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The Forgotten Neighbor

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It is perhaps the greatest honor of my professional career to be embarking on my current trip. Less than 2 weeks ago, I was invited by the White House to attend a series of events in Cuba.  It is the first trip by a sitting US President since Calvin Coolidge in 1928.

I will be leading a roundtable Monday with Cuban entrepreneurs, all of whom are hungry to access investments from a country that has blocked them off since the embargo signed by JFK.  They have asked me to speak on accessing capital and the importance of entrepreneurship for Cuba, but I’m pretty sure they already know that the companies they create will have an impact not just on the future of their families, but on the future of their country.

With every passing day as a venture capitalist, my awe, respect, and appreciation for entrepreneurs grows.  Often everything is against them: incumbents, families, capital, employees and, in some cases, governments.  In fact, Snapdeal, the first investment of my VC career, was founded by entrepreneurs who wanted to stay in America but we denied them a visa.  Those who proceed, perspire, and ultimately prevail should be celebrated.  What they create can, in some cases, touch more lives than any government.

Thanks to my partners at New Enterprise Associates who come to work every day trying to fight the status quo to make the world just a little bit better.  And most importantly, thanks to all the entrepreneurs I get the privilege of working with for teaching me far more about failure, courage, and tenacity than they will ever know.

I’ll try and impart some of their collective teachings in Havana, but what will likely happen is what always happens: I will learn far more from the Cubans than they will from me.


Written by sheeltyle

March 19, 2016 at 11:44 am

The Makings of a VC

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In Silicon Valley, there is a constant debate about whether venture capitalists should have previously been entrepreneurs.  While it can certainly be helpful, history shows us that some of the very best VCs took completely different career paths: Mike Moritz was a journalist, John Doerr was a salesperson at Intel, and Arthur Rock was an army veteran who then did corporate finance.   Some argue that there are actually more failed entrepreneurs-turned-VCs than non-entrepreneur VCs, but in general the asset class is one where failure is so prevalent that the numbers are likely a wash.

Although I haven’t founded a company (beyond the candy store in my 3rd grade desk, or my nonprofit), my time at Skybox Imaging, which was later acquired by Google, taught me a lot as it relates to building a business: selling a product, scaling an organization, and raising money from the other side of the table.  But as a venture capitalist, it gave me something that I’m not sure I could have gotten any other way:


The longer I’ve been in venture capital, the more I admire entrepreneurs.  Everything is against them: incumbents, families, lack of capital, and even the government in some cases.  Those who succeed are truly remarkable, and often lucky.  But nobody gets it right all the time, and even successful businesses go through ups and downs.

Entrepreneurs don’t usually need VCs when things are going well; in fact, sometimes the best thing that we can do is get out of the way.  But when things aren’t going well, that’s when the truly best VCs truly show their character.

When choosing a VC, I recommend that all entrepreneurs ask VCs for references not just from their companies that did well, but from their companies that failed or went through tough times.  It’s where you will find out the VC’s true colors.

Are they scared, or empathic? Do they resort to drastic measures, or are they more measured?  Have they seen ups-and-downs before, or do they believe that everything should always go well?  Do they fire immediately, or are they more deliberate?

Written by sheeltyle

February 28, 2016 at 5:46 pm

Lessons from Lagos

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“I’m in Lagos, Nigeria. Pulsating energy, chaotic beauty…this country will be the best growth story of the next 20 years.” – my tweet from a few weeks ago. 

Lagos is hot, dusty, crowded, chaotic, and corrupt.  The black market currency rate for the Nigerian Naira fell from 280:1 to 305:1 in the 5 days I was there (the “official” rate is artificially pegged to the US dollar at 200:1).  Petroleum export revenues account for over 90% of total exports, so the fall in oil prices has hurt the country badly.

Nigeria reminds me of India 15 years ago, and likely what China was like 25-30 years ago.  The new President, a former militant, is focused on two rampant problems: corruption & Boko Haram.  By all accounts, he is succeeding on both fronts.  The state governments are trying to diversify the country’s economy, particularly through technology and agriculture.  In other words, there is no better time to be an entrepreneur or investor in Africa’s largest country.

Here are my lessons learned from Lagos:

  1. Corruption is complex.  A number of billionaires have private planes not just for convenience, but also because it’s a great way to smuggle money in and out of the country.  After all, customs officials just check luggage, not planes.
  2. Overstating imports is common.  Nigeria officially imports more toothpicks than all of Europe.  It imports incense sticks equivalent to half of India.  Why?  It’s impossible for government officials to count the actual number of toothpicks or sticks, so they are deliberately overstated to convert “black money” into white, or to exchange Naira into dollars.
  3. Starting up a company is expensive.  Most office spaces require 2 years rent up front.  Broadband costs somewhere between 10-50x as much as America, depending on the speed you want.
  4. President Buhari is incorruptible, but his wife may be his downfall.  She likes shiny objects, the high life, and could be his Achilles heel.
  5. State education is a joke.  One of the Andela fellows received a masters in Computer Science from a Lagos university.  And yet, she hadn’t written a single line of code on a computer before becoming an Andela fellow.

I can’t wait to go again.  Nigeria will become the 5th largest country in the world by 2030 with an exploding young middle class.  In chaos, there is often much opportunity.

Lagos Picture ST




Written by sheeltyle

January 28, 2016 at 2:15 pm

4 Predictions for 2016: an impeachment, tech v law, and more

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2015 started as the year of the unicorn, and ended as the year of the unicorpse.   Emerging markets, the rule of law, the off-demand economy, and the education bubble finally getting popped…here’s what we can expect in 2016:

  1. Emerging Markets will be in vogue again (except India) as US interest rates rise. Brazil’s currency will stabilize, reforms will be pushed through, President Dilma Rousseff will get impeached, and investors will start flocking back to the 5th largest country in the world for more than just the Olympics. Andela will be just the first of many Nigerian startups to get major US funding as President Buhari makes Africa’s largest country, which will overtake the USA in population by 2050, a safer haven for both tourists and investors. On the other hand, India’s bloated valuations for unicorns like Ola, Flipkart, Oyo, and others will begin to abate as investors realize Indian customers are more price-sensitive and less brand-loyal than they were hoping.
  2. Court cases will wield direct impact on startups more than in any other year in recent memory. Madden v Midland may cap the interest rates that companies like Kabbage, LendingClub, SoFi, OnDeck, and others charge in certain US states thanks to usury laws. O’Conner v Uber could classify 1099 workers as full-time employees, especially for companies in which contractors are working near full-time hours. Tyler v FanDuel & Draftkings may declare fantasy sports businesses violations of the Unlawful Internet Gambling Enforcement Act of 2006. And as the driverless car begins to hit the road under the guise of autopilot, there is bound to be a case on liability in the event of a crash or hack. The central question will be, who is at fault: the software provider, the car manufacturer, the owner, or some combination? Many questions remain unanswered.
  3. The On Demand Economy, particularly in food, will face headwinds, consolidations, and shutdowns. The hot-in-15-minutes, cook-at-home, heat-at-home, order-from-restaurants, pick-up-from-restaurants, and 30+ other on-demand food delivery startups will start to run out of money as investors realize their unit economics may never work. Most will get acqui-hired or shut down. But one company will likely emerge that could take on GrubHub…and it won’t be Uber’s UberEATS. All other categories will become Uber[FILLINHERE].
  4. Education startups will begin to displace struggling traditional institutions. More students will choose to take classes on Coursera or Khan Academy for free instead of amass colossal debt at for-profit educators like the University of Phoenix. Entry-level job seekers will flock to companies like LearnUp instead of attending expensive vocational schools. Primary school applications to schools like Altschool and Think Global School will skyrocket. Students, especially those in emerging markets like Kenya, will begin to receive fully accredited college degrees on their mobile phones thanks to One University Network. New funding, from both private and public sectors, will pour into education startups as people start realizing that our educational system is broken and far too expensive.

Let the games begin.


LearnUp: Using Technology to Solve the Skills Gap

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This post was originally published on NEA’s website:

Marley Barazon was 16 when she immigrated to the United States from the Philippines.  For months, while handling the rigor of senior year of high school, she looked for a job to support her family as they attempted to make it in a new country.  Application after application, she kept receiving rejections.  After three months, Marley finally came across a Craigslist posting for a position at Old Navy, and the link redirected her to LearnUp.  After completing the scenario-based LearnUp training, she applied for the job, and received her first interview in America.  Then, the good news came—Old Navy wanted to hire her, as a “Sellebrity”, or retail salesperson, at a nearby branch.

It is an economic irony that in every country around the world, there are thousands of unfilled jobs and yet simultaneously a high unemployment rate.  In America, we have a ~5% official unemployment rate, but in certain cities that rate is three to four times as high—and is even higher amongst minorities, youth, and low income folks.  If you add those who are underemployed, the number is even higher.  LearnUp is trying to solve this “skills gap”, starting with entry-level jobs, by working directly with employers to put online the necessary content an applicant needs to know to be a successful employee.  Applicants then complete targeted training at zero cost to them before applying for the corresponding job, which increases their chances of getting hired by 300%.  We believe this could not only help the people desperately in need of work to get jobs, but could also revolutionize vocational education over time.

Whether you are a young immigrant looking for your first job, a veteran who fought on the battlefield in Afghanistan who now wants to succeed in civilian society, or a single mother trying to find her next gig, LearnUp is your platform.  But at the end of the day, LearnUp isn’t just a job-training platform.  It is a platform for hope.

At NEA, we are excited to announce our co-lead Series A  investment with our friends at Shasta Ventures to support Alexis, Kenny, and the rest of the LearnUp team on their quest to retrain America.

Written by sheeltyle

September 16, 2015 at 10:44 am

Frugal Innovation (Jugaad) & Indian E-Commerce

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Last week, I spoke in New Delhi at The Growth Net.  My panel on “frugal innovation: technology for those living on less than $2/day” had Sanjay Kapoor and Nandan Nilekani, both of whom have had remarkable careers building technologies that have touched billions (literally).  Here is an interview I gave with Boom Live after the panel which talks about the future of Indian e-commerce (e.g. Snapdeal at $5 billion valuation could be cheap) as well as the way I think about frugal innovation (e.g. using tree stumps as cricket wickets in India is just the beginning of frugal innovation – and companies like Uber could touch those in the middle class and lower class more than we think).

Written by sheeltyle

April 4, 2015 at 3:09 pm

Why Silicon Valley Should Help Washington

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This guest op-ed was originally published by Forbes here.

Why Silicon Valley Should Help Washington 

The following is a guest post by Teryn Norris, a U.S. policy advisor, and Sheel Tyle, a venture capitalist at New Enterprise Associates. The views expressed are their own. 

In Silicon Valley, 2013 will be remembered as the year the idea of separating from the United States went viral.  There was the Stanford lecturer and investor, Balaji Srinivasan, who called for “Silicon Valley’s Ultimate Exit,” declaring to a large audience of elite entrepreneurs,”We need to build an opt-in society, outside the U.S., run by technology.”

There was Larry Page, the CEO of Google with a net worth over $30 billion, who suggested a more experimental approach in which technologists “set aside a small part of the world” beyond existing laws and institutions. Page’s vision is shared by billionaire investor Peter Thiel, who in 2008 co-founded the Seasteading Institute to create floating city-states in the ocean.

And then there was Chamath Palihapitiya, another influential venture capitalist, who took a step further in proclaiming, “The government, they’re completely useless… If the government shuts down, nothing happens and we all move on, because it just doesn’t matter.”

It’s tempting for many observers to dismiss these ideas as outlandish: after all, Silicon Valley is not on the verge of seceding from the Union.  Yet it is also a fact that the United States has seen few, if any, separatist thought movements backed by such wealthy and elite individuals since the mid-1800s.

Even beyond the erosion of national identity, what this thought movement reveals is a systematic lack of appreciation across parts of the tech community for the role the U.S. government plays in supporting the most innovative economy in the world.  Indeed, the U.S. federal government remains the world’s single greatest benefactor of scientific discovery and technological invention, without which Silicon Valley would neither exist nor persist.

In the end, Silicon Valley and Washington need each other to thrive.  Instead of dreaming about abandoning U.S. governance, the Valley should strive to improve it — not only through forward-looking policy advocacy, but also through new ventures to make American government more productive.

The Limits of Silicon Valley

It is now well established that Silicon Valley was born largely through U.S. defense and intelligence spending in the 1940s and 1950s, laying the foundation for the global information technology revolution.  As serial entrepreneur Steve Blank has documented in “The Secret History of Silicon Valley,” this occurred through a series of federal grants to Stanford and early-stage companies developing microwave systems and vacuum-tubes, and eventually semiconductors and the Internet.

While the State laid the foundation, there is little question that Silicon Valley’s private investors and entrepreneurs ultimately built much of the information technology sector as we know it.And to this day, the Valley remains one of the most forward-looking places in the world: Tesla’s electric vehicles, Coursera’s platform for free higher education access, and Google’s self-driving cars are just a few examples of its companies working to solve big problems.

Despite these examples, there is a growing sense of disappointment with what the Valley is delivering— what some are calling a “systemic failure in the startup ecosystem” that primarily creates Instagrams instead of Hyperloops. As Harvard Business School Professor Josh Lerner concluded, “the venture capital model is no panacea for innovation. The boom-and-bust cycle, the mercurial effects of public markets, and the narrowing of its objectives have made it something far less substantial.”

These trends make sense given the incentives facing most venture capitalists in today’s markets: if the public markets reward fast-growing internet companies like Twitter at multiples as high as 40x revenue, then why wouldn’t investors pursue high-flying software or consumer internet deals?

As a result, VC investment in more capital-intense and higher-risk technologies has fallen substantially in recent years, with software startups increasingly dominating at the expense of sectors like energy, transportation, biotech, and advanced manufacturing.  As Peter Thiel has lamented, “We wanted flying cars. Instead, we got 140 characters.”

The Entrepreneurial State

Fortunately, the federal government continues to provide the seed corn for the U.S. innovation system through unmatched investments in high-risk technology research and development (R&D).  On the order of nearly $150 billion per year, this commitment far exceeds any other nation and is almost five times the size of the entire global VC market, driving the development of new, foundational technological platforms upon which the private sector builds commercial value.

Nuclear power. Jet engines. The Green Revolution. Semiconductors. The Internet.  Hydraulic fracturing. Solar photovoltaics. Gas turbines. Advanced batteries. Recombinant DNA and genome sequencing. All of these blockbuster technologies and more were originally developed with U.S. government funding, and future breakthroughs in path-breaking areas like quantum computing, nano-manufacturing, and fusion power will require the same.

Of course, today it is commonplace for skeptics to point to examples like Solyndra.  But whether or not the government should finance large-scale manufacturing facilities is besides the point: even the most libertarian economists agree on the productive role of public spending on research and development.

This doesn’t mean the private sector doesn’t develop breakthrough technologies on its own — the bygone Bell Labs is a prime example — nor should it discourage venture capitalists from developing new investment models.  But as British economist Mariana Mazzucato concluded in her recent bookThe Entrepreneurial State, “most of the radical, revolutionary innovations that have fueled the dynamics of capitalism… trace the most courageous, early and capital-intensive ‘entrepreneurial’ investments back to the State.”

State of Innovation

Silicon Valley and Washington need each other to thrive: the Valley needs a productive federal government to continue supporting our national innovation system, and Washington needs a Valley that turns new inventions into good jobs and productive commercial products.

Of course, the Beltway city could also use its own strong dose of disruptive innovation to deliver more value.  Instead of dismissing government, the Valley should direct more of its energy toward ventures that make it more efficient and responsive.  For government operations, companies like Palantir have only scratched the surface in overhauling data mining and analysis capabilities. For government advocates and watchdogs, startups like OpenGov, Outline, and FiscalNote have much greater potential to provide analysis tools on complex public programs.  For civic empowerment, there remains enormous opportunity to create information and organizing platforms, such as NationBuilder, to engage the public and make government more responsive.  And this is only the beginning of what’s possible, both here and for governments across the world.

For over a half-century, the unique partnership between Washington and Silicon Valley has produced transformational results and helped make the United States the most dynamic and entrepreneurial society in the world.  Today, the challenges of the twenty-first century demand even more ambitious and meaningful innovation, and that is why we must renew and strengthen our partnership — not abandon it.

Fiscalnote & Government Transparency

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At NEA, I work actively with around 10 of our portfolio companies and passively with a few others.  In every one of those cases, I’m the youngest guy in the room.  Except in the case of Fiscalnote, where I very well may be the oldest.

When I first met founder Tim Hwang, I felt like I was looking in a mirror.  He reminded me of an East Asian version of myself.  He had the same tendencies and quirks I do: habit of trying to fit 2 minutes worth of information into 1 minute, avoiding the question of age until asked point blank, the occasional forgetfulness of when we had met certain people (in his case, he guaranteed he had met me at least 2 times before but I am willing to bet $ that we had never met), even the same thick glasses that signify way too much time in front of screens…

But that’s where the similarities end.  For example:

  • Tim, now 21 but then a teenager, was the youngest elected school board member for the largest school district in Maryland receiving 70,000 votes through via a voter targeting strategy he learned while working for the Obama Campaign.
  • Tim founded the National Youth Association which represents 750,000 youth in the US and played a large role in helping those under the age of 26 stay on their parent’s health insurance plan in Obamacare.

Somehow, Tim also is the CEO of Fiscalnote, a real time government analysis platform.  Fiscalnote aggregates and analyzes speeches, court cases, and existing government legislation at all levels: local, state, and federal.  The talented, but young, team has built a number of algorithms to predict whether new legislation will pass and have back-tested it to over a 99% accuracy rate.  Fortune 1000 companies all the way down to restaurant owners now have an easy way to figure out what legislation does or may affect their business.  Effectively, they are trying to make a very important part of government transparent.  We recently closed a round with Mark Cuban and a few others.   Fiscalnote also happens to be the first startup I’ve heard of that is moving out of Silicon Valley and to DC!

I’m thrilled to be an investor and can’t wait to watch this unfold.

Written by sheeltyle

September 30, 2013 at 11:29 am

CrowdMed & NEA

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“In 2003, an 18 year old girl got very sick. Without any warning or apparent cause, she fell into a deep depression. She had to drop out of college. She would sleep 14 hours a day, too fatigued to do anything when awake but watch TV. She gained 50 pounds of weight and woke up several times a night with nightmares, soaked in cold sweat. Eventually suicidal thoughts entered her mind. She asked her mother to sleep in bed with her so she wouldn’t hurt herself.  That girl is my sister, Carly.” 

“Over the next several years, our parents brought Carly to 16 different medical specialists and racked up over $100,000 in medical bills, desperately seeking a diagnosis. Each doctor would treat her symptoms as best they could, but none could identify the root cause of her illness. We’d later discover that her disease affects just 1 in 15,000 females. Her doctors had never heard of it, much less seen it.”

This is the story that Jared Heymans,  CEO of CrowdMed, months ago told me.  There was so much wrong with Carly’s situation: the time it took to receive a correct diagnosis, the exorbitant costs of gratuitous visits,  the damage from misdiagnosis and mistreatment.  Parts of these issues are endemic to the American healthcare system (i.e. costs), but others can strike anywhere (i.e. the misdiagnosis, especially due to her rare condition). For example, rare diseases affect 25 million people in the US and 350 million people worldwide, yet they are often just as misdiagnosed as more common diseases because of medicine’s pronounced 80/20 rule.

At Bessemer, my colleagues invested in Crowdflower, a company that helps contributors complete microtasks via their crowd of people; and I have always been impressed with Mechanical Turk, LiveOps, and other crowdsourcing companies.  So when Jared told me that “the wisdom of the crowd” might also be applied to rare diseases, I was intrigued.  And when his vision became CrowdMed, I couldn’t wait to invest.

Jared and his team have built a platform that empowers patients struggling with their ailments—many of whom have “tried everything” but can’t get the right diagnosis—post their symptoms and history on CrowdMed for a small fee (~$199 for now).  Then, a team of MDs (note: Medical Detectives, many of whom are NOT Medical Doctors) scours the web, literature, and other sources to derive probabilities for potential diagnoses.

So far, this model has worked pretty well.  In fact, dozens of cases have been solved on the platform– some, in as early as three days.

These are cases, and  stories, like Carly’s.  Hers was the first case solved on CrowdMed, and it took 3 days.

I entered venture capital because I wanted help build businesses that, if they worked, changed people’s lives for the better.  CrowdMed is the epitome of that promise.  I’m thrilled to be both a personal investor as well as a professional partner through NEA’s recent investment.

Written by sheeltyle

August 13, 2013 at 10:10 pm

NEA India CEO Summit – Lessons from the Founder of Naukri

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Last week, I traveled to Mumbai for NEA’s India CEO summit.  We brought together a number of our CEOs who are either based in India or are directly playing in the Indian market.  We also had two speakers: the former Chairman of SEBI (India’s version of the SEC) and Sanjeev Bikhchandani, the founder/Vice Chairman of Naukri, India’s first public internet company.

Naukri, an Indian job listing site, has a remarkable story.  Unlike many companies in the west, Sanjeev wasn’t used to the notion of spending for growth and taking a short term loss to set the company up to make a long term, larger profit.  Eventually, he was convinced that in his situation, because he hadn’t yet turned on any marketing channels, there was a reasonable line of sight to spend short term dollars for long term gains.  The company raised $2 million from ICICI Ventures and the timing was perfect: a few weeks later, the dot com bubble crashed and the venture markets dried up.  Naukri then had a loss for two years before getting back into the black, after which it effectively doubled profit year over year.  Today, it is a public company (under the holding company InfoEdge) and is on a run rate of 120 crores in profit this year, or $24 million.

He gave an inspiring talk with unique pointers to our team of CEOs.  I took some notes and wanted to post them here:

  • Every once in a while, a business or sector will have tailwinds.  Recognize them, use them, and exploit them.
  • The best businesses are built on deep customer insight.
  • The question that you must ask yourself is: are you solving an unsolved problem?
  • The best CEOs are those who are able to build trust across the table.  That could be to customers, to partners, to investors, or employees.  It doesn’t matter.
  • Share recognition, power, and wealth with your best employees.  Sometimes, you may have to dig into your own ESOP pool to make that happen.  Your employees are not working for the company, they are working for you.
  • Create convergence of interest, not conflict of interest.
  • Often superior corporate governance gets a 25-28% premium.  That means transparency, disclosure of full financial statements (not required in India), and can even mean a non-executive chairman.
  • People get hooked to freedom more than to compensation.
  • Once again, give massive, massive ESOPs to the right people.
  • It’s always a collective decision when things go bad.  Rally the troops together and don’t put the blame on someone.
  • Hire for commitment, character, and competence.
  • The way to beat western companies is to be more customer driven than competitor focused.  Plus, US companies are often scared of headcount.  If you have better customer insight and an army of people, you’re tough to beat.

In the middle of his talk, Sanjeev told a story that brings together a lot of his advice on recognition, aligning incentives, and creating a convergence of interest.  During his tenure, he wanted to increase the salaries of his best people during a rough patch for the company.  He went to Bala Deshpande, now an NEA Partner but at the time at ICICI Ventures, who initially disagreed with his proposal, until he offered to cut his own pay.  She then agreed, but also gave him a separate incentive: if sales were above a certain number, he would receive a bonus equivalent to a percentage of the sales.  He told the rest of the team about this plan, who then volunteered to cut their salaries by 30% (instead of having them raised!) and also participate in the variable sales incentive plan.  Suddenly, everyone was aligned to drive the company forward and a year later, the team crushed their goals and everyone made significantly more money than they could have under their original plan.

These aren’t principles that will work only in India, or in Asia, or in emerging markets.  Rather, they feel like universal principles and universal values that can apply to any time of business anywhere.

Written by sheeltyle

November 7, 2012 at 7:17 pm