The 7 Questions Interview Series: Data and Venture Capital
The 7 Questions Interview Series: Data and Venture Capital “The 7 Questions Series” is an investigative content series where we seek out key leaders in a specific industry and/or subject matter expertise area and ask them 7 key questions that inquiring minds want to know in terms of how they view data as part of their investment process. However, there is a twist to these questions: we provide the interviewee with a hypothesis for each question to help frame and set context for their answer.
Data and Venture Capital Series Objectives
The objective of this series is to establish direct connections with venture capital organizations, angel investors and M&A specialists across the globe and ask them the same set of 7 questions regarding their orientation when looking to invest or investing in companies. We want to derive insights from their direct experiences and expertise that will help companies, both B2B and B2C, at all stages of their evolution. We are also curious to see if their answers are similar or different. These interviews will be featured on their website as part of an ongoing series.
Interview with Jonathan Bixby, General Partner at Stanley Park Ventures
Jonathan Bixby is currently the General Partner at Stanley Park Ventures. Along with his twin brother Joshua Bixby and longtime friend Mike Benna, Jonathan invests out of both Stanley Park Ventures and Oak Mason Investments, investing in people that are changing the world in Canada and abroad.
Jonathan was previously an entrepreneur-in-residence at Vancouver-based startup accelerator GrowLab. Prior to GrowLab, he was the CEO and cofounder of Strangeloop Networks, creator of the first network appliance and cloud service for accelerating dynamic web applications. Under Jonathan’s leadership, Strangeloop raised $21 million in financing. Strangeloop was selected the Best Employer in British Columbia for a record five straight years (2008 to 2013). In February 2013 Strangeloop was acquired by Radware (RDWR).
Prior to forming Strangeloop, Jonathan cofounded IronPoint Technology, the largest content management company in the country. As chairman of the board, Jonathan led IronPoint from startup to successful acquisition by The Active Network (ACTV) in 30 months.
Jonathan also sat on the board of the Vancouver Enterprise Forum, the final jury for the New Ventures BC competition and the board of Energy Aware. He is a Business in Vancouver Top 40 Under 40 award recipient.
Robin Smith: Tell us a bit about you and your firm.
Jonathan Bixby: Stanley Park Ventures is a startup studio that turns great ideas into profitable companies.
As co-founders, Joshua, Mike, and I work closely with entrepreneurs, providing them with vetted ideas and a proven playbook for execution. We help find the right product/market fit, and leverage human and financial capital. We assist with all of those time-consuming tasks, freeing them to focus on creating sustainable businesses.
Robin: What types of companies, industries and areas are you investing in today? In the near future?
Jonathan: Currently our portfolio companies consist of two FinTech companies. The first, Koho, provides an alternative to traditional banking, and the second, Lendful, is a peer to peer lending platform disrupting marketplace lending. Our portfolio also consists of one HealthTech company, Blue Mesa Health, which tackles chronic disease with a focus on diabetes by providing a 16-week program delivered with digital therapeutics. Another company in our portfolio is Pampr, currently undergoing a rebranding as Revive, which delivers mobile massages on demand in your home or office in various cities across Canada.
Our focus is not on one specific area of tech or geographical location, but rather insuring the best timing and market fit while executing with the most intelligent, driven and passionate entrepreneurs. Our approach with a Startup Studio model insures that we find these people through a vetted process and can reach the highest potential for the business.
“If you can’t defend your financials with data then your chance of success significantly decreases.”
Robin: How valuable is data collection to today’s venture capitalist?
Jonathan: Data drives everyday decisions in our company. At Stanley Park Ventures, we provide checkpoints in our process that allow any necessary pivots to be taken in a timely matter. Rather than wasting time holding on to an idea, our process ensures these decisions are made early on. Data is often a the deciding factor for us: Cost of Customer Acquisition (CAC) and Lifetime Value (LTV) are crucial measurements, especially for B2C operations like Koho, Lendful and Pampr. You can have a great team and product/market fit, but if you’ve miscalculated CAC, you can sink as fast as if you built something people don’t need.
LTV/CAC might not be the number one factor for determining the success or failure of a company, but it must be very high on an entrepreneur’s list of priorities. Figuring this out as soon as possible can help shape the product itself, making it easier to grow the company and move quickly towards profitability. A great example of this approach is captured in this blog post.
When investing or fundraising, your financial model needs to be airtight. It must include cash flow, balance sheet and income statement, the accuracy of these data points could determine whether or not the financing is made. If you can’t defend your financials with data then your chance of success significantly decreases.
Robin: Does a company’s technology matter when choosing to invest?
Jonathan: As a Venture Studio, we are creating companies from scratch. That said, we rely very heavily on reusable technology components for each of these businesses so that we don’t need to reinvent the wheel for every company. It has become very cheap to start a company because there is so much technology out there to get you started. We are fundamentally technology investors so the focus is always going to be on a great founding technology team. Being good at writing code is one thing but being able to listen to customers and build a product that people actually enjoy using is much harder. We are very focused on business-facing technologists.
Robin: What industries are leveraging technology and data in order to innovate, grow and disrupt? Are there any industries that aren’t leveraging data that should?
Jonathan: We are really interested in this dynamic. We think that the industries that we are choosing to invest in are not leveraging data in an effective way. Specifically, the FinTech space has a ton of data but we believe that it can be used more effectively – specifically on the customer acquisition side.
In HealthTech we have a lot of great data around the effectiveness of certain clinical approaches. But at the same time, we are still in the dark ages around others. Finally, the insurance space has a ton of data but again we need to really focus on the specific areas that matter.
“Every business needs to be data centric. If you aren’t focused on listening to your customers from a data centric perspective then you are going to get your butt handed to you.”
Robin: Why are some SMBs late in adopting technology? Does this hinder your investment decision?
Jonathan: Our experience selling to SMBs is that unless it is core to their business, then good enough is good enough. At Stanley Park Ventures our approach has been to invest in companies that can hit revenue quickly through B2C or companies that can monetize throughout that same channel while building out solid Biz Dev pipeline in the larger B2B space. We have yet to invest in a company that specifically focuses on SMBs.
Robin: Are you seeing more data-centric startups? Might there be more in the future?
Jonathan: Every business needs to be data centric. If you aren’t focused on listening to your customers from a data-centric perspective then you are going to get your butt handed to you. We preach this from day one with our portfolio companies. The goal here is to offer a compelling product to an end customer that loves what you do: data is key to this. I truly believe that every startup needs to focus on this. Paying lip service to this in a presentation is very different than really living this from a product, marketing and development perspective. You need to have data collection, analysis and action as a core part of your business.
About Stanley Park Ventures:
Stanley Park Ventures is a startup studio that turns great ideas into profitable companies.
As co-founders, we work closely with entrepreneurs, providing them with vetted ideas and a proven playbook for execution. We help find the right product/market fit, and leverage human and financial capital. And we assist with all of those time-consuming tasks, freeing them to focus on creating sustainable businesses.
Jonathan’s Social Outposts:
Stay tuned for more expert interviews as part of VL’s ongoing 7 Question Series!
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