Full transcript: Spark Capital partner Megan Quinn on Recode Decode

On this episode of Recode Decode, hosted by Kara Swisher, Spark Capital General Partner Megan Quinn talks about the evolving balance between venture capitalists and entrepreneurs.

You can read some of the highlights here, or listen to the entire interview in the audio player below. We’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

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Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network. Hi, I’m Kara Swisher, executive editor at Recode. You may know me as the inventor of bitcoin. Oops, did I say that out loud? In my spare time, I talk tech. You’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in.

You can find more episodes of Recode Decode on Apple Podcast, Spotify, Google Play Music, or wherever you listen to your podcasts, or just visit recode.net/podcast for more. Today, I’m in San Francisco with Casey Newton, the Silicon Valley editor of The Verge, who is co-hosting with me in anticipation of his upcoming podcast, Converge. Having a good time?

Casey Newton: Having a great time.

KS: We’re trying to do something interesting and give Casey a little trial, because he needs a little improvement on his interviewing skills. We want him to do well in the podcast business. Not better than us, but well. Us, and I mean that in a royal way.

Anyway, Casey is joining me for several episodes of Recode Decode this month, and today, we’re thrilled to have Megan Quinn in the red chair. She’s a general partner at Spark Capital and previously worked at Google, Square and Kleiner Perkins. At Spark, her investments have included Coinbase, which we’ll talk about, Slack, Niantic. Megan, welcome to Recode Decode. Those are great investments, all of those.

Megan Quinn: Thank you for having me, and happy birthday.

KS: Thank you, it’s my birthday. That’s true. I am older. I’m not very wise, but ...

CN: I’m so excited we’re having a birthday podcast for you.

KS: Yes, exactly. Where’s the cake? Megan baked me cookies. Megan brought cookies.

CN: Right, but in a way, it was for both of us.

KS: In a way.

CN: She made them.

KS: She did. Thank you Megan, that’s really nice. I have to say, Marc Andreessen did not bake me cookies in any way when he did his podcast. Neither did any of the other VCs, fascinatingly.

Anyway, let’s get right away on to you. You’ve got some amazing investments. One of the things we like to do on Recode Decode is get people’s history. You don’t have to go back to high school or anything like that, but I want to get people a sense of where you came from and how you got to where you are.

CN: Maybe a good place to start would be with something that you tweeted, I believe, last week. Anil Dash was playing this fun game on Twitter, give a shout-out to somebody who helped you early in your career, before you had to. Megan, you tweeted that in college in 2003, Meryl Stone convinced you to join what you thought was a boring search-engine company instead of going to work for the Weinstein brothers at Miramax. I’d like to hear that entire story, if you could.

Absolutely. During college, I was an intern at Miramax. I’m originally from Los Angeles, so the entertainment thing always seemed sort of interesting. I would intern there during my summers, and so ...

KS: More than one.

More than one. I knew the Weinstein brothers from afar, but I’m not claiming to have known them directly. I was a plebeian.

KS: Good. That turns out to be a good thing.

After school, of course, I was thinking about returning to LA. It’s where my family is. I had had these gigs in the entertainment business, and so that seemed really natural. It was about halfway through my senior year that a friend of mine, Meryl Stone, who ... Kara, you may recall, she was one of Larry and Sergey’s very first assistants, back in the day.

KS: I do not remember her but perhaps. I’m sure she’s made my appointments with him ...

She had been a year ahead of me at Stanford and she loved working there. She’s like, “It’s an extension of college, it’s so great.” At the time, let’s recall, this was before Gmail. It was truly just a white page.

KS: This was what year, 2000 ...”

End of 2003.

KS: It was early, early on. It was past the garage, but when they were in that tiny, little office space.

It was early, but not early early. The only thing I knew about Google was the white homepage that we all know. She said, “Just come in, meet some people.” I said, “Sure.” This was before Google had optimized their interview process, so I had 18 interviews, including with some people you definitely remember, like Cindy McCaffrey.

KS: Sure, absolutely.

Who ended up being my first boss.

KS: She just keeps tweeting vacation photos.

I know.

KS: Since she left 100 years ago, like a very smart person.

And David Krane, and to tell you how little I knew about the company, I sat down with David Krane and he was like, “Well, why are you interested in Google?” I had looked at the website super quick before coming over. I was like, “Well, it just seems that Larry and Surge are really onto something here.” He said, “I’m sorry, what was that?” I was like, “Surge.” I had never seen the name “Sergey,” it shows how sheltered I guess I was. Eighteen interviews later and I’m sure lots of different intelligence tests or something, I got an offer and I still was like, “Eh.”

KS: Susan Wojcicki might have been in that group. Was she?

She was definitely in that group. I had to interview with Larry and Sergey, so it was a point in time when they were still interviewing everybody.

KS: They were interviewing everybody at that time.

They asked me one question.

KS: Which was?

How would you organize a bookshelf?

KS: Oh, that was their ...

CN: Wow. What was your answer?

I am not a particularly creative person. I said, “Alphabetically by last name.”

CN: That’s what I would have done, too. Wow, I could be Google material.

This is before Instagram. This is before people were color-coding their bookshelves, okay?

KS: Color-coding. I like the Warby Parker method of putting books on shelves by color.

CN: They do it by color over there?

KS: Yeah.

CN: I find that it’s too precious for my taste.

KS: I love it, I think it’s so ...

CN: You passed the bookshelf test ...

KS: Let me interject. You were interviewing for what job?

It was a generalist marcom role.

KS: David Krane was in PR.

Yeah, and so I worked for Cindy. My first actual activity was being a gopher for the IPO. I was nobody. I was accepting the gifts that people kept giving them and then filing away who they had to write thank you notes for, but that was ...

KS: What was the best gift?

What was the best gift? This is when those socks came in, with the little toe, and they loved them.

KS: They loved those.

The toe socks. That was a real highlight of the mini Morgan Stanley gift baskets.

KS: Nice, well, Sergey’s wearing ... I think, I was at an event the other day where he was wearing toe socks, I think, I’m pretty sure. Anyway, you just did just scut work, essentially.

I did, and I was part of an acquisition team that fall, so after the IPO, for a company called Keyhole, which was led by John Hanke. That ultimately served as the underpinning for Google Earth and Google Maps. I was a historical map collector by personal passion. I’ve collected maps since I was a kid.

KS: What?

Yep. I’ve always loved maps. I always tell my husband, MG, that if the house catches on fire, leave the photos, leave the Apple products, grab the maps. I was really excited to work on what would end up being Google Local and Google Maps and went through a series of different jobs at Google in my seven-and-some-odd years there.

CN: What was it about historical maps that got you so excited from a young age?

I’ve always loved maps, because I’ve found them to be the perfect intersection of utility and design. I find them personally beautiful, aesthetically interesting, especially the further back you go, the more interesting they are. There’s places in the oceans that they had monsters that they believe were there and this, you too shall not pass, and so on and so forth. At the time in which they were created, they were actually a utility. They helped people get around, and so I was very attracted to the idea of being a part of cartography 2.0.

KS: Interesting. You are probably not the age that you used maps like I did, like in cars. I had maps.

CN: Did you have a Thomas Guide?

KS: It’s interesting, a lot of geeks are interested in mapping, like Jack Dorsey. He likes subway maps, though. They like transit maps and things like that.

He likes to see how cities ...

KS: Cities move, and stuff like that. You just like maps, just beautiful maps, in general?

Yeah. I like all elements of them.

KS: I just saw a bunch at the Exploratorium, they’re wonderful. They have upstairs, they have tons and tons of historical maps.

Actually, San Francisco has this collector, David Rumsey, who’s famous. He has one of the largest collections of historical maps in the world, actually, and he’s just downtown.

KS: That’s fantastic. You did that, so then what? You were there.

CN: Something that I want to focus in on is, Megan, if I remember this correctly, you were doing communications around Google Maps, and then at some point you moved to a product role.

Right.

CN: Which I feel like is something that’s pretty unusual in the tech world. So how did that come about?

It’s unusual in the tech world, and it’s unusual in the Google world, too. I do not have a computer science degree.

KS: A problem at Google.

When I left, I think there was something ... I’m going to get the number wrong, but let’s call it 400-odd product managers, and I was one of four that didn’t have some sort of technical degree, in maybe electrical engineering or something. What happened was, quite honestly, is that Nokia bought Navtech and TomTom bought Tele Atlas, and now we’re dating all of ourselves here, but at the time that seemed really threatening, because Nokia was a fierce competitor.

We depended upon them for the data, for our maps. We started to think maybe we need to have data independence if this category is going to be important to us, both from a consumer product perspective as well as from an advertising product perspective.

KS: Information perspective.

Exactly. I started a project at that time with Sebastian Thrun, who I think you both know, who’s gone on to found Udacity. He was the technical lead, I was the product lead, for something called Ground Truth. Frankly, I got the job, I think, because I was the most interested in maps and I’d worked with John and he trusted me a lot. It started off as a large business development effort. We went around the world, we were acquiring different data types.

Fun fact, every single geo point on the earth requires 22 different data types, so you need polygons to know if you should fill in the map with water or if it should be a forest and be green. You need geo codes, you need road names, you need road directions, and so on. It started off as a massive business development effort, and then when we had enough data acquired to actually start building is when I moved over to the product role. I did quite a tour of duty within Google, and then led that from a product perspective for a number of years.

KS: Right, which was one of the more successful efforts. Mapping was critical to Google, because then they bought, besides Keyhole, the one that did all the cars, the search, that was from a Stanford group, right?

Yeah, for Street View. Street View actually was not only just to give consumers street-level imagery of the world around them, which was interesting in itself, but also so that we could build the map, because you need to have street-level imagery to understand road direction and road priority. Is something a major highway? Is it a back-country road? I moved to the product role for that and actually, given that I brought some cookies, there’s a good anecdote around that.

When we launched the U.S. internally, so we were dogfooding, which is a famous Google notion at the time, it was really critical that we get as much feedback from people as possible about errors that we had. We knew we weren’t 100 percent correct, but if we were going to exchange this map that people were using every day in a number of products with one that we had homegrown built, it needed to be perfect. Expectations were high.

Basically, I started a three-month-long effort to have people dogfood, find errors, and there was a number of different ways that we asked them to find errors, and then for every bug they submitted, I baked a cookie and sent it to them. I ended up making 8,000 cookies, over 8,000 cookies ...

KS: Wow.

As part of this debugging effort, and then we launched it.

KS: That’s such a friendly way to do it, because most Google people are just rude. That was really nice of you. I get a sense why you left Google at this point, because you’re way too nice. You don’t have to insult Google. You were there doing that. Why did you leave, then?

In 2011, John Hanke and I actually spun out into an autonomous unit.

KS: That’s right, to keep people there.

Exactly. John had been there for a while, had been extremely successful. Google obviously wanted to keep him but I think what he was interested in doing was figuring out ways that we could leverage the map data that we had just spent all this money, frankly, building, for new products and services that maybe weren’t Google Maps, weren’t directions or local search. He started an autonomous unit. He took me and four or five other people with him.

KS: What were they called? They had a funny ...

Niantic.

KS: I know Niantic did, but that effort was called something.

AUs is how we always referred to it, for autonomous units. We went and we started Niantic, this group of us, and I worked with him on that for a while before ultimately going over to Square.

KS: The idea behind Niantic, explain that. He tried something else before that. What was before it was Pokémon?

The first product was something called Field Trip.

KS: Field Trip, that’s right. My kids went on it, that’s why.

I love Field Trip, to this day. I think it should exist. The concept around Field Trip was, what if you could walk through Wikipedia? As you’re walking down the street, you get pushed an old photo of what that building looked like, an interesting fact about what happened at this intersection. Just what would it be like if you had all of the world’s geotagged information at your fingertips in a way that wasn’t annoying and was interesting and compelling and so forth? That was the first project, and then ...

KS: It was kind of wonky. My kids did it, and I remember they did it at the Presidio, right?

It was all over. It was a time before push notifications were really clean and well worked out.

KS: Right.

CN: I feel like it’s something that could still work today, but it’s still waiting on the right hardware. I think if Google Glass had been a massive success, Field Trip would have been one of the reasons why.

KS: There were a bunch of them in this genre.

You want it to be passive and delightful, not incessantly annoying.

KS: WHen AR is really there is when it will work.

Exactly. The second project — I had left at this time but was helping on early prototyping — was a game called Ingress, which is still live today and enormously popular, actually, and then the rest is history. They continued to build.

KS: Pokémon Go was the one they did after it. Why did you leave there?

I started having recurring nightmares that I was going to wake up and be 55 and SVP of some product group at Google and would have never, ever worked anywhere else except Google.

KS: It’s a nightmare, it’s a recurring ...

Only in the sense that I loved working there, but I knew that I needed to see more business models, products, work with different types of entrepreneurs, and so I really went for the 180. Larry and Sergey were not cults of personality. In fact, they tried to push decision making to the edges, and prop up other spokespeople. The company was obviously quite large at that time, it was about 35,000. I had never worked in hardware. Adding those three things together and looking for the 180 opportunity ended up being Square.

CN: I’m curious when you got there if you felt like you were a Google product person through and through, or whether you had different ideas about building a product that you took with you when you became the head of product at Square.

I definitely had strong points of view on building product when I went to Square that was very much indoctrinated in me by the Google system. Actually, I was originally hired at Square to be the director of risk. It was about 20 people. Keith and Jack hired me, and they wanted someone who had never done risk before, because they wanted someone who would treat risk like a product. If you know anything about payments companies, risk is really foundational.

KS: That’s the critical part of that business.

Turns out, I get there — I said yes, by the way. I said, “Okay, I’ll take this job. I have no idea what this means, but I’ll figure it out.” Not even two weeks had passed and the company launched some product or another and everyone came back in the next day and was like, “Oh, what should we build?” I was like, “I don’t know, what’s next on the road map?” They were like, “Oh, there isn’t really a road map.”

I sent this long letter to Jack — which, unfortunately, I don’t have the email because it was on my Square email. I’ve always wanted to get it back — about, “Hey, I’m the new girl here. Don’t want to step on any toes, but here’s like six or seven things I would do differently as we think about building out this product engine across engineering design and the PM function.” He just wrote back, “Congratulations, you’re our head of product.”

KS: Wow. Now, we understand Twitter. Thank you for that little insight. God. That utterly rings true. That rings beyond true.

CN: It sounds familiar, but I think it’s also a great story about recognizing talent in the workplace and handing the reins to the people who were already starting to do it anyway.

KS: How about taking billions from investors and having no clue, okay.

Square runs like a well-oiled machine.

KS: Now it does.

It did then, too.

KS: It did, yes. That’s mostly because women are in charge. In any case, so you were doing that and you decided ... What did you like about that? About Square itself. Obviously, Square is actually getting quite a bit of traction now, especially.

It’s doing great. What I really appreciated about Square at the time — and it’s subsequently, I think, been a real advantage for them — is their focus and emphasis on design. In my however-many seven-plus years at Google, I met one designer. I didn’t really even appreciate that it was a function that was core to product building. That was not how Larry and Sergey and Marissa, to some extent, thought really hard about building products. Obviously, Jack brings that perspective and that priority, and that was really very interesting to me.

CN: Right. That’s what I wanted to get at with this question of whether you consider yourself a Google product person, because when I think Google product, I think testing the 96 shades of blue on the home page, just this incredibly data-driven approach. I wonder what it was like to land at Square where there is this vision of, “Everything must be beautiful and clean.”

KS: Apple-like. That’s where he gets his inspiration.

I truly walked away with a hybrid view of the benefits and pitfalls of both. I believe strongly in data and leveraging data to build better products, but I do think you can’t ignore intuition and that’s really where the design thinking comes in.

KS: Right. You were there. Why did you leave there? This is ... venture capital is next.

Yes. John Doerr was on my board at Google, and Mary Meeker was on my board at Square. I knew both in those board functions while I was at the respective companies. Really, really liked both, admired both, and spent a lot of time with Mary in my role at Square. People, I don’t think, fully appreciate just how product-oriented she is as an investor, which is surprising, given she has a banker background. She was extremely helpful to me. She’s great.

I had been chatting with the two of them, and then a couple other Kleiner partners reached out and said, “Hey, you know, we have this open partner role on the early-stage team. Have you ever thought about venture capital?” I really hadn’t, I had never seen a woman VC before Mary. I thought you had to be a member of the AARP to be a VC. I just started talking with them and was really attracted to the idea of getting to see a horizontal view across a lot of different products and entrepreneurs and businesses that I hadn’t had when I was just focusing on maps, or just focusing on payments.

KS: Speaking of the elderly and also male, essentially, did you have any worries about that? Obviously, this was post or pre Ellen ...

Interesting story, I had signed my offer letter from Kleiner, and the Ellen Pao trial or lawsuit was announced the next day.

KS: Nice, well done. How did you feel about that?

They all called me to see how I felt about that. I probably went one more layer on references and talking to some people, and Aileen was really helpful in that capacity, Aileen, Cowboy [Ventures], she’d previously been at Kleiner. Decided it was worth trying myself.

KS: Why venture capital? Just because you wanted to ... A lot of people want to stay in operating roles, versus ... A lot of people in venture haven’t done operating roles.

Right. It was truly so that I could see a bunch of different products and businesses. I had felt like when I was at Google, I was really deep in that bubble. If you’re in Google, especially early days, you thought the world revolved around Google. At Square, I was working honestly 18-, 19-hour days, and all I thought about were payments. The opportunity to stick my head up and learn, frankly, at scale, for my job, was really exciting.

CN: How do you go from a place where you’re building products to all of a sudden needing to get caught up to speed on many business models that you haven’t run across before?

I’m still doing it, quite frankly. I learn every day; every meeting I have is an education. It’s really through meeting other people and talking with folks. One of the most humbling pieces about being a VC is that it is your job to be the student. Inevitably, the person sitting across from you knows a lot more about their market and their business and their product than I ever will. I say unless they’re building something in maps, there’s no question that they know more specifically about their business than I do, and then to pass judgment and know that you’re often wrong. That ability to be a student as a job is really exciting. If you’re someone who is intellectually curious, that context switching is awesome.

KS: Did it matter that people don’t look like you, essentially? Getting back to the older male white demographic, really, pretty much.

That was why I had never thought about venture capital beforehand, but ...

KS: You can have mentors who are men or anyone ...

You definitely can. Frankly, I’ve only ever worked for men and had wonderful bosses and mentors in my time at Google and Square. Mary is a woman, obviously, and hugely inspiring to me, and was a critical part of my going into venture capital in the first place.

KS: What were your worries about it, then? That you wouldn’t be listened to or that they’re just ...?

It wasn’t anything specific to my gender, it was that I didn’t know what the job actually entailed. I think from the outside it is hard to say, “You’re a VC, Tuesday, 9 a.m., what are you doing?” You just have to figure that out.

KS: Golf, golf.

I’ve never gone golfing, not once.

CN: My understanding of it is that it’s a lot of meetings and it’s a lot of listening and then 99 times out of 100, you say, “Thank you, this was great. We can’t actually give you money, but let us know if we can be helpful.” That’s most of the meetings, right?

KS: It sounds like reporting.

CN: Except the reporters are never helpful.

KS: That’s stupid.

I think it depends on the person. The anecdote I give is, my husband is also a venture capitalist, but he’s an introvert. Every meeting for him is extremely taxing and so he probably does max three a day. The rest of the time, he is reading and then synthesizing a point of view by writing, which ends up being top of funnel for deal flow for him. I’m the opposite. I’m probably doing 12 to 14 meetings a day, and it’s because I love meeting people and talking to people and I’m a social animal. That’s how I learn about new things versus all of the reading and writing that he’s doing. I actually think it depends on the individual.

CN: 12 to 14 meetings a day is so many meetings. Are there actually 14 interesting people a day to meet around this town, or world?

There’s a never-ending list of interesting people to chat with, but it’s also quick calls for recruiting, trying to close a candidate for a portfolio company, it could be any number of different things. Doing a diligence call with someone in some obscure industry because the company you’re looking at happens to provide their SaaS solution. It just depends.

KS: You were at Kleiner, and then you moved to Spark.

That’s right.

KS: How long were you at Kleiner?

I was at Kleiner for three-and-a-half years ish. Something like that.

KS: You were one of those, they had different levels of partners. Were you in Mary’s group there?

I was one of the partner’s that was split between the venture and the growth fund. Mary runs Kleiner’s growth efforts, and I was three-quarters early stage, one-quarter late stage.

KS: You wanted to move to Spark because ...

Actually, so when my husband and I moved to London for a year, I was with Kleiner when we moved to London. He moved so that he could get GV’s investing efforts off of the ground there.

KS: This is Google Ventures.

This is Google Ventures, that’s right. Halfway through the year, I just decided that when I move back was going to be a really clean time to do something new. I told the Kleiner team that I was thinking about doing something different. I had an idea for something that I wanted to do that I still, at some point, want to do.

KS: A company.

Not a company, actually, a different type of funding vehicle. I had met my now partner, Jeremy Phillips, on Spark’s growth fund six months before that. We had been chatting and he just kept calling and ringing, he was very persistent. I had known Bijan for some period of time.

KS: Bijan Sabet.

Yep. Slowly but surely, more of the Spark partners kept reaching out and we spent more time and then after 15 months, I actually decided to join them. It was a very long process for me to get there, because I had not been thinking about going to another firm. I actually told Kleiner I wasn’t going to another firm.

KS: Right. A lot of firms are looking for experienced women entrepreneurs to bring in, which is harder. Do you have any idea why that is? I don’t want to focus too much on the woman thing, but it’s true. You’re one of the few women venture capitalists of any high profile.

That’s right. There’s not a lot of women general partners. I think the number is something like six to seven percent of all GP’s are women, so it’s a very, very small group. I think that there’s a lot of reasons. The one that speaks to me most intimately is the “you can’t be what you can’t see” meme, because that’s truly why I got into venture capital, is I saw Mary and she was awesome and she was helpful and I loved working with her, both as a board member and as a partner.

That was really the inspiration for making the jump for me, to the extent that there’s more women there, more women will see women who could potentially be them in a few years. I think it’s already in the proof. We’ve just recently hired another woman on my team. I’m not saying that my partners wouldn’t have hired her if I hadn’t been there, but I don’t know that she would have wanted to join an all-male group.

KS: Right. It’s off-putting, in some way. Since then, you’ve been investing in ... We’ll talk more about that issue in a little bit, but you’ve been investing in Coinbase, Slack and also Niantic, where you’ve worked. Can you talk about your theories and then in the next section, we’re going to talk about where things are going.

Sure, so Jeremy Phillips and I oversee Spark’s growth funds. We have two funds. We have a billion dollars under management and we’re trying to build something a little bit different, which is to say we are trying to build the most collaborative fund possible. Jeremy originally started the fund three years ago, after Spark having a long history in early-stage venture investing. He comes off of an entire career of operating, so he’s never been an investor before. He was Rupert Murdoch’s right-hand guy, he started a company and took it public in Australia.

KS: He’s a character, also. He’s a wonderful character.

He is. I think the fact that we have two people who, by and large, have been operators for the majority of their career and are new to investing, gives us the opportunity to try and evaluate how we would build our own practice from scratch, not having done this before, which is a once-in-a-lifetime opportunity.

We look at every deal together. If anybody on the team — we have four more junior folks on the team — meets a company that they think is interesting, we all meet on the second meeting. We all spend time, we all do diligence, we all call customers, and we come to a shared point of view. All the way down to the terms sheet, we don’t put a name on the terms sheet for a board seat.

This is different. This doesn’t sound revolutionary, I know, but this is different than how firms typically operate. More often than not, it’s individuals coming together on Monday morning, pounding the table for a deal they want to do and then going off their own separate ways for the rest of the week.

KS: You eat what you kill.

We’re trying to really invert that model completely. All the companies that you’ve listed, I’m an investor in and Jeremy’s an investor in, as well. They’re on both of our bios. We do work with both after the investment. It’s a great little model.

CN: When you say it out loud, it seems like there would be lots of benefits of collaborating. I wonder, why has it been rare up until this point?

Probably a lot of ego.

KS: Probably.

Probably a lot of ego and ownership around deals and companies, because that’s how general partners have historically been compensated. What did you source? What did you close? What was your exit? We could have gone down that path. That’s the path of least resistance in many ways. We made this deal together that we were going to do things differently, and every loss was going to be our loss, and every win was going to be our win. It’s an experiment. It may totally backfire, but right now, for us, it’s really working.

KS: I think a lot of venture firms talk as if they do that, but they do not practice it.

Exactly right.

KS: I’ve been in so many rooms and I made this joke just a second ago, but I literally was in a room where someone goes, “We eat what we kill.” I’m like, “What?” Then get served by a butler. Entrepreneurs love being referred to as roadkill.

Anyway, this is interesting. When we get back, we’re here with Megan Quinn. She’s a general partner at Spark Capital, she previously worked at Google, Square and Kleiner Perkins. At Spark, her investments have included Coinbase, Slack, Niantic, and we’re going to talk about those investments and where venture is going next on Recode Decode, with my co-host, Casey Newton.

CN: On Kara’s birthday.

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Kara Swisher: We’re here on Recode Decode with Megan Quinn, who is a venture capitalist at Spark Capital and also with my guest host, Casey Newton, of The Verge. We’re talking venture capital and Megan’s history, which is really fascinating. You’ve worked at a lot of places. Let’s talk about your theories of investing right now. We’ll get to bitcoin in a minute, because Coinbase was one of the earlier companies, but you’re in Slack, which is another fantastic company. How do you think about how you invest? How much do you invest? Go technical.

Sure. Our current fund is 600 million. We invest checks of 15 to $50 million. We’re not actually focusing on a specific ownership, it’s more about these dollars and at work and the subsequent valuation. We look at companies that are series B all the way up to pre-IPO. It’s a very broad swathe of the overall ...

KS: It can be anywhere, and any investment.

Yes. We look at consumer, we look at enterprise, we look at companies in South America and Europe, and we’re really looking for category leaders, and that’s how we talk about it.

KS: 600 million is the amount you have, correct?

600 million in Fund Two, 400 in Fund One. A billion under management.

KS: That’s small compared to the Vision Fund.

In fact, collectively, we’re all small compared to SoftBank’s Vision Fund.

KS: We’ll get to that. You decide, depending, and you want a big chunk of these companies, right?

It’s not as ownership focused as early-stage investors tend to be, because we’re at the growth stage. It’s really important to us that we’re not taking product market risk. Our venture partners are the ones who are investing in entrepreneurs who have an idea on a napkin or a prototype. We are willing to take on some type of risk, but it can’t be product market risk. It really needs to be more execution risk, and overall market orientation risk.

KS: What do you look for? Say, what did you look for in Coinbase or Slack?

We are looking for amazing entrepreneurs, first and foremost. That’s true across all stages. We’re looking for compelling, differentiated products. That’s a little bit higher of a priority for Spark, I think, than most venture firms. We are looking for massive markets. If not massive today, the opportunity ahead, perspective that we have about the world where the market will be huge.

We’re looking for business fundamentals. Even if the company is an early series B, we want to have an understanding of what that business model is, and whether it can scale with cash, as opposed to just adding more bodies.

KS: When you do that, everyone else is trying to do that, pretty much. Entrepreneurs, great product, huge market.

Everyone’s cash is green.

KS: I know. Exactly. How do you differentiate yourself?

I think Spark growth benefits from having Spark Venture have this really warm, well-received reputation in the market. People like Spark. In fact, what I always said about Spark before I joined is, “Oh, it’s those nice guys back east.” Now we’re trying to change it to be those nice guys and some women and also, we’re out here in San Francisco and in New York. People have a good halo, a good feeling, around Spark as a firm. We always say and we tell entrepreneurs, we’re not going to hurt your business. And by the way, that sounds like a low bar, but it turns out, a lot of VCs can do more harm than good by injecting themselves at different times or places when not needed.

We tend to be founder driven, based on where and how much we help, and it really does depend on the stage. We’re obviously spending more times with the companies that are earlier in their life cycle, the ones that are going to go public in the next year. We work super collaboratively, so people do see Spark, specifically, Jeremy and I, as a unit that they are getting access to across the board, versus you are going to only talk to this one person and never anybody else at the firm and you’re that one person’s guy or gal. We really have a very collaborative approach.

CN: How many investments are you making a year or since you started, how much have you been investing?

We’ll make anywhere between five and eight investments a year, it just depends on those check sizes. We have a portfolio of about 22 companies right now, half of them where we’ve led and half of them were we’ve followed. We like working with other growth funds. We work really closely with a number of growth funds that you would know: General Catalyst, IVP, Kleiner Perkins, so on and so forth. As these round sizes get bigger and bigger, this is a group that you would have thought was actually more competitive than not, is tending to collaborate more because there’s so much capital that’s going into these companies.

KS: Because there’s so much competition with the money. Even though it seems like maybe we’re in a bit of a winter, there’s still so much money washing around.

I think it’s a winter at the earlier stage, in the seed stage, that’s where the data has come out more recently. It does not feel like winter, it feels like the surface of Mars right now on on late-stage. Mars is hot, right?

CN: That’s what I’ve been led to believe.

Surface of the sun.

KS: That’s hot.

CN: It seems like even just in the five or six years that you’ve been actively investing, there has been this flood of money, particularly into the early stages, and I’ve read a lot about how the venture capital industry seems to be changing, there are a lot of questions about its future. Do you feel like you’ve seen a lot of change in VC since you’ve joined, at least as far as the amount of money available and the leverage that might give you?

I’ve been doing this for, let’s call it five years. I don’t know if that’s exactly the amount of time, and that’s still considered pretty early to the industry. The other folks who have been doing this longer like to remind me there used to be a time when VCs had the power and they were the ones selecting the entrepreneurs and it was this summer and glory of VC opportunity and now it’s the entrepreneurs have all the power, we’re all competing desperately to show them how ...

KS: Imagine Blair speaking like this. Anyway, sorry.

How much value we can add. That’s so offensive.

KS: You know what I mean. I always have a test, if you have to shoot everyone in the room except yourself, who’s left?

CN: You spend that much time thinking about who in the room to shoot? Everything makes so much more sense now.

I brought you a cookie, so ...

KS: I know, not you. I wouldn’t shoot you. If anything, if you had to shoot everyone in a room, the entrepreneur is the last person you shoot.

Right.

KS: Right, so that’s all.

They’re the one that’s building the future.

KS: There is a stack rank. You could easily, just try that. Just borrow it, borrow it anytime. You can do that with companies.

CN: You’re always free to imagine who you would murder, Megan, if you take one thing away from this recording session today.

KS: No, it works. Think about it as a company. We can do it here.

CN: I think I get the metaphor.

KS: In any case, the venture capital is in charge, but you say you’re not thinking like that, you’re thinking entrepreneur based, correct?

Right.

KS: They’re at the center of the thing. What do you contribute? I want to talk about some specific companies.

It depends on the stage, in terms of how involved we are, but it’s everything from recruiting ... So I am an active recruiter for the portfolio companies that want and need my recruiting assistance, I close candidates. I’m actually going right from here to close a VP product candidate for a company. I’m sourcing candidates, and I’m an active customer closer.

I joke with a couple of the companies that we work with that I’m their best performing AE, account executive, in terms of sourcing different business opportunities for them because again, I get to interact with a lot of different people and a lot of different companies, and there’s interesting synergies all across the place, even if they’re in different markets, and so on, so forth.

KS: You’re trying to poach Google or wherever, somewhere else, or how do you do that recruiting part?

Oh, yes. I’ve been gone from Google for a long time, so it feels like open season. I can definitely ...

KS: What do you look for when you’re thinking of that, when you’re bringing someone who’s a startup? Big companies are trying to have more power now. They’re where all the money is now.

Absolutely. You’re looking for people who want to go someplace where they believe that they can change the trajectory of the company. I actually completely disagree with the Sheryl Sandberg model of if you’re offered a seat on a rocket ship, just get on. Don’t ask which seat. I think that’s a nice sound bite and obviously, it’s worked well for some people. The counter I have to candidates when I’m talking to them is, “Wouldn’t it be more interesting to go to a place that you know it’s not going to do as well if you weren’t there, because that means you’re going to have ability to add value.”

KS: Push a button on that rocket.

Exactly, exactly. Have control, really. Really feel like you’re contributing.

KS: When you’re doing that, when you’re trying to get people to do it, how difficult is it now to get people to go to startups? I would think it would be a challenge right now, for some reason.

It doesn’t feel any more difficult now than any other time, but I will say as an anecdote, I’m on the board of a company in North Carolina called Pendo, and we put down ...

KS: What do they do?

It’s a product experience platform for enterprise companies. They do analytics guides, walk-throughs, NPS for B2B software. We put in our investment memo, we write a long memo that goes along with every investment, and there’s a risk section. What do we think are the things that could really be a downfall here? We put for Pendo, recruiting, because it’s in Raleigh, North Carolina. We don’t really know Raleigh. We don’t have a network in Raleigh. It felt like it could be hard to get really great people to go there. Of all of our portfolio companies, all 22, they have the easiest time recruiting. They are picking people out of the Bay Area, Chicago, New York. All folks that want to move down there, or have some land, have a family. It’s been interesting to watch.

KS: That’s interesting. When you’re on the product side with customers, what are the key things you do as a venture capitalist?

I like to help more on setting up a product-building organization. It’s not going to be helpful if I’m going in and saying, “Hey, not that color of blue, this color of blue,” or, “Have you thought about rounding the edge here, versus keeping it ...” That’s not useful to the company, but helping them think through how they can create an organization that builds products across engineering, design and product — and that means everything from let’s talk about the cadence of product reviews, what does a road map look like, how do we measure our success? These things sound very fundamental, but there’s a surprising lack of them, often, in the earlier-stage companies.

CN: How much room is there to invest in the consumer space right now, in particular? I know you’re looking across all spaces, but I feel like conventional wisdom right now in venture capital is that consumer is really slow and boring. That’s my perspective, also, as a reporter. Maybe you’re seeing really interesting things recently that just haven’t bubbled up yet.

I think that where we’ve seen a lot of interesting things on the consumer side have been these fully integrated direct-to-consumer brands. We have a thesis. It’s not particularly unique to us. In fact, Kirsten has built a whole practice around it.

CN: Kirsten Green?

Kirsten Green at Forerunner. The internet has changed the game as it relates to building consumer products and accessing consumers. You no longer need to have enormous ad budgets, you don’t have to do deals to get your product on the shelf, that the internet has really leveled the playing field. For the first time, word of mouth is really a foundational customer acquisition channel. You can actually count on it and you can measure it.

We have met ... In the last year, I had someone on my team look at this, 57 different fully integrated direct-to-consumer brands. I’m not going to say the ones that we met with, but all of the ones you could think of, so the Pelotons and Allbirds and Hubbles and so on and so forth. We do think that there’s really interesting investment opportunities there. We have some caveats to that. We think price matters there more than most places of software investing.

We also think that ... Our unique perspective is that it’s not enough just to have a brand, you actually have to have a community as well, and that community has to be organic. It has to be customer love that ends up manifesting itself in a conversation with the company that is authentic. Which is to say, if it’s something, if it’s a website, where you just go here, you input your credit card, and then you get some X, Y, Z thing in the mail.

Even if it’s an amazing, beautiful brand, we have a hard time believing that’s a billion dollar company. If you’ve organically built a community of people who tell their friends and acts as sales representatives for you, and are actually giving you product feedback and have this exchange and dialogue with that customer base, that has tremendous opportunity to move into adjacent product lines and become a really, really big business.

KS: Give an example.

Glossier is a great example. Emily built up a website into Glossier for seven, eight years, focused on product reviews in the beauty space and skincare space, and then took that community and built the products that they were asking for. It’s doing phenomenally well. They have a portfolio of products that they sell in the skincare space, and that community, in turn, gives back. They tell people it’s part of the engine of their growth, and also help them develop new products down the line.

KS: Does everyone have to be thinking like this or can there just be a transactional, “I want this.”

I think that you can totally have interesting businesses that are purely transactional but I think that there’s a cap on how big they can get and therefore, from an investment perspective, it’s a better investment for an early-stage investor than a late-stage investor, who needs to see a three to five X on that return.

KS: What do you think is interesting right now? What topic areas?

That’s my least favorite question. It’s like journalists being asked, “So, what are you working on these days?”

KS: AI, robotics. I can answer your question.

You already answered? Those are all good. At the growth stage, it’s a little bit different than venture stage, right, because there is a finite pool of companies for us to invest in. It’s not just tons of people with a napkin idea or in academia, working on some interesting piece of tech.

The companies that we’re investing in and looking at have, by and large, already raised some sort of capital, have seen some sort of traction. We tend to not be thematic driven, we tend to be entrepreneur driven. We see these entrepreneurs as the ones who have found success with a product, have taken it to market, are seeing product market love, and that’s the opportunity for us to engage as late-stage investors.

KS: What are you looking for in those entrepreneurs?

We’re looking for, definitely, intellectual rigor, honesty, first and foremost, I should say. I look for self-awareness. I think it’s really important, as entrepreneurs mature up the cycle, in terms of company building, that they have a good understanding of the things that they’re really good at and the things where they need help, where they need to either leverage their board or bring in executives. We look for people who are intellectually curious.

Yes, you’re focused on building your business, you’re obsessed with your customer, but you don’t have blinders on. You’re interested in how the world works, so you can see around corners before others can. We’re looking for people who are magnets for talent. Recruiting is one of the very most toughest parts of building a company. It’s a long, long list.

CN: You don’t want to talk about many areas that you’re interested in, but we should ask you about the blockchain because at this exact moment in time, it’s blockchain mania.

KS: Mania.

CN: I read today that people are taking out mortgages to buy bitcoin, so that feels like a healthy part of the cycle that we’re in now. You started with ...

KS: Do you know I have bitcoin?

CN: You do? Do you know it’s prohibited by the Vox Media ethics policy to own bitcoin?

KS: I bought it a long time ago.

CN: All right, don’t tell Jim Bankoff.

KS: I lost it.

CN: How’d you lose it?

I was going to say, we can solve this. You could donate it to me.

KS: I’m not going to donate it to you, I don’t know where it is.

CN: After she baked you the cookies?

KS: I’m going to ask you about Coinbase, because I think that’s where my account is. It might be there.

I hope it’s there. It wouldn’t be lost, though, if it was there.

KS: It’s one of those companies, because I did a story on them whenever ... This was five or seven years ago.

It’s been around for a while.

KS: It was Jeremy, right? Jeremy.

CN: How did you get involved with Coinbase?

We have known Coinbase for a number of years, through our friends at Union Square Ventures, so Fred Wilson ...

KS: Who does Coinbase? Who’s the CEO of Coinbase?

Brian?

KS: Brian.

Brian. I thought you were referring to my partner, Jeremy. Brian Armstrong is the CEO.

KS: Right.

Our friends at USV, frankly, even when I was at Kleiner, Fred would ping and nudge, and for a while there, bitcoin was just sailing along.

KS: It was doing an up and down.

It was up and down, but it wasn’t up and down like it is now.

KS: No.

We’ve always kept an eye on the market, but again, from a growth-stage perspective, we need there to be a little bit more market maturity. The company went out earlier this year to raise a round of financing, and we ended up participating. Our thesis there was really simple. We think the toothpaste is out of the tube on cryptocurrencies, and we think the world needs a safe, well-lit place to transact. That’s what Coinbase offers.

CN: What makes it safer than the Mt. Goxes of the past?

They’ve spent 18 months, two years, it’s actually a competitive advantage for them, working with regulators and security firms to be able to provide the safety and security around that business.

KS: There’s a bunch of others, correct?

There’s actually not a lot that are doing pure play what Coinbase is doing today. Not to say that there won’t be, by the way, I’m sure.

KS: There will be hedge funds, there will be everything.

Square Cash is launching some bitcoin trading feature functionality. We just think that they’re further enough ahead in the market and it builds and establishes this really great brand. The analogy everyone gives is Airbnb. People were sleeping on each other’s couches and renting rooms before Airbnb, but Airbnb provided that really safe, clean, approved, you got feedback, it was a transaction, you felt good about it. We think Coinbase is providing that type of experience for trading crypto.

CN: Do you have a strong point of view on what cryptocurrencies are actually for? Is it a sort of value? Is it a way to transact? Is it just going to be everything?

Today, it’s speculative, 100 percent. One of the folks on my team said he was liquidating his 401K to buy in, which made me pretty nervous. I am optimistic that it will actually be a tool for transacting, once we’ve reached some sort of steady state. Obviously, in a world where it’s going up by $1,000 every couple hours, you don’t want to go onto Overstock.com and use that to buy a mattress. If we can get to a place where it’s steady state, I think there is real opportunity there.

KS: What are you looking at? Are you looking a lot? Are all the venture capitalists all of a sudden gone crazy with crypto?

I think that started a few years ago on the early-stage side. On the late-stage side, we really feel like Coinbase is the bet from our perspective.

KS: Being ... A bank to figure it out. It reminds me a little bit of early internet, actually, in a lot of ways. People were talking about there was a lot of con people and people got washed out pretty quickly, and then the people that came in later were the ones that seemed to benefit the most from it.

Right. Coinbase has stuck to their knitting around safety and security, and really ... They haven’t tripped over themselves to launch a bunch of different types of currencies. They’ve been really careful and thoughtful about every new currency they bring to the platform. They have been really thoughtful about being communicative with their customers. They’ve obviously had some performance issues due to all of the volatility and interest in this space. They are really trying to build that safe brand in crypto.

KS: People who are in crypto, what should they be thinking about or wanting to ... If someone wants to liquidate their 401K, you were like, “Do not do that.”

Please don’t do that.

KS: Right. What would you say to people who are looking at this?

If you have a spare, what’s today? $17,000?

CN: Something like that.

Let’s call it $17,000. If you have a spare $17,000 that you are fine seeing go to zero, okay, fine. That’s not the worst way to spend it. I don’t think that cryptocurrencies or bitcoin, specifically, is ever going to go to zero, but I think that if you’re someone who’s willing to have it go to zero, then you can ride out the stomach-lurching of volatility that I think we’re going to continue to see for a while.

KS: How long? Why?

I think anyone who tells you that they know how long this is going to last is a false prophet.

KS: Right, but where does it go, actually? Cryptocurrency? Becoming a regular industry.

It stops being so volatile, it reaches a steady state, and then ideally, aspirationally, moves into being a method of payment.

KS: Method of payment, absolutely.

Now, Slack. Talk about Slack. You’re also in that.

I love Slack. I’ve invested in Slack twice. I invested in Slack at Kleiner and then I invested in Slack, or Spark invested in Slack, again. It’s an amazing company. At Spark, actually, we don’t do any email internally, none. There’s zero. All communication within the firm happens within Slack. All external emails get piped into Slack. It’s truly the system of record for how we do business, and it’s enabled us to build this firm, frankly, across multiple coasts and offices. I’m obviously a huge fan of Stewart’s and the team that they’re building there, and the opportunity ahead.

KS: What do you worry about in terms of challenges? Obviously, he’s had lots of offers to sell. There’s competitors building one, Microsoft among the many.

There’s an opportunity for them to sell. I think Stewart is really focused on building a really big business, and so the biggest risks right now are really just around execution. That’s around the nuts and bolts of building a company and teams and building a product and closing customers, all things that they happen to be doing really well. I pause, not because I’m trying to think of something to hide, but because it’s actually really hard. Every day that goes by, Slack seems more and more inevitable.

KS: Right.

CN: I want to ask you about Niantic, which you have this long history with. They had some success with Ingress, and they had this amazing blockbuster success with Pokémon Go, and now they’re working on ... Is it Harry Potter, the next one? They have another huge ...

Wizards Unite.

CN: That’s probably going to be pretty big as well, but there’s this conventional wisdom that investing in game studios can be risky because it is so hits driven and if you don’t maybe get the right license to the right IP, then next thing you know, you don’t have any more hits. Did you approach that as a games business, or are they selling something else over there?

I did not ...

KS: Selling something else /

CN: I don’t know ...

KS: What are they selling over there?

CN: “We’re a platform company for communication” or something.

The business and the company today is extraordinary, even though we all don’t talk about Pokémon Go every hour, it’s still an incredible business. The team over there is extraordinary, it’s a team I know really, really well. We believe that they have the opportunity to build an iconic company at the intersection of AR, which is obviously white hot as a trend, and real world physical location.

They are not just trying to build AR experiences for you sitting on the couch or around the table, or even ways to collaborate in the office. They want to tie AR to the real world and build at that intersection, at that seam. Today, that’s all been games, and that’s great, but I don’t think that that’s the end-all and be-all for their opportunity ahead.

CN: There will be, maybe, the return of Field Trip in some form, or some spiritual successor.

We’ll see how much influence and impact I can have.

KS: Tell me more about AR, because that’s something Apple is obviously, deeply engaged in.

And Google.

KS: And Google, probably Apple more than, having recently spent a lot of time with their executives, AR seems to be at top of mind at that company, for sure. Where does that go? Talk about what that means, when you’re thinking about that. It’s not just games, it’s everything, really.

It’s really everything, and I think that we’ve done a little bit of a reset in the venture capital market as it relates to VR and AR. You’ll recall two years ago — and we led the series A on Oculus and we were thrilled with the team and the outcome, and that’s wonderful — but the whole industry at large was like VR, VR, VR, VR, VR. I think that we realized — we as a collective we — that we really needed a bridge technology to get there, that we weren’t going to all be walking around with, that’s what I call the Google thing, with the sweatpants for your face. We’re not going to be walking around with that any time soon. Over my dead body am I wearing that, frankly.

KS: You’re just never going to be.

Probably.

KS: It’s a dream of a nerdy white guy in Silicon Valley.

You said it, not me. We needed a bridge technology, and I think AR is that bridge technology, because it’s accessible in ...

KS: It’s not even a bridge technology, I wouldn’t even call it that because I think you’re right, people are not going to be operating like that. They’ll be doing something, but not prone necessarily, or sitting.

The reason I call it a bridge technology today is because it’s heavily dependent on mobile devices, which everyone’s got that computer in their pocket. I think where it moves closer to the VR dream versus the AR dream is when we have a newfangled ... Some sort of eye application, whether ... Snapchat glasses I don’t think were it, and I think, frankly, that was a bit over-hyped as being their big AR play, or whatever it was ...

KS: I think they believe that too, now.

I do think that there’s going to be some sort of wearable on our face that will project AR into our field of view, and then at that point, is it AR or is it VR? It’s kind of a blend. The AR that we see developing today, I think it’s early with the launch of AR kits and AROS, or what are they both calling their two things? They sound the same.

CN: I don’t remember what Google’s is called.

KS: I don’t know. I call it MR, mixed reality.

Mixed reality, there we go. I think the products and services that we’re seeing develop so far, it’s pretty early. It’s a lot of Pokémon Go knockoffs and cute tools. “I’m going to measure how big this thing is with a ruler that’s not really here,” you know that kind of thing? Whenever these new technologies launch, specifically, frankly, on the IOS platform, it usually takes 12 to 18 months ...

KS: I say mapping before interesting things, telling you where to go in front of your face. This is a little path in front of you.

CN: This is my problem, every time I visit New York, I get out from the subway, and I just have to walk in four different directions until I guess the right one.

KS: No, but there’s going to be pointers.

John Hanke has talked about this publicly quite a bit, in terms of AR mapping being the next generation of cartography. There’s a lot of companies that are early stage that are building with that thesis part.

CN: Do you think whatever the next glasses turn out to be, is that likelier to come from a tech giant or a startup?

A tech giant, but I say that with my growth-stage hat on, just in terms of the capital required for that type of hardware. That might be a pessimistic view. If you talk to my venture partners, they would absolutely tell you it’s going to come from some cool, new upstart.

KS: I’m with you on that one. All right, we’re here with Megan Quinn. She’s a general partner at Spark Capital, we’re talking about a lot of fascinating things, we’re talking about AR and VR and all the Rs. She’s previously worked at Google, Square and Kleiner Perkins. When we get back, we’re going to talk about where things are going more so and what’s going to be looking out, longer than just a few years.

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We’re here with Megan Quinn in the red chair, she’s a general partner at Spark Capital, and she previously worked at Google, Square, Kleiner Perkins. We’re also here with Casey Newton from The Verge, he’s practicing being a podcaster. How’s it going?

CN: I think it’s going really well. I’m getting great feedback.

KS: In any case, Megan, you can comment on that if you feel like it, but we were just talking about AR and VR. What are some of the things you think when you look at the venture, we were talking about changes and how you’re doing more collaborative. There’s been a lot of big changes lately, in terms of money washing in with this tax reform, there’s probably going to be more money washing into the system. You have SoftBank Vision Fund, as we discussed. What do you think the big trends in venture capital are? What do you think are the changes? It’s one area that really is artisanal in a lot of ways, if you think about it.

Yes. I think there was this hope a couple years ago that there would be this great reset, right? Everyone was calling “Bubble” all the time, and there’s been a flood of capital, it’s all going to go away, there’s going to be this great reset, and we’re going to get to enjoy normal valuations again. I just personally don’t believe, having done this for a limited time, but five years, that that is ever going to happen.

I think that the capital is more or less here to stay. Of course, barring some massive, global, economic collapse. The folks like Fidelity, who walked away for a little bit, are back in full force. Of course, you have various new vehicles, like the SoftBank Vision Fund, and then you have the sovereign wealth funds from all parts of the planet, who are looking for places where they can put capital with potential great upside. It seems, especially for me at the growth fund, where I focus, that there is a never-ending supply of money bags.

KS: What does that do to the venture firm? They always also talk about how things are going to change. We are the new venture firm, and it looks like the same venture firm.

I actually think that there’s a flight, then, to quality because it does turn out that if you pick good board members, they can be helpful to you. The money may be all green, but the advice is not all good. I do think that even when you’ve got folks like SoftBank, and I know that team there, they’re great, but there’s only so much they can do when they have an enormous portfolio and are putting 100, 300, 500 million dollars to work across a lot of different companies. I think that entrepreneurs then start to focus in on, “Well, if I can get money from anywhere, why don’t I get it from the very best people?”

KS: Right. What does that, then, entail? It’s just having a thing, right? Being nice or being known as killers, or what?

No, being known as useful. The days of being known as a killer, to me, I think, is more or less over, in a world where entrepreneurs get to pick from a buffet of different funding options. I think someone who can come in and be a true partner and add value — and, by the way, that adding value might not be product feedback. It might be customers, it might be recruiting, it might just be someone that you trust with you on the entrepreneurial journey, quote unquote, as they say. I think that’s hard to get from a bank.

CN: Right. I have a buddy who says his vision of the future of venture capital is that Amazon becomes a bank and just gives out loans and free AWS credits, and that becomes the entire seed-stage economy in VC.

They already do give out free AWS credits.

CN: Right, so throw in a bank, and then that’s like the biggest VC firm, maybe.

KS: They should be a bank. That’s a great idea. I like that idea.

CN: Free idea. Jeff, if you’re listening, I hope I can connect you.

KS: Let’s talk about that idea of what changes. One of the things that’s been rocking Silicon Valley and the whole country is sexual harassment issues. This has got to be something you’re thinking about, not just as a venture capitalist, but also, these startups and stuff like that, which are largely unfettered in their behaviors.

One of the excuses that Uber was using, which I think is somewhat lame, is that they were too busy building everything so big that they couldn’t possibly stop people from sexually harassing people, or creating an atmosphere of sexism. How do you look at that? You have to be thinking about that, because you want to build sustainable companies for the long term, presumably.

Absolutely, and I’ll add I’m thinking about it a lot as a woman, period, who have friends who’ve had horrible experiences, and family members who have had horrible experiences. It’s something that really is important to me. There’s only so much diligence you can do, which we definitely do, before we invest. We have the benefit at being growth stage that there’s also other folks who have done diligence, presumably. We are able to come to ...

KS: Or not, presumably.

We ask now, now we’re asking. We come to a deeper, 360 view of an entrepreneur. We actually push our companies to do a series of things, so have sexual harassment training. You’re never too young as a company to do that.

KS: It’s on the list.

Exactly. We want to see — and this is something that I’m seeing across boards — we want to see those employee surveys. Not once a year at some sort of annual roundup, I want to see it in every single board deck. What are people worried about, what do they think is going well? There’s a lot of almost prototype testing of employee sentiment that we want to see bubbled up, at the board level, which even historically, if it was being done, board members may not have cared, but it’s something that we really pay attention to now.

KS: What do you imagine solves the problem? There’s been a lot of people talking about the various ways to do it. Obviously, a monoculture of men is a problem. Where do you think it begins? Where do you think the real problem is, from your perspective?

I think it’s top down, and top down, I don’t necessarily mean within the company, the CEO. I mean top down from the elders of our industry, whether they’re on the operating side or the investing side or the banking side, or what have you.

I think that one of the few good things about the shift that we’re going through in Silicon Valley is that we’re going to get the vermin out. There’s never one cockroach. You and other journalists are doing fantastic work of running down these stories and these cases, and we need to exorcise the bad actors from the industry so that entrepreneurs of all ages, ones that are just getting going, recognize, “Look, I don’t want to be kicked out of my company or fired or even worse.” They do that by looking up.

KS: Do you imagine, when you’re thinking about this, because one of the things is that they don’t have great HR functions, they don’t have great ... I had someone, well known, someone was brought to a startup from a big company, in charge of culture and people, whatever the heck they call it right now. It’s HR, essentially. I said, “What is your job?” It’s a much smaller startup, and they were coming from a big company. They said, “My job is stopping people from fucking each other.” They said that, incredibly.

I was like, “Ha, ha.” They’re like, “No really, it’s a real problem in a whole culture way is to try to get people from thinking of these startups as different and these fast moving, where they just say things off the top of their head, or they don’t know how to behave,” which I think they should know how to behave as adults, which is a whole different story about their upbringing, but in terms of cultures of companies that this is allowed. I think Uber was the perfect example of that. It was the quintessence of that kind of ...

I have a couple of views. One, I believe in building out a management team earlier into a company’s life cycle. Probably most VCs do.

KS: I agree.

I think that you can always up-level again, if someone grows out of that role, but getting a group of people around a table who are adults — and again, I don’t mean adults in terms of age, I mean in terms of maturity, and that’s a different thing. Getting a group of people who are functional leads, mature, and can be good thought partners to those entrepreneurs, is something that’s really important to do, not at employee number 500, but I’m talking employee 20 and employee 30. That’s something that we definitely spend a lot of time with our portfolio companies doing.

The second thing is, I actually meet with the VPs of people or HR, whatever the title is, separately and alone on a regular basis. We have coffee, we have lunch, and it’s not a feedback session on the entrepreneur or some sort of tattle telling, it’s just I want to get this person’s candid, unvarnished and confidential view on how things are going from a people perspective, that I can’t see from those board meeting decks, even if they are polling their employees regularly and surfacing that data to the investors.

KS: Are they emboldened enough or given enough power? I often find they aren’t, the HR people particularly, are not. They often serve as recruiting function versus a culture ... Recruiting is top of mind at these startups.

I don’t know if it’s my approach. I can’t say exactly why, but people feel comfortable talking with me about that type of thing.

KS: Then what do you do?

We coach the executive team in ways that we think to administer to that feedback. That might be us directly doing things differently, that might be getting executive coaches involved, that might be changing people out of roles altogether. Not at this level but in other functions, where we think we need to up-level the person, it’s useful to get that perspective. I think, by the way, that is one of the most critical and difficult roles to hire at any company.

KS: 100 percent.

CN: With everything that’s been in the news, do you have a sense of how much actually is changing inside of companies? Does it feel like there has been a sea change?

It’s hard for me to say how much has changed in the last six months within the company. We’ve certainly, like I said, started doing new things in terms of Spark asking for companies to go through this sort of training, me reaching out directly to all of our portfolio VPs of people. I think that they’re trying to understand the employee’s sentiment on a more regular basis has been there for longer than that.

I don’t know that it changes the day-to-day operations of companies, but it’s certainly at top of mind for the entrepreneurs that we work with. They really are horrified by the things they’re reading now. I’m not saying that we’ve only invested in perfect angels. I’m sure that they all have their own challenges and problems. I believe that they’re all ethical people, but they’re all advocates for us in terms of changing the way that companies operate, and the things that used to be acceptable.

KS: I think sometimes it’s a CYA thing, cover your ass, more than anything. In a lot of ways, what’s interesting about a lot of the reaction is people assessing what they did, like a lot of men doing that, “Maybe I did this wrong, maybe I did that.” It’s usually the good men that are doing that, not the horrible men, which is always typical of that.

It’s also that backlash of, “We can’t make everybody bad,” and it’s a really interesting time, because you immediately move to the backlash versus the problem. That’s my worry, is that just like with the Ellen Pao things, everything went underground and then it came back again, essentially. When that happened, everyone was like, “Oh, I’m not going to ...” I forget, there was ... we’re going to Mike Pence these lunches. You ever heard that expression?

No.

KS: Some venture capitalists in the Valley talk about that. “I’m going to Mike Pence a lunch,” meaning there will be another person at these lunches.

Right, because they can’t meet directly with a woman.

KS: I know.

That really solves all the problems, thanks, dude.

KS: We had a story at Recode after that, ‘I’m not going to invest in women entrepreneurs.’ There can’t be any confusion. I was like, ‘You can’t control yourself? That couldn’t be the option?’ Which I think is interesting. I do wonder if it’s going to last or be, “Let’s wait until this one passes.”

I think we are in the early days. As my partner says, there’s never one cockroach.

KS: No, there’s plenty.

This notion of open secrets, when people talk about that, there are a lot of open secrets that aren’t yet in print. What I think when people say open secrets is the rumor mill around specific people or incidents or things that are hard to then translate into facts, and then ultimately into a story. I know it will take time, but I think we’re still in the early days.

CN: I will say, you’re talking about how you could accomplish real change. I hope some of these entrepreneurs are rethinking their holiday parties. We’re in holiday party season, and you read so many of these stories, and holiday parties are this recurring feature where people drink to excess and then do terrible things. Maybe think about your holiday party.

KS: Our holiday party is going to be so boring, because of my intervention.

CN: I think it’s fantastic.

Thank you.

CN: Holiday parties should be boring. If the best night of your year is at your company holiday party, get a new life.

KS: I was taking pictures of alcohol at various Vox Media places, I’m like, “Oh, look,” and I’m sending them to the executives.

CN: I love to responsibly enjoy alcohol. I think it’s great that there will be less of it at our holiday party this year.

KS: It’s interesting. Let’s finish up talking about where Silicon Valley is, because one of the other things is political issues, obviously. You don’t necessarily have to be political, but people are thinking about the role that tech plays in society at large. They’re getting pilloried at Facebook and their behaviors during the Russia investigations. More than that, what’s their stance on automation, on robotics, on job loss, on AI and the responsibility around AI, and sexual harassment is part of that same thing, is this growing up, conceptual thing. Of course, being young and brash is part of the ethos here, which is almost Peter Pan-like, in a lot of ways.

I think you’ve seen the balance of power from an industry perspective obviously shift from New York and the east coast to the Bay Area, and that’s come with banking to technology, as technology continues to service not just the underpinning of the economy, but of how we all work, and what we do in our free time, and of culture in many different facets. What I do think is changing, though, is this notion of it being young, brash men, Peter Pan people, actually.

When I look across our portfolio, there’s not that many that would qualify in that statement. In fact, I think what was the average age of an entrepreneur these days is 38, 39. I think that that has been the MO for a long period of time, but Silicon Valley has had to grow up. As the big tech companies, whether it’s Amazon, Google, Facebook, whatever, have been forced to grow up in the eye of regulators and various other investigations.

I think that that’s pulled up the maturity, in a lot of ways, of startups. Even in terms of how they operate on a day-to-day basis. Now, that’s not across the board, and there’s still a lot of bad actors, but entrepreneurs look up to these folks aspirationally, and want to build for the long term and recognize that building for the long term entails carrying yourself and operating at a certain point of view and with a certain amount of respect.

CN: Amen to that.

KS: Amen to that, really?

CN: Yeah.

KS: When you think about the responsibility of tech is more into it, do you feel that tech understands that it should be part of the conversation going forward, of people, of this country? The political ... A lot of this has been a backlash to technology, it’s been a backlash to the weaponization ... I wrote about it last week, the weaponization of social media, the ability of people ... The sexual harassment allegations are going wide because of social media, in a good way, in a lot of ways, because you can amplify, that you can’t hide your open secrets, like you were talking about.

Everything it has with it is fraught with the concept. I do think these company leaders are worried. I’ve been called recently, this week, by lots of CEOs at big companies saying, “Boy, we’re really in trouble, aren’t we?” Where is Silicon Valley’s responsibility in that, especially in the big companies?

I think they have a foundational role in the conversation at large, across the US. I think what we’re learning, the hard way, is that we don’t just get to be a member of that conversation when times are good and we like the guy in office. If anything, frankly, we have even more of a responsibility to stand up, articulate our principles, and actually act on those principles in times where we don’t necessarily agree with the person in office, or the way that things are trending. I do start to see that.

There are folks. Erin Leavy’s been outspoken, Sundar [Pichai] to a certain extent. Mark did his walk around the U.S. There have been different versions of that effort, but I think that this is all a part of a growing up and realizing that we have a voice at the table, we have an opportunity to be around the table, and we can’t just do it if it’s Obama or some other Democrat. We need to engage and represent Americans, both the ones that worked for us as our employees, and those who we are building products for, in a thoughtful, real way.

KS: What about bringing tech elsewhere? This is a theme that I’m very interested in. Not just visiting them like Mark Zuckerberg does, but in more of a, “You have a company in North Carolina. Most venture capitalists really do fund here,” they really do.

They have a myopic view.

KS: Absolutely. I remember Marc Andreessen once telling me he doesn’t like to go beyond the Stanford shopping center, essentially. That’s where he likes to have lunch and that’s where ...

I think it’s completely changed. The war for talent in San Francisco, in the Bay Area at large, has forced companies to at least open second offices in what you might call second-tier cities, with the Phoenixes of the world or the Waterloos or Vancouvers, and so on and so forth. I think that that trend is only going to accelerate. If you actually asked me a prediction that you have for the future, going out a couple more years, I think these fully distributed teams are the way that we are moving across the tech industry.

I’m an investor in a company called Envision. It’s about 400 people. It’s a design platform. I would say it’s based in New York City, because the CEO lives in New York City. The entire group of 400 people, it was fully distributed around the world. We used to say in venture capital, it wasn’t that long ago because I was there, that, “You all need to be in headquarters, you need to have that pressure of we’re all building this together, we’re on deadline together.”

They have built a very meaningful business as a fully distributed team, and we are starting to see that trend accelerate across the rest of the portfolio. It’s usually the lack of talent or the ability to bring in talent, because there’s just only so many people that we can fit in these seven-by-seven square miles, that forces these companies to do it, but then they realize that there’s other benefits, like they tap into new talent pools of universities, they get to move into ancillary businesses where there is a base there of some sort of industry that’s interesting.

They meet new customers that they didn’t see before. Their employees are happier. I really believe that we now have a set of software tools, whether it’s Slack or Zoom or Trello, what have you, that have enabled this fully distributed workforce to come to fruition in reality in the next few years.

CN: I love that idea, but I have to say, in practice, I spend so much of my time with my conference calls dropping. The New York office Wi-Fi is bad, so this call can’t connect. Also, I think you wind up creating a lot of cultural problems for yourself when you’re a distributed workforce, and people feel really disconnected from one another. I’m willing to believe we’re going to see a lot more distributed work forces for all the reasons you just mentioned, but I think those businesses wind up having a lot of really tough management work that they have to do, that I think a lot aren’t good at.

There’s certainly an amount of overhead, but even on employee engagement, and I’m going to pick on Envision again because I’m just coming out of a board meeting, so it’s top of mind. Even Envision, they have the highest employee engagement across our portfolio, and this is because people collaborate across time zones, across countries, across teams. They don’t have to get on an elevator to go see someone else on this floor. Everyone feels instantly accessible at the end of their fingertips.

KS: I would agree. You have to start a company like that, too. I think Recode, All Things D was started in my house but not really. Everybody was somewhere else, so people are used to it. You have to develop a workforce that’s not used to a central location.

It’s a muscle, yes, I agree, that you have to develop.

KS: Which is interesting. To finish up, can you give some predictions? This is the end of the year. Do you have any big predictions, something really crazy wild, and what’s really over-hyped?

For 2018, or ...?

KS: Well, you can do 2018, 2025, 2050.

I already made one, which is I do think that we’re moving towards a world of more fully distributed workforces, and that’s enabled by technology and driven by talent and the war for talent. In terms of the short term, like next, for example, I think next year will be a really pivotal year in self-driving cars. Not to take a hard right, no pun intended, into a completely different area ...

KS: You completely intended that pun, but go ahead.

I think that instead of having one-off, two-off, three-off cars in different test cities, next year’s really going to be the year where we see fleets in streets, operating completely autonomously, picking up normals, not engineers. I think it will be a real learning year, not necessarily for tech, but for society at large.

KS: Are you invested in one?

We were the lead investors in Cruise. They sold to GM. We are not on the board any longer. We obviously know that team ...

KS: More? Are you looking at others?

Our venture-stage team is definitely. Again, we need to get a company to a certain stage before it makes sense for growth fund.

KS: Fleets of self-driving cars next year.

Yes, which will change a lot of different things over a period of time, car ownership, what it means to commute, all of those things. I think that’s a short-term one. AI is the standard bearer for VCs these days. If you don’t mention AI, you get kicked out of the club. I will say, applied AI is really what we’re looking for.

KS: Super AI is a new one.

Super AI.

CN: What’s super AI?

Omnipresent AI.

KS: Someone was just doing, it’s super-er than the regular one.

Super AI. Actually, what we’re looking for is applied AI. It’s great that you’ve got a company that does AI. We want to see actual material changes, either to a customer or to an experience, because of AI.

KS: I agree. I agree with that.

That’s the thing that we’re waiting for. We think we’ll start to see that.

KS: I just ran into someone, at the Code conference, of someone that ... You taste some wines and they use AI to figure out your actual preferences of other wines.

CN: People don’t actually have wine preferences.

KS: They do. Yes, according to AI.

They do. Actually, this brings me to another. We spend a bunch of time with various genome-sequencing companies because the price of genome sequencing has obviously collapsed over the last five years. You can sequence your genome from everything from am I at risk to get breast cancer to what wine is most appropriate for my palate?

KS: Exactly. And have them at Code!

CN: I’ve changed my mind. Go ahead and do that at Code.

KS: Way long term.

You’ll be mayor of San Francisco.

KS: That’s not long term, but go ahead.

That’s short term? There’s a lot that’s changing. I think on the VC-industry side, I really do think that the fears around there’s being so much money, how are we ever going to be able to invest and make returns? It’s actually going to result in a flight back to quality, ironically enough.

I think some people are going to lose their shirts on ICOs, and ICOs are going to become not just regulated, but heavily regulated. I think there will be more cryptocurrencies that perform like bitcoin. By perform, I don’t mean the volatility, but I mean reach the level where my grandfather is asking about it at Thanksgiving, and that it won’t just be for speculative stored value, but actually for transactions.

KS: Right. Last question for me and then Casey may have one. Company going public, you VCs need exits, don’t you?

That’s right, we do.

KS: Slack, is that the one?

I can’t comment on our own portfolio, though.

KS: Who do you think is going public?

In the next year?

KS: Mm-hmm.

I think Airbnb. I’m not an investor anymore, I was at Kleiner. I think Dropbox. I don’t think Uber. I gave you two.

KS: Spotify?

If they don’t get taken off the table. I’m not an investor in Spotify, and I have no proprietary knowledge. It’s been interesting to me that Google hasn’t taken them off the table, or Apple hasn’t taken them off the table.

KS: They have reasons.

They all have reasons, but again, coming back to ...

KS: “Take them off the table!”

Sorry, that’s our VC lingo. I apologize. I know that lingo. They have been able to work with an industry that’s incredibly difficult and archaic, and get to a point where, again, it’s toothpaste out of the tube. You’re not going to pull the music out of Spotify at this point.

KS: You know what? It’s a better product.

CN: The product is so good.

KS: It’s better, it’s just a better product, that’s all. That’s all it takes.

This isn’t a time for me to say that I’m an Apple Music user.

CN: Wow. Now my final question is why Apple Music for you?

I like the playlist recommendations, they’ve always worked for me.

KS: You’re one of a lot, but still.

CN: They have more than 10 million now, so you’re not part of a tiny minority, but I find Spotify way better, myself.

KS: I do, too. It’s a product, it goes right back to what you were talking about. What’s next for Megan Quinn after all this? Are you going to run a company?

No, I’m going to be a venture capitalist for the foreseeable future. It’s a commitment. When you become a VC, it’s a little bit like getting married to a group. You’re in it for the long haul. My plan is to continue to build out Spark’s growth fund with Jeremy and team and have a lot of fun, and hopefully a lot of success along the way.

KS: All right. No CEO for you? I always like to have a lady in a CEO position, I’m sorry.

Never say never.

KS: We’re looking forward to when you come back when you’re that. Anyway, thank you so much. We’re here with Megan Quinn. She is a venture capitalist at Spark Capital and has been around the proverbial block in technology. Lots of companies. Casey, thank you so much.

CN: This was my pleasure, Kara, and happy birthday to you.

KS: Thank you so much again.

Happy birthday.

KS: Thank you again.

I can threaten to sing.

KS: No, thank you, I’ll have another one next year.

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This article originally appeared on Recode.net.