All Things Angel Investing #18
Interview with Anand Chandrasekaran
We’re back! It’s been a little while since our last edition, but we’re excited to return and to announce our first sponsor: On Deck's Angel Fellowship (ODA). ODA is where the best angels go for networking, education, and deal flow. Learn more and apply for the next cohort here.
In today’s edition, we’re featuring an interview with Anand Chandrasekaran, a top Silicon Valley product manager and (very) active angel investor.
Trends & Call-Outs:
One recent trend has been the rise of founder-managers, current founders not just angel investing, but actually launching funds. A recent tweet and article from Jason Lemkin on this caught my attention with Jason stating in response to the trend: “your founders stock should be your best investment”. As angels, how would you feel about founders also actively running funds? Can they manage both, or is it a distraction? Is it fair that investors diversify while founders are encouraged to be so concentrated?
Check It Out:
Read: How much angel investing is too much for founders? (Jason Lemkin)
Listen: Bessemer’s Byron Deeter’s thesis for investing in Twilio at the seed (20VC)
An Interesting Thread:
Paul Graham sparked an interesting conversation on investing in companies at different stages. I’ve often found myself honing the mental flexibility to go from getting excited about market dynamics and an early MVP for a pre-seed company to diving into cohorts for a Series A business with revenue.
Interview With Anand Chandrasekaran:
Anand is the Executive Vice President at Five9 and has been a founder/ product exec for the past 17 years. He has been investing and advising companies such as Rupeek, On Deck, Khatabook, Dealshare, Smith.ai, Fiddler Labs, ClassPlus, LocoNav, InVideo, and Two Chairs.
From Small-town India to Stanford to Angel
I grew up in India, did my school and college there, and came to the US for graduate school. I later learned I was the first student to go from my college in a small town called Coimbatore to Stanford in 70 years -- I realized that it was probably because nobody had tried it earlier. Sometimes, if you just try something crazy, in the worst case you are no worse off than where you currently are. And if it actually happens, then you know there’s a way to go make it happen.
My grandfather was a huge role model. He was a doctor who studied in British-ruled India and ended up going to practice at a tiny village. While he could have gotten a more lucrative job in a bigger city, he chose to stay and help his local community. He taught me generosity. Today, I try not to make everything about my work transactional and instead try to focus on being generous and giving back.
Over my career, I’ve worked on or led teams that have worked on 5+ products across B2B and B2C spaces that have 10+ million active users. And in the case of Messenger, we hit a billion user number while I was at Facebook. Currently, I run product management, design, and product strategy for a publicly traded software company Five9 (we added $10 billion in valuation over the last ~24 months as digital transformation efforts accelerated during the pandemic).
Motivations for Angel Investing
While I was at Stanford, my computer science professor Rajeev Motwani was known for believing in and supporting technical founders. As an angel, I strive to play that same role by being their first champion. I rarely tell a founder that their idea is bad because while some ideas are early, late, or partially thought-out, I think every founder has the right to believe in their dream. Founders need believers, allies and supporters early on. I strongly believe product-market fit for an idea usually comes from founders’ will-power more than anything else.
Embracing The Beginner's Mindset
With my investments, I always try to take an optimistic viewpoint. I try to consider a world view in which this company I am looking at succeeds. If I want to live in that world, if I am more excited about that world than today, then I lean in.
I also have a healthy skepticism for experts. I have observed that “experts” tend to go around looking for the problem assuming they already have the solution. I think that's probably a reason why so many incredible things are invented by people who are not experts because they're open-minded and looking for the biggest problem to solve, rather than the problem they think they know a great solution to.
Anecdotes as an Operator
One practice that has really helped me is to not be afraid of tackling new challenges, even if you don’t know where to start. Almost always you have skills that are transferable. For instance, initially, every product I built was iOS-first. However, when I moved to India, iOS was sub 10% of the user base. I hadn't even considered building Android-first until I moved to India. It was a huge paradigm shift, but I decided to dive in headfirst and started using a much older Android phone so I could do QA on the same OS that a majority of my customers were using. I’d also point out that the transition to cloud happening today is a tectonic shift similar to the PC to mobile shift pioneered by the launch of AppStore over a decade ago.
Balancing work and investing
Productivity is really about calendar management. I’m rigorous about blocking my calendar off. I try to only focus on things where I am the best person to add value.
Lessons learned as an Investor
A few lessons come to mind. First, as an angel, you make your money from the successes but your reputation on the failures.
Second, is to look for patterns. As an example, I have observed two patterns with investments I've done that have worked out. One is an obsessive focus on product-market fit from the earliest stages. As an example, I’ve worked with many marketplace startups that focused exclusively on being live in one or a small number of cities for many years. They were figuring out their playbook before they tried to shift into a high growth (and high-burn) phase. Perfect the playbook first.
Third, I’ve come to appreciate the importance of founder chemistry. I really encourage founders to make time to proactively figure out and work on their chemistry so they can have fun on their journey.
Finally, I try to keep in mind that while I have lots of mental models, patterns and generalizations, venture is ultimately a business of exceptions.
Feel free to reach out to Anand if you want to get in touch. He’s accessible on LinkedIn, Twitter, and over email by anand.chandrasekaran@gmail.com.
Are you an active angel? Check out On Deck Angels: ODA5 starts in October 2021. Accredited investors can also back our AngelList Syndicate.
Feedback // suggestions // ideas? Email sam@intangibleangel.com