Building Real Startups with Purpose Kanyi Maqubela

Episode Overview

Kanyi Maqubela is the Managing Partner and co-founder of Kindred Ventures, a seed-stage venture capital firm based in San Francisco. Established in 2014, Kindred Ventures focuses on investing in and forming early-stage startups across various sectors, including fintech, digital health, e-commerce, supply chain, and climate tech. Under Kanyi’s leadership, the firm has invested in over 80 companies, such as Upstart, Reddit, Impossible Foods, Out school, Mural, HelloSign, and Earnest. Kindred Ventures distinguishes itself by taking an active role in the formation of startups, partnering with entrepreneurs before they have created their companies, and helping to form initial teams and sharpen ideas before funding. This approach emphasizes a hands-on, founder-first philosophy that aims to support dedicated founders on their journeys .

Before founding Kindred Ventures, Kanyi served as a Partner at Collaborative Fund, where he was an early advisor to companies like Tala and Walker & Co., and a board member at Buffer, Camino Financial, Spruce, and True Link. His entrepreneurial journey includes roles such as running growth at One Block Off the Grid, a solar startup acquired by NRG, and being an early employee at Doostang, a career network acquired by Universum Global. Additionally, Kanyi co-founded Heartbeat Health, the largest virtual heart health platform in the United States, showcasing his commitment to leveraging technology for healthcare innovation .

Kanyi’s academic background includes studies at Stanford University, where he majored in Philosophy and explored subjects like computer science, chemistry, physics, and mathematics. He has also served as an Adjunct Professor at New York University Tisch School of the Arts, teaching a curriculum adapted from his time at Stanford. Fluent in Xhosa, Kanyi brings a diverse and global perspective to his work. He resides in San Francisco with his family and serves as a founding advisor for Screendoor Partners and on the Board of Directors of the UCSF Foundation Investment Company, further demonstrating his dedication to community engagement and impactful investing .

Episode Transcript

Kanyi Maqubela: The goal of a startup is to sort of birth its idea and to protect its mission. And so you do have to protect the mission.  but part of birthing an idea is, going through an extreme amount of pain and,  you know, and fresh thinking and rethinking to meet the market when the market evolves. And,  a number of startups that we’ve seen go to, you know, to significant success over the years, the, you know, from companies like Uber and Lyft to companies like Coinbase and, you know, and even stripe,  have evolved meaningfully in their product capabilities over time.

Kevin Rosenquist: Hey there, and welcome to Pay Pod, where we bring you conversations with the trailblazers shaping the future of payments in fintech. My name is Kevin Rosenquist. Thanks for listening. Venture capital often gets a reputation for chasing the next flashy app or viral startup. But what if it could be about something more? What if venture capital could be a force for solving real global problems. That’s exactly the mindset of my guests today. Kanyi Maqubela, managing partner of Kindred Ventures. Kindred isn’t just backing companies. They’re backing visionary founders tackling some of the world’s biggest challenges, from climate change to the future of financial access. In this episode, Kanyi Maqubela shares what makes a founder truly ready to build something groundbreaking, why speed and adaptability are non-negotiable, and how startups can punch above their weight to drive real change, even in industries dominated by massive incumbents. Kanye is a fascinating person and a wealth of knowledge. If you’re a founder thinking of becoming a founder or just interested in how startups get off the ground, you’re going to enjoy this one. So joining me from San Francisco, Kanye Makhubela. A lot of people think of venture capital as just chasing the next app or trendy startup, but kindred seems like why does that mission driven focus matter to you personally and to kindred as a firm?

Kanyi Maqubela: Oh, gosh. For three reasons. The first reason is,  we are now in the era of software and technology where it’s not a niche. It’s not even a sector. It’s actually a way of doing business across all sectors. And when you are investing in the technology that pushes all sectors into the future,  you really need to think about your impact in a more holistic sense.  and so that’s important to us first. Second,  we’re trying to attract founders that have true global ambition.  A lot of the most important companies over the last 25 years of, of, , of venture backed startups, which is, you know, where we’ve been operating in investing, have a global mandate and a global mission. And that’s important to attract the founders that are excited about that. And, you know, and then third, we’ve been operating under the view that Silicon Valley, which is where we sit and where we’ve been investing principally, is no longer just a place. It’s also now a mindset. And so we want to attract people from all over the world who can bring that mindset to solving problems and creating scaled businesses.

Kevin Rosenquist: Well, when you’re looking at a founder who might be tackling something big like healthcare or climate tech or something like that, what signals tell you that someone can actually make a dent. Those are pretty massive problems.

Kanyi Maqubela: Totally. It’s funny because a lot of the most important startups are really small at the beginning and not small because they’ve just gotten started, because of course that’s the case, but small even in that the founders are reasonably narrow in what they’re solving. When they get started. And what those founders have, though, is what I refer to as altitude shifting capability, which is to be at the sort of five foot level where you’re really, really craftsman and you’re trying to design a product really well so that you can get just a couple of users to use it, but then also can zoom up to 10,000ft and think about the future and can consistently align towards the future. And so it’s sort of like going back up and down is the characteristic that I think is oftentimes most indicative of a founder that, you know, that’s going to go on to be successful. And then the other one, and this is probably the most important definition of a startup in general is speed. Can you ship products fast from idea to some user is telling you it stinks. How short can that be? And the shorter that that can be in almost every case,  is another important heuristic for whether a company is likely to succeed.

Kevin Rosenquist: Yeah. Do you find that? I mean, is the speed becoming even more imperative?

Kanyi Maqubela: Well, speed used to be such a big difference between a startup and an invention. And so a lot of the companies that didn’t use software, that didn’t take advantage of the power of the internet in the 80s, 90s and 2000 were just slower because a lot of the principles of designing software, the, the, the lower friction in shipping software, the ability to adopt it and, and and scale it quickly is, is really unique.  These days, though, the incumbents are often softer in internet companies.  Google’s pretty fast.  stripe is an incident at this point, and they’re shipping products as quickly as anybody. And so speed is meaningfully more important because a lot of the scaled,  sort of leaders in a lot of the industries where we’re excited to create disruption are themselves of the same sort of DNA and culture that the startups are. And so, yes, you have to be even faster. Absolutely.

Kevin Rosenquist: I think I saw this on your website, maybe LinkedIn or something, but you talked. There’s something about talking about being a firm believer in founders solving real problems. Yes. What does that look like in practice, and how do you support founders who are trying to change whole industries?

Kanyi Maqubela: It first comes down to understanding the nature of startup risk. So what a lot of people sort of incorrectly assess in a startup is at the moment. Once you’ve built your product and gotten a couple of people to use it, it’s a lot less risky. And so a lot of investors want to wait. And not only that, but once you make your first dollar of revenue, it’s less risky. Once you make your next your first $100,000 of revenue, it’s less risky. And our view is that that’s not the case. Our view is that there are some distinct phases in, you know, in the life of a, of a startup. And each of those distinct phases is sort of a step function in risk change. So the first of those is committing to it in the first place. Just truly committing. And that’s actually for a surprisingly large number of people, you know, who think about startups. The hardest one is just going all in.  and it’s hard for obvious reasons, like, you know, do you have the personal,  balance sheet to be able to do it? Do you have self-belief?  Do you have enough of a plan? Do you have support from your family and all those things? And then, you know, and then once a company has, you know, been committed to by the founder, we feel comfortable backing it.

Kanyi Maqubela: Okay. The next milestone is not have you built something? The next milestone is not have you gotten a person to use it? The next milestone is have you made something people want which is product market fit?  and so as soon as you commit from that point until you have made something people want, it’s still the same risk. That’s really hard. Yeah. You’re still pretty much dead that whole time, right?  and so at that point of true commitment, what we look for,  outside of the commitment, obviously is, what are the inputs on what I mentioned before, velocity.  So what are the inputs on? Like, are you likely going to be able to ship stuff quickly? Are you likely going to be able to do the altitude shifting? So do you have a strong master plan? But are you also very detail oriented? Are you obsessive about design? But are you also obsessive about your market?  and, you know, and can you talk about those with equal fluency and passion?  Do you have the ability to recruit?  Somebody really smartly said that hypergrowth startups are really just,  you know, han capital engines and, you know, and, and the saying goes, you know, team, team, team at the end of the day.

Kanyi Maqubela: And so can you hire amazing people and, and have them take a risk and commit to you and to your vision and to this company, oftentimes when it’s still, you know, an irrational economic decision to do so. And have you demonstrated a capacity for that in your past, or do you feel like you’ve got, you know, enough persuasiveness to do that? Those are the sets of things we look for. And then, of course, we’ll scrutinize the business model and the product roadmap and the product architecture. But the truth is, a lot of those things are proxies for the person. And it’s the person and or the team that, you know, is usually the main decision that we really need to assess at the very beginning of these journeys. And we feel like that’s something that now, you know, with some pattern recognition, having looked at probably 2000 startups over the last decade plus, you know, and invested in over a hundred,  you know, we feel like we have some heuristics that we can rely on there.

Kevin Rosenquist: Yeah. You bring up a good point, too, because like being able to build a team, you know, a lot of times is maybe, maybe mostly equity. Future equity,  you know, at the top. I mean, it’s hard, you know, it’s a risk for anyone coming on board too. So, yeah, that entrepreneurs gotta have the vision. They’ve got to be able to recruit. They’ve got to have people skills. They’ve gotta understand the market. There’s so many different things when you’re looking at it like at a founder, at an entrepreneur and his or her idea like what? How much do you weigh the person versus the product or the or the vision?

Kanyi Maqubela: I think ideas are really important, actually, and I think they’re underrated,  within our industry. , I think it’s underrated because,  so much of being in that 0 to 1 phase, the I’m committing,  to a startup to I’ve made something people want phase is is walking through the idea maze, which is figuring out not just what the macro idea is, but what the micro idea is, which is like, what is the exact product implementation? What are the exact interfaces like? What are the priorities like, what’s the prioritization of which features we’re going to ship at which time, and being able to articulate those things with sharpness and clarity and make really good decisions when the data, when the data requires you to change your mind,  is super important. So we actually do look at the idea a lot, but we don’t look at the idea just unto itself because the truth is you can build, for example,  you know, a payment service, a next gen payment service provider, starting in the mid market and enterprise. Or you can build a payment service provider starting with Y Combinator startups, and you can end up with Stripe and Adyen. And so where do you start and what the actual detail of it is matters somewhat less than is it internally consistent? And then is it consistent with the strength of the founder? Right. And so that’s where we spend a lot of time scrutinizing and really pushing these founders and challenging them because, you know, their resilience under, under, under challenge and under scrutiny is actually also a really important part of this too.

Kevin Rosenquist: That’s a really good point. Yeah. How often do you run into founders or potential founders that just you’re like, oh man, this person just doesn’t have it. This person is brilliant. They’ve got a great vision for certain things. But this is probably not their lane.

Kanyi Maqubela: So all the time and in this particular scenario what we’re looking for is somebody who is firm but not brittle. And so firm and flexible right. So can you stick to your vision and can you be just the right level of stubbornness that you can commit. And you can continue to push and persist even when you know it’s unclear exactly how you’re going to be able to do so. But are you also flexible enough to change, you know, can you be can you can you avoid being dogmatic?  and, you know, and so a lot of times we’ll find founders who are sort of strong willed and stubborn but actually kind of brittle. And the Britten the brittle is, you know, they’ll, they’ll, they’ll, they’ll crack in, you know, in the, in the midst of, of pressure. And that’s an important thing to test for up front.  and, you know, and it’s and it’s a nuanced thing because you don’t want somebody who’s overly pliant,  and you don’t want somebody who,  will fold at the slightest bit of, of, you know, of, of scrutiny or pressure, and you don’t want somebody who listens too much to their coach, but you don’t want someone who doesn’t listen to their coach at all. Right, right.  and so it’s sort of a gentle balance that you have to strike.

Kevin Rosenquist: That is an interesting balance. Yeah. Because. Yeah. You want I mean, I’ve, I’ve met a lot of creatives over the course of my career that they’re very I would say brittle is a very good way to put it. Like it’s just that they get very offended or they get really like no this is right. Trust me, I know this is right. And it’s like, no, come on, listen to people. People have ideas for you. Let’s make it even better. And some people are just not open to that.

Kanyi Maqubela: And honestly, it’s a funny thing in a pitch because, you know, we’ll do a couple of things in a pitch as a, as a venture investor. We’ll both try and pitch ourselves. Right. And so how do you pitch yourself as a venture investor, as a as a. As an aside, it’s a whole separate conversation. But then we’ll try and get to some of this stuff. And so sometimes I will criticize something that I might even agree with because I’m interested in understanding where the brittle points might be. I’m interested in understanding when, you know, when, you know, somebody scrutinizes and or criticizes something that you hold very close, you know, and hold very dear. What’s your like? How do you react? Because inevitably, over the course of a ten year startup journey, you’re going to find incredible amounts of that. And do you have, you know, the Constitution to be able to go through that with grace, but also, you know, the grit and, and and persistence that’s going to be necessary?

Kevin Rosenquist: Yeah, a little tough skin because it’s your baby, right? It’s your baby. When you have these products and you have to have a little tough skin or else you’re, you’re you’re. Yeah, it’s going to be tough. It’s going to be tough. So you know, there’s a lot of startups that are working on big issues like climate change, health care, future of work, maybe even stepping in to solve problems that governments or big corporations struggle with. Or maybe I don’t want to get political, or maybe pushing to the side in more recent times. Why do you think founders are so well positioned to drive real change in these spaces?

Kanyi Maqubela: I think really it’s more a comment about markets than it is about founders.  and, you know, my my view is that,  in many scenarios and, and, you know, it’s not my view that it’s in every scenario, but in many scenarios, , open,  level playing field markets,  are actually the best system design to encourage the best ideas forward. , and, and so markets are which, you know, are where founders operate, but it’s also where scaled corporations operate. So it’s not just founders. Like I think a lot about , Moselle is an interesting example of, of a consortium of the biggest banks in the United States who are able to figure out how to do a new set of payment rails for instant payments that had bedeviled the industry for years. And so it doesn’t always have to be a founder, like sometimes it can be an incident.  You know, I think about, you know, I think about the research efforts Google has put into,  the attention paper and, you know, in the foundation for the transformer and, and then, you know, the AI wave that that open AI and the subsequent companies have sat on top of Google was actually the progenitor of that.

Kanyi Maqubela: And so it’s not always startups. Sometimes it’s the innocent, sometimes it’s the big being old,  you know, old legacy business. But I think it’s can you figure out how to create market forces whereby,  you know, there’s native demand and there’s native sort of supply that meets that demand. And in fintech in particular right now,  there have been a lot of artificial , government and or regulatory blockers all over the world.  and, you know, and this is, you know, a 25 year old tale.  you know, there was I always I always think about how we all are familiar with error 404, web page not found.  When you go to a website, , there was an error 402 payment gateway required to, uh. And so even in the sort of foundational protocol of the, you know, of, of the web and of, of the browser in particular,  there was meant to be payments in there. And the reason why there wasn’t is because there was regulatory blockage, but there was a bunch of demand and a bunch of supply. So with respect to how to think about why, you know, startups and founders are so uniquely well equipped to go in there.

Kanyi Maqubela: , just speaking honestly, it’s because a lot of them will ask for forgiveness, not permission.  and they’ll build systems, and those systems sometimes will work so radically well that we have to figure out how to change our perspective on the world to meet those systems. , a really good example of that, you know, right now is, is, , a lot of what’s been happening with,  with stablecoins, right? Like in the last year and a half, stablecoins have become a really, really, really timely topic. And a big part of it is because there’s a lot of global demand for certain fiat currencies. But fiat currencies are controlled and managed and regulated by governments of all kinds.  but there’s so much demand for it that a new set of rails to allow you to get a synthetic fiat has emerged and has taken over in such a way that now every government in the world has to figure out how to react. Right. And so it’s a little bit of asking for forgiveness, not permission. So that’s where I’d say the unique startup and unique founder contribution to solving problems fits into the picture.

Kevin Rosenquist: Yeah, that’s a great point. It’s interesting to watch how the stablecoins are helping some emerging markets and smaller players to actually play with a little more, you know, with a little more backing. You know, I mean, it’s a very interesting time for that. And I’m going to be very interested to watch where it goes in the next 2 to 5 years, because it’s kind of a game changer for, for, you know, for a lot of, a lot of smaller, smaller markets and probably a conversation for another time. But it’s something I’m very interested in as well. But speaking on that, like are there other sectors that you see are ripe for disruption? Oh gosh.

Kanyi Maqubela: There are so many that are ripe for disruption. , just speaking within financial technology,  you know, I think that the idea of an inert , general ledger that you can’t talk to and interact with from an accounting standpoint is a great example. , why is it that accounting is stuck in,  you know, the 1995 version of Excel?  and, and if accounting is intended to be.

Kevin Rosenquist: In the windows 95 song in my head right now, the little doodle doo, Do.

Kanyi Maqubela: You know, the living, the living, breathing system of record for your money should be something that is a highly modular API, , you know, accessible with endpoints that can plug into all of your other systems that can drive data to and from your other systems. So that’s a good example of a place where some of the incredible capabilities that you see in enterprise software have not yet truly broken in that are going to break in. So that’s one case. Another case I’d say is some of the legacy industries. So insurance is a good case for this right. Like insurance it is hundreds of years old and in part because of the regulatory difficulty, but also just because,  frankly, until I there hadn’t been a really, really, really great way to tackle some of the sort of nuances of that space. But the way that you do property and casualty insurance today looks the same way that you did that it did in the 1970s and looks basically the same way that it did in the 1870s.  and,  and again, like the idea of usage based insurance just in time insurance, real time pricing,  real time claims adjustment, real time risk monitoring, the, you know, ability to, to do,  observability and monitoring that we can do in the enterprise should be applied to insurance and that should change the actuarial science.

Kanyi Maqubela: And it actually really should be able to do that. And yet we haven’t been able to break through. I’m seeing opportunities there. So I’m really excited about that.  You know, I do think that, , there’s going to be more of a sort of resurgence now in, in the alternative credit and the alternative lending space, like in the early part of the 2000, there was a big boom, in part fueled by the zero interest rate environment. , and, you know, in these new platforms, these new marketplaces that we’re trying to bring new credit products to market. But I think that actually going to see a resurgence even in this higher credit,and,  and cost of capital environment because of AI.  so there’s a number of pockets actually, where I see opportunity for some huge transformation that, you know, we’re just knocking on the door of right now, specifically in financial technology and services.

Kevin Rosenquist: Do you think that the buy now, pay later is sort of the first step in that next wave of,the way we what you’re talking about with the credit, .

Kanyi Maqubela: Buy now, pay later is very interesting and, you know, buy now, pay later and other, , interfaces for delivering credit.  Let’s put it that way.  are going to continue to proliferate. Buying now, pay later are both not new at all.  you know, and to use a pithy US example,  you know, buying, you know, buying a Power Ranger on layaway is something that, you know, a lot of people born in the 80s would understand. Right. , but frankly, like the idea of buy now, pay later and put this on credit, it is even older than that. Like, it’s, it’s 50 years old. It’s 70 years old in merchants offering it. Get. So scaling that has been something, and scaling that programmatically through technology capability is something that is modestly new. But the concept is old. I do think that there are other concepts though, like just in time underwriting.  so, you know, we have a company called Tala in our portfolio, which can take people who don’t have any credit score, don’t have any banking history, and offer them a spot loan.  that is perfectly priced to their behavior,  based on the signals on their phone.  And, like, that’s an example of an opportunity to do more so-called alternative lending, because you can suddenly put a buy now, pay later button on every merchant everywhere in the world and know that there’s going to be infrastructure for it.

Kanyi Maqubela:  and so the delivery mechanisms are now becoming a lot lower friction. Right. And so that’s part of what is really fresh and new in a really cool way. The other part is a lot of this sort of embedded capability is going to mean that a lot of things which were not thought of as fintech before are fintech now.  We have a trucking carrier that has no trucks. And, so they sort of do the leasing and the gas and the brokerage for picking up loads, but they will also do just in time financing.  and that just in time financing so that you can rent a rig. Right. Rent a truck means that they’re actually fundamentally a fintech company now,  and so a lot of the sort of new just in time and embedded capabilities are opening up new lanes of delivering credit productively, sort of in situ or at the moment of need,  rather than having to go over to the bank, get credit, and then go back into whatever your business is and activate said credit. Right.

Kevin Rosenquist: All right. Well, if any potential founders out there are listening, there’s lots of good ideas just came out of you, Kanye. So,  you know, you might be getting some calls from people.

Kanyi Maqubela: Good

Kevin Rosenquist: When it comes between balancing profit and purpose because of the fact that you care a lot. About what the mission of your startups are that you want to invest in. How do you balance the financial returns and make an impact?

Kanyi Maqubela: It’s an important question because it’s a question that almost everybody who cares about impact is asked. And it’s a question that I also think is up for startups in particular.  where this is not relevant. And here’s why.  balancing profit and purpose would be an absolute privilege. I would love to be able to do that.  Most startups are balanced, are balancing,  profit and death.

Kevin Rosenquist: Right? That’s true.

Kanyi Maqubela: Right?  it’s the truth. Like in balancing, you know, profit and no profit. Right.

Kevin Rosenquist: And going back to a day job. Yeah.

Kanyi Maqubela: Precisely. Precisely. And, you know, and so we think of,  the goal of a startup is to sort of birth its idea and to protect its mission. And so you do have to protect the mission.  but part of birthing an idea is, going through an extreme amount of pain and,  you know, and fresh thinking and rethinking to meet the market when the market evolves. And,  a number of startups that we’ve seen go to, you know, to significant success over the years, the, you know, from companies like Uber and Lyft to companies like Coinbase and, you know, and even stripe,  have evolved meaningfully in their product capabilities over time. And part of why they’ve evolved is because they’ve evolved to the changing needs of the market. They’ve evolved to the breakthrough capabilities that underlie their technologies. And so I don’t think on this question of profit and purpose, one can be overly dogmatic because the world is really dynamic, and we’re just trying to figure out how to keep making progress. But I do think that the founder and their governance. Right. So their board,  and, you know, and the people who lead these companies do have a responsibility to protect their mission.

Kanyi Maqubela: And,  and so if you’re doing, I think, a good job as, as a board member and you’re doing a good job with governance, you’re reminding a founder to go back up to 10,000ft. You’re reminding a founder sometimes to go up to 50,000ft.  you’re reminding a founder to understand that as they get bigger and this is always the case for every kind of startup, whether it’s Facebook or Uber or Google,  all sorts of stakeholders who are not just your customers are going to care a lot about how your business operates in the marketplace. And if you’re not aligned with those stakeholders, it’s going to create risk for you, right? So you have to think about that, and you have to be really thoughtful and proactive about that. , and so good governance actually, I think requires that.  So that’s my somewhat dodge of an answer, but also my honest answer is oftentimes profit. And no profit is the biggest,  is the biggest risk. But then staying mission aligned and then helping these founders, you know, in making sure they understand their stakeholders beyond just their customers is actually a good sort of risk mitigation and growth optimization.

Kevin Rosenquist:  What do you think separates the founders who make that leap from the ones that get just stuck in the idea phase, the ones that never really can kind of get over that hp.

Kanyi Maqubela: There’s a couple of leaps. There’s the first leap of making something people want. Right. And in that one, I think that being willing to ship stuff that isn’t perfect. I think perfect is the enemy of good is the phrase right?  and there’s a saying, I think Reid Hoffman said that, you know, if you’re proud of what you’ve shipped, you’re probably shipping it too late.  and, you know, I’ve.

Kevin Rosenquist: Not heard that one. That’s good.

Kanyi Maqubela: Particularly in software. That tends to be true. , because you can iterate quickly and it’s low cost to be able to iterate. And what’s really important is keeping. Your rate of learning is as steep as possible in that early, early, early phase, because you’re trying to figure out exactly which interface and which tweak and which user flow, and which messaging is going to make people excited about this. And so,  getting out of your own way and just shipping,  and which is to this point about velocity, just shipping. That’s the first one.  The second one is I’ve made something people want and it’s at an interesting scale, but I am no longer a sort of startup trying to be birthed. I’m now a startup trying to figure out if I can become a big company, if I can become a market leader. And that’s the next leap. And that’s a different category, but equally important leap. And what that leap usually is, is,  has your appetite and has your vision and has your roadmap expanded,  over time. And I think it needs to expand over time.

Kanyi Maqubela:  You know, a lot of people, when they looked at Uber, thought the taxi market is single digit billions of dollars globally. If you take the whole taxi market,  this might be a pretty good business, but you’re not going to take the whole taxi market.  Five years later, it’s like, well, shoot, it’s actually not the whole taxi market. Maybe it’s the whole urban transit market shooting. Maybe it’s not the whole urban transit market. Maybe it’s the whole sort of transportation market. And then so can your appetite continue to grow, you know, commensurate with, you know, with your capabilities. And then can you hire against that? Right. And so I think I will continue. And Mark Zuckerberg does a famously good job of this where he’ll continually reinvent Facebook.  or meta, I should say, to, to to fit the technology capabilities, but also, frankly, like the opportunity set that the company has grown into.  and I think that really great founders learn how to do that once, get a taste for it, and then we’ll do that forever, ideally for the next 20 years.

Kevin Rosenquist: Exactly. Some of the biggest challenges in the world, from climate change to access to financial services, which is something we talk about a lot on the show about a lot on the show with underbanked and unbanked people. You know, all of this disproportionately affects underrepresented communities. Does that shape the way kindred thinks about diversity in the founders? You back. Is that something that’s important to you? Yeah.

Kanyi Maqubela: , yeah, it does, and it doesn’t in the sense that,  if somebody is of a certain demographic, we certainly won’t back them or certainly will back them. But it does in the sense that,  you know, we have to be more consciously open minded and more consciously and proactively, uh. Hip to, so to speak,  the founders really understanding their underlying markets.   and sometimes that lands in. You are the same demographic as the customer you serve. Sometimes it doesn’t.  And it’s not, , you know, inherently the case that someone should serve the demographic of the customers, you know, that they’re operating in, like, I think about,  cloud trucks in our portfolio. The founder is,  you know, is a black Nigerian immigrant. , and the number of truck drivers in the United States that are black Nigerian immigrants is not that high.  but he has extreme empathy for that customer. And he’s been working in trucking a really long time, and he really understands the needs of of that customer and their credit profile and their cash flows and their stressors, and, you know, where they like to go home, why they like to go home, what’s happening in Kansas City, what’s happening in Atlanta, what’s happening in San Diego and why? And I think that empathy is what makes him very persuasive.

Kanyi Maqubela: Right. Whereas, you know, Brian Armstrong from Coinbase is empowering capabilities for people all over the world. You know, in, in and you know, and as you know, Coinbase is a scaled global business. And I you know and and Brian is a is a you know is a is a is a white male who is an engineer from Airbnb. So,  it, you know, I think you can have that sort of demographic,, , mismatch ostensibly, but you have to have deep empathy. And I think that deep empathy is the most important piece because Shivani Siroya from Tala, you know, is an Indian woman and she cares a lot about the global South. And, , but, you know, that is not in and of itself why she’s so persuasive. , it can help at the margins and,  you know, and it’s, you know, and sometimes it can help me even more meaningfully than that. But she’s empathetic.  and so we look for empathy. Most of all.

Kevin Rosenquist: Having worked with so many founders tackling ambitious issues. Is there one piece, piece of advice or common mistake that anyone listening to who might be a prospective Founder that you might want to share with them.

Kanyi Maqubela: There are three common tropes, and apologies for adding more than you had asked for, but.

Kevin Rosenquist: No, no.

Kanyi Maqubela: Please. The first is,  not having a high enough bar on who you hire,  because your company is the team you build and,  and you’ve got to hire the most amazing people and the best founders.

Kevin Rosenquist: Are you saying people settle, kind of settle for people that may not be the best option, or the.

Kanyi Maqubela: People settle or people, , under invest in it, frankly, are and under investing in it, they’re like, I can’t find a good engineer. It’s like, well, how much time are you spending on that? How highly are you prioritizing it? And if you’re not prioritizing it, number one, you’re not going to find the 99th percentile people, right? Because somebody else is. , and so the way that I’ve almost always coached entrepreneurs on this one is to prioritize that way higher. And when they do, because these are tenacious, creative, you know, aggressive people who can go out there and figure stuff out, they will suddenly find, oh, it turns out my friend’s roommate, who’s the smartest person that she knows, has sent me this whole new list. And I’ve been dog on a bone after those people. Right. So I think it’s prioritizing hiring more highly, more, more earlier. A lot of people relating to that will prioritize it too late. So they’ll say, I need an amazing person in a month, which means you need them. You needed to start looking for them three months ago. Four months.

Kevin Rosenquist: Ago. Yeah.

Kanyi Maqubela:  and so they’ll prioritize it too late. And so pull it earlier and put it up higher on your list on the hiring side. The second is, you know, as I referred to earlier, , good. Being the enemy of perfection and shipping. Ship it. Because you might find that it’s actually good enough, or you might find it’s terrible in very unique ways, and the rest of your roadmap should be tweaked. And so people who wait too long to get their product into the market. I think, , is another common failure mode. And then the third is,  if I can’t raise this money, then I have no other options. And so thinking of fundraising as the oxygen for a business and being an entrepreneur is sort of like being an astronaut, you know. And cash is oxygen, not fundraising. Cash is oxygen, you know. And sometimes you can, you know, you can go to a planet that has oxygen in its atmosphere and, you know, and that’s called profit. And, you know, and sometimes you need to figure out how to make your cash last longer. And that means you need to renegotiate contracts. That means you need to ask for longer payment terms. That means you need to be willing to hire at a slower pace and frankly, like to ask more out of your existing team. Him, and I can’t tell you how many of the strongest founders said that I will. Raise cash as a last resort to solve this particular oxygen problem. Who? Then raised more cash on better terms later, and or didn’t need to raise cash at all because they got to profit sooner. And so I think the other one is, , overly relying on cash as your only source of oxygen or fundraising, rather as your only source of oxygen.

Kevin Rosenquist:  Makes sense. Those are great tips. Well, Kanyi Maqubela with Kindred Ventures. Thank you so much for your time. That was a great conversation. Really appreciate all the insight.

Kanyi Maqubela: Thank you. I enjoyed it.