Julian: Thank you everyone for joining the Behind Company Lines podcast. Today we have Anna Barber partner at M13, which is a venture firm accelerating businesses in the future of consumer behavior with four pillars, health, money, work, and commerce. Thank you so much, Anna, for joining the show. I know this is a difference.

Been on, on our typical guest, but I'm so excited to dive into your background, your experience in the VC realm, your funding companies, seeing the different experiences that they go through and overall is just really excited to have you on the show. So thank you again for joining. First things first, what were you doing before going into Venture Capital?

Anna: Hey Jillian, thanks so much for having me. It's great to be here. I've been investing for about six years. Prior to M13 I was running Techstars la so the accelerator here in Los Angeles, and I know you're located in LA too, and it's so cool to see everything happening in the ecosystem here.

And before that I was a founder and operator. I founded a company called Scribble Press, and then way along before that I was a corporate lawyer and strategy consultant. So done many different things in my career.  

Julian: What, what got you from corporate law to, to then running a startup yourself?  

Anna: Yeah, that was, that was several jumps.

Yeah, you know, I've I've always been kind of a risk taker and not afraid to try new things, and in 1999, I got an offer to leave McKinsey where I was a strategy consultant and go work at a tech startup in San Francisco called pet store.com. So I was part of that original.com boom. And then the subsequent bust, of course.

Julian: Yeah. Yeah. A lot of people talk about how the the.com era, you know, with, with Web One and Web two and that development now kind of being mimicked with, you know, the web three movement. Are you seeing kind of some of the one founder said that they'd seen this movie before? I know it's kind of a tangent question, but I'm curious about your perspective on, on, on how you're seeing Web three kind of almost in repetition to what it was back in that era.  

Anna: Yeah, I think it's a good analogy. What was happening in the late nineties was really people seeing for the first time the power of the internet and a lot of experimentation. What are we gonna be able to do on the internet that's new and different? And so eCommerce was one of those things.

Just like recently we've seen this experimentation with what can we do with web three and what new businesses is this going to enable? So then the, the market crash, we had the.com bust, you know, in 2000, 2001. And then what happened was people kind of lost confidence in the entire. Technology sector.

There was actually a joke at the time. We said B2B and B2C meant back to banking, back to consulting. So a lot of people just thought, you know, this new internet nirvana is not gonna happen. So I'm just gonna go back to my old safe job. I think we're seeing some parallels now with sort of how people feel about web three, which is, oh, this whole thing isn't gonna happen.

This was just a grand experiment. And in both cases we would be wrong, right? So as we saw a lot of. The businesses, you know, that came through that.com crash and then survived businesses like Amazon and Google that had been founded before the crash, you know, are now some of the largest companies built on the backbone of that new internet technology and how we were, you know, able to use that to transform the way we do commerce and communicate.

And I think we'll see the same thing in web three. I think what we're experiencing now with this downturn you know, kind of a natural correction. And then the businesses that Web Three will really enable in the future are still going to be built. You know, and so it's, it's hard to see into the future.

Just like in 2000, it was hard for us to see what the future would be today. It's hard for us to see the future would be, Yeah. What the future will be. But if I had to guess the things that Web3 does so well that I find the most exciting. are Things around owning your own data and managing your privacy and being able to control who has access to your data and protecting it.

And then, so that's number one. There's something around individual autonomy that Web3 enables that's going to launch some really interesting businesses. The second one is kind of group decision making and collective action that Web3 enables. So we're, you know, when you think about the very nature of Web3 of being decentralized and what that implies, those are businesses that take advantage of that decentralization, I think are the ones that are going to be.

You know, the most successful in the future.

Julian: Yeah. Are there certain qualities that a company has that you've seen over the years that, that make them successful even through whether it's economic downturns or new technology that, that comes into? Fold and, and widely adopted. You know, we, we, we recently think about cloud and, and how that's influenced a lot of companies like aws and, and bringing all that information into the cloud creates this, you know, infrastructure that allows companies to store the data and, and, and utilize that and, and get up and running more quickly.

But are there certain qualities that, that you've seen that companies have that make them successful regardless of the, you know, the external factors that they face.

Anna: Yeah, it's a great question. So I think if you think about the technology revolutions we've seen internet, mobile, cloud, and now web three. Yeah.

So some of it is being right place, right time, Right. Having, having, you know, being at the right point in the innovation cycle. I'll give you an example. I was VP of product. In 2000 at a company called Rent anything.com. So what we were doing at Rent Anything was allowing people to rent underutilized items sitting in their garages to their neighbors.

So this was a crazy idea at the time because we didn't have mobile phone, we didn't have geolocation. So we were literally going around and knocking on people's doors and saying, Do you wanna list your, you know, power mower? Do you wanna, you know, list your drill for, you know, your neighbors to rent and borrow?

And let's just say the timing wasn't right for that idea Today that business seems a lot more plausible. Right, right. We are all used to the sharing economy. We've gotten comfortable even with the idea of sleeping in each other's houses, like Airbnb and driving each other's cars. So today that idea makes sense.

Timing was bad. So I would say to your question about, you know, what a, what a successful companies have in common. Good timing, but more important than that, really. You know, I look at, when we think about companies at the early stage, it's impossible to separate the idea of the company from the founder.

So, you know, what we're looking for is founders who have such internal conviction and drive about their idea that they're not swayed when the market. Starts to hiccup, right? So a founder who is totally convinced about the future that she's building and that she sees isn't gonna care about the outside market.

That's just noise. And you have to have that kind of personal, internal conviction, even when it seems like the world's against you, you know, to keep building and keep going, and you have to be able to convey that to other people to get them to come join you on that journey. Yeah, so that's, you know, really what we look for is that kind of, you know, personal north.

Julian: Yeah. Yeah. Thinking about your experience, what, what moved or inspired you to move from entrepreneurship and, and building to then investing companies and, and I would say supporting and enabling ideas that, that you thought were, were exciting or you know, were accelerating, you know, some, some pillar that, that I mentioned before that, that you focus on.

What was the inspiration behind, you know, that movement from entrepreneurship to investing?  

Anna: The last company that I started and led was called Scribble Press. And I there were, there were some significant headwinds we were facing with that business, just in terms of the operating margins were very challenging.

The market was very challenging. There were a few different iterations in that business. One of which was selling iPad apps into schools. And at the time the app store business model wasn't really set up for recurring revenue. So it was very hard for businesses like the one I was running to make money.

So we had a lot of headwinds. And the way I navigated through those, I saw in retrospect, I could have made better decisions as a ceo. Had I done some very simple things like calling in on my advisors, kind of asking for more external input and feedback validating things before overspending or for, before committing the company's resources.

So it was sort of a compliment of things that I looked backwards and thought I saw places where I could be a better ceo. So my foray into investing was really not. You know, I wanted to be on the financial side of the industry. It's because I became curious and interested in supporting founders through that journey of kind of figuring out how to get out of their own way so that their idea could win.

And becoming, you know, the most powerful versions of the leaders that they can be. Yeah. So I was actually planning to become a coach. Yeah. And I stepped into investing really sideways. And it's been an incredible journey. The relationship that you're able to form with a founder or a founding team as an investor, if it's based on trust, if it's clear to both parties that you really both have the same goal and have each other's best interest in mind, can be a really transformative relationship.

Julian: Yeah, is that, I was looking up M13 and, and it's really cool how you approach investing. And I would say it's, it's not fairly traditional but you talk, or on the website at least it describes this M13 propulsion platform. And from the diagram it looks. It looks like rather than, you know, there's, there's an a partner that supports multiple founders.

It's actually flipped. It's a lot of partners supporting, you know, founders in, in, in having almost like a team environment. Is that kind of what came about from your experience? Talk about what, what goes into the approach that propulsion platform approach that you think or, or that you've seen success in?

Anna: Yeah. So M13 was founded by Carter and Courtney Ream who were brothers who had been entrepreneurs themselves. They launched a better for you vodka brand called Vve. And so when they set out to start M13, their vision was related. Build a team of operators who had on the ground experience, which pretty much describes every partner in the firm and, you know, most of the rest of our team, we've all been kind of on the other side.

And then allow that entire team to each help. You know, each company. So, so the, the, the graphic you're referring to really describes the fact that we don't have this idea of, you know, I'm your lead investor, you only talk to me the entire company. All, everything the partners have to offer is kind of open you know, to all of our portfolio.

So we've got five investing partners. We've got five operating partners. That's a significant investment in what we call our propulsion platform. You'll notice that all of our iconography is all outer space because the, Yeah. Firm's name M13 is from Messier 13, which is the brightest cluster of stars in the galaxy.

And our hashtag is brighter together. You know, which is. You know, you, you know, you could say it's a little hokey or goofy, but you know, but it really rings true. I do really think that we are effective at bringing the capabilities of the entire group to bear for each company.  

Julian: Yeah. How has in your investment strategy or the company's investment strategy changed over time?

Obviously there's different climates there, there's different external factors, you know, like I mentioned earlier, and I'm sure there, there's many more to be listed. But what's changed in the investment strategy over time previously and then now with the macroeconomics that we're dealing with currently?

Anna: Yeah, so I'll talk about the evolution of M13 strategy when M13 first started. A lot of the investments in Fund One were really iconic consumer brands. So think companies like Roth's and Bonobos and Lyft and Pinterest and Thrive Market. So, you know, even companies on the kind of CPG side. As we've evolved, we've kind of, we've gone what I would describe as deeper into the tech stack into enabling technologies for the future of consumer behavior.

So when we think about eCommerce, which is an area where I focus. We're thinking about the tools that allow direct to consumer, brands to flourish, tools that help consumer brands attract customers, especially in an environment where the advertising market is so challenging. On, on the, on the delivery side, we're thinking a lot about last mile delivery and the circular economy and how to deal with excess inventory.

So we're looking for companies that sort of help consumer brands all across the value chain, but not investing in the consumer brands themselves. Yeah. And the same is really true for when you look at our digital health strategy. We're investing in enabling technologies to support digital health providers.

In, you know, consumer FinTech, we're looking at enabling technologies that help companies who are offering consumer financial products, you know, to to operate their businesses better. So we've kind of, we're still focused on consumer, but we're going kind of down a layer into the tech stack across the board.

Yeah. And then also applies to web three. We're looking at a lot of enabling technologies that, that help Web three companies launch. Yeah. In terms of, you know, the current environment Venture is a long term game. And we, you know, what happens in the outside market is kind of beyond our sphere of influence or even our sphere of impact, and that's true both for us and for our companies.

And so the way that it most affects people is psychologically. Yeah, because you know, people start to feel differently when the feel more pessimistic when the market around them isn't good. People look at falling revenue multiples and you know, lack of IPOs and falling stock prices, and people frankly start to feel scared or worried, or start to doubt.

You know, doubt decisions, right? And that is exactly the time, both as a founder, as an investor, when you need to shut all that noise out and focus on why you came here in the first place. So, from a founder's perspective, it's who am I building for? What am I doing that's helping my customer, and how do I just do it better?

So, The advice we give is do fewer things better as opposed to do more with less. My partner Matt Hoffman, said that in a recent interview, and I think that's really true. And from an investing perspective you know, it's, it's a great time to invest. A lot of amazing companies have been, you know, built in down markets.

It gives. US time to evaluate and really get to know the founders that we're looking to invest in. We don't have to make quick decisions like we did in the market a year ago and allows us to really build relationships. And then it gives us and the teams that we work with time to build sustainable businesses that are growing profitably and not just chasing growth.

So we're still active. We just wrote a series, a term sheet last week. We are out in the market. We are looking to invest in the next generation of great founders.  

Julian: Yeah. If, if I were a company that was founded by M13, what are some of the qualities you mentioned? You know, having a, a founder who has, you know, a personal North Star that they believe in, in a product that they believe in or, or, or problem that they believe in solving.

What are, what are some of the other qualities that, that, you know, I, I would, I would have if I was a, a company funded by M13.  

Anna: We look for in addition to that strong North star strong founder market fit. So why you, Is there some reason why you're particularly qualified to build this? We look for like a native curiosity.

So for me, this sometimes. You know, I refer to this as strong opinions loosely held. You have to have a really strong point of view about what you're building and where you're going, and you have to be able to respond if you get feedback from the market that your idea wasn't right. So when founders put together their plan, their five year financial plan, or three year financial plan or whatever, the only thing that we know about it is that it's.

Right? We don't know how it's wrong. You know, It's too optimistic. It's not optimistic enough. Something's gonna cost more. Customers are gonna wanna pay, pay less. We don't know. So you, but you have to have the courage to put the stake in the ground and then also respond when it's different. So some founders you know, some people have trouble with that idea because, They just wanna be.

Right. Right. And if you're more focused on, on, you know, kind of being right than getting it right, that's the problem. So we look for people that wanna get it right as opposed to people you know, that wanna be right. And part of that is like really being collaborative and being able to access everything that's around you.

When I'm always on the hunt for is a founder that can take what you give them and turn it into something more. So I'll give you an example. There's a founder that I recently backed who's got a retail, a startup that is that is helping boutiques sell their unsold inventory. And she herself started out as a boutique owner, so she understands the customer problem really well.

So there's that founder market fit. She's got a massive vision and she's been able to attract. Small boutique owner from Florida. She has the former chairman of Brooks Brothers on her board. So this is someone who's been able to attract the top caliber in retail talent, you know, to come and support her vision.

And like, that's like, that's what we look for. That attractability that, you know, I called these founders like Pied Piper founders. They're, they're, you know, they've got, they've built a following of people kind of following them down the. Because, you know, entrepreneurship is a team sport. You know, this is not a solo game.

I am personally not looking to back you know, those iconic founders who want their name and lights alone. I am looking for people that wanna build a team and do this as a team.  

Julian: Yeah, I, I, I love the team support you know, aspect of it because, you know, it, it really does encompass a whole not one person can do everything.

And, and if you think that then, then you're losing some pieces of information that you could gain from the relationships you have with either your advisors, mentors or, or people on your team that are working on your product. So I, I love that, that, that The anecdotal experience that, that you had with your with that recent founder in regards to just like, you know, founders and, and tools and, and helping enable as an investor from, from your perspective, what are some of the, the most valuable tools that you've offered your founders to be successful?

Is it advice, is it actual platforms and technology that you enable them with, or is it connections partner? What are the things that, that you help, the tools that you help them to be successful as they go through this journey?  

Anna: So, I'll speak about this first from the M13 perspective, because so much of what we offer at M13 isn't me.

It's our collective resources as a team. So from the M13 perspective, some of the places that we most dig in are help with hiring an organizational structure. So my partner Matt Hoffman, who I mentioned, you know, is a long time chief people officer, serial chief people officer, and is pretty helpful at.

Helping you figure out who you should hire and how you should structure your team, not just necessarily filling your pipeline with candidates, although we also do that as well. We have a data team. Most early startups before they get to say series B, cannot afford to have the internal data analytics team.

So we have a team that will come in and evaluate your customer data and look for patterns that you might not always see, and that can be hugely insight. We also have a, a way of making introductions. We have our own proprietary database of all of our connections. So everyone that someone at M13 is connected to is in this database and that allows us to be really efficient with how we make introductions.

But for me personally, you know, I look at all of that as kind of You know, the meat and potatoes of what we do. You know, and where I really wanna be helpful. I wouldn't say it's like advice, I just, I just, for me, advice has this connotation of like, you're telling someone what to do and I never wanna be in that position.

And I don't think, honestly, that's what founders look for. I am not looking to back founders who wanna be told what to do, you know, I trust them implicitly. I'm looking for leaders that I can follow and if I can be helpful to them. Helping them engage in asking the right questions and the hard questions and then like, figuring something out that they might not have been on their own and just have that conversation with them.

That's what I'm looking to do. You know, and, and then also making introductions, you know, is something I do a lot of, you know, opening up my network and things like that, but I sort of feel like that's table stakes. The real impact I'm looking to have is like helping them get to that bigger vision and see that bigger vision.

Julian: What are, just outta curiosity, what, what are some of the, the important questions that founders should be asking?  

Anna: Yeah, so the kind of questions you could be, should be asking yourself are who really are your competitors? Because your competitor for the bigger business you're trying to build is not your competitor today.

And therefore You know, which part of your business should you be investing in? So these are kind of the big strategic questions about how to take your company to market. So for example, I'm on the board of We Care, which is a company I invested in, LA based company. Amazing team. Fantastic c Jessica Chang, who's doing an incredible job navigating all the opportunity in front of the company which is massive and the business.

It's a pretty complicated business. It's a marketplace for childcare that is wrapped into an employee benefit solution. And also has a government subsidy angle. So we talk about things like where should you put your focus? Is it the marketplace? Is it the corporate benefits within that? Is it smaller, large companies?

Is it the government? How do these things fit together? So asking those big questions and keeping your eye on what do I need to be doing in the next six months so I can get the opportunity that's waiting for me in three years and position the company for success. Like, that's the kind of stuff I like to talk through.

Julian: Yeah. No, that's incredible. What, what do you think is required to build a great company?  

Anna: Oh my gosh. That is the loaded, what is the magic? What is the, you know, Yeah. What is the ma where are the magic being? Where can I get them? You know, I think, I think it's some of the things I said before, I think it's being powered by a real vision and wanting to solve a problem.

So I'll give you a personal example. When I started scribble press the company I mentioned, I did it because I met someone on an airplane who had the idea and she pitched it to me. And by the end of the plane flight, I had decided to go stop what I was doing at the time, which was working in entertainment as a talent manager and go start this company.

I knew that that company had to exist and that Iowa was meant to build it. Yeah. So I think it takes that kind of conviction. I used to say to people, if you could do any other thing, then start a company, then go do that thing. You should only start a company if you literally have no other choice because you know that you're what, whatever you've imagined has to exist and that you have to kind of bring it to life because you're gonna be in that seat five years, seven years, 10 years.

It's an incredibly long journey, and you need. . Yeah. And when things get tough, which they always do, there is no company, you know, in the world that had a straight shot to success, then you've gotta go call on that initial conviction and passion, you know, for figuring this out. Like in order to like motivate your team to keep going.

Yeah. And when you can't see, when you're, when you're working, when you're doing a startup, it's like you have a flashlight and you're in a dark. And you can only see like a tiny bit ahead of you. So it looks really easy from the, you know, when you're sitting there ringing the bell, everyone's like, Oh, great job.

You know, thinking probably I could have done that, but that person was in the dark that whole time, right? Yeah. And so they had to sort of like, keep going and keep that conviction. So yeah, so, so we look for that, you know, And then, and then we want, we wanna back teams that have that and also have a right to win.

Yeah, have something that's kind of propelling them to success, whether it's their own experience whether it's the tailwinds of a growing market, an amazing product, right? You've, you've gotta have both the right mindset and conviction, and then also, you know, a little bit of luck helping you along.

Julian: Yeah. I always like to ask this question. Is there anything that I, that I didn't ask you that I should have?  

Anna: I, I don't think so. Although we haven't touched on really the LA ecosystem and what's happening here in la Yeah. Which I think is pretty special and exciting. You know, I've lived in LA for 22 years.

I've kind of watched the, the tech ecosystem here develop you know, and have different sort of waves as we all We all knew LA was, you know, happening and was going to happen, was going to be a big center for tech innovation and I just think we're in a really remarkable. Time right now where that is happening.

And the breadth and depth of companies coming out of this ecosystem is really exciting. We had LA Tech Week, you know, Yeah. A few months ago. And just the amount of people that were there. I used to think I knew everyone in the community and I don't know, which is a hallmark that the community is really flourishing and thriving.

Yeah. So to have the opportunity to be Helping lead one of the large venture funds in LA while LA is having this moment you know, is, it's incredibly exciting, I think.  

Julian: Yeah. Is there, is there any specific category that, that the LA ecosystem is focusing on? Or, or is, are you seeing just a plethora of, of different kind of industries that, that they're disrupting?

Anna: So what I love about LA is I think it is not any longer one industry. Yeah. I. Early on in, in kind of LA it was consumer, you know, it was maybe consumer and e-commerce. It was really what LA was known for. But if you think about it, we've got deep tech, you know, we've got biotech, you know, we've got Cal Tech and uc, Irvine here, and you know, the big universities, us, C u, ucla, lots of kind of research driven startups coming out of those on the kind of deeper tech side, then you've got a really strong consumer footprint.

You know, with starting with companies that were built here like Snap and Dollar Shave Club, and then had their alums kind of go on and kind of see the startup market, you know, for you know, for consumer facing startups. And then now you've got a lot of consumer brands. You've got this. Kind of flourishing of like small consumer brands and then the technologies that support them.

And then finally this web three layer, which I think is really interesting. There's just a ton of founders in, in crypto, blockchain and web three here. So it's a really nice variety. I wouldn't say it's kind of. You know, a one horse town or anything like that?  

Julian: Yeah, yeah. I was, I was talking to a founder who was helping bigger brands kind of get on or, or create kind of a decentralized network to, to, you know, involve web through technology.

I was talking to another company that was focusing on the sustainability play. There's so many companies in. In this ecosystem working on, I think, really important problems, but also working on enabling other other companies to solve their problems more efficiently and effectively. So it's been so fascinating to, to learn from their journeys and, and also kind of see the similarities between founders and a lot of what you said in what, you know, makes a really good founder or, or kinda creates this personality or archetype of a founder.

You know, you invest in it, is what we're seeing a lot today. And I have the pleasure of doing it through this podcast. And I know we're coming close to time and, and I really appreciate the conversation and, and learning from a different perspective on, on companies, the ecosystem of investing and what makes companies, you know, successful.

And, and last little bit. One for selfish research, but also for my audience to research as well. What books or people, kind of a bonus question here. What books or people have influenced you the most in your career?  

Anna: A couple books I'll mention. , Reboot by Jerry Clona. A great book kind of in the coaching space.

Before I read this book, I didn't know you could be a coach for founders or even that maybe founders needed coaches. And that boot book was really an eye opener for me. And then the, another book I'll mention is Atomic Habit. . I think as I've sort of progressed in my career, I have really tried to be more intentional about where I spend my time, realizing how little of it I have.

And that book has really helped me. And then a book I haven't read yet, but that's just come out that I'm really excited to read called One Women Lead by Julia Boton that I've read a lot of positive reviews of, and I'm excited to read that book.  

Julian: Awesome. And, and last, last, last question is where can we support the, the companies that you're supporting, you're investing in?

Where can we get involved? I'd love to give this, this time for my guests to give us your plugs. What are your LinkedIns, What are your Twitters? Where can we support the vision and mission of M13? .  

Anna: Absolutely. So we have a founder community@mthirteen.co that you can join, so you can sign up to get updates and access all of our free founder resources.

So that's a great place to check out M thirteen.co. I'm active on LinkedIn and Twitter. I'm Anna W. Barber. My dms are open and I would love to connect with you there.  

Julian: Incredible. Anna, thank you so much. I, I love learning from your experience, not only as an entrepreneur and a founder, but someone who's investing in next generation products that I think I'm excited to, to get involved in on a day to day basis.

So I hope you enjoyed yourself, but again, thank you so much for being on the show.  

Anna: Thanks, Julian. Thanks for having me.  

Julian: Of course.

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