Why Ann Miura-Ko is “the Most Powerful Woman in Startups”
Ann Miura-Ko is a founding partner at Floodgate, a seed-stage VC firm. She’s also a founding member of All Raise, a non-profit committed to improving diversity in both funders and founders. Among her early investments are Lyft, TaskRabbit and Modcloth, which, as our recent conversation shows, are only part of the reason Forbes called her “the most powerful woman in startups.”
We talked with her about her teaching position at Stanford, how she thinks about the future, and how she makes investment decisions. Ann will be speaking at this year’s Lean Startup Conference in October about all of this and more.
Let’s start off with how and why you helped found All Raise and what its mission is.
I’ve been in venture now twice. The first time was just for a couple years, from 2001-2003, before I went to grad school. I was in Boston, working for the first time in venture capital as an analyst for this guy who was incredible and an amazing mentor. But I wanted to see if there were other incredible people in the industry who were women since I hadn’t encountered any. There were none in the firm, so I remember asking him if he knew of any general partners who were women in the Boston area. In a place where there are many, many venture capital firms, he couldn’t think of a single female general partner.
I had a mom who had very low tolerance for complaining about whether or not there were people like me either in class or at work. She always told me, “That’s not where you’re supposed to make friends anyway. It’s fine that you have no friends in class – you’re there to learn.” But when I returned to venture in 2008, I remember wanting to see people who were similar to me in some sense, but I didn’t see that as much as I would’ve hoped. I was in California at that point, where there were a handful of women, which to me was already really inspirational. It felt like it was the right time and the right place to start putting a voice to that. For a long time, I felt like I should just be the change that I wanted to see, but I couldn’t do that by myself. The more people who could join me on that journey, the more powerful we could be together.
Are those the women who joined you to create All Raise?
Yes. We got started over casual breakfasts. It was actually really driven by Aileen Lee from Cowboy Ventures and Jess Lee from Sequoia Capital. This was around the time when a lot of sexual harassment issues were coming to light. We just looked around the table and Aileen said, “I think we should do something more than sit around and have breakfast.” That was when different initiatives started popping up. Initially, it was people picking up and doing things with one another that felt right. I was working on putting together dinners with potential female operators who were interested in becoming venture capitalists. I was getting calls from all these women and was giving them different kinds of advice, but the same message kept coming out over and over again. So I thought, “Hey, if we could put all these women in one room, deliver this message to a lot of them, and then also bring in women who’ve just been through that process. How amazing, how empowering would that be?”
What’s the message?
Talking to them about what’s normal at a venture capital firm and what isn’t, helping them to understand how they can have power within an organization, and making sure that they’re set up for success when they walk in.
It’s answers to questions like: What do you look for in a partnership? What questions can you ask? What do you need to know about your compensation? How do you develop power within a venture capital firm? Where am I in the interview process? Because it takes a really, really long time to get to know a venture capital firm, and you need to understand the dynamics going in. Also, it’s not unusual for the interview process to take months. So the other thing is how you look out for a firm that’s really only trying to hire a woman to check the box against a list of things that they need to fulfill versus looking for you, with all of your expertise and the things you know, and putting the right resources behind you to make sure you’re successful. That was what I worked on in the initial days.
Eventually, I joined Jenny Lefcourt in the initiative called Founders for Change, where we’re amplifying the voices of the founders who are demanding greater representation and diversity not only within their organization, their cap table, and their board rooms, but also in terms of the makeup of all of these organizations. What I was interested in seeing was that a lot of these founders believe that they’re not just creating technology, they’re creating change and culture. They believe they need the same support from their investors, and that means investors and funds have to represent that mindset. Well known founders within Silicon Valley demanded this kind of change across the board, and if they wanted to see it internally, they also had to see it within the organizations that touched their group. I thought that the voice of the founder was so powerful in delivering that message back to the venture firm: if we’re the founders, we’re going to be looking at these issues as we evaluate our sources of capital.
Let’s move to Floodgate now. To begin with, I’m curious about the company name and how you came up with it.
We were originally called Maples Investments, because my co-founding partner is Mike Maples, and we had that as a placeholder. At one point he said to me, “Hey, do you think this is going to hold you back?” And I said, “Yeah, unless we call it Maples-Miura-Ko Investments, it’s probably going to hold me back.” He then said he had no attachment to the name and wanted to set up our partnership for success, so we started looking for another name. We worked with this guy who’s since passed away but who was the brains behind naming the Kindle and TiVo, among other things. He had this amazing way of coming up with the essence of an organization and what you’re trying to do, and he had a whole list of names. We were really drawn to Floodgate because we believe that we’re at the headwaters of change. That was the image that we had in our minds as we were naming the organization.
How does Floodgate complement All Raise? Do you think of them as sort of a pair, or are they totally separate?
For me, again, it’s always been if I don’t see something that works for me, I can be the change. I can be the person who represents the thing that I want to see. Before we started Floodgate, I was actually thinking about starting my own company. I was getting my PhD in mass modeling of cybersecurity, and I wanted to start a company in that space. This opportunity kind of fell in my lap, and it was during a period when I knew that computing was becoming cheaper because I was going through the PhD process. I also knew that there was massive opensource software that was available. That meant that if the change was starting on the founders side, then there had to be a change on the financing side.
I remember when I was talking to Mike Maples about starting Floodgate, I got a lot of people telling me that I should join a large venture capital firm with a good name and work my way up. What I did instead was what I imagine other founders feel when they see the right opportunity in front of them and everyone’s telling them it’s a stupid idea. You dig in your heels and you say, “Of course this is the right thing to do.” For me, it was the worst possible timing. I had not finished my PhD. I had an 18 month-old daughter. I think a few months after I started Floodgate I was pregnant with my second child. And so, I’m trying to finish my PhD, start this venture firm, and carry my second child. It’s complete chaos. But, the belief in what we were building was so pure and so urgent that it’s something that I’m still proud of to this day. In 2008, as the financial crisis was happening, we saw this opportunity and we pursued it. To me, that’s very representative of how I believe founders react to different situations, and an example of authentically believing in a business. Our focus and our values came out of that, and the moment—like the one so many founders have – when Mike and I were the only two people in the firm. We didn’t have signage on the door front. We had to unclog the toilets. Everything was either him or me.
What are Floodgate’s values?
One is: do what’s right. We’re always so close to company founders because we’re there at inception, so we feel like the most important thing for us is to do what’s right, all the time. Second, we believe that greatness is a decision. It’s not something that just sort of happens. You have to wake up every morning and decide to be great and decide to demand greatness from people around you, and that’s something that we’re fundamentally committed to.
We know that the founder’s job and founder’s work is actually their life’s work. Otherwise, they wouldn’t be doing this. And so, our third value is that your life’s work is our life’s work. We want to treat the entrepreneur’s project or company not as a deal but as if it is our own life’s work as well. Our fourth value is that we seek truth over tribalism, so we have a very fundamental philosophy that truth doesn’t come from any particular place or title. Every single person who walks in the door might have seeds of truth, and it’s our job to seek that out and to understand it. It’s not about the most popular person or the most popular idea, but rather what is true. That gets back to the idea that when we first started Floodgate we always thought of ourselves as being owners and not just employees, and what that comes down to for me is bias for impact. You’re always thinking through how can you have the most impact instead of how you can keep yourself busy.
Does that play in to the companies that you choose to invest in?
Yeah, I mean there’s a lot of that because when we think about how we invest in companies, we’re not thinking about just a product that people want. To me, that’s only a small piece of what we’re investing in. We invest in a company that I hope will have a legacy 30, 40, 50 years from now. Those values reflect that, but it goes further. When I’m assessing a company, I think of it as a full stack. We start off at the very bottom with the team that we want to see. Who is in that team? What are they capable of? Are they able to build the things that they want to do? Are they all-in? The second level is what we call proprietary power, which is the secrets that they know that no one else knows? Many of those are earned secrets, so it’s because they’ve had experience in that particular space. Probably the first question that I ask founders is why is this your life’s work? And, that usually elicits something around the secrets that they know are true.
Above that is product power, and for me that’s about what is the path to getting to product-market fit? Then above that is business model power—so, how do you make money? How do you not only make money in terms of revenue and revenue growth, but ultimately how do you develop profits and a profit center? Above that is company power, which is really about your organization and your decision-making processes. How do you develop power within your organization to understand your values and how you’re driving towards the future, and also what is the future that you’re driving towards and why? And then the last, and potentially most important, is category power: what is a category that you ultimately define as a company? How do you develop the rules of that game so that you have the advantage? And when people think of that category, why is it that they think of your company? All of this helps you become the king of that category. Those are all the things that we think about when we’re assessing a company. Now, many of those parts of that stack get developed much later in building out the company, but we want to see signs that a founder and their team can actually develop all of those skillsets.
You also teach. You’re obviously very busy, so I’m curious why you do that in addition to everything else, and how it fits into the whole picture. What you can do in that kind of a setting that you can’t do at Floodgate or at All Raise?
Well, I think it’s a few things. I teach a lot. This last year, I taught a blockchain class. I’m a co-director now for the Mayfield Fellows Program, which runs for nine months at Stanford. And then I taught a class called “Intelligent Growth in Startups” in the engineering department. I think the reason I like to teach is when I have to explain things that I know to other people, it crystallizes what I know and what I don’t know. The second reason is when you get to know students on a very fundamental and personal level, particularly in the Mayfield Fellows Program, where I’m teaching 12 students for nine months, you develop a deep sense of optimism about the future. I love the way that these students look at the world. It reminds me of how I used to look at the world and see all the possibilities. I think as you enter into your 40s and 50s, you just become naturally a little bit more grouchy and a little bit more set in your ways, and I think teaching keeps you forever young. I love that feeling of optimism. But also when I’m teaching something and someone has the courage to question it, they will make me think again. Without that, I feel like I would just get more set in my ways. So, teaching is important to me in order to maintain optimism about the companies that I’m seeing and the possibilities for the future.
Looking at the future in another way, you have three kids now. Do you keep them in mind you think about which companies to invest in and the world we’re all creating for them?
In some sense, I love looking at the world and trying to imagine where things will go in the future, and obviously my kids are a part of that future. It’s influenced me a lot in terms of how I think about educating my kids, but not so much the investments that I make today, because a lot of those investments are mostly for adults. They’re products that are applicable to the people here now. We might think about the impact that those businesses will have on kids in the future, but for me, it really comes back to the education piece, which I think a lot about. I think a lot about literacy and computer science and math and statistics. I think a lot about what are the human elements of work that won’t be ever replaced by a machine, which is really around judgment.
The future is also about the ability to see around corners and imagine, so I think about the skillsets my kids need that don’t get taught in schools today that I wish were taught in schools. I think about the places like Stanford, for example, where we could start to talk about ethics and how do we get technologists to engage in that conversation. Those are the two fundamental ways that, as I work as a VC and as I work as an educator, I try to incorporate how I want my kids to grow up into the work that I do.
Is there an area you think is in desperate need of innovation that no one has dipped their foot into yet? Some sort of pet obsession you wonder why no one is fixing?
Oh my gosh, I have a lot. On the consumer side, I have a real interest in how society has become much more secular and the hole that’s been left since people don’t go to church anymore. Whether that’s the opportunities for service, the opportunities to connect with people who are not like you, the opportunities to teach your children on a very regular basis the fundamentals of what is right and wrong and to have some sense of universal values. I think that there is a huge hole there, and you see that hole being filled in kind of darker ways. I wonder if there’s more of a positive opportunity in that space. I haven’t seen anything, but I feel like there’s a hunger for more connection. You hear about the epidemic of loneliness, and I think these ideas are all very much tied to one another.
Another area I’m interested in around connecting and having a space to express yourself is the future of remote work. As people work much more remotely and in distributed teams, there’s this very unsolved problem around knowledge management. This idea pops up once in a while and people become interested in it, but people still use SharePoint from Microsoft and the file sharing companies haven’t really solved how to maintain a knowledge base. So, as people become remote workers, how do you express what your expertise is? I think those things become really, really important over time, so I’m looking for solutions in that space as well.
Okay, last one. What’s your go-to method for stress relief?
I love playing piano. I’ve been playing since I was four, and I’m trying different styles of piano now because I’ve been mostly a classical pianist all my life. I’m interested in that as my own personal form of meditation. I’ve been really bad about being able to completely clear my mind, but I’ve realized that whenever I play the piano it’s just me, the notes, and what I’m trying to play. It’s probably as close to meditation as I’ll ever get.
The Lean Startup Co. is thrilled that Ann will deliver a keynote at the 2019 Lean Startup Conference in San Francisco on October 23-25, 2019.