announcing my investment in apcera

in the headline-grabbing and tweet-filled world of consumer web and mobile startups that we live in today, it’s sometimes easy to forget about more traditional b2b companies that have been or are currently being built-in the valley. sure, it’s not as catchy as building software that will touch millions of hands, but the act of company-building in the enterprise is just as interesting — at least to me. and while my experience at twitter certainly opened my eyes to the potential of consumer-facing technologies, my entrepreneurial dna is made of up of many pieces of the b2b space, and now at kleiner, i fully anticipate being quite active in this space, as well.

months ago, i received an email from derek collison. i recognized the name and then googled, recalling that derek’s work at tibco, as well as how badly microsoft was trying to recruit him. as a long time angel investor and now vc, you just absolutely love to get those emails. derek had heard of me from composite software, a b2b company i founded back in 2002 and which is located in san mateo, and wanted to reach out because he was trying to decide which startup to join next.

after meeting derek a few times, i went into “persuasion-mode.” if i had anything to do with it, he was not going to join a company, he was going to found one — or so i told myself. derek and i spent more time together and it was clear that not only he was an outstanding technologist (and person), but he could also attract top technical talent from his deep experience in the valley. we met more frequently, and the idea for a new company — apcera – was born.  derek knows that the maturation of these platforms is hard work and needs heavy lifting. you can’t just build this next generation as a bunch of scripts. to that end, the company already has dna from the likes of Google, Twitter, and TIBCO..

apcera’s mission is to build and deliver the next generation of cloud platforms to the enterprise. people have been waiting for platform as a service (paas) to arrive as a core technology for future cloud platforms, and while it has done well out of the gate, apcera is trying to build platform technologies that all aspects of the enterprise can leverage. i’m so excited to work with derek and his team on this mission — it reminds me of the days sitting in my house a decade ago, trying to recruit engineers for composite software and building something entirely new that creates the foundation for a real, disruptive company.

anatomy of my first venture investment, gumroad

they tell you not to invest in your first year of venture — or at most do one. the conventional wisdom is to observe, not be tempted, develop a bit of pattern recognition, and eventually, when the right opportunity comes around, you’ll be ready to lean in. well, that sounded boring to me. i’m too impatient for that, it seems, and it’s hard to temper my excitement when i get to meet new technical teams every day. of course, i have the unfortunate task of saying “no” quite often, though even i’m surprised how fast the first “yes” came.

back in december of 2011, i had just joined kleiner perkins and had a slew of meetings, coffees, and phone calls. it was exciting, overwhelming, not to mention i was swimming in a sea of new introductions generously made by friends and colleagues. during one of those 100 initial meetings, someone suggested i meet this guy — sahil — who just left pinterest to found his own payments company. that certainly caught my attention. luckily, my friend followed up with the introduction and i was able to meet sahil. i remember being a little shocked at how young he was (19), but also impressed how mature he was and his thoughts on design and business. at the end of the first meeting, we decided to keep in touch, began emailing about product ideas, and i tried to help him with some introductions to various valley companies for his partnership ideas. through those interactions, i quickly learned sahil was no kid — he was a force.

so, i started to dig into his product, gumroad. he’d raised angel funding, and the company was formed from one of sahil’s many side projects. this was a different type of product. rather than raise money for a specific idea, sahil saw a need earlier and just hacked together a tool to solve the problem of selling online. with gumroad, now links become vehicles for purchases. i dug around some more and saw that gumroad was in the luxurious position of having mostly organic traffic (which is priceless), and since i just came from twitter, the prospect of innovating around links was simply intriguing. i started to get more hooked on the idea.

founder, check. product, check. but what about market? this is tricky. it’s not a space i’ve poured over, but luckily, one that was clearly emerging. kp is already invested in square and has experience with other payment technologies. and, there’s the reality of what facebook and twitter mean to the social web. we all share links, billions a day. what if those links are just a way to get new content, sell items, buy e-books, sell instagrams, and so forth? during my runs over a few weekends, and it began to dawn on me just how big this market could be, and how close to the transaction gumroad could be. it was a simple yet powerful idea. the timing is right. the focus of “making selling as easy as sharing” feels right.

and so, i talked to my partners, and called up sahil and said i’d like to offer him a term sheet. i think he was surprised. there was silence on the phone. he wanted to think about it. that was fair 🙂 and over the next few weeks, we talked a lot [and went up to sf to hack on a project together!]. there were some tough negotiations. this guy can negotiate! i’d be lying if i said i know where gumroad is going to go in the future. and, that’s the exciting part. i thought a lot about sahil, the product, the market — and making my first real venture investment. and, this just felt right. so, i followed my intuition after that, and was lucky enough to have sahil agree. it is a real honor to work with him, and i look forward to helping him and bryan, sid, and the rest of the gumroad team invent the future.