I'm Kent Lindstrom, co-founder of Upfront Capital, a Silicon Valley venture capital firm that invests in the software startups of the future. We focus on AI, cybersecurity, and fintech. I'm going to take you behind the scenes in Silicon Valley. This is the Something Ventured podcast.
All right, welcome back. This is the Something Ventured podcast. I am Kent Lindstrom. I am your host. My guest today is Mark Suster. How are you doing?
I'm doing great, Kent. Thank you for having me.
Thank you so much for doing this. The AI told me definitively when I asked that your name is pronounced Suster. And it gave me a little pronunciation guide, S-U-S-T-E-R, S-U-S-S. And I thought to myself, that seems like kind of a shifty AI there. I'm going to go check myself. So, I know it's Mark Suster.
I appreciate you saying that. You're in rarefied air of people who get it right first time. So much so that I was actually surprised. I was like, "Wow, well done you." I usually tell people it's like my mom's name, which happens to be Sue. And she owned a bakery, which is also true. And she likes to stir things. It's Suster.
That's so funny. You know, it's funny. I went on YouTube to find, you know, hoping to find somebody saying, "Hey, here's Mark Suster, he's my guest today." I must have seen 10 videos, and people are so adept now at chopping up videos so they start with these cold opens. So, none of them had your damn name at the beginning.
It's funny. And I never correct anybody, so you could never know for sure. I just over the years I learned most people get it wrong, so who cares?
I think I found somewhere where you said it. In any case, Mark has been a founder, built a couple companies, sold those companies, which seems pretty good. But is now a venture capitalist at Upfront Ventures, which is doing a couple interesting things. It's in Los Angeles. He is behind the blog Both Sides of the Table, the both sides I assume being a venture capitalist and a founder. It is a driving force behind the Upfront Summit, which as venture summits go is probably one of the coolest ones or one of the most famous ones taking place in LA. I think one of the most interesting things about your background that you're about this, but you went to UCSD.
I did. So did Elad Gil by the way.
Man, you ruined my—I was just going to say nobody in venture goes to UCSD, but I guess two of the best guys in venture went to UCSD.
I mean, you may know this, but it has one of the top computer science programs in the country. It's incredible on sciences. One of the top medical undergrads in the country. We're very good on pre-med, on sciences, on AI. So it's a wonderful academic university. When I went there, which was '86 to '91—so I'll let people do the math on whether I got out in four years or not—when I went there it was a kind of stress box. People don't understand that UCSD is the same thing as Berkeley and UCLA. It's part of the UC system and they just immediately think San Diego State, which also is a good university. But UCSD highly academic and when I went there it had one of the top suicide rates in the country just because it was a super grinding kind of university. I was not that student.
Yeah. Kind of like Cornell. Did you mistakenly think it was a party school before you went there?
No, it was the opposite. In fact, I just spoke to this lady last night. Her name is Christie Burton, a long-time super close friend of mine from high school. And we went on a trip. We knew we had to go to the UC system because back then it was $1,500 per year. It was, you know, state subsidized. My parents didn't have a lot of money despite my father being a doctor and my mom being an entrepreneur. And so I had to go to a UC system because they were cheap. So I had my pick of which one to go to, and I decided on UC Santa Barbara. And Christie and I in high school drove down to UC Santa Barbara, and we just partied the entire weekend, including going to see Otis Day and the Knights who were playing at a fraternity party. I'd never been to a fraternity party. And at the end of that weekend, I chose to go to UCSD without ever visiting it. And I never told Christie, and she signed up for UCSD for the exact same reason. So we ended up in college together.
That's funny. So for those of you coming around the world listening, UCSD, University of California San Diego, is in a town called La Jolla, California. It used to be called UCLJ actually when they first, but nobody knew where LJ was. And you would think it's a path block from some of the most beautiful beaches in the world, you would think that would be a college town, it would be a beach town. It's not. It's an incredibly hard academic, biotech, good theater program too, I think, but it's mostly this biotech thing and engineering.
So my wife went to Brown undergrad, and when we first visited La Jolla and I showed her my campus and I showed her my dorms—I was ninth floor of Tioga Hall, ocean view from my dorm—and she simply said one thing to me. She said, "Why didn't my parents tell me this existed?"
That is so funny. So man, Elad Gil, what are the odds? I always joke with people on this podcast that every venture capitalist went to Harvard or Stanford, and then they always say they fell into venture, they have no idea how they did it. Harvard, Stanford, and then sometimes Princeton. I went to Northwestern. I'm like nobody went to Northwestern. There was actually like over a hundred venture capitalists who went to Northwestern, but UCSD, rarefied air. So, you become a venture capitalist. How do you kind of animate into that? Very different, because most venture capitalists have not been founders. And this is something I've kind of looked at for a while because I'm a founder turned venture capitalist. There's a lot of people in the category where they call themselves operators, which means they've worked somewhere, and that's great. But if you actually look at people, Marc Andreessen did it, who built companies and then became venture capitalists, it's a little more—not unheard of, but a little more rare than you think. How did you kind of make that transition? I mean, they're very different jobs.
Yeah. It's funny you say so. The world has changed a dramatic amount, Kent, as you know. I would start by saying my first job out of university was as a computer programmer. Again, I was talking with Christie about this last night. She didn't know this about me, but from 1987 to 1991, I worked in a computer store in Sacramento, California. And I taught programming in high school.
Well, I mean, the big thing that I had was my parents got an IBM XT. And of course, I also had access to Apple IIe's and then Apple Mac. But my parents had an IBM XT. And the really big innovation of the IBM XT, circa 1985-86, I don't remember exactly which year it was, was that it had a 10 megabyte hard drive. So, you no longer had to swap two floppies. By the time I got to work in the computer store, I was able to afford my own—I built my own computer from a brand called Leading Edge, and it had 30 meg, and I just couldn't believe I had 30 meg to play with. It was, you know, unbelievable. Mostly what I did is I built in initially macros. I learned how to program in Lotus 1-2-3 macro language. Then my professor showed me actually if you did it in an independent language and you used a compiler that you could publish a program. So all throughout high school, then throughout college, three days a week I worked in a computer store in college and had a programming job in college despite studying economics and political science. So when I graduated, I was first a programmer. I did programming in COBOL on mainframes and then moved into database design, DB2. And then moved into an area that was not really important in the early '90s, which was middleware. And middleware was if you had a client and a server, so a desktop and a mainframe, the middle of the transaction had to handle things like what happens if the connection goes down, what happens if the database goes down, what happens if we write a record into a database but then the network goes down and the client never knows that we wrote the record. So we built these layers called middleware and it was around the time, I think a little bit later than that, Tibco became popularized. But all of my point being, in the lead-up to the internet, the internet itself, the network and the middle component became the most important thing. So that's what led for me, I moved out to Europe. I lived in Europe for 11 years. The first of it I was working with large telcos on launching internet offerings starting in 1995 through 1999.
Yeah. Do you think—I try to explain to people these periods in time when things became cool. And I wonder if we've become too abstracted from things. Like, there was a time when if you had a computer, you might very well have just gotten out a soldering iron and put some parts together and learned how to do a power-on self-test and all that kind of stuff. And when the internet started, you'd get on a modem and log into the Minnesota library or whatever the heck it was. And today you've got four billion, you know, whatever the max RAM, and you just talk to your computer and it does whatever. You're so abstracted from what was actually happening. I just think it's interesting.
That's why I love the initiatives like Raspberry Pi and people building things again. When my kids were younger—I have a 20-year-old and a 23-year-old—when they were younger, I had them assemble computers. I had them play with Raspberry Pis to learn what a CPU was, what a GPU was, what a motherboard is. Like, I think being tangible really matters. But I'll say this, like when I graduated high school—and not to obsess about high school, but I'm going to make a point about this—I read a quote. People list their senior quotes and there was a guy named Bobby Earnsdorf and he wrote, "Nonconformity is the highest evolutionary attainment of social animals." Having read that, my first thought was, "What the [bleep] does that mean?" But the fact that it stuck with me since 1980—he graduated, I think, two years before me, 1984. And I misattributed it. I looked it up before our call. I always said, "Nonconformity is the highest form of social attainment." Maybe that's what he wrote, because that's always what stuck in my mind. I think being nonconformist is important and it's important in venture. It's important as a venture capitalist. It's important as an entrepreneur. So, if you're funding what everybody else is talking about today and you have a really easy time at cocktail parties, you probably missed the trend by three to five years. And the stuff that I'm talking about at cocktail parties bores people, I guess as usual, because I become really fascinated with the topics that interest me of where I think the world is going. And usually it's not what anyone's talking about and that doesn't mean I'm always right, but if I'm right, those become the kind of bigger outliers.
Yeah, I've had Hunter and Sacha from Homebrew on, and they've been very successful. I've had Capital Loss, and they, you know, forever they just invest like—they would describe it this way one week and that way the other week. And they invested in this thing that we made fun of—friendly but kind of made fun of—this drone company in San Diego a long time ago called Shield AI. And we're like, what the—what, drones? And what the heck? It was just—we're like, these guys are just having fun. Well, turns out now one of the hottest things in—
Exactly who they are. I was introduced to them when they were raising their seed round. And I think it was Founder Collective that sent it to me. I was very interested in defense. We—25% of all of our investments are in space, hard tech, and national defense, and that's actually increasing. So I was very interested in it at that time. The problem is their round moved so fast and they raised it at this quote-unquote crazy price. I think it was like a $30 million valuation, and I couldn't wrap my head around that. And of course they're worth billions and billions now.
Yeah. And so how do you contrast—you become a venture capitalist. How do you contrast that? The thing that I note about the job—and I want to talk a little bit more about that nonconformity too—but when you're building a company, things are dynamic. You're missing payroll or you're growing and now there's nine people and now there's 30 people and now there's an HR department. When you're a venture capitalist, the thing you do on day one—find companies, help companies, and raise capital from LPs—is kind of the same thing you do on day 4,000. Did you find that to be a transition that obviously worked for you, but you did it for a while?
Yeah, I would say this. Honestly, it was very hard. And so, let me just say a couple things. First of all, I ran software companies for nine years. I found it liberating. I went from being a consultant where I either built systems but oftentimes was advising CEOs on what to do, to actually having to do something that has to work, that has to be completed. And I think there's enormous pride that comes from building things and completing things. And I'll come full circle on venture capital on that in a second. And I remember on my way into venture capital, I talked to a guy James Currier. You may know him, founder of Venmo FX.
