The CodeBreaker Mindset™ Ft. Navin Chaddha, Mayfield Fund, Managing Partner

The CodeBreaker Mindset™ Ft. Navin Chaddha, Mayfield Fund, Managing Partner

Chitra Nawbatt (00:11)

Welcome to The CodeBreaker Mindset™, where leaders and influencers share the rules, pivots, and serendipity to achieving goals and dreams. I'm your host, Chitra Nawbatt. Joining us today is Navin Chadha, Mayfield Fund Managing Partner. Navin, welcome. Thank you for joining us.

Navin Chaddha (00:29)

Absolutely, it's a delight to be here today.

Chitra Nawbatt (00:33)

You have a distinguished career as an investor for over 25 years and been the managing partner of the multi-billion dollar Mayfield fund for almost two decades. You've invested in over 60 companies of which 18 have gone public and 27 have been acquired. You started your career as a tech entrepreneur and founded two companies in tech and media. Take us through your journey from founder to leading a multi-billion dollar venture capital fund.

Navin (01:03)

Absolutely. So I grew up in India, graduated from IIT Delhi, came to the US in 92 to Stanford University to pursue grad school and did my masters and PhD. And based on my PhD work, we invented streaming video over the internet. And at the same time, Yahoo and Netscape were happening. So a lot of VCs and entrepreneurs approached us in mid of 1995 and said like, hey, Netscape did a browser. Can you build a video browser? So I had to make the hard decision and pivot for the first time in my life and say, huh, I'm almost ready to graduate with my PhD, hoping to become a professor at a top university. And now I'm thinking of starting a company and I did make the leap and I'm glad I made the leap. started V Extreme in January of 1996, that became the de facto standard for audio and video streaming on the internet. 18 months later, it was acquired by Microsoft, became Windows Media. Then I did a second company where I was more a board member and a co-founder called iBeam Broadcasting, which built an alternative internet for delivering video and audio, what was called a video content delivery network. 

That company went public and then was acquired. And then as a founder, CEO, again, I did a third company called Revio, which merged with CPA.com and is the leader in the CPA profession. And by luck, by accident, again, I got to invest at Microsoft starting in 98, 99 in startups in the internet era and then joined the venture capital business again by accident in 2004. So, full-time VC have been doing it for 20 plus years, have been very lucky to lead a multi-generational firm which has been around since 1969 as the managing partner. Since 2009, I have raised eight funds under my leadership, established presence in India, and personally have been on the board of 60 companies, as you mentioned, have had the fortune of working with some great entrepreneurs who have gone on to create iconic companies like HashiCorp, Lyft, Poshmark, SolarCity, and many, many others. So it's a blessing and God's grace to be doing the business I'm in, and I'm excited as ever and actually more excited in this AI era of where the future holds. So that in a nutshell is my journey. And I'm sure we'll talk about the ups, the downs, the luck, what worked, what didn't work, but hopefully it gives you an idea of my background.

Chitra Nawbatt (04:09)

No, amazing. And that's fantastic because you're already getting into some of the elements we're going to be talking about, especially being there, the entrepreneurism and the investing so early being ahead of the curve. But to get into two elements of what you talked about, the entrepreneurism and the venture capital on the entrepreneurism side.

Was either of that in your family tree? Was that part of your family frame of reference? Because to be a at least three, four time founder entrepreneur, where did that come from?

Navin Chaddha (04:40)

Yeah, so I think a lot of it is growing up, you see what's happening at your home. My dad was a business executive, CEO, but working for other entrepreneurs. And I saw how most of the upside in India is consumed by the entrepreneur, the founder, or called the chairman, the managing director. And then you have people who are just employees. But then all my maternal uncles, were entrepreneurs. So that's where when the opportunities came, I said, help, let's assemble the parachute, jump in, at most what will happen. I'll be able to open up the parachute as I fall down and it happened. But you can't overthink in life, right? Like in life, you have to make calculated risks and make sure you know how many bones you're going to break if it doesn't work.

And I was lucky to have mentors. My professor at Stanford, he told me like, hey, go do a company. At most what will happen, it won't work. Come back and finish your PhD. I'll be your safety net. So in life, you do get the support, you make decisions, you go all in, and hopefully it works.

Chitra Nawbatt (05:60)

And then on the investing side, was that also something within your frame of reference from either your family or what you were exposed to early at Stanford? Because at least for myself, venture capital was not something I discovered until much later. I didn't know about that as an asset class. So how did you get educated on that and then decide to go full into it?

Navin Chaddha (06:22)

Yeah, so having worked as a three-time entrepreneur, I got to work with a lot of VCs and I actually had gone in as an entrepreneur in residence after exiting my third company to start my fourth company, which would be a company which would be cross-border between US and India. And in the process, we realized how big the India opportunity for startups is, and many VC firms convinced me to come in and lead the India practice. So that's how I got into the venture business. And I said, okay, let's try this. A lot of people have helped me become who I am. And it's my time to give back and never look back. Just go in. India, new opportunity, entrepreneurial, build the team, build a thesis and never look back. And then from India, I expanded into US, then became the managing partner and still going merrily on that journey.

Chitra Nawbatt (07:28)

And tell us a little bit more about the Mayfield Fund. You talked a little bit about it, but a little bit more details in terms of size, scale, what you invest in, a little bit of that color.

Navin Chaddha (07:42)

Absolutely. So first and foremost, Mayfield has been in business since 1969. We are an early stage venture capital firm, which invests primarily in information technology and life science based businesses. In our history, we have funded over 550 companies of which 120 have had IPOs and another 225 have been acquired. 

Currently, we are managing actively investing $1.2 billion dollars in the early stages. Seed, we have a $250 million dollar AI start initiative. We have an early fund, Mayfield 17, which is a $580 million dollar fund investing at the Series A stage. And then we have Mayfield Spring product, which starts investing at Series B, and it's a $375 million product. And then we launched a new initiative in fall of this year, which is a subset of the money pool we have called Mayfield AI Garage, where we even go earlier. We are looking for founders and residents where we team up with them at the ideation stage and help them start a business. So that's our business, early stage, no late stage, no growth stage. 

And we are investing in three primary areas. Number one, is enterprise technologies up and down the enterprise stack. The second area we invest in is consumer facing opportunities. And the third area is how do we use innovation in biology, life sciences coupled with engineering to go after problems in human and planetary health. So those are the three areas where we are investing a lot of capital, early-stage focus.

And our lens, which I'm sure we'll talk about, our thesis always is, invest in people. Not their idea that much, because great people evolve and markets come and go and markets change.

The Rules of the Game

Chitra Nawbatt (09:51)

So on that front, in everything you just described, there may be rules written and unwritten that you have followed, created, or choose not to follow. So let's get into the rules of the game. How did you figure out the written and the unwritten rules of the game in investing?

Navin Chaddha (10:15)

So I think here is the way I look at the world. Learning, you can do it in many, many ways, right? One, you can learn from reading books, reading blogs, going to all the popular sites, which I won't mention. You learn so much. Then you go to practice, burn your hands. You learn more. But in my experience, you learn the most from mistakes. And then you figure out, and it's called pattern recognition, what works, what doesn't work. And hopefully you go and not make the old mistakes. You focus on making new mistakes. And at Mayfield, first, given that we are an institution, we have a 50 plus year history, as I mentioned, of pattern recognition. Secondly, I've been doing this stuff since 1996, first as a serial entrepreneur, then as a VC. So that's how you learn. You burn your hands. You learn by experience. And experience counts for something.

Chitra Nawbatt (11:26)

And so given that, could you maybe break down for us through that 50 year heritage of the firm? Your own rich history from the late 90s to today, both on the founder side as well as an investor side. Are there certain quote unquote written rules that you see in terms of that pattern recognition, right? Pattern recognition over time, certain consistent written rules, if you will. And unwritten rules where they're not actually literally written down anywhere, there's a certain consistency to it.

Navin Chaddha (12:03)

Yeah. So I would say the written rule at Mayfield, what we have created is zoom in on the people. We are a people first firm, which bets on people because they make products. Products don't make people. People build companies. Companies don't build people. So our investment lens is really figuring out the entrepreneur. Do they have it in them to create greatness, right? So that's the secret sauce of what we evaluate. Of course, if we are there on the people, then we go to the problem they're trying to solve. And the written rule is, is it a painkiller or a vitamin for the customers they're going after? And third, how big is this? Is it a niche that 100 people need this as a painkiller or is it a mass market phenomenon?

So we look at those three things, people, the problem they're solving and how big it is. And then you look at other things, but given that we're investing and the ideation stage, there's nothing. It's a paper and pencil idea. So you're just dreaming along with the entrepreneur. And we spend a lot of time understanding the values and the beliefs of these entrepreneurs and making sure we are aligned with them, if you will.

And once you're in, you're completely in. And in my career, right, with the 60 entrepreneurs I have worked with, I have had the fortune of never having the difficult conversation of making the founder, not the CEO, unless they want it. It's very rare. So I've been practicing people first, right? So I think those are the written rules.

To your question on the unwritten rules, it's hard. Like we learn every day and It's hard to codify them, right? But we still go wrong on people. So we are just trying to get better.  Just get better and better and better at that part of it.

Chitra Nawbatt (14:16)

And you know when you talked about zooming in on people, looking for the elements of greatness and spending a lot of time with the entrepreneur, there are certain attributes you're looking for. Break that down for us in terms of what those attributes look like, what those elements of greatness, what that looks like.

Navin Chaddha (14:36)

Yeah, yeah. I have been first, we used to keep it secretive because it's like our, you know, black magic pattern recognition. So I'm not going to lay out all the things, but there are a few things I'll talk about because what we look for in entrepreneurs, actually, we end up creating an X-ray. We don't look for market signals. We just evaluate people.

So first and foremost, right? Like yes, there are some table stakes. They need to have hunger. They need to have integrity. They need to have vision. They need to have passion to go through any wall. But company building is a team sport. So the number one thing we look at are these people, team players. Are they going to put the company first, team second, themselves third, or it's the other way?

Then we look at, do they have EQ to know what they're good at and where do they need help? And finally, and most importantly, how we believe they need to be secure in their skin. Because if you're not secure in your skin, then it's hard. The other ones I'm just going to keep to myself, otherwise people can fool us, if you will.

Chitra Nawbatt (15:54)

Okay. And so how do you think then this rapid pace of artificial intelligence, which will only continue to explode at a dynamic pace going forward? How does artificial intelligence impact any of the written or unwritten rules when it comes to investing because you've been doing it for a long time and you've been consistently ranked as a top investor on the Forbes Midas list of top 100 tech investors. You've even reached within the top five. So from that very expert perch you have, AI impacting investing in the rules of the game.

Navin Chaddha (16:33)

Yeah, so I think it's interesting for Mayfield, given the stage we invest at, it's a people business, right? AI ain't going to be able to help us evaluate humans because if you're a human first, people first organization, what will we say? Let AI interview you. So the evaluation of the person will be human. The painkiller part of it, the market size of it, AI can help us do that, and it already is. So that's the evaluation phase. Now, identifying entrepreneurs. This is where, with our brand, a lot of our deals are inbound. Either they reach out to the venture capitalist, or we get referrals through their network. But now we have implemented data science for signals in the world where founders are starting new companies. How do we get to them? So that's where two things is where we are leveraging AI and data science, if you will. But people evaluation us, we're not going to have people say, is AI, a questionnaire. That doesn't happen.

Chitra Nawbatt (17:48)

And going a little bit further on what you were saying around data signals, you started to give us some of the secret ingredients that you're willing to share around your pattern recognition of what causes you to invest. But if you could use an example to bring that to life for us, right? In terms of the data, the signals, the pattern recognition, and how you synthesize all of those inputs.

Navin Chaddha (18:15)

Yeah, yeah. It's very simple, right? Like it's people first. So let me give you an example. A Lyft, a very successful company, John Zimmer, and Logan came and pitched us a company called ZimRide. We looked at the mission of the company is to elevate people's life by providing the world's best transportation because people waste a lot of time and their values were just amazing.

Many companies at that stage don't even talk about values, right? They want to uplift others. They want to just make things happen. So when somebody says, this is my mission, and my job is to uplift others and do it in a nice way, it resonated with us. Turned out we make the bet. Zimride was the wrong idea, but they quickly pivoted into Lyft and became a mega business and same was the story with Poshmark. Manish comes in and pitches us and he said, I'm going to build like what Instagram does, similar concept. I'm going to build the next eBay, go back to the roots of people selling fashion to other people. Rest was history. So it was all around the vision, the values and the relationship we could build.

And these journeys have been 10, 12, 14 years because that's what it takes. know, greatness doesn't get created in five years. So those are the signals. There was no data. So the data people look for on company market signals, most of the places where we have had huge successes, there are no markets. These companies create markets. So when people look at signals on business data, Gartner reports, that's not where Mayfield invests.

Chitra Nawbatt (20:13)

That's extremely informative because as you talked about...

You know, there's no data, there may or may not be signals. There's no, lot of information on that particular market. That's not where you invest. So you're talking about being very ahead of the curve, right? Because value, value is created on the edge. Value is created on the, on the future edge of innovation, if you will. And so how do you then have a differentiated information gathering and synthesis process to stay competitive, to have those tentacles out in the world where others aren't.

Navin Chaddha (20:48)

Yeah, yeah. So I think that's the job, right? Like first, you have to build a brand that we are here as a people first firm, we're evaluating you and helping you, if you will, and not your idea. We're going to watch your back. We're going to be your safety net. And we are willing to take risk on an extreme where at the idea stage, we are willing to write big checks, five million, six million, eight million, 10 million. And we have all been fellow entrepreneurs. We've been in your shoes. Look at our track record. And we have domain expertise in your area. So if you package those things and bring them to entrepreneurs, it appeals to a certain set of them, maybe not to everybody.

We only do in our early fund eight to 10 investments a year with high conviction, work them, provide value, not only the board member and the investment team, but we have a whole founder amplification team, which I'm sure we'll talk about on value add what we do. So if you're authentic, you have a unique product, people find you, people find you, right? There's enough referral based business. There's secret sites like Yelp and TripAdvisor. Keep doing good. Be authentic. People will find you.

Chitra Nawbatt (22:16)

And before we actually get into value creation. You know, what's your process in the vetting of all of these inputs, right? Because when it comes to information and feedback loops, right, there's that which is data driven, it can be substantiated. There's that which is perception driven. And there's that which I like to call manipulation driven, meaning it's fabricated because you're trying to drive to a certain outcome. That's where the eighth, ninth, 10th dimensional chess comes in, right? 

Navin Chaddha (22:46)

Yep.

Chitra Nawbatt (22:50)

And so how do you decipher distinguish? vet between these elements. How do you navigate that?

Navin Chaddha (22:55)

I think it's intuition and it's spending time with the entrepreneur. And in my experience since the mid 90s as an entrepreneur and VC, I believe in the blink moment. I know within a few minutes, this particular entrepreneur is worth going long with and unpeeling the onion. This is not gonna work. So it's intuition. The stage where we invest that data, a lot of the other stuff creates analysis paralysis. We are venture capitalists, early stage venture capitalists. We are in the risk business. We are supposed to create home runs. So use your intuition, use your imagination, and spend a lot of time with the entrepreneurs. If they are unwilling to do that, not for me, not for me. So that's how we gathered the signals in a very, nobody's pitching to anybody. Just get to know each other.

Chitra Nawbatt (23:55)

Value creation, you talked about it. Where does value creation come in and what is it? Because many venture capital firms say they do value creation, but it's window dressing. This is a differentiator for you. Talk about your value creation process and how you're a code breaker in this regard.

Navin Chaddha (24:16)

Yeah, so I think there's a lot of firms which actually do provide value. Our approach is sit down with the entrepreneur once we give them a term sheet and ask them, where do they need help? Some people know it all. They don't need help, so we do nothing. We just go along for the ride. And SolarCity was a good example because Elon Musk was one of the co-founders. So you go there, you take notes. I'm being authentic, right? You do nothing besides providing money. But in certain other cases, we have a whole a la carte menu of where we can help people. So first, the board member, having been an entrepreneur, can be your mentor. Right? Help with strategy, help with what product to build. Next step is, if you are a first time entrepreneur, you need help getting lawyers, accounting firms, real estate. We have ninjas who do that.

Next thing is you're just founders. You need to build a team. We provide if you need the talent function. Now you have the talent. You need to create a pitch deck. You need to have story market fit to be able to hire the next employee to be able to talk to customers. Then comes the product market fit to create a minimal viable product. That is where we have a network of 3000 CXOs who will give you advice, no guarantee. They will buy your product. So that's the phase from idea we are involved with. Once you have a product, we have the network to get you launched with media companies, with PR companies, website creation. And then once you have launched, what are the next two things? You need customers, we have a Rolodex, we'll intro you, no guarantees, they'll buy. And then you need the next round of financing.

So we have the ecosystem for that too, but some people don't need it. It's okay. Some people need it all. Some people need one. Your call. We have this. You decide. It's free. And if you want to take it, take it. So it's very authentic. It's like, and I would say one third of the entrepreneurs don't need any of them. It's okay. And 20, 30 % need it all. It's okay. Some people just want financing help. That's okay. Some people are not good storytellers, so we just help them with story market fit. 

Chitra Nawbatt (26:48)

You used a word earlier. Yeah..

Navin Chaddha (26:50)

Am I making a change to you, right? Like it's not one thing fit all that, Mayfield has a university, right? Like come in, we'll make you better. No, no, no, no, We are your advisors. You run the company. You tell us where you need help and we'll help you.

The Pivots

Chitra Nawbatt (27:05)

Yeah. And on that front, you talked earlier about pivots. I want to get into the pivots in career, in business, and investing in life. And let's start with you. What are some of the profound? Actually, you touched on this earlier, but going a little bit deeper, which is this, what are some of the profound career and life pivots that you've made? And how do you think about it in terms of what was voluntary for you and what might have been involuntary based on what you were facing or what you were facing in building your business?

Navin Chaddha (27:41)

Yeah, so I think I would say let's talk about two. One is a student basically coming from India, IIT, coming to Stanford, visa, working on a PhD, very lucky to have published 25 papers. All universities want you as faculty. The internet hits. People come to you and say, start a company and you're going, have no work experience. I call my parents, I call my friends, I have to take leave of absence from the PhD program and they tell me, you're crazy. Who does that? Startups coming from India, mid 90s, who works at them? Why would you do that? Go work for Microsoft, go work for these companies. So after thinking through it for 60, 90 days, basically, I make the leap. That was the first pivot. Second pivot was entrepreneurism to venture capital, which is...

I want to build things, but again, one door opens another door and you go do it. And what will happen? You'll try for five, six, seven years, either you'll succeed or you go back to what you know. So those have been the two pivotal moments where I've had to change the direction. And then I've had failures along the way, right? Like you can appear, people only know you for your successes, but you do have failures, right? Like you do have failures both as an entrepreneur and as a VC.

Chitra Nawbatt (29:22)

When you talked about making that leap of faith in the entrepreneurism, right? You called mom and dad friends. Who does that? Who leaves their PhD program? Where did that leap of faith come from? Did you write a pro-con chart? Did you meditate? Did you look at yourself in the mirror and do the champion pose? Where did that go for it? Where did that come from?

Navin Chaddha (29:44)

Yeah. Yeah. So I think to me, I listen to everything and then at the end, follow the gut and say like, what's the downside? My professor is saying one year leave of absence, company fails, come back. So, hey, great opportunity. That's the best thing. Life is about taking risks. I left India, came to the US not knowing anyone. Right? So that's what you have to do. You can't overthink. That's analysis paralysis. You look at the situation, look at the pros, look at the cons. no matrices, nothing and say, what's the downside? Try it a year later, come back.

Chitra Nawbatt (30:20)

What's the biggest risk, since you use the word risk, what's the biggest risk you took or you made from an investing perspective? Walk us through that.

Navin Chaddha (30:28)

Yeah, so I think actually the biggest risks have created the biggest companies where the founders were first time and the markets were known. Where it's only one case, actually the company also had traction. Whenever I have deviated from not investing at the ideation stage or the early stage, it doesn't work out for me. And luckily out of the investments, only one or two have shut down and another three to four have basically returned less than the money we invested. So I've been very fortunate. God has been kind in helping me make the right decisions. So, and all these companies had some traction. They weren't seed A's. They were series C's. So I got sucked by data, thinking like, hey, this is going to work. I was just wrong. Just wrong. So I'm just happy doing what I know how to do well. Why get confused? You get indigestion when data is thrown at you. You don't look at the people or the market. But anybody can sell to their friends or get early traction. So that's where my failures have been, not at the core business I do, indigestion. Going and doing something where you are not an expert, haven't done many things, you make mistakes and then you say thank you very much. Let me go back to what I know.

Chitra Nawbatt (32:03)

But what was it though that caused you to veer off path?

Navin Chaddha (32:07)

I think like we're in the business, we're all humans, right? Like basically at that time when you're early in your career, you're swinging, right? So it's not, we don't do safe deals. These markets look like massive markets and they had initial traction, we picked the wrong horse because we were looking at traction. So the thesis was still right. How do we create home runs and their competitors went and did it. Sometimes we chose the wrong people. Sometimes they couldn't execute. Sometimes we didn't invest in number one. I had learned, I forgot working with Bill Gates in the tech markets, the number one company makes the most profits, number two breaks even. And there is no number three. 

Once I invested in the number three company. Next time, because I thought multiple winners can happen, and the next time I didn't look at the people that they can't execute. So those are the two play. One of them we made a zero, and the other one we got half our money back and done.

Chitra Nawbatt (33:16)

right so that that's super instructive because

Navin Chaddha (33:18)

I have done like two or three times, 5 % of the time, it's human. Right? Like it's human to try new things, but you learn from mistakes, right? You can only learn so much from books. I had to practice to learn what you're good at. And that's what I advise founders, become the king or queen of some hill. Don't try to be a jack of all trades. Like you can have any theories, but

I'm just being candid, right?

Chitra Nawbatt (33:42)

No, and this is super, I mean, this is super informative because what you're saying is, is as an accomplished and mature investor you are, we're human, we can go off the track, right? We can, derail is a strong word, but we can kind of deviate from what we know. And so to that point, what's your process in terms of how you maintain that discipline because you made that mistake before. Maybe a few years later, a few months later, something comes to you in a bit of a different context. Maybe you make a similar mistake again.

Navin Chaddha (34:16)

No, no, I don't.

Chitra Nawbatt (34:17)

How do you keep yourself disciplined to say, I'm not going to make that mistake for the fourth time?

Navin Chaddha (34:22)

No, I'm just not going to do it, right? Only if you're going, hire other people who are specialists at that. So Mayfield Spring product, which exists as series B, we have a leader who only specializes in that. Right? So bring people. It's not that money can't be made there. I don't have the skills. So surround yourself with excellence. Have the EQ. Right? So that's what I'm doing. What I practice, tried it two, three times. Doesn't work. Go back to what works 57 times, but surround yourself with excellence, people who are specialists. I believe in sports, right? Like you play a certain position, pick any sports, don't go and play some other position. Be the best at the position you play at and get, assemble a team who's better at those other plays.

Chitra Nawbatt (35:06)

How do you think about pivoting when it comes to investments? Because you said this earlier, right? When you're making that investment, it is for 10 years plus. These are not overnight hits. These are 10 year plus commitments. And in that time, most elements, market forces, people, processes, the economy, are dynamic, not static. What is that process that you go through in terms of how you partner with your companies and where and how you may actively or in a supporting role need them to pivot because of what's happening in the market. How do you how do you deal with that?

Navin Chaddha (35:50)

Yeah. I think our job is not only when we invest to be ahead of the curve and when market shifts are happening to be ahead of the curve, the art is actually how do you influence the entrepreneur? And you can only do that if you have a deductive style, not a dictatorial style. And you have to have built that trust. They know you're coming from a good place and depersonalize the conversation, but it's not about them. It's all about winning. And if you have a strong relationship with the entrepreneur, you're able to influence them because it's for the common good, right? And we have been able to do that very effectively where you don't have that bond.

It's hard, right? So invest in people, invest in relationships who also believe in this. Journey will be fun. There'll be a lot of meandering, lots of ups and downs, and together you'll figure it out.

Chitra Nawbatt (36:52)

On that meandering, what's your review post-mortem and learning process on investments and how you feed that into your pattern recognition in terms of updating your investment algorithm, if you will, as well as value creation algorithm?

Navin Chaddha (37:14)

Yeah, yeah. we have a, every month we are updating like how companies are doing, but every six months we meet and do a portfolio review on every company. And we look at a few metrics. The first one is, we made the bet on people. That's great then. Red, green, yellow. We said, this is a pain killer market. Red, green, yellow. The company had a plan. We invested ideation stage. They'll have a product. They'll have this thing. Where are they? So you look at just like a pilot or a car does, what's my oil? Are the brakes working? A few things. Look at it and then right next steps. What are we going to do with it? Let's go talk to the entrepreneur. Let's go talk to the board and together in a collaborative way. It's collaborative intelligence. It's teamwork to figure out the stuff. We believe in radical candor where we care deeply about entrepreneur and relationships, but we have to give them feedback because otherwise you can just be nice, give no feedback. It's a recipe for disaster, right? That's ruinous empathy. We don't believe in that. So every six months, but remember we're not in any rush. Markets are taking time to develop.

It's okay. Most companies mis plan. But if the founder is not executing or is the problem, that's what we need to go diagnose.

Chitra Nawbatt (38:52)

You talked a little bit about this, to sort of bring it together in the anatomy of a company, if you will. What's your pattern recognition on the necessary ingredients to build and scale profitable tech and AI driven companies? And not so much for today, but for 10 years from now.

Navin Chaddha (39:13)

With it. Yeah. think the rules of investing and building enduring companies, not just profitable, don't change that much. I'll just tell you my rules of the road and they're not that many. First, the companies which become enduring start with a shared set of mission and values. Very important. You need to have a mission, vision and shared beliefs. 

Second, you need to realize this is a team sport. It's not an individual sport. You're not playing badminton. You're playing. You can pick any game. Soccer, American football, basketball. It's a team sport. Third, you need to make sure in your thinking your customer is king or queen. Listen to them. Listen to them. Listen to them. 

Fourth, Make sure once you have listened to them, the solution, the product you're providing is a painkiller. It's not a vitamin. And then finally, have a culture of nimbleness because dinosaurs never survive. So those are my five things that I tell every company and it doesn't matter. A new technology will come. There'll be new bubbles which will get formed, history has taught. There's only one way to build these companies.  

Chitra Nawbatt (40:45)

And going a little bit on this word, you talked about a painkiller, but let's talk about this word pain for a moment. Sometimes when things don't work out our way or the way we want unexpected or expected, it can be disheartening. Has there been a critical situation in your journey, whether on the business side or the life side, where you were hijacked either by somebody else or yourself? And maybe an example of each and how you dealt with that, how you recovered, how you charged forward.

Navin Chaddha (41:16)

Yes, so I think on the personal side, I've been very lucky to have lovely friends, lovely coworkers, my wife, my kids, my parents, my sister, my in-laws. I'm just grateful for them to be supporting us, for them to be able to let us do things we want to do. And we try to do good, so we get more good back. 

I would say on the personal front, when my third company didn't work out to be a big exit, it hurt me. I took the blame on myself because till then everything I touched had become big. I didn't realize the dot-com crash has happened. 9-11 happened. I took it personally on me. Why didn't I see it? But the good news is we made changes ahead of time. The company is still around.

It was started in 2000. It's called CPA.com 24 years later, but I did. And looking back, I would have done that situation differently. I did a lot of self-criticism, self-sabotage, if you would say. And then when you fail as an investor, the first failure where I got a duck was not easy. was not easy. Luckily, I don't have that many. Maybe more are coming. It was not easy and there just the market shifted, Like just the market went to zero and I just missed a risk factor. I didn't know that iPads will come out. And I said, how couldn't I think about that? Because iPhones had come. Now that I look back, how would I know? 

So my philosophy has changed, right? Don't be so self-critical. Give yourself breathing room and I'm always doing that to others, be nice and say it's okay. But when it comes to you, you need to apply those same things to yourself. So nobody, I never have anything ill to say about anybody. I believe people just do good things. My problems are self-inflicted.

The Magic 

Chitra Nawbatt (43:33)

Well, you talked, you mentioned about intuition and God earlier. So let's get into the magic. How do you define intuition and how do you define serendipity?

Navin Chaddha (43:45)

I think serendipity is very, very important. I believe everybody works hard, who's trying to be an entrepreneur. So we always have the right people who are trying to do good things with the right values. Two things have to happen. You need to be in the right place. My case, Silicon Valley. Here, center of innovation when I did my first company.

And the next thing is right time. When the confluence of right people, right place, right time happens, magic happens. So that has happened to me not once, multiple times, multiple times. And it's happening again with AI, right? There very few people in the venture capital business in early stage who have been through cycles since the mid nineties. And I'm lucky that I'm one of them. So have enough pattern recognition. So that's what I would say, huge believer in serendipity and on your other question on intuition. At the end, the stage we are investing on when you're starting a company, first principles win. Don't overthink.

Write down a few things, just two or three. Keep a calm thing and just decide. Are you gonna be in love with this and never question your decision and just go? Those are the best decisions. I got married, but parents introduced after two meetings in 97. Everything has worked out. So you can do that. Right, like.

Chitra Nawbatt (45:26)

She's your lucky charm.

Navin Chaddha (45:29)

Yes, I'm here because of what my wife has done for me and my mother and my sister and other things, right? It's a big part behind every successful person, their spouse, parents make the huge difference. So I'm the lucky one.

Chitra Nawbatt (45:44)

You you just talked to you, you brought something there though together where you talked about AI and serendipity, whereas many folks out there might be afraid of AI or worried. And you talked about pattern recognition, been through so many cycles and bringing AI and serendipity together that all of that is serendipity in a way. And so.

Navin Chaddha (46:02)

Yeah, yeah, right time, right place, right people.

Chitra Nawbatt (46:05)

And so on that front, maybe bring it to life for us in an example, maybe your most highest positive example of where serendipity played a critical role in your investment returns, a specific example.

Navin Chaddha (46:22)

This is in AI or in which area?

Chitra Nawbatt (46:25)

just, any serendipity in general, like where did serendipity play a critical role in your investment returns?

Navin Chaddha (46:32)

Yeah, yeah. So let's look at Lyft, right? Like Zimride. Basically, we funded a company where it was for long-term commute, long-distance commute, mean, right? Students are going from Stanford to USC, or people are commuting from South Bay to San Francisco. They do ride sharing. iPhone happens with location, with real broadband is happening. The company surrender personally, just goes to short distance commute. And suddenly the 1099 economy or the sharing economy rises, where instead of cab drivers, which is good, the yellow cab market, humans want to drive other people. Mobile, broadband, location, sharing economy, and Silicon Valley.

But what else can you ask for? So the company from Zimride, a software company, becomes a mobile marketplace. Who would have thought? wasn't even in our investment memo.

Luck? I'm in!

Chitra Nawbatt (47:43)

I was going say that's an amazing example. So given everything we've talked about, what's your take, what's your definition of The CodeBreaker Mindset™?

Navin Chaddha (47:56)

I think everybody has a different view. My view first of all is I want to thank you for the work you're doing. It's very, very important, right? Before reading what you sent me, I've never thought about this thing. And my belief is everybody is different. Turns out when you go to school, everybody has to give a common exam. If you go to an SAT, everybody is giving the same thing. In life, the exam you get is different from anybody. So if you can figure out the strategy of you, the value of you and personalize it, don't analyze too much and get into analysis paralysis. Just be yourself, be authentic. And that's the mindset. If I can tell anyone anything is: have that.

And I'm hoping through the work you're doing, examples like this give courage to people to follow their dreams and not think about downside. My belief is, you know, fear is the only thing that limits one's potential. So get that out of your system. Just get it out of your system. At most what will happen, you'll fail. Einstein said, if you're never failed, you're not going to come up with anything new. You need to have enough failure in front of yourself. So I love this concept, just love it.

Chitra Nawbatt (49:25)

Thank you so much and I hope that that's what all of us, you know, learn and take away from this. So I thank you so much. And on that note, you know, what's your advice on how to cultivate The CodeBreaker Mindset™ for those of us trying to create our own path of plan to action, how to cultivate The CodeBreaker Mindset™.

Navin Chaddha (49:47)

Yeah, so I think as I mentioned earlier, figure out yourself first. What's your mission? What's your vision? What's the values for yourself? Once you figure that out, jump in. Because have no regret in life that I could have done this, I could have done that. And don't be afraid. Fear is the only thing that limits one's potential. So be bold, take the leap, success will follow. And believe in karma. Don't focus too much on the results because it takes, just go in, enjoy the journey, smell the roses. One door will open other doors. So just be yourself, take the leap and go.

Chitra Nawbatt (50:35)

And any advice you have, any parting advice you have for those who are now trying to think about, how do I equip myself to deal with the future with this high velocity of change coming from tech and AI led innovation, which is only going to become faster? I want to still be relevant. I want to have a job. I want to think about my future career. Your advice on how people can equip themselves for the future mindset wise, as well as skill wise.

Navin Chaddha (51:04)

Yeah, so I go back always to be authentic. Figure out what you want. Don't follow the herd. Have no FOMO. Define your own North Star and compass. Once you know that stuff. Strategy tactics will just get figured out.

Chitra Nawbatt (51:25)

Navin Chaddha, thank you so much for joining us.

Navin Chaddha (51:30)

Thank you! It's a delight and I want to thank you for giving me the opportunity to share my story, my learnings, and I'm hoping the work you're doing will be very, very successful. And I'll be able to contribute in a small way to make your work amplify and more successful. 

Chitra (51:50)

In a big way.  Thank you so much.  

Navin Chaddha (51:53)

It's been a delight. Thank you very much, Chitra.

Chitra Nawbatt (51:56)

Thank you for supporting The CodeBreaker Mindset™. For more episodes go to www.chitranawbatt.com to like and subscribe. Connect with me on social media @ChitraNawbatt.