“In the Studio” this week welcomes a Silicon Valley veteran with decades of operational and investing experience under his belt, an active board member to many successful companies, and who holds a wealth of experience around financial services and tools for both individuals and businesses.
Mark Goines, a Partner at Morgenthaler Ventures, brings a true wealth of experience in financial products and services to founders. After executive stints at places like Charles Schwab and Intuit, Goines began angel investing to help the next generation of entrepreneurs in the space identify and attack new opportunities as the web grew and, more recently, as mobile platforms explode. After some angel investing success, Goines followed in line with a recent trend of prominent individual investors and operators to become an institutional VC on Sand Hill Road.
In this conversation, Goines and I discuss a range of topics related to B2B applications and the climate for founders in Silicon Valley. Specifically, Goines shares a thesis he’s developed around what he calls “RSBs,” or “really small businesses,” typically those which employ less than five people. RSBs are not served well by existing business tools, which are either too primitive or too sophisticated. Marketers can now identify and target these RSBs for next to nothing, creating opportunities to build verticalized or broad solutions for them.
Behind this thesis, more interestingly, are deep insights around a long-term trend that combines many forces: A global economy whose center is shifting; more business formation during recessionary periods; a national economy where certain jobs may not come back; attitudinal shifts away from wanting to working for larger corporations; less job security in the workplace; and the fact that individuals tend to be happier running their own businesses once they’re able to get through the initial bumps of the startup stage. For founders interested in this space, Goines advices to build horizontal or platform solutions and to resist the urge to customize in order to reach the greatest set of potential users.
Additionally, Goines shares his thoughts on how he perceives the Valley has changed over the past five years. While he notes things are great for founders overall, he does share some well-reasoned notes of caution for us all. First, there is an oversupply of early-stage capital, much of it institutionalizing, which will lead to less true angel investors, a decline that’s hard not to notice. Second, incubators and accelerators which help drive the rate of company formation even higher could help artificially inflate valuations, which could have serious consequences on what founders may be able to take home in such an acquisitive environment. It’s hard to ignore the insights of an experienced angel investor like Goines on these subjects, and especially so given his focus on the financial world and its products.
Mark served as Senior Vice President and General Manager of the Consumer Division of Intuit including Quicken, Quicken.com, Quicken Insurance and Quicken Mortgage. Mark is an adviser at Garage Technology Ventures Mark also served as VP of New Products for Charles Schwab & Co, innovating in online investing. Additionally, he coâ€“founded and was Chief Marketing Officer at PassMark Security, an advanced authentication services provider that he helped sell to RSA in 2006. Goines today focuses on investing in technology...
Morgenthaler Ventures has been in the venture capital business for more than 40 years, steadily investing through every market cycle. Among the many Morgenthaler-funded companies that have gone public or were acquired are: Apple, Atria, Brion, Illustra Technologies, IPC â€“ The Hospitalist Company, Medaphis, Microchip, New Focus, NexTag, NEXTEL, Nuance Communications, Perclose, Premisys, Ribozyme Pharmaceuticals, Synopsys and VeriFone.