ICON MANNOctober 04, 2019

MARLON NICHOLS

ICON MANNOctober 04, 2019

IN CONVERSATION WITH…
MARLON NICHOLS

Co-Founder and Managing Partner of MaC Venture Capital

“One of my greatest motivations is validating all the sacrifices my parents made for me to be here and have all the things that I do today. Proving them right is essential to my drive and determination.”

I AM

Kingston, Jamaican born

Mount Vernon, New York Bred

Private

I came to the states when I was 7 or 8 years old. My parents had both gone there about two years before to get jobs and set things up so they could send for me. In Jamaica, my dad was a train engineer. In America, he was a bus mechanic. My mom was a beautician in Jamaica. In the U.S. she was employed as a nanny and housekeeper. They both sacrificed to give me opportunity. We didn't have a lot but what we did have mattered. Every summer until I was about fifteen years old, I would return to Portmore in Saint Catherine to be with my grandmother.

There, unlike the Bronx, I could be in my block (‘yard’ in the U.S.) until about ten o'clock at night just playing. Everyone looked out for one another. That level of freedom is part of the culture there. One of the things that forever sticks with me about those times is understanding the differences in how people live and exist in different countries. Jamaica is much poorer than the U.S., and this gave me a level of appreciation for what we had, even though we didn't have a lot. Compared to what my friends and family had in Jamaica, we were wealthy. I take this perspective with me everywhere, especially in the work that I do. It gives me a unique lens. When I am looking at an investment opportunity, I am thinking, does this idea or product benefit the world or just the wealthy, can it change lives? It’s because of those lessons of my youth, being rooted in reality that is always with me; governing not just who I am, but also how I am.

MAKING THE GRADE

Math and science were my favorite subjects. I went to an all-boys parochial high school. I played varsity basketball and had no definitive thoughts as to what, or who I wanted to become at that time. There was no guidance, per se, about studying for the SATs, or which colleges to apply to. My parents worked a lot, which meant I had to stay in the house all the time, so I watched television. I saw every episode of the Brady Bunch and knew that MIKE BRADY had six kids, a dog, and he was able to support them all while living in a relatively nice house where everyone had a bed by being an architect, so I thought why not. Every school that reached out and showed interest in me for a scholarship, I applied. Northeastern University offered me a partial academic scholarship.

Freshman year, I declared my major. ARCHITECTURE! Listen, I was horrible (Laughing). Drafting projects was not my thing. By the middle of my freshman year, I switched majors. Fortunately, one of my closest friends, STEVEN PEARSON, also at Northeastern, had just picked this major called 'Management Information Systems.' It was the intersection of business and technology, so I thought okay -math and science- and switched. While at university, I did three co=ops, one of which was a six-month co-op in Cupertino, California at H.P. that enabled me to take additional courses in Project Management. That experience showed me a different lifestyle in and around tech. I picked up a whole new skillset that others wouldn't have coming from undergrad. Also, now I saw the homes that people were living in, the cars they were driving, the neighborhoods-they were better than Mike Brady’s and much different than mine.

DOT.com RULES OF THE GAME

In 2000, I graduated just as the dot.com bubble burst. I join this dot.com consultancy; Breakaway Solutions and consider myself lucky as they undergo three rounds of layoffs but continue to promote me. Fortunately, I had this mentor, MAURICE COLEMAN, who explained to me the underlying rules that were at play. Breakaway was looking to cut costs, so they were promoting talented eager-to-work younger inexpensive employees while getting rid of the higher overhead that comes with more experienced employees.

From there I worked with Frictionless Commerce and relocated to London to help launch the company there. That was an eye-opening experience. Seeing a start-up from level one. I did everything from pre-sales, sales, implementation work, customer support. I probably swept the floors. Whatever had to be done, I did it and got the opportunity to see different swim-lanes within a company. When SAP bought the company, I had a decision to make; stay or go. I realized my potential and my ambition, which meant that I didn’t want to be put in a corporate box and I wanted to have the time to figure out what I wanted to do with my life. I knew I wanted to do something big and important, so I left and joined NDS a consulting firm in New York, before they were acquired by Edgewater, doing technology selection for their client Blackstone. Then I was asked to build a practice, to create a strategy around media and entertainment. Warner Music was our first client.

By 2005 my team was working on solutions for the music industry to save itself from piracy and aiding large brick and mortar bookstore chains in their conversion to the Internet. It was all fun, until it wasn’t. I got into consultancy because I wanted breadth. Now it was becoming a rinse and repeat job with me having a defined lane. I needed something else, so I decided to go to business school. But first while working full-time and along with two friends, created RISE TO COLLEGE, a test and university prep program that ran for seven years. Any given class was 13 to 20 inner-city kids, all of whom were performing at the top of their school. Instead of community college being their only option, our kids went to institutions such as Cornell, Vanderbilt, Vassar.

KNOW WHAT IT IS YOU LIKE, ARE INTERESTED IN OR GOOD AT AND THEN DO WHATEVER IT TAKES TO MAKE IT REALITY.

My introduction and eventual foray to the VC world came after going back to my mentor, Maurice. I let him know that I was ready for a change, and here were the things that I liked.

Technology
Interacting at C-Suite or Executive level within corporations
Strategy conversations
I want to be around really smart people all the time, and I want variety.

PROFESSIONAL RISK

I made the decision to study for my GMATs. Cornell University gave me a full scholarship as a Roy H. Park Leadership Fellow. The business school had its own MBA-led Venture fund, which was an excellent entry for me, knowing that the experiential aspect would actually set me up to do it and build my network. I began 'working' for the fund before I started which primed me to take it over my first year. I was the first black Lead Fund Manager in the program's history. I focused our efforts on expanding our associates from 15 to 61 and then paired those MBAs with actual V.C.'s in the 'real world.' Now I had relationships with world-class leaders in the V.C. space which eventually led me to join Intel Capital.

LISA LAMBERT, DHARMESH THAKKER, and KEN ELEFANT were great mentors at Intel. While there I became a Kauffman Fellow, Intel sponsored it. Four years in, I began to feel frustration for wanting to do certain kinds of deals that did not necessarily meet the company’s core strategy. Again, I was faced with a decision to best assess my goals and determine if I was in best position to achieve them.

Leaving my role as Investment Director at Intel Capital, which was at one time the largest and most active VC. firm in the world, to start CROSS CULTURE VENTURES was the biggest professional risk I have taken to date. I had a thesis and a fairly good reputation in the industry but had no idea if the firm would be successful. In the end, I decided to swing big and bet on myself. Today Cross Culture is one of the best performing VC firms in our vintage.

The lesson I learned is that nothing happens until you start moving, so don't wait to build your dream. Better to fail fast than to let opportunity pass you by.

CROSS CULTURE VENTURES

My vision was to provide capital to the very best entrepreneurs who are changing our world and do so without bias. That means that I sought out to create a fund that hears from and represents everyone. It would not just be black and brown. Nor did I want it to follow the lead of what the rest of the industry does by investing primarily in white men. No, I wanted to create a fund for the best ideas and challenges that have not been met. TROY CARTER shared that vision. Cross Culture's investment thesis is Cultural Investing, which is defined as discovering emerging behavioral trends, then determining which of those trends will become social norms or a part of pop culture.

Investors speak the language of economic, wealth creation, and profit – that is not separate from a transformational idea that improves the way we live without bias. They can co-exist as seen by our investments in companies like Ajua (Kenya), Blavity, Fair, Gimlet Media, Hingeto, Mahmee, LISNR, Mayvenn, Ready Responders, Solo Funds, Skurt, Thrive Market, and Yumi, etc.

Cross Culture Ventures is performing above the top decile mark for our vintage (2015). We've had four exits to date. The most successful ones were:

Gimlet Media being acquired by Spotify, which represented a 4.5x gross return to our investors
Skurt being acquired by another of portfolio companies, Fair, which is now valued at over $1B

I'm thankful for the other two exits, but consider them base hits:

MessageYes was acquired by Nordstroms
Sidestep was acquired by Represent Holdings, a Custom Ink company

LEARNED

I am lucky in that only a couple of investments didn’t make it. The lessons I learned from them are monumental and guiding:

If you see smoke, there is going to be fire.
Communication between entrepreneur and investor are key
Understanding the motives and true mission of those you fund is key
Companies should not be overly dependent on a small subset investors nor partner base

MaC VENTURE CAPITAL (Mac VC)

Cross Culture had reached the milestone of a top-performing Seed stage fund, so it was time to start thinking about how best to scale. For me that meant to add qualified and talented general partners to the team. At the same time, we were doing more and more work with the team at M Ventures. It became clear that we saw the world through a similar lens and were pretty aligned in terms of investment philosophy. So, I approached their team (Charles and Michael to start) with the idea, and they were receptive. We then spent the better part of 2018 stress testing the prospective merger. In the end, we found that 1+1= 3 so we moved forward with MaC VC

MaC VC is an early-stage venture capital firm. We invest primarily at the Seed stage, which we define as the point when a company has built a product and is starting to receive feedback from the market. The firm’s general partners are ADRIAN FENTY, CHARLES D. KING, MICHAEL PALANK and I. Adrian and I serve as the firm’s managing partners.

Since pop culture drives the world around us, we try to invest in companies that are building technology solutions that fit with how we believe humans will behave in the near and distant future. So the thesis is accurate for both CCV and MaC VC. In fact I view MaC VC as the next iteration of Cross Culture. The only difference, if at all, is probably an even greater focus on software, internet and mobile.

UNICORN, MISSED

PELOTON. They have essentially changed the concept of home exercise and group training. The experience is addictive, as evidenced by the online community and their incredible customer LTV.

WeWORK, FAILED IPO

Do the work to get your house in order before filing. Once you file, the information becomes public, and folks can start to go through it with a fine-tooth comb so better to file after you've properly cleaned up. I'd also love to see later stage companies get back to basics. Profitability is your friend.

EMERGING MARKET: JAMAICA

For the last four years, I have gone back bi-annually either with the Development Bank of Jamaica, U.S. Embassy, Tech Beach Retreat, or the Branson Institute. There is a real emphasis on entrepreneurship, not to the exclusion of tourism, which has been its bread and butter. But making technology and entrepreneurship the backbone of wealth creation in the country.

The challenge from a venture capital perspective is the size of the market which ultimately will define the return on investment potential. How do we take the opportunity and expand it throughout the Caribbean and other emerging markets that have similar attributes? That must be answered to get the venture dollars.

DECEMBER 08, 2018. GARGAMEL IS FREE

I was in Jamaica courtesy of the Branson Center for Entrepreneurship and the U.S. Embassy to give a keynote for investors in Kingston. I think it was the day before I was scheduled to leave that someone in my network posted a video of BUJU BANTON getting out of an SUV and onto a plane. There was a backing track and everything. (Laughter). It was wild.

Photo Credit: Dae Howerton and Dallas Logan for ICON MANN

MOTIVATION

Both my parents, for sure. They never gave up. Watching my mother's drive and determination is one of my key drivers in life. Growing up, I saw the hard work she did as a nanny and housekeeper, but she was not content to remain that. My mom did those jobs to contribute to the household while putting herself through cosmetology school which turned into doing people’s hair in our kitchen to get extra money, which then became getting a job in a salon and eventually opening her own salon. In her I saw true entrepreneurship; how hard it is to get started, how hard it is to maintain it. Her shop is still open.

MANTRA

I have two. The first is Treat people the way they want to be treated. That is not necessarily the way I want to be treated. I may value something that is not important to you so it comes down to understanding people and giving them what they need to arrive at the end goal.

The second is from my 3rd-grade teacher and neighbor MS. SMITH, “Don’t settle. Don’t just meet the minimum. Work hard and try to achieve.” Yes, she lived across the street. She saw potential in me, and would be on me. Her daughter and son, who were around the same age, became my friends. On Saturdays, she would send us to the library.

HAPPINESS <---> WEATLH

Human beings are complicated. Achievement means different things to people. There is correlation and causation. Can you be truly happy when you are monetarily poor? Yes. Can you be truly happy when you are financially wealthy? Yes. But the reverse is also true. I think to be happy requires a good understanding (of self) of what you specifically need. Once you understand that then the only question is; are you able to go and get it and make it part of your reality? That is where happiness should lie.

THE READ

Winning Angels: The Seven Fundamentals of Early Stage Investing (David Amis and Howard H. Stevenson)
The Alchemist (Paulo Coelho), shows that the journey matters. It can actually be very defining in terms of when you finally achieve or reach the end goal. Also, how much you appreciate what you achieve, even if what you set out to achieve is different than you originally sought. It can be better.

THE LISTEN

I DID IT MY WAY (Frank Sinatra). I am going to get my North Star the way I am going to get there, in my way.

HARD KNOCK LIFE (JayZ). Listen, shit ain’t easy. Everyone is going to have their challenges. You just have to figure it out.

MVPS

Professional: My partners. MaC VC’'s success is contingent on the four of us working well together, so I prioritize the health and strength of my relationship with my partners.

Personal: My family keeps me grounded--remind me of what is really important, why I work so hard, and why failure is not an option.

Interviewed by Tamara N. Houston

ICON MANN