This is part of the Startup Insider series, articles with the goal of helping aspiring founders, entrepreneurs and investors understand the ins and outs of the world of startups. You can sign up to stay up to date with this series here.
While a lot of entrepreneurs and founders stumble into entrepreneurship through encountering a pain point or realizing that they want to be their own boss, for Interplay Ventures Founder Mark Peter Davis, he always knew that he wanted to be an entrepreneur. This North Star helped guide a lot of his decisions and was the primary catalyst for the formation of Interplay Ventures, a foundry and venture capital firm that builds, incubates and invests in companies. Additionally, Mark has been a big advocate of startup communities having started the New York, Columbia and Duke Venture Community.
Mark shared with us his current investment thesis, what he saw in companies like Warby Parker and Coinbase, common mistakes he sees founders make, what he’s learned when it comes to community building and his advice to early stage founders and investors.
“It’s not something I chose. It’s not something I strategically picked as a career option. It was something I did because it was something I was passionate about from a very young age. I was always working on various ventures at any point in my career in college and beyond. As I got further in my career, I got the skills I thought I needed to be successful.”
Mark would get various experiences working in venture capital, consulting, operations and 2 CEO roles before deciding to bring everything together through Interplay Ventures.
He added, “Interplay was initially conceived as an intention of what I was interested in. I was interested in company building and entrepreneurship so I wanted a platform where I could participate in both of those and tried to figure out a good approach to doing that.” So far, things have gone really well for Interplay Ventures having made various investments including bets on Coinbase and Warby Parker.
Mark recalled why he invested in Coinbase, which has really taken off in the last few months. He shared, “I knew one of the founders Fred Ehrsam before he started Coinbase. He had the right skills and DNA and I really wanted to work with him for a long time. So when I had the opportunity to do that, I jumped on it.”
Mark believes that the market Coinbase is in is phenomenal especially with crypto starting to gain attention from mainstream media more than ever before. He added, “If you look at the curve, this has been in an exponential space consistently for years. This has been a consistent trend that has been happening. I think there’s a tremendous amount of impact that blockchain and the currencies can have in the global economy and we’re in the very beginning of seeing what this can do from my perspective.”
In terms of trends, Mark thinks that crypto currency, cannabis, robotics and artificial intelligence will have massive growth in the next few years. He believes that equally interesting are not the ones that are trends or have hundreds of companies already in the industry. But instead, Mark is excited about companies that are targeting a niche that nobody is expecting because nobody is paying attention to it.
He adds, “Whether that happens to be couches with Burrow or a private investigator market like Trustify. If there are entrepreneurs working on obscure farming strategy or something about mining that nobody is talking about. I’m interested in that because it’s a great opportunity to make investments and add a lot of value in the supply chain and I just think its intellectually stimulating.”
Mark believes that founders should be thoughtful about gatekeeper issues, which is when a founder is selling to a market that has a lot of people/decision makers.
From what he’s seen, there are these patterns, these breakthrough strategies and approaches to a market and then there are a lot of people who take those approaches and reapply it. He shared, “When we got behind Warby Parker, shortly after that there’s a lot of direct to consumer ecommerce companies that come up and you have to parse through the Warby Parker of this and Warby Parker of that and you have to parse through and select which one has a viable business strategy. For entrepreneurs out there, if there’s a lesson to that, if you’re trying to take a macro strategy that someone else has pioneered, you have to understand what makes that strategy special.”
What made Warby Parker special?
Mark added, “The team was exceptional. I think there was a different dimension to it that made it interesting. You have a lot of direct consumer that cut out retailers and they become the retail front and that gives them a price advantage. But I get interested when they not only have a price advantage but also create a structural change in the market.”
Mark gives Burrow, as an example of another direct to consumer company where they don’t only have a price advantage but they also created a structural change in the logistics of coach delivery.
A big believer in the power of communities in supporting entrepreneurs and would-be entrepreneurs, Mark has also spent a lot of time building communities including the New York Venture Community, Columbia Venture Community and Duke Venture Community.
He shared, “I do think these communities are kind of gateways for people who aren’t necessarily in the startup community yet to make friends and to meet people and see that it doesn’t lead to financial destitution. Once people get into them, they can find a lot of resources that can help them to be more successful whether its partners, business collaborations, strategic partnerships, customers, it becomes easier.”
Advice to Investors & Founders
Mark shared his advice to young investors, “Never stop learning. I think one of the greatest things about being an early stage investor is that you are surrounded by so many intelligent people both in the investment community and the entrepreneur community. It’s really important not to forget that you get to wear the student hat in this role. I think it’s probably the single most important thing. If you stop learning, you start losing your edge.”
For entrepreneurs, Mark believes that contrary to popular belief, ideas do matter. He shared, “There’s a tremendous number of smart entrepreneurs chasing bad ideas and failing. You need to do customer development and you need to know that people want this product. If you can find product market fit and you’re organized passionate and committed, you can find the right resources to get this off the ground.”
Mark believes that at the core of entrepreneurship, it’s very simple: you need to provide a service that makes peoples lives better.
Finally, he believes that aspiring founders should view startups as science experiments and should systematically think about entrepreneurship. He shared, “If you tell people you’re doing an experiment, you’re doing a test. If you think about a venture as a test before you setup the company, you’re able to see if it’s a good idea or not. You don’t want to continue to pursue a venture blindly because you feel pressure to succeed; your time is valuable.”
You can learn more about Interplay here.
About the Author: David is a senior at Penn studying Cognitive Science and Computer Science, originally from the Philippines. At Penn, he’s heavily involved in the startup scene as an investment partner at Dorm Room Fund. Currently, he’s working on SkillStackers, the easiest way to scale work using a virtual workforce. Previously, he started a nonprofit organization called YouthHack which has gone on to scale to do programs in over 8 countries in the last 3 years. David enjoys meeting new people and sharing the stories of exceptional entrepreneurs!