be able to see if they have a risk of going blind if they're diabetic. That's a very simple example of the thesis. We invested in 10 companies that are aligned with that thesis, including a new bank in Iceland, which basically is like a Monzo or an N26. It runs on your phone but the interesting thing in Iceland is that country has has one system, and any bank that uses it basically encapsulates the entire financial infrastructure. So, anybody who has a bank account in this new bank will be able to leverage the entire banking infrastructure of Iceland. The plumbing has already been done so, pretty much, it's a bank built with a simple API that just plugs in and you can do what Stripe does very quickly using the banking infrastructure. So, that's another example. We've invested in a nanotech company that has decentralized manufacturing, where nanoparticles can be used to make better batteries, better polymers, and better coating materials and so on and so forth. So, a wide range of companies.

VN: Are there particular verticals you like to invest in? You just mentioned a few that you find particularly exciting within decentralization, like healthcare and banking. What are the most exciting verticals within that thesis?

BK: Healthcare is obvious. I mean, healthcare and COVID have shown that our healthcare process, how we actually do patient care, is not very effective. Making patients go into the healthcare system to get care is not a very scalable business. When you have millions of people who need care, like in the post-COVID world, how would we do it? Our system is broken, it just can't work, so we just need to reinvent that in a different way and I think there's a fantastic opportunity there within decentralization.

Crypto is in the news and everybody is on board with that hypothesis, but the whole crypto model is built around peer-to-peer financial transactions. There's no intermediary. Banks used to be the intermediary between lenders and borrowers, money creation and money usage. Crypto has shown that we can actually programmatically do that so that there doesn't need to be any third party to resolve that problem, and Iceland is one of the centers where a lot of the mining happens because of geothermal energy, the cheap cost of energy. Before Bitcoins, it was aluminum companies that leveraged Iceland. Now it is all the Bitcoin miners who are actually coming and setting up data centers and shop here. I just read the news that the Genesis Mining company was actually thinking about buying a geothermal power plant in Iceland; that's legally not allowed, but surely they can aspire to do it. So, healthtech and fintech seem like obvious use cases for this decentralized world, but, if you really think about it, anything where you need to walk into a building to get the service, it's going to be reversed. So, all that service is going to go closer to the user, because we can actually make that happen today. The technology is there, the institutions just have to catch up.

VN: What is the size of your current fund and how many investments do you typically make in a year?

BK: Because we write seed checks, we have a different model. We don’t just write one check; what we do is we progressively invest more into teams as they make progress from the first time we meet them to when they get out of the valley of death. 

The first fund size was about $5 million, and we raised money in three tranches. It’s very similar to the Berkshire partnership model, so all the investors who came in at the early stage, we just needed to raise a million dollars to get started. We did that, and we wrote three checks of $100,000 each, and one of the teams is RetinaRisk, where we have progressively invested a lot more. And the fund now is around $3.5 or $3.6 million dollars. We are more or less done. As I said, I don't need to raise more money because some of the teams have already accelerated to a point where they're profitable, they're growing really fast, so we will see rewards from the teams that we have worked with for the past year, year and a half.

VN: What kind of traction does a startup need for you to invest? Do you have any specific numbers?

BK: At the stage that we invest in, we don’t look for traction. What we really look for is alignment with our thesis. We ask the founders to answer seven questions. And, of course, this is something that’s been made popular in Peter Thiel’s Zero to One book and almost every Stanford Graduate probably remembers it. But, that being said, I still think that those questions are valid. Those questions are not hard to understand but it's hard to answer in the context of building. So, we ask founders to basically write in more clear terms how they're thinking about building this company. Through those seven questions we get to see where we can really help them.

Obviously, distribution is always a big challenge for founders, so when we started investing in RetinaRisk the company had no app, they had nothing. So, we helped them build the app, got the distribution going, we are going to cross about a million downloads worldwide and now they have a fantastic API business where they're talking to large healthcare systems. The first one was the National Hospital of Iceland, where the National Hospital has basically automated the whole eye screening process for the first time in the world. Patients get notified by the app when they should go in for an eye screening and in the you can see how useful that is in a world with COVID. Not everybody that has to go into the hospital, only the highest risk patients need to go in.

So, again, as I said, these are the small checks we write and then we progressively write more checks as teams make progress. So, we basically wanted to elevate the time founders spend trying to raise money because, at the early stage, most investors try to ask for traction and things like that. So, obviously those things are important but, again, those are not the most important things. What is more important is that they’re on the right track, that it’s something that's worth solving in a potential market that we can actually go capture. If you're able to answer those questions, if you just build enough value proposition into the product, traction is something you can get and we’ll just progressively invest more, rather than investing after a founder gets traction. I think that some VCs are kind of sloppy; really, if you think about it, once a founder has figured out how to get in front of customers and how to get paid, why do they need VCs? ‘Why do I need you? I know how to get money from my customers and, by the way, there are millions of them.’ So, I kind of call out some of those investors who basically say, ‘Hey, show me traction,’ and I say, ‘Well, if I have traction then I don't need you.’ It's kind of one of those chicken and egg problem. My teams, when they go to some of these investors and they come and give me feedback that some of the venture capitalists tell them, ‘Oh, you're kind of early for us,’ I usually advise them to say, ‘Aren't you the luckiest son a bitch in the world because once I've crossed that line, I don't need you. So, you better invest in me now!’

All jokes aside, I used to be in banking and finance and so I know how money gets raised, but founders don't know all that. They think that if somebody's a VC, that they're some big shot. They're the same as a founder is. And, by the way, at least the founder has a product, the VC has a commodity. The money from VCs all looks the same. It doesn't matter what they do. So, my bigger theme is that when investors say, ‘Hey, show me traction,’ I basically say, ‘Just walk away, because what you really need from VCs are conviction-based investors.’ Investors will basically see if this is something that they want to build and want to see exist, and they can help in building a business. At the end of the day, it’s not just about money, it’s about lots of things. That's my learning in the last decade and a half of doing this.

VN: What do you look for when it comes to product or market?

BK: I look at the market. Obviously, it's important and venture returns are notorious;y hard math problems to solve. It's a power law curve. For example the 10 teams that we’ve invested in, our investment criteria is not that they return to 2x or 3x. Our investment criteria is that whatever percentage that we hold in that company, it should be worth the entire size of our fund. So, let's say you write a $50,000 check and we get three to five percent in that company because they're in the early stage. That five percent should be worth $5 million dollars. It needs to become a $100 million business, and in order for that to happen you just have to work backwards: they need to be making at least $10 million in revenue per year, and when you say $10 million, how are we going to factor that in? What are they selling? If it's consumer facing, obviously it needs to have at least one million customers, so you need to be able to charge them $10 for it per year, and so on and so forth. So, we do simple math like that.

Usually those are the hard things to do, so we break down the complex problem of decision making into simpler things that we can actually get our head around. That’s what most experienced VCs do. We overcomplicate this venture investing problem; it's not that complicated, at least because I'm a practitioner I can say that. If you make this into something where you meet 100 founders and need to one to the one, I think that's a hard problem, but if you pick a problem that is big enough, that is worth solving, and this founder is passionate and is not willing to give up and is very committed to solving it, then it's better to go and start working with that founder and build a company, because they will eventually solve it.

VN: What do you think about valuations these days? Have they changed at all thanks to COVID?

BK: Because I invest in the early stage, it’s usually a function of an experienced founder. For example, a founder has already walked the path and has already exited, so they know the valuation ranges, and then they start with that. Of course, COVID has changed a lot of things because, today, the traditional marketing and all that has to change. How you go to market has to change a little bit. How you used to budget in terms of office space and all that has to change a little bit. 

We’ve always been fortunate in the Nordics that we don't have like the sky high, Y Combinator valuations. We've been quite fortunate because founders are a lot more grounded here, and they're willing to work with you and they’re willing to give you a discount to get started and, of course, if you commit to work with them, everybody wins. That is the truth in the Nordic Region: there's no nosebleed valuation at the seed stage. Once they cross certain milestones and then they start scaling, then the valuations go up accordingly.

That being said, we have invested in a Silicon Valley company as well, a Delaware company, and they used to be part of Village Global, which is an accelerator in Silicon Valley where Bill Gates and Jeff Bezos is an investor. It's the nanotechnology company that I talked about. So, the valuation was very similar to the Y Combinator level, but that's fine because they were going after a very massive problem. I found that to be justifiable because I really wanted to work with the founder.

VN: There are many venture funds out there today, how do you differentiate yourself to limited partners?

BK: You know, an interesting thing is that I always tell them is, ‘I’ve been doing this for about 10 years and I’ve never lost money investing in a startup.’ That’s a good pitch, because a lot of LPs have burnt their hands.

As I said, the venture map math is a hard one; if you raise a $100 million fund, you better know how to have at least one $1 billion business in it. If you can't get there, then guess what? You're not going to return money back to the investors. My LPs have been very fortunate in understanding that because I've been educating them and saying, ‘I don't want to raise a $50 million fund and write a seed check because that would be silly. Let's do a $3 million fund and just do 50x on that, or 100x on that, so everybody wins.’ I'm an investor in the fund as well so I also have a different model: I'm not working for fees. Just the fees is not what I do. I basically am an investor in the fund, so I’m kind of like a partner. I don't take a carry, I don't do any of that, because I'm in the same boat as my LPs. That might change in the next fund, I don't know yet, but at this stage the pitch to LPs is that I'm in the same boat as them. If I win, they win. I basically work really hard with the founders to build companies, which is very different from most VCs, and haven't lost money, so that should be a good one.

VN: Venture is a two-way street, where investors also have to pitch themselves. How do you differentiate your fund to entrepreneurs?

BK:  What I usually tell founders is that everybody needs a coach. Michael Jordan needs a coach, and doesn't mean that the coach is better than the player. It's not that. It's just that you need a sparring partner who can give you things that maybe you don't have. Kind of like a mentor would, but a committed mentor is hard to find. Everybody wants to mentor, but nobody wants to commit the time to really mentor. I say, ‘You know what? Talk to all the founders I’ve worked with and you ask them how Bala is as a mentor or as an investor.’ That's the best pitch that you can give to a founder. If the founders have been happy with the level of service that I provided to them, which is being their confidant, being their companion, and, by the way, it's a very lonely journey, building the company. Once you kind of figure out all the early problems then it becomes a lot easier. There's lots of people, your board of directors and  your network, all that becomes a lot easier to do, but at the early stage, when you don't have traction, when you don't have product, when you don't have a team, how do you move forward? That's where I thrive, because that's kind of my sweet spot. I help founders navigate that path and help them prioritize what they need to do first and what they need to do next. I help them build companies. That is what the difference is. It’s not about capital. I always say, ‘Money solves money problems. Money doesn't solve all problems.’ I try to solve all the other problems then the money problem solves itself, usually.

VN: What are some of the investments you’ve made that you're super excited about? Why did you want to invest in those companies?

BK: I already talked about RetinaRisk. It's an algorithm, it’s an app, it’s API, it's basically reinventing how healthcare is delivered to diabetic patients. From a patient point of view it basically also helps them to manage a diabetic condition, which actually, if you look at it, there are no good platforms out there that help a diabetic to manage their risk. The biggest risk of diabetes is that you go blind, that's the one big risk, and this is a scientifically validated algorithm, peer reviewed, doctors built it, but we basically took it and put a technology wrapper around so it can be redistributed into the hands of so many people as possible. 

The second one is Flow, which is a meditation company using virtual reality. We think that mental health and meditation, all of that, everybody says, ‘Oh, it's a crowded market,’ and I say, ‘How many people do you know who meditate?’ Or at least they say they meditate; maybe in Silicon Valley there's more than others, but I can assure you in other regions, like in Iceland or Finland or Norway or Denmark, there's not a lot of people who meditate. It’s very regional. So, we built this Flow platform in virtual reality where you can actually swap out the guided meditation in the local language and you can swap out the visual cues, you can swap out the music, you can swap out all the things. So, we made it into a customizable platform now. We work with companies and with HR managers to  bring meditation into work. The stress and anxiety of work is very high and, of course, COVID has put more stress into the workplace. When people get back into work now it's going to be chaos. We believe that they need to have a space where they can actually go and calm their mind and get back to work. 

We also invested in a supply chain risk management company in the US, which basically gives you near real-time decentralization of risk for the supply chain. It pulls real-time information and shows you how your supply chain will be impacted. We’re working with Microsoft on that. That’s a massively useful company. There’s a company from India called Expertrons, which has built a video bot and they are growing really, really fast. They actually help aspirants get a job in their dream company by connecting them with mentors and using video bot to decentralized mentoring. If you want to be a mentor, I have to talk to you, I have to get your time, but if I ask you to record 10 videos and then I stitch those videos in real-time so it mimics a conversation that you and I can have as a mentor and mentee, 80 percent of the questions of getting a job can be solved. This company is based out of Mumbai and they're just focused on India right now but they’ve just been blowing up the numbers. They started last August, and they are already operationally profitable and the team size is about 92 people. They're on a unicorn trajectory; of course it takes time to get there but they will do $10 or $12 million monthly record revenue very quickly because it's a big problem. Getting a job is such a long life cycle from the time you apply for a job and then getting an interview and all that, trying to cut short all the time is going to create tremendous value.that's what Expertons does.

The other team that we've invested in is an Israeli company that actually makes armbands that allow you to control computers and phones without fingers. If you don't have fingers then how are you going to use your phone? Everybody talks about voice but I think gestures are better. This team has kind of flipped it by making sure the computer understands your gestures, rather than you understanding how to input data into a computer. They’re working with the Israeli Yeshiva hospital to create a pilot using virtual reality.

We've invested in a voice-based technology for dyslexics. Basically, if you go to a university a lot of things are written and read, so people who have dyslexia cannot understand things. They struggle. I was looking at a program where they said a lot of people who are incarcerated, most of them are dyslexic. They drop out of school because they just can't keep up. So, we use technology to say, ‘We should allow people to learn what they can learn, rather than imposing a way of learning.’ They’ve signed a deal with one of the universities in Iceland to bring all the coursework that the university has to dyslexics.

As I mentioned, Fund I is almost done and we are probably going to take on one or two more teams, then we're launching Fund II. With Fund II I’m really thinking about India. I will probably go and do an India Venture Studio, which is going to be exciting to see.

VN: What are some lessons you learned?

BK: Probably the most surprising thing for me was that the first principles of building a company have not changed. Funding only changes one parameter in that process; you still need to build a team, you still need to build a product, you still need to get distribution. If you put the level of effort that goes into raising funds and if you just take half of that effort and put it into all of these tasks, I think you will build a better company. And if you build a better company, funding usually happens on its own. I’ve always believed that money is like water: it always finds the cracks. It will find the place where it needs to go. By the way, you see these patterns with second time founders, people who already successfully built a company. You see that they're not spending a lot of time seeking investors. They know what they're going to do, they know how to build it, and they are usually doing it, and the investors are the ones who are chasing them. 

The second thing that I learned is that a lot of people, just like money, believe that technology is kind of like this superpower. Maybe it is, but I've always felt that the founder and the founding team are the real key. Like, what makes them? Why are they doing what they do? And spending time with them and building their trust, and getting them to trust you as a partner in this journey, when you get that relationship going, all other things become a lot easier to do. Winning becomes easier. Taking the time to build that trust has also been a fantastic learning for me. Maybe it's because I used to be a management consultant, and I know that you can't advise a Fortune 500 level company if you don't have any trust. If they don’t trust you to know your stuff, they're not going to listen to you. You need to show them that you can be trusted. Irrespective of what stage a founder is, how experienced they are, it doesn't matter; I usually give them a lot of time and try to work with them and try to build trust and see if I can help them build great companies.

As I said, because I’m an accidental VC, I’m very contrarian in what I do in the sense of I’m very rarely moved by the end results. Some of the deals that I've invested in have done 100x. I’m not too excited about it; it’s great that they did that, but what’s more exciting is those founders still pick up the phone and call me when they really need some counsel. They say, ‘Hey, I’m at this stage, what would you do?’ and that's very gratifying to me because, obviously, they wouldn't do it if they didn't think that I was a friend and somebody who they can trust to ask that question. So, that's also something that I encourage other investors to do but you’ve got to be authentic, you got to commit to doing that, otherwise it won't happen.

So, these are kind of life lessons. It works. I've seen it happen. And, also, the whole numbers game in the venture world is just a total ruse. Obviously you got to be lucky in some things but I also think if you commit and do the work, just like a founder would, I think usually you end up with good results. 

VN: What excites you the most about your position as VC?

BK: I just love the hard problems. It doesn’t matter how smart you are, it's still a hard problem, so you've got to really apply yourself, you’ve got to really show off. You can't mail in your work. Those are the kinds of things that really make me tap dance to work because every startup, there was no recipe. Everything is different. Every startup is different, every team is different, so I cherish solving some of the hard problems with the founders. Of course, you don't solve them yourself, it’s just being in the middle of it. It's kind of like going to the Super Bowl and being able to throw that ball; you’ve got to do years of work to be able to do that and I'm really fascinated that I get to do that every day. The problems that some of the founders are working on and solving, they’re not easy, they’re hard work. It's fantastic that we can actually have the time of day to go work on these things. 

VN: Is there anything else that you think I should know about you or the firm or your thoughts about the venture industry in general?

BK: All of the things that we've been experiencing in the last year has shown that geography was not a real constraint. We created those constraints and I always use the example when everybody was like, ‘Oh, you have to be in Silicon Valley to build this unicorn.’ And now it's like, ‘Oh, you have to be in Miami because everybody's going to Miami.’ I’m like, ‘Make up your mind. Was it really Silicon Valley or is it Miami?’ Therein lies the contrarian view. The geography was just a ruse. It was not a real thing. It was just created and fabricated by a group of people and, of course, if you drink your own Kool-Aid you believe in those kinds of things. I've always believed that you can build a vibrant community that believes in solving hard problems, even in a remote island with a population of 300,000 people.

Because I've been doing it long enough, I can see it's rare. Very few people think that way and you need to have that kind of thought process to be a VC. If you're doing venture investing you have to be a contrarian, you have to be able to be wrong, but you also need to be able to have an open mind and to say, ‘You know what? I'm not right about things but when I'm wrong about something I should change my mind,’ I need to understand why I was wrong about it. So, that's also something that I have learned. I mean, these are all things that you're we’re not teaching our kids but I think we should. I’m fortunate that I happen to be in this profession because it’s a very humbling experience to basically go out there and you have to make decisions with no data, a high level of uncertainty, and real money on the line, which is always humbling and gratifying at the same time.