"We don’t look for founders of companies, but founders of movements" - A chat with venture capitalist Toni Schneider

We welcomed prominent Swiss entrepreneur and Silicon Valley expert Toni Schneider to speak at our “Ask the Investor” event on 26th October at the startup space in Schlieren. The former CEO of Automattic, the company behind WordPress, Toni Schneider is now a partner at True Ventures, an early stage venture capital firm based in San Francisco, California and was recognized as CEO of the year at the Crunchies for his work at Automattic. Before the event, we took the opportunity to ask him a few questions.

You welcome our venture leaders Technology when they make their trip to Silicon Valley. What made you get involved? What makes venturelab special in your opinion?
venturelab started visiting us in Silicon Valley about three years ago. It’s so long ago I’ve forgotten how the original connection with venturelab happened! I grew up in Switzerland but I’m based in San Francisco so a lot of Swiss startups end up looking me up when they come to San Francisco and venturelab reached out to me to see if I would be interested in working together. It’s fun to finally see venturelab here in Switzerland actually.

What makes you continue to be involved in venturelab?
Bringing a group of startups over to Silicon Valley is really useful because it’s like a class that you can look at. Last time they were over there was a pitch event, which is a great way to see a whole batch of companies at once. I’m not aware of anyone else who does that for Swiss startups, with a good program of coming through and visiting everyone in Silicon Valley and getting immersed in that culture. I think that’s very useful for both sides.

When people pitch to you as part of venture leaders would you invest?
Yep!



Do offer anything else, like support?
Not formally, but for me it’s a little bit more than just investing. I like to help out Swiss startups so even if it’s not a fit for us as an investment I like to try to help out and give advice or make introductions to other people, but it’s pretty informal. When I left Switzerland 25 years ago there were no startups, then 10-15 years ago there were a handful. I would say it’s really been in the last five years or so when programs like venturelab started to grow and I feel like now it’s growing very rapidly, so I’m trying to understand it myself and see how all the pieces fit. venturelab is one of the leading programs doing this type of work.

As someone heavily involved in the startup ecosystem in Silicon Valley, what is your “outsider” view of the Swiss startup ecosystem? What can we do better?
It’s one of the reasons for my trip, because I really want to see it in person. On paper there are many advantages to it, there are world class universities and people always talk about Google and how big that’s got in Zurich, and there’s a tech scene now and there are programs like this one and I feel like there’s a real interest in creating startups, and there’s enough now that I think people coming out of school consider it as a real possibility as a career. That’s come a long way and it’s growing every year. The startups here have the same feel as everywhere else, they have a very similar approach. The Silicon Valley approach works all over the world. But, it’s still small, and that’s the challenge. I actually think that location is becoming less and less important: I know there are a lot of people whose focus is on making Zurich a startup hub and that’s great, but, in reality as an investor, I happen to care about Zurich because I’m Swiss, but other than that, we don’t really care where a company is located. But I think if you continue along this path, it will get big enough that it will be noticed more and more. I think one of the challenges now is that if you’re in the US and you say “Startups in Europe” people think Berlin or London and they haven’t really heard of Zurich in that way. Word hasn’t completely got out yet so, as an ecosystem, there’s certainly more you could do to go out and promote yourselves, tell the story and raise the profile.
 

 
Similarly, is there anything that Silicon Valley can learn from Switzerland?
Maybe… startups in Switzerland are still very early, they’re maybe in the second or third generations of people going through the system. Every time that happens it gets bigger and there’s more experience being generated but there haven’t yet been big, well-known companies coming out of that system. So until that happens, and we can look at that and ask why that happened in Switzerland, people in Silicon Valley are too busy to be looking to learn from other places! But, that said, I think one of the big differences that in Switzerland people have a bit more of a long-term view and take a more deliberate approach to things, and I feel like for some tech companies that could actually be useful. In the US the attention span is very short, and for startups that’s often an advantage, people go very fast and figure things out very quickly and I think that’s something Switzerland still needs to learn. In Switzerland people don’t like to move out of their comfort zone, they don’t like to try something new that might be a failure. In Silicon Valley it’s completely the opposite, people don’t want to be in their comfort zone. It’s not like one approach is right and the other is wrong, but I think that’s what both sides can learn from each other: when should you go incredibly fast and when does it make sense to be a little slower and more deliberate?   
 
As an investor, what sets aside a startup for you?
We invest very early, we’re a seed stage investor, so there are no customers yet, there might be a product but it’s not launched yet, so the focus is partly on the product, but mostly the team. So what we get excited about is when we have a team of founders that we feel have really compelling, ambitious long-term vision. We sometimes say that we don’t look for founders of companies, but founders of movements: Someone who thinks so big that the change they’re trying to bring to a market is a whole movement that’s going to transform everything. That’s pretty rare, it’s rare to find someone who has that level of vision, but is also practical enough to have a good plan of how to get there because it’s a long road with lots of ups and downs. It’s really a people decision in the end, so we spend a lot of time on that. We look at thousands of startups per year and invest in just 15. They’re all good, they all have good ideas, but there are just a few that stand out.
 
In the venture leaders program do you see that vision more often?
I feel like there have been a few that stand out and the quality seems impressive. You’re obviously doing something right! Having that filter that helps to find things that stand out is very useful for us.


 
From looking at your Twitter feed, it is clear that gender equality is an important issue to you. In your opinion, what can tech companies do to redress the balance?
Not just with gender but also with racial equality. I actually think you should push this forward around here because this is an area where Switzerland is shamefully behind. I was glad to see that in your program there are a few female founders – in a lot of programs it’s 100% male. It was more like that in Silicon Valley about five years ago and it’s changing very rapidly. In our case, we started actively doing something about it about two years ago. We’re on our fifth investment fund at True Ventures and in the first four funds we had about 17% female founders or co-founders on average and in this latest fund we’re at 35%. If I look at our last 10 investments, eight of them had either all female or at least one female founder. So now that we’re really paying attention to it, it’s shifting very rapidly.
 
Does that mean that you actively bias your investments towards female led companies?
No, we don't actively bias towards female led companies. We did a few other things, we went through and we made sure the way we present ourselves is not just open to women but open to everyone so we removed everything that was very specific to one type of person. We’ve always believed that entrepreneurialism is a global force for everyone, that everyone should be able to do this, but in reality, when we looked at it there were places where it was very focused on men in the things we had already done and that was starting to reinforce its self. So we went through our website and our materials and looked at our message to make sure that we don’t pre-determine the outcome by talking about things in a certain way. We might say to ourselves that we’d invest in everyone, but if they’re not coming to us and they’re looking at our website and thinking that all they see is a bunch of men then we’re doing it wrong. So we changed our messaging and our images and we started to go to and host some events around female founders and people of color and just started to pay more attention.

For every team we invest in, we have a code of conduct and a certain expectation of how you’re going to build your startup and one of them now is that you’re going to build a diverse team from day one. Nobody says they don’t want a diverse team, but they figure they’ll think about it later, and all of a sudden they’re 20 people and it’s all people like them and then it’s a problem. So now we’re pushing people to look broadly for employees from day one. And there’s no excuse. There are super talented people out there and we’ll help them to work with the right recruiters so that they’re being sent diverse CVs. We also do training with people on unconscious bias and learning the terms and the language and spotting problems early. There’s a lot that can be done and I think that we were one of the earlier firms to really do this but now everybody is dealing with it. People are starting to realize that it’s everybody’s problem and that it’s real and it’s everywhere and we need to be proactive in addressing it.