Q&A with M13’s Gautam Gupta

Gautum Gupta is a Partner at M13, a full service venture platform that leverages their operating expertise to help founding teams excel.

Briefly explain to us your journey to M13?

I just by luck started my career in venture capital working at General Catalyst.  I originally joined as an intern and then spent eight years right out of undergrad.  It was an amazing learning experience — the ability to gain exposure to entrepreneurs and phenomenal investors was one of a kind.  

After eight years of being on the investment side, I decided to see if I could build a business on my own.  I partnered with my buddy from college and we started NatureBox.  Like any startup, it had its ups-and-downs but we built it to be a pretty decent size revenue business and brand following.  By 2018, NatureBox received new investors and became cash flow positive.  I decided then to step away from being CEO and took some time off.  

After some traveling and reflection, I realized that I wanted to get back into venture capital and use what I learned as a CEO and operator to help the next generation of entrepreneurs.  I felt that M13 aligned with my vision of working for a VC firm entirely built of operators. 

As an investor turned founder turned investor again, what has been a notable takeaway from this path?

As an investor, you are trained to run away from problems.  You see hundreds or thousands of opportunities a year and need to find the needle in the haystack.  So, as soon as you see something that could potentially prevent a business from scaling or performing as you hope, you are trained to pass and move on to the next one.  You are trying to build a portfolio of home-runs and have to make fast judgement calls and hold a high bar for where you ultimately invest.  

As a founder and operator, you are trained to run towards problems.  You work to find problems within a business and how best to solve them.  You are expected to get your hands dirty.  This requires a different mindset. 

How does M13 foster transparency in their relationship with entrepreneurs?

It starts with the first conversation we have with founders and spans across all the ways we work with them.  During the first conversation I always tell entrepreneurs, at the risk of being unpopular, if there is a reason that we may not invest.  

Nobody wants to call a founder’s baby ugly and you have to do that in a sensitive way.  But, it’s really important to be transparent, especially since our decisions are based on a thirty minute phone call or one hour presentation.  There is not a lot of data, so it requires even more communication.    

Beyond that, the biggest thing when building a relationship is support.  When the founder is down, experiencing roadblocks or feels like they have the weight of the world on their shoulders, my job is to be the company’s biggest cheerleader.  On the flip side, when things are going well, my job is to look around the corner.  

So, it comes down to the fact that we are going to be transparent from the geck-go about what’s on our mind and be thoughtful how we support our founders on both good days and bad days. 

What is one business characteristic or metric that you think is underappreciated?

I think there’s a lot of discussion around building a great distribution channel and figuring out ways of growing products.  But, I also think great products are hard to come by.  I spend a lot of time looking at retention and engagement metrics rather than customer acquisition metrics.  It’s very telling how much time a company spends on improving and optimizing their engagement instead of their top of funnel. I view that as a proxy of whether the company is trying to build long term, sustainable growth or just growth at all cost.  

What is a thesis that you hold that most people would disagree with?

I think the distribution piece is one that most people would disagree with.  I also think that fast is not really as important as good.  There’s a lot of pressure in the venture world to grow quickly and have this hockey stick growth, but quite often some of the best and most enduring companies take a few years in the beginning of their life to figure out product-market fit.  Measuring success in how many years it takes to get to a certain milestones is a vanity metric.  There is too much focus placed on that instead of sustainable value creation. 

What is a particular category that excites you?

I’m spending a lot of time on eCommerce infrastructure.  The thesis that we have is that there are tons of merchants that are selling online and there are only going to be more trying to provide an Amazon-like experience.  So, they are going to need similar software and tools.  As a result, there is a lot of white space for third party infrastructure businesses to provide these solutions and help these merchants compete effectively with best in class eCommerce platforms. 

Another space that I am spending a lot of time on is housing.  It is kind of ironic that you can go to the grocery store and pay a 2% transaction fee but to buy a house there is a 6% fee.  There is a lot of white space for companies to figure out how to make home buying easier as well as the whole system of buying, selling, and maintaining a home much more tech-enabled.  

What particular investment taught you an important lesson?

I feel like you learn from every investment.  There are those conversations that you never forget.  I remember leaving the first conversation that I had with BigCommerce and thinking, “wow, these are true entrepreneurs.”  They bootstrapped this company to a $5 million revenue run rate in Sydney, Australia and had a deep knowledge of the problem that they are solving. It’s important to come away from these conversations with patterns that you can employ going forward. 

If you could ask one person for advice, who would it be and why?

There are so many great venture capitalists out there that have such interesting perspectives on this industry.  I am very appreciative and privileged to have worked at General Catalyst so early in my career where there are so many talented folks who have done everything from early stage to growth. 

There are also so many great entrepreneurs who have amazing knowledge on how to build businesses.  When we were building NatureBox, we were most inspired by Netflix.  Netflix took this very data-driven approach to redefine a massive industry.  We felt like we were doing something analogous as we took a very data-driven approach as well, and utilized a subscription model to disrupt and reimagine the snacking industry.  

So, being able to talk to Reed Hastings and learn from him would be amazing. 

If you could join the crew from Inception and implant one idea into the minds of entrepreneurs, what would it be?

A few things.  One is that aspect we were talking about earlier: growth at all cost is a hard way to build a sustainable business.  So, one idea would be to slow down, nail the core element of the product and continue to improve product-market fit before you start to scale.  

The second thing that comes to mind is how much a business’ success depends on people and how you treat the people around you.  This includes your Co-founder.  It is important to invest in all of these relationships and create a mechanism for improving and checking in.  Also, what I have learned as an operator is that when someone leaves your company, your natural reaction is to be upset that they left.  But in hindsight, I think it is important to appreciate the contribution they made to the company.  You should celebrate what is next in their career.  So, to put it simply, I’d also implant the idea of being more thoughtful. 

What accomplishment outside of work are you proud of?

In college and early in my professional career, I transitioned from being not health-oriented and overweight to being much more health and wellness focused.  As a result, I ended up losing seventy pounds in six months with diet and exercise.  

Having my own struggle with weight gain and loss, I became very sensitive to how difficult it is for most adults.  There is such a psychological component to why we eat and what we eat, and the underlying problems with the food system proliferate these issues.  I am proud to have gone through that experience because it allows me to be acutely aware of how hard it is for the average American to keep a healthy and balanced lifestyle.  That is part of why we started NatureBox — to improve the food system and make healthy, high-quality food more available. 

What is your creative outlet and how does it help you channel your flow state?

Reading provides me with the most creative freedom because it takes me out of the context of thinking about a specific company or market and just slows down my mind.  Even if it is reading business or management books, it gives me the ability to make connections between things that I am reading and things in my day-to-day work life.  

I dedicate some amount of time to reading everyday.  I do that in two ways.  I have a bunch of articles that I save and pocket — ten to twenty of them — and one or two books that I am working on.  I usually read the articles on weeknights, and on weekends I try to spend an hour or two on the books. 

What is one childhood memento that you have and how does it serve you?

For right or wrong I have never been very sentimental.  I moved a lot in my twenties — maybe six or seven times — and did not keep many things.  But, one of the ways that I lost a lot of weight was through basketball.  Growing up, I loved collecting basketball shoes and posters and I still have a bunch of them.  Even though I don’t have much time to watch or play, having these items allows me to appreciate how much I loved it and reflect on the way it impacted my life.

What is one daily ritual that you cannot live without?

I do intermittent fasting and have a light lunch like a smoothie from Daily Harvest that has become a really nice routine for me. 

What is an unlikely or unique place where you find inspiration?

Apart from reading, I always try to cultivate relationships with peers in whatever industry or role I am in.  When I was running NatureBox, I always had five or six CEO peers whom I could talk to and exchange thoughts with.  I have something similar now with folks that are in venture capital.  I find these relationships really helpful as it is almost like a socratic seminar.   

What is the last: 

TV show you binged?

I just started watching The Boys on Amazon.  It’s great!  I am a big fan of anything comic book related. 

Movie you watched?


Song you listened to?

I have been on this Bhangra train recently — which is a type of North Indian dance music.

Podcast you listened to?

The 20 minute VC.  

Book you read?

We just started a book club at M13.  The book we just finished reading was Where’d You Go Bernadette written by Maria Semple.  

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