At Homebrew we’ve stayed a very small group by design, believing at the earliest stages of a company, continuity of relationship between the investor and founders is essential to preserve trust and context. But sometimes growing the team isn’t just about adding another set of hands, but a different set of experiences, interests and capabilities. And that’s what we had the chance to do in early 2019 when Kate Stern joined Homebrew. We mutually anticipated it would be a three year role, after which Kate could decide if she liked investing or wasn’t ready to leave the world of operating (she joined us from 5+ years at Uber). During this period we, and the Homebrew founders, have benefited tremendously from Kate’s work. So it felt appropriate as she gets ready to leave the firm to celebrate her and share her reflections with us.
Homebrew: Looking back at our “Welcome Kate” blog post three years ago, what were you thinking at the time. What was the process of joining us like from your end?
Kate Stern: First of all, it’s hard to believe that was three whole years ago - time has really flown! Thinking back…
Normal first day nerves! I’d been at Uber for almost five years and it was so comfortable - any new role would have felt like a big change for me, but moving into the venture world felt particularly intimidating. VC is a relatively opaque industry, and it was hard to know what to expect. I’m so grateful to have gotten the chance to really apprentice alongside the two of you! In those first few weeks, I had absolutely no idea what I was doing, so I just shadowed you two in everything to try to figure out what I was supposed to be doing.
Once I gained a little more confidence, I was blown away by the pace of learning. There’s so much context required to really understand portfolio companies, and there’s no real way to learn it without diving in head first. This is even harder when it comes to evaluating new companies and learning what great investments look like. In one day, you’ll have to develop a strong opinion about a dozen different industries. In this job, I really learned how to learn… and learn quickly.
The hardest thing though was honing my own point of view on good companies. At the seed stage, no matter how much you know about an industry or a founder, you’re still taking a real bet. Developing my own convictions independent of how hot a deal was or even how excited you two were about a company was challenging, but also the most rewarding part of the job. It didn’t happen overnight, but it’s fun to compare where I am now versus where I was three years ago.
On top of all this, I was settling into San Francisco. I’d moved out for Homebrew after nearly ten years in New York, and the east coast / west coast culture shock is real!
Homebrew: Venture capital is no longer as opaque as it was 10 years ago, but a lot of what gets shared is pro-VC content marketing more than the real day-to-day reality. Once you started actually doing the work, how did reality compare to #VCTwitter?
KS: So much of what is shared about venture, especially on Twitter, is an endless string of wins. Of course I knew that wasn’t the whole picture, but there were definitely some things I needed to adjust to.
The best parts of venture capital are pretty well advertised, and I can say now that they really do live up to the hype. When it comes down to it, much of my time at Homebrew has been spent talking to incredibly smart founders tackling really hard problems and building their lives’ work. That passion and energy is so fun to be around - I’m thankful to all the founders who let us come along for the ride. Most of the tech world only gets to know founders once they’ve made it; seeing them when they just have an idea and how they make it come to life is as inspiring as it gets.
On the flip side, though, one of the hardest and least talked about aspects of venture capital is how many disappointments there are. We all spend more time talking about our wins than our losses, but the reality of early stage investing is that many of our portfolio companies don’t become runaway successes. It’s difficult to see teams I’ve built close relationships with not get that massive outcome they’d hoped for - it’s definitely one of the worst parts of the job.
The other thing that can be a bit of a surprise is that venture capital can be pretty lonely, especially compared to working at a startup or company. As an operator, you’re always working with a team, and most of your success is a function of your contribution to that team. At Uber, I had projects where I worked alongside the same group day in, day out, for months or longer. It’s very different in venture. Of course we’re all on the same team, and we discuss companies and learn from each other, but it’s certainly more individual work than on the operating side. It’s just the nature of the job. I was super grateful that our dynamic at Homebrew was so collaborative and supportive, but it doesn’t always look like that. And I was so happy to get involved with organizations like All Raise that specifically aim to build community and make venture feel a little less lonely.
Homebrew: You had both finance (Goldman) and operating (Uber) experience prior to joining Homebrew. For someone earlier in their career path and trying to decide whether to jump into venture right now versus getting some additional experience prior, would you recommend one path over the other?
KS: When I was first thinking about going into venture, I used to ask this question all the time, hoping there was some ‘magic path’ that would make it easy to break into venture capital. Of course, the secret is that there’s no one perfect route into a job in venture. I know great investors from all kinds of backgrounds, from finance to operating or even something totally different.
For me, my time at Uber was crucial to building the network and skills I needed for venture. Since we invest at the earliest stage of a startup’s life, the product sense I learned on the operating side has proven much more useful than being able to build out a detailed financial model. Of course, if I was a growth-stage venture investor, the reverse might be true.
For folks early in their careers considering their next step, I’ll pass along the best career advice I have ever received: don’t overthink your ten year plan - just go where you think you’ll learn and have fun. Early in my career, I might have thought this advice was silly. But looking back, the work I’m most proud of (and the work that’s advanced my career the most) has happened when I followed my interests and optimized for learning, not a long-term plan. We spend a huge percentage of our lives at work; spend your time doing something you like, and you’ll end up in a place you’re happy with.
Homebrew: You’re still a VC until 5pm Friday the 11th, so let’s make sure we’re using this opportunity to promote a portfolio company. Pick one and tell us why it’s the next decamegacorn!!!!
KS: This is a tough one - it’s so hard to pick just one story, and even harder to pick just one company! Some of the most rewarding work I’ve done in these past three years has been the time spent learning from our founders. Their passion for whatever they’re building is contagious, and it’s so fun to see the world through their eyes.
One standout among many is how much I’ve enjoyed spending time with the Noyo team. This may surprise you, but before Noyo, I hadn’t thought too much about what needed to happen on the back end when I enrolled in health insurance. When I first joined Homebrew, Shannon and Dennis really took the time to ensure that we all understood the scope and urgency of the problem they were solving - the status quo for benefits enrollment not only is slow and wastes significant resources, but also leads to costly and complicated errors where people aren’t actually enrolled. Building a universal API for benefits is a true game changer, and there’s nothing like it on the market. Only in venture can you meet people who see this sort of problem, recognize the massive positive impact from solving it, and then go do it! They’re one of many such stories in our portfolio, and I’m so excited to see them grow into a huge business.
Homebrew: When you joined Homebrew you were upfront about wanting to use the experience to figure out whether venture was right for you at this point or whether the pull of operating - really building a company with a great team - was still strong for you. Now that the three years are done, tell the world what you decided! [drumroll sound effect]
KS: I’m heading back to building! I’ve loved my time on the investing side, but after a few years of working alongside founders in a more hands-off role, I’ve found myself wanting to get back in the weeds tackling tough problems alongside a team.
I’m excited to say that I’ll be joining Fuzzy as VP of Strategy and Operations to help Zubin, Eric, and the rest of the team build the go-to resource for pet parents. On a personal level, I’m excited to build the kind of product that I’ve always wanted as a dog parent (and if you know me, you know how much I love my dog!).
It’s also a business I’m really bullish on (now that I’ve been able to hone my investing POV!). Two trends I’ve been really interested in are the consumerization of health and wellness and the digitization of primary care. I think these trends apply to pet health too.
Fuzzy aims to be a go-to resource for pet parents that is engaging, accessible 24/7, and built on the advice of veterinarians. There are 183 million pets in the US and only 118,000 vets to serve them. Scaling quality care is good for pets, pet parents, and veterinarians. I think a huge business that capitalizes on these trends is inevitable, and I think Fuzzy is going to be that company.
Thanks for everything you brought to Homebrew, Kate!