20VC: Finding VC Partners That Look Beyond The Numbers, The Black Box of VC Secrets That Needs To Be Shared & The 1,000 Reasons A VC Won't Invest In You When It Has Nothing To Do With You with Leah Busque, General Partner @ Fuel Capital

Leah Busque is a General Partner @ Fuel Capital, one of Silicon Valley's leading seed funds with the most incredible portfolio including many previous 20VC guests Ryan @ Flexport, Florian @ Mesosphere, Alex @ Clearbit and Dan @ Convoy (episode Friday). As for Leah, prior to VC, she was a pioneer of the sharing economy with her founding of TaskRabbit, one of the leading online labor marketplaces in the US, raising over $37m in the process before their sale to IKEA last year. Due to this incredible success, Leah has been named to Fast Company's "100 Most Creative People in Business". In Today’s Episode You Will Learn: 1.) How Leah made her way from sitting on the couch discussing dog food with her husband to founding TaskRabbit and how that translated into the world of VC today? 2.) How did Leah's time in operations affect: Question from Sean @ Shasta: the founders Leah backs and why she chooses them? Question from Craig @ Collaborative: the business models and unit economics Leah backs and why she backs them? 3.) Leah has said before that "authenticity and transparency between VC and founder are now table stakes", what more can be done to improve the VC product? How did Leah select the investors she worked with on TaskRabbit? How can founders truly determine "founder friendly" VCs? 4.) What have been Leah's biggest surprises on her move into the world of VC? What elements has Leah found most challenging? How has Leah looked to scale that learning curve? 5.) What does a successful marketplace look like? How does one know when is the right time to really scale a marketplace? What is the inflection point? How can marketplaces be efficient with their unit economics from day 1? How does one balance the NPS of the supply side with the NPS of the demand side? Items Mentioned In Today’s Show: Leah’s Fave Book: Founders at Work Leah’s Most Recent Investment: Bark: Parental Control Phone Tracker App As always you can follow Harry, The Twenty Minute VC and Leah on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC. Leesa is the Warby Parker or TOMS shoes of the mattress industry. Leesa have done away with the terrible mattress showroom buying experience by creating a luxury premium foam mattress that is ordered completely online and ships for free to your doorstep. The 10-inch mattress comes in all sizes and is engineered with 3 unique foam layers for a universal, adaptive feel, including 2 inches of memory foam and 2 inches of a really cool latex foam called Avena, design to keep you cool. All Leesa mattresses are 100% US or UK made and for every 10 mattresses they sell, they donate one to a shelter. Go to Leesa.com to start the New Year with better nights sleep! Zoom, fastest growing video and web conferencing service, providing one consistent enterprise experience that allows you to engage in an array of activities including video meetings and webinars, collaboration-enabled conference rooms, and persistent chat all in one easy platform. Plus, it is the easiest solution to manage, scale, and use, and has the most straightforward, affordable pricing. Don’t take our word for it. Zoom is the top rated conferencing app across various user review sites including G2Crowd and Trust Radius. And you can sign up for a free account (not a trial!). Just visit Zoom.us.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is the 20 Minute VC with me, Harry Stebbings. Now, if you have not made the transition from Snapchat to Instagram, do it now and you can find me on Instagram at H Stebbings 1996. Hopefully, this will not affect Snapchat's stock price too much. However, to the show today, and I first listened to this incredible guest when I was walking to college around five years ago. And I remember hearing her founding story and it just left me so inspired. So a very special show for me today and I'm thrilled to welcome Leah Buskey, General Partner at Fuel Capital, one of Silicon Valley's leading seed funds with the most incredible portfolio, including many previous 20 VC guests like Ryan at Flexport, Florian at Mesosphere, Alex at Clearbit and Dan at Convoy, whose episode's coming out this Friday, a very special one there.

• 0:41Harry Stebbings?

  As for Leah, prior to VC, she was a pioneer of the sharing economy with her founding of TaskRabbit, one of the leading online labour marketplaces in the US, where she raised over $37 million in VC funding in the process before their sale to IKEA last year. Due to this incredible success, Leah's been named to Fast Company's 100 Most Creative People in Business. I do also want to say a huge thank you to the wonderful Yuri at Forerunner for the intro to Leah today, without which this episode would not have been possible. But before we dive into the show today, what are we without a great night's sleep? And that's where Lisa comes in. Lisa is the Warby Parker or Tom Shoes of the mattress industry. They've done away with the terrible mattress showroom buying experience by creating this luxury premium foam mattress that's ordered completely online and shipped for free to your doorstep.

• 1:25Harry Stebbings?

  The 10-inch mattress comes in all sizes and is engineered with three unique foam layers for a universal adaptive feel, including two inches of memory foam and two inches of a really cool latex foam called Avena, designed to keep you cool. All Leesa mattresses are 100% US or UK made and for every 10 mattresses they sell, they donate one to a shelter. So go to leesa.com for your perfect night's sleep. And if you're like me and lose sleep worrying about the quality of conference calls and communicating remotely, then check out Zoom, the fastest-growing video and web conferencing service, providing one consistent enterprise experience that allows you to engage in an array of activities, including video meetings and webinars, collaboration-enabled conference rooms and persistent chat, all in one easy platform. Plus, it's the easiest solution to manage, scale and use.

• 2:10Harry Stebbings?

  And has the most straightforward, affordable pricing. Don't take our word for it, though. Zoom is the top rated conferencing app across various user review sites, including G2 Crowd and TrustRadius. And you can sign up for a free account, not a trial, just visit zoom.us. However, that's quite enough from me, so I'm now thrilled to hand over to Lea Buskey, general partner at Fuel Capital.

• 2:35Speaker 01

  You have now arrived at your destination.

• 2:38Harry Stebbings?

  Lea, it's such a pleasure to have you on the show today. As I said, I remember listening to your Stanford Entrepreneurship podcast many years ago and being so inspired. So thank you so much for joining me today.

• 2:48Speaker 02

  Thank you so much for having me. I'm excited to be here.

• 2:50Harry Stebbings?

  Not at all, but I want to start on two entries for you. And first, a question from the wonderful Mike Maples, who asks, what was the spark for founding TaskRabbit? And then secondarily, how did that lead to your position today with Chris at Fuel? Let's start with that.

• 3:04Speaker 02

  Okay, we'll start at the beginning. So my background is engineering. I was a software engineer at IBM for eight years before I had the idea for TaskRabbit. TaskRabbit came about one cold winter night in Boston. It was February of 2008. My husband, Kevin, and I were getting ready to go out to dinner when we realized we were out of dog food. And we had this 100-pound yellow lab named Kobe, who we kept very well fed. And it was cold and snowing outside and we had called a cab to take us across town to meet friends for dinner. And we thought, how are we going to get this dog food? This is such a simple problem. Why isn't there a simple solution? But in 2008, there was no App Store. The iPhone had just come out four months earlier. It was a completely different time. And so my husband, who's also in technology,

• 3:48Speaker 02

  and we always have these very geeky conversations in the house. We had this whole idea around, what if you could just connect with someone in your neighborhood right now? Maybe there's someone at the store and we should be able to use this new device, this new iPhone to leverage location awareness and the social graph and connect with them immediately. And that's really where the idea was born, out of the need for dog food one night in Boston. And so if you now fast forward 10 years later, it has been a decade since the inception of that idea. We have had an amazing journey. It's been incredible. Incredible ride. We were one of the first in the peer-to-peer space. We were one of the first to pioneer the sharing economy. And it really started because of my passion and my love for these new technologies emerging.

• 4:32Speaker 02

  And so when I thought about what I wanted to do next, I realized that I had put my head down in one company and one business and one technology for a decade. And I really, really miss that engineering and that technical side of me that really wanted to pick my head up and look around and continue to learn and be curious about new and emerging technologies. And that's really what led me to explore venture as the next step in my career. And then I was lucky enough to get introduced to Chris Howard, who founded Fuel Capital four years ago by a mutual friend, Megan Quinn, who runs the growth team at Spark. And she was the matchmaker. And she just knew that Chris and I would hit it off and he was looking for a partner and I was looking for a platform to join. And so it was a perfect match.

• 5:16Harry Stebbings?

  Well, I mean, I think there's one big takeaway for me from that. You have a lot to thank Kobe for from the dog food.

• 5:23Speaker 02

  That is so true.

• 5:24Harry Stebbings?

  But I do want to start today on the theme of transferable learnings and discussing kind of the many successful years in operations there with TaskRabbit. And I want to ask you a twofold question to start with. Firstly, and one from Sean Flynn at Shasta, in terms of how it kind of influences you stay, how does your time in operations influence founders you choose to back and why you choose to back them?

• 5:44Speaker 02

  Well, you know, TaskRabbit, again, was an incredible journey. And we were so early in the space. Sometimes I feel like, oh my goodness, were we too early? There were moments during that journey, during that life cycle of that company, that I worried. Maybe we were a little bit ahead of our time, maybe we were a little bit early. Maybe the consumer mindset wasn't quite right. Maybe the product-market fit wasn't working the way it should. And to persevere through each one of those moments and continue to push forward and innovate and educate and bring the customers with us, I think now ends up being a key criteria, a key attribute I look for in founders when I meet them. I love to sit across from a founder and look them in the eyes and just ask them, why are you here?

• 6:30Speaker 02

  What brought you to this moment? What is your story? You know, how are you purpose built for this particular opportunity that you're telling me about? And you realize that when a founder has the passion and the drive and the story that goes along with what they're building, that that perseverance is really going to shine through and that passion is really going to carry them through all of those walls that they're going to need to bust through, all of those hurdles that they're going to need to jump over. And so I'm really looking for that perseverance and that passion.

• 7:00Harry Stebbings?

  Can I ask, in terms of, you mentioned the timing there. How do you assess and evaluate timing today when looking at kind of really new, cutting edge technologies with fuel?

• 7:09Speaker 02

  Yeah, I mean, that I think is also an influence I've had from TaskRabbit. Because I was, as an engineer, so passionate and able to see the potential of these early technologies, mobile, social, location. Back in 2008, mashing up those three technologies, just, it wasn't something people were doing. We were at the early cusp of that. And so I've seen the value of being able to look ahead and have a vision for how you can utilize the technology to push innovation forward, to push humanity forward, really. And so I would say that's made me, as an investor, more curious, maybe willing to take on a little bit more risk from a technology stack and a technology standpoint.

• 7:53Speaker 02

  It also helps that I'm an engineer and I can understand the technical implications behind a technology stack. Because I think that if you can understand how something is built and you can build it yourself as a founder, then you're much more likely to be able to figure it out faster and to scale it faster as well.

• 8:11Harry Stebbings?

  In terms of kind of figuring it out faster and scaling faster, often that's also the slight role in, in some cases of the board and the VCs. And you've worked with many of our high guests and friends of the show. And so I'd love to hear, with both the operations background and now being in VC, how do you view the, the optimal relationship between VC and founder? And what that interaction really looks like, having had both?

• 8:33Speaker 02

  Well, you know, I've been lucky enough to have some incredible relationships with my venture investors and Mirac. From Floodgate Fund who led our seed round of investment. You know, I consider a great friend and a mentor. She led our seed round. She sat on my board for three years. She rolled off, I think, when we raised the Series B round. Because those early-stage investors, you know, they evolve. They tend not to stay on boards forever. And so I had great examples with Anne, with Rob Hayes at First Round, with Steve Anderson at Baseline, with Craig Shapiro at Collaborative Fund. I had great examples of relationships that I want to replicate with founders that I invested.

• 9:10Harry Stebbings?

  What about them makes you want to replicate them? What made them so special?

• 9:14Speaker 02

  You know, I think there's something, one, really special about the early stage. When investor is willing to bet on you and bet on your company before you're successful, before you have barely any traction, the belief that they have in you, I think that actually goes a long way. Wanting to work with someone who is aligned on your vision, is aligned culturally, has alignment around values and what's important to you as a person, as a company, as a CEO, as you build a team. I think those are all things that, all four of those people I mentioned, at the early stage, we just had alignment around. And, you know, I use them in different ways. Anne was on my board in the early days. She helped me get set up with dashboards and metrics

• 9:56Speaker 02

  and really be thoughtful about analytics and how to measure the business. Steve was someone I would call behind the scenes on the side if I was negotiating a partnership or a business development deal and just say like, how do I get this done? Like, this is what's going on. What would you say? What would you do? And so I think that finding people to bring around the table that have the alignment around vision and passion and values is key. But then figuring out what their superpowers are and how to utilize them in different ways is really the leverage point. And so now, myself as an investor, I love playing the role of the behind-the-scenes, the trusted confidant. I will tell you my entrepreneurial story. I will tell you what I did wrong.

• 10:40Speaker 02

  I will tell you what I wish I did differently. I will help you raise money. I, you know, these are all experiences that I've had that I really, really want to share with a Next generation of founder.

• 10:51Harry Stebbings?

  You mentioned that kind of the determining of culture fit and alignment with both entrepreneur and investor. I'm intrigued, in the fast moving world of deal cycles in the valley today, do you think that from both perspectives, founders and VCs have enough time to really make that personal determination? And how do you think about that now, investing and assessing that relationship as an investor?

• 11:11Speaker 02

  That's a great question. I think it depends on stage and size of company. I think it depends on the role you're playing. So at Fuel, we tend to get involved at the earliest stages. If you're raising a pre-seed round or a seed round or maybe a small series A round, that's usually our sweet spot. And so for us, things do tend to move quickly. We don't typically lead deals, although we have in the past. And so we're very collaborative. We're working with a lot of other investors that we co-invest with. And so things do move quickly. And I would say my entrepreneurial instincts of sort of trusting your gut, being really quick to make decisions, quick to make an analysis,

• 11:52Speaker 02

  to spark a relationship with an entrepreneur have all come in handy at this early stage. I think at the later stages, it's different. When you're raising a series A, a series B, a growth round, and someone's going to sit on your board for the next seven years, those end up being different dynamics and different relationships. And in some cases, you probably do have a little bit more time to make that analysis and make that assessment.

• 12:15Harry Stebbings?

  I do have to warn you, I did do a little bit of stalking behind the scenes for this interview. And one of the things that you've said before is that authenticity and transparency are now table stakes. But there is a gap. I'd love to hear, what do you think can be done to kind of greater enhance this? And where the gap is in the VC product now coming in afresh?

• 12:34Speaker 02

  Yeah, you know, I've thought a lot about this because, you know, as an entrepreneur over the last decade, I've pitched hundreds of investors, hundreds of VCs, hundreds of family offices and private equity, all the way up and down the chain. And I do feel like there is a gap, particularly at the early stages. And my philosophy is this, we live in a day and age where there's so much transparency. If you look at any social media platform, Instagram. Snap, Facebook, there is full transparency between you and your friends. But even more than that, you and people you follow, maybe people you don't know, but you feel like you know, right? Because you're following them and you're following their lives and you're following their stories. There's just no barrier any longer. I think that there's been a barrier in VC.

• 13:18Speaker 02

  There's been this black box for entrepreneurs that particularly first time entrepreneurs, as I was, that you may not know how to navigate. You may not know how to raise money or what it means to be in the middle of a fund cycle for a venture firm and how that could impact your investment or follow on or pro rata. And there's so many things, I think, that have been held close to the chest in the VC community that I feel like deserve transparency. And so one of the things that drew me to Fuel was Chris Howard and his values around authenticity and transparency and working with founders. And we've been doing a lot of work. I mean, it's early days of this next generation of Fuel, but we have a strong value system about how we want to work with people,

• 14:02Speaker 02

  what sort of transparency we want to offer. And I believe that's going to go a long way. These are things that I sometimes wish I had as a first time founder when I first started out.

• 14:12Harry Stebbings?

  Listen, I'm so pleased you said that about the black box of VC. My sole mission of the show is to kind of reveal, so to speak, the black box of VC. So I couldn't agree with you more with that passion. Speaking of kind of black boxes and kind of research, I got a brilliant question from your husband behind the scenes. He said, kind of digging a layer deeper on the relationship between founder and VC that we discussed, now as an investor, how do you balance wanting to get the best deal, but then also still having that kind of fundamental operator mindset, ensuring that you keep the best interests of the entrepreneur at heart? How do you think about that?

• 14:44Speaker 02

  Thank you, Kevin, for that question.

• 14:47Harry Stebbings?

  It's a tough one.

• 14:48Speaker 02

  It is, and you know, he knows that I've actually struggled with this before I decided to go into venture full time. I mean, how can I sit across from an entrepreneur when I've been an entrepreneur, when I've been in their shoes for the last decade? And I think there's a lot of empathy that I can bring to the table. And I think, you know, where I netted out on this is I strongly believe in Chris. believes this as well, that when the founder is successful, the company is successful and the venture investor is successful. And it happens in that order. So if you continually put the founder first, the founder's needs first, and understand how that is impacting the company in a positive way, then inevitably you as an investor are going to make out great as well.

• 15:32Speaker 02

  And I don't think it's about optimizing the deal and the structure and squeezing out that extra 50 basis points of ownership. I just don't think it's about that in the long run. If you're playing a long game, which you should be as a venture investor, because these are decade-long relationships, they're decade-long funds, and they take a lot of time to develop.

• 15:53Harry Stebbings?

  Can I ask, you know, it's founder first is always thrown around in the industry. I'd love to hear with you with the kind of decade or so of different fundraising meetings from family office to private equity to VC, what were the signs that made you concerned about, although founder-friendly as we all are, what were the signs that made you think that maybe one is more than the other and maybe one isn't, their kind of telling points?

• 16:14Speaker 02

  Yeah, I mean, I think in the earliest stages, because there's not a lot of data, you really have to rely on your instinct of how did you connect with this partner, with this investor? Do they understand the vision? Are they passionate about the space? Do they understand the impact that you're having? I think later stages, you know, you start to dive into the numbers and the unit economics. And, you know, for TaskRabbit, we always operated in a way that we were contribution positive and very, very fiscally responsible. And so we never really butted up against that as a question, as a problem in our fundraises. But I would say I was always looking for partners that kind of looked beyond the numbers and really wanted to be a part of the movement.

• 16:58Speaker 02

  I always saw TaskRabbit as something bigger than small jobs, tasks and errands. We were really changing the way people found work. And we were making waves in the labor markets, you know, all the way up to lobbyists and the government and congressmen taking notice. And so I was always looking for people that connected with me on that level. That story as well as the financial model and as well as the numbers too.

• 17:24Harry Stebbings?

  No, absolutely. I love that looking beyond the numbers, but as if we couldn't go more personal than asking your husband for questions. I would love to turn it on yourself now. We discussed some of the kind of influences from operations to VC. In terms of those first few months in venture, I'd love to hear, what's it been like on the other side of the table? And have there been some big surprises for you?

• 17:43Speaker 02

  There have. So first off, it's been incredible. I'm just so excited and so thrilled about this next chapter of my career. And I feel like, you know, Task Rabbit was my first baby. I now have two other children. So I consider myself with three children, Task Rabbit being the first. And so when you're in it and you're so deep in it, it's hard to think about being out of it and looking beyond it. Now I can say sort of coming out on the other side that I feel like this last decade has really prepared me for what I am meant to do. And I think that is because I am so passionate about emerging technologies. I'm so passionate about helping first time founders in particular, founders that don't have a network,

• 18:28Speaker 02

  that may feel like outsiders, that, you know, may not fit the typical mold or may not have the pedigree, may not pattern match with all the other entrepreneurs that investors see all the time. I certainly didn't match any of those patterns. I really am passionate about bringing more inclusion, bringing more diversity to the founder community and supporting these founders to build the next incredible companies. Because I believe that the next billion dollar business is going to come from a woman. It's going to come from a person of color. It's going to come from someone who does not fit the typical mold. And I really want to be there at the beginning for that person and support them

• 19:11Speaker 02

  and open up my network to them and help them succeed.

• 19:14Harry Stebbings?

  Can I ask, what've been the biggest challenges to you? We mentioned the first few months. What've been the biggest challenges to you in the first few months really scaling the learning curve? Have there been any that stick out?

• 19:23Speaker 02

  You know, so I would say some surprises as well, go along with that question. So, one of the things that surprised me the most was now that I meet thirty companies a month, minimum, I mean, sometimes it's more, sometimes it's a hundred, you're meeting two or three companies a day. You realize that there's so many reasons that have nothing to do with the actual company, with the actual entrepreneur, for reasons why you wouldn't make an investment. And I think as a founder, you go in and sometimes you can take it so personally, like, "Oh, why didn't this person invest in me? Like, we had such a great connection, a great conversation." But there's a thousand other reasons why an investor isn't gonna make that investment that have nothing to do with you or the company.

• 20:07Speaker 02

  They may already have too many investments in the space. They may not know enough about the space. They may not be educated enough. That was a big surprise.

• 20:15Harry Stebbings?

  Is that the responsibility, the investor then, to relay that to the founder, to ensure that they don't get disheartened?

• 20:21Speaker 02

  Yes, so here's the thing, here's my belief on this front. I've realized now that because you take so many meetings, you can't invest in everyone, right? We at Fuel do about a deal a month-ish, something like that. And so, if you're meeting hundreds of companies a month, like, and you're gonna do one deal that month, then those are tough odds, right? And so, when I sit down with a founder and I realize that this isn't gonna be a fit for Fuel, for whatever reason, I really just wanna help. That may not mean writing a check and participating in the round, but that may mean introducing them to other investors. That may mean going through their pitch deck with them and giving them feedback. That may be being a sounding board or brainstorming.

• 21:05Speaker 02

  I just wanna utilize that hour that I've committed to spending with that person in a productive way. Because I have so much empathy for where they have been and my experience over the last decade as well. And not every meeting is gonna be writing a check, but if every meeting can be helpful in some way, that's what I'm striving to do.

• 21:23Harry Stebbings?

  And then it also builds the kind of grassroots brand awareness for Leah being the helpful investor that gives time and kind of respects entrepreneurs' time.

• 21:31Speaker 02

  That's right, and that's so important.

• 21:33Harry Stebbings?

  What would you say some have been in terms of scaling that learning curve and really getting to grips with venture itself?

• 21:39Speaker 02

  Well, you know, it wasn't until I started pitching at my investors LP meetings that I realized my investors had investors. And then on sort of this side of the table, so Fuel has, you know, institutional investors that make up our fund. You realize that some of those investors also have investors, right? There are fund of funds, these LPs that run funds and they also have investors. I mean, there's many layers deep here of capital that I think was a surprise to me. Has been a learning curve about what those dynamics and what those interactions are. And then just getting ready to sort of go out and prepare for the next stages of Fuel

• 22:19Speaker 02

  and how we interact with our LP community, what we're looking for in our investors, what our investor makeup looks like. It's actually sort of similar in thinking to being an entrepreneur and pitching venture capitalists about investing in your business. It's just we're pitching limited partners about investing in our fund and what makes us different and where we fit in the ecosystem and what our portfolio looks like and what the returns have been. So that is a side I hadn't been exposed to, but it's been so much fun to get ramped up on and to learn about.

• 22:51Harry Stebbings?

  No, absolutely. I find the LP side of the world probably one of the most interesting when looking at the different kind of classes of LPs. It's fascinating. But before we dive into the quick fire, I do want to touch on kind of one of your core technical areas of expertise, being marketplaces. So I'd love to first define success within the realm. And what does a successful marketplace look like to you in its workings and mechanics?

• 23:12Speaker 02

  So thank you for that question. I mean, I did a whole analysis and write up of something that's been in my head for many years around the anatomy of a marketplace and how the anatomy of a marketplace has really changed over the last decade. And so when I think about successful marketplaces, I think about marketplaces that have liquidity between supply and demand. And marketplaces are complicated and that's what I love about them because as soon as you scale up supply, you need to match demand with it. And if a marketplace is imbalanced. In any way, then it's like a leaky bucket. You're losing customers, you're losing suppliers, and you have to move so, so quickly to kind of patch that bucket up and scale up both sides at the same time.

• 23:55Speaker 02

  So things that I look for are metrics around liquidity. What are the ratios between supply and demand? What do they need to be now? What do they need to be at scale? How do you drive efficiencies in the operations, in the connections between supply and demand? And how do you scale those efficiencies over time so that the ratios get better and better and better? What are the network effects as the marketplace grows and scales? How does that make everybody's experience on the marketplace even better? And then the last thing I look for is around unit economics and business model of marketplaces. And this is something maybe that I'm a little spoiled with with TaskRabbit, because we were always so cognizant of unit economics and business model and operating with positive margins,

• 24:39Speaker 02

  that I really believe the healthiest marketplaces can operate that way from the beginning. Sure, there are times that you're going to want to scale up and pour some gas on the fire to get to scale, to get more demand. But if you can't match the supply quickly, none of that is going to matter. And so you really have to be ready to scale. And you have to know what those underlying metrics are to understand if your marketplace is healthy or not.

• 25:03Harry Stebbings?

  Can I ask, what does ready to scale look like in marketplaces? Is there an inflection point which defines kind of gas on the fire time?

• 25:10Speaker 02

  Yeah, I think it really comes down to, do you understand unit economics? Do you understand how all the building blocks fit together? And if you were to add 100,000 customers tomorrow, would you know how to build up the other side to match it? And if you can answer those questions, and you can operate in a positive margin way, and you know how to get those metrics to work, then I think you're ready to scale. If you know how to get those customers, as I said, you know, pour some fuel on the fire, can you match both sides in the same way?

• 25:40Harry Stebbings?

  And then final question before we move into the quickfire. You mentioned the balance there between supply and demand side. I'm always increasingly worried with marketplaces whereby one side is always incredibly high MPS and the others can be very low. And it can be that terrible equi- In some ways, how do you think about the balancing of that MPS across both demand and supply?

• 25:59Speaker 02

  Okay, so no one is ever happy with you. If you change things on one side and customers are really happy, chances are that on the other side of the marketplace, you've really made someone mad. And that that is also just the complex nature of a marketplace business. Now, that's not always the case, but we certainly saw that with TaskRabbit all the time. If customers were having a great experience, that in some cases could have been at the detriment of the supplier. If the suppliers were having a great experience and were, you know, making a lot of money, that sometimes could have been at the detriment of the the customers. And so it's a tough balance. It's a tough mental balance, too. As a management team, as an executive operating one of these marketplaces,

• 26:41Speaker 02

  to never quite feel like you're winning on both sides. But I think it's the nature of the business. It's one of the pieces that make them so complex. And I think that's okay. I think it's okay that sometimes the MPS for both sides are the inverse of each other. And you just have to balance that over time.

• 26:59Harry Stebbings?

  Well, I'm thrilled that my caution is justified and I'm very happy to hear that answer. But I do want to move into my favorite being the quickfire round. So I say a short statement. As you know, sixty seconds per one. Are you ready?

• 27:11Speaker 02

  I'm ready.

• 27:11Harry Stebbings?

  So tell me, I need to read more this new year. What should I be reading? Favorite book?

• 27:16Speaker 02

  So this is a book I actually go back to a lot. It is a book that literally changed my life. I read it over ten years ago, right before I founded TaskRabbit. And it's called Founders at Work by Jessica Livingston. And I was working at IBM as an engineer, living in Boston. I knew nothing about startups. I knew nothing about the startup community. I didn't know anything about Y Combinator or any of these incubators or any of these companies. But I read that book and I so connected with the authenticity of these founders' stories. And their journeys really resonated with me. And it's what inspired me to really quit my job at IBM and start my own company.

• 27:58Harry Stebbings?

  How's becoming a parent changed your view of the world and what you invest in?

• 28:03Speaker 02

  Changed my views dramatically. I think that as a parent, I've realized that I want to leave this world in a better place, not just for me and my children, but my children's children and beyond. And so for me, I've gained, I think, that perspective on generational implications that technology can have. And so I think it's changed my perspective on businesses to invest in, the potential of impact a business can have, not just financially, but on humanity. And certainly, I think, given me a lens to assess companies through, to look at companies through and understand if I'm the best partner to help them, because I'm looking for something really special that's long lasting.

• 28:48Harry Stebbings?

  No, I completely agree. One of the most special things in the world from the guy that doesn't have children. But what taught me, biggest mentor and how did that relationship come about?

• 28:57Speaker 02

  My biggest mentor, wow, it has to be Scott Griffith at Zipcar, who in the early, early stages, again, I hadn't left IBM yet. He kind of took me under his wing and he gave me the courage to quit my job, to start TaskRabbit. He let me sit at Zipcar office in Boston for free for the first year we existed. And I really got to see what a CEO looked like, what it meant to be a CEO, how he interacted with his team, how he inspired, how he operated on a daily basis. And I'm just so grateful for that time and that mentorship that he gave me early on. And we've still stayed in close touch today. So he's just been a fantastic person to have in my life.

• 29:37Harry Stebbings?

  If there was one thing that made you choose Chris at Fuel as the next move, what would that one thing have been?

• 29:43Speaker 02

  People are the most important thing in anything you do, in startups that you join, in co-founders that you bring on. And when I met Chris at Fuel, I realized that he is just a great person. He just is authentic. What you see is what you get. There's 100% transparency and we share values. And I really wanted to work with someone, I wanted to work with people, that I was excited to be around on a daily Basis and build something really important together. And after spending more and more time with Chris, it was very easy to see that he was that person for me. And it's just been a fantastic partnership.

• 30:27Harry Stebbings?

  Penultimate question and one from Craig Shapiro, one of your investors. What are the secrets to making a husband and wife partnership work so well?

• 30:36Speaker 02

  Kevin and I work really well together. Anyone who has worked with us will tell you this. In fact, people at TaskRabbit sometimes did not know that we were married. And Kevin sat in exec meetings. He reported directly to me. He scaled the early days of our IT and servers and engineering team. And, you know, I think it just really comes down to, of course, respect. But then also realizing sort of what each person is really good at, where their strengths are, where their weaknesses are, where their vulnerabilities are. And when you're married to someone and you're with them 24/7, like you have a really, really deep, insightful perspective on those things.

• 31:17Speaker 02

  And so if you can leverage that perspective and that insight to work together really well and sort of say like Kevin is really, really good at the tech, deep technical aspects of scaling servers and IT and that engineering team. And that was an area that I'm not as strong in. I'm more of a programmer, a designer, an engineer. So we complemented each other very well from a skill set standpoint. But then from an emotional standpoint as well, just having enough respect to kind of support each other where it's needed, I think is really key.

• 31:49Harry Stebbings?

  And then I want to finish on your most recent investment. I'm not sure if we can do one that's publicly announced and why you said yes.

• 31:57Speaker 02

  Yes, so a recent investment that I'm very excited about, and I actually cleared it with them, that I could mention it, is a company called Bark. And they have created a monitoring platform for parents for their children's social media accounts. So they plug into over 20 different social media platforms, like Instagram and Snap and Facebook, Twitter, et cetera. And they do monitoring. Utilizing natural language processing, machine learning algorithms, artificial intelligence, and they will flag and alert parents if there are any issues. So, great example would be if a child is getting bullied on social media.

• 32:38Speaker 02

  If a child is having any sort of trouble or disturbing behavior, this platform protects the child's privacy. It won't actually show you what exactly is being said, but it'll alert parents that there's an issue and they need to have a conversation with their child. And what was really compelling about this company is Brian, the founder, is a technical founder. He's a second time, third time entrepreneur, a serial entrepreneur. And he has a vision for this business that is so high impact and so important. And even in the early days, he had received over 25 letters from parents thanking him for actually saving their children's lives by being able to alert them that there was an issue and they were able to intervene before, you know,

• 33:23Speaker 02

  some really troubling, concerning behavior had happened. And I just think that this is a great example of where technology has maybe broken down in some places, but we can also use technology to kind of support and fix and provide a safety net for this next generation of children that are growing up from the very young ages with this as part of their lives. So I'm really excited about their mission and also the technical aspects of what they've built.

• 33:48Harry Stebbings?

  Absolutely. I love that. Doing well by doing good. But Leah, I want to say, as I said, I was so inspired by your talk many years ago at Stanford, and it's been such a pleasure to have you on the show today. So thank you so much for joining me.

• 33:58Speaker 02

  Thank you so much, Harry. It was so much fun.

• 34:02Harry Stebbings?

  One of those shows where I really remember how much I love what I do. And if you'd like to see more from Leah, then you can on Twitter by following her on at @labunleashed. Likewise, we would love to see you behind the scenes here at the 20 Minute VC. You can follow us on Instagram at @hstebbings1996. It'd be fantastic to see you there. But before we leave you today, what are we without a great night's sleep? And that's where Lisa comes in. Lisa is the Warby Parker or Tom Shoes of the mattress industry. They've done away with the terrible mattress showroom buying experience by creating this luxury premium foam mattress that's ordered Completely online and shipped for free to your doorstep. The 10-inch mattress comes in all sizes and is engineered with three unique foam layers for a universal adaptive feel, including two inches of memory foam and two inches

• 34:45Harry Stebbings?

  of a really cool latex foam called Avena, designed to keep you cool. All Leesa mattresses are 100% US or UK made, and for every 10 mattresses they sell, they donate one to a shelter. So go to leesa.com for your perfect night's sleep. And if you're like me and lose sleep worrying about the quality of conference calls and communicating remotely, then check out Zoom, the fastest-growing video and web conferencing service, providing one consistent enterprise experience that allows you to engage in an array of activities, including video meetings and webinars, collaboration-enabled conference rooms, and persistent chat, all in one easy platform. Plus, it's the easiest solution to manage, scale, and use, and has the most straightforward, affordable pricing. Don't take our word for it, though. Zoom is the top-rated conferencing app across various user review sites, including G2

• 35:29Harry Stebbings?

  Crowd and TrustRadius, and you can sign up for a free account, not a trial, just visit zoom.us. As always, we so appreciate all your support, and we cannot wait to bring you Friday's episode with Daniel Lewis, founder at Convoy.