Business as Usual: Eniac Ventures' Nihal Mehta

Transcription: 

Okay, so good afternoon, everyone. Happy Monday. This is Audrey Russo, President and CEO of the Pittsburgh Technology Council. And today, like every day since the beginning of the pandemic, we are hosting a noon show. And we have, as always fabulous guests. Today, our guest is joining us from Manhattan. And I think you're going to be pretty thrilled to just have an opportunity to hear from him and entertain some questions. So we're pretty excited about that. Before we get started, I just want to tell everyone that, you know, we couldn't do this without Huntington bank, they've been our partners right from the onset, and have worked with us on every piece of experimentation in terms of media, and marketing. And I want to give a shout out to Jonathan kersting. He's joined us here today. He's vice president of all things media and marketing, he's gonna keep his eye on the questions. So we launched the series right at the beginning of the pandemic, to keep the community tethered and informed and to showcase some of the world changing innovation. That's not just occurring here in Pittsburgh, but around the world. And today by having me on Nahil Mehta with us, from any adventures, he's going to be talking to us about his work. And he as I mentioned earlier, he's based in Manhattan. So we have muted your microphones that's only to be considered of our guests. And then where there is a chat. So I'm asking all of you to just put your questions in there, Jonathan will keep his eyes on it. And this is not an opportunity for selling your wares or your services. This is just an opportunity to ask questions of our guests. So I'm going to jump right in. And I mentioned earlier I'm going to reintroduce him is Nico metop. He is the founding general partner of any x ventures. And I think we met him a while black, the world is like a blur right now. But, Nahil, thanks for joining us, you're in New York City, and safe and sound and you've reported to us that things are going swimmingly in New York. So thank you for being here. And let's just before we start, let's just talk about who is neon, who is me all the man, what is he up to? What's his journey been? And then we'll jump into talking about some of the work you're doing with any adventures.

Sounds good.

So who are you?

My name is Nahil Mehta. Hey, guys, first of all, shout out to Pittsburgh, you guys rocked it this past weekend and last few days. And I was mentioning to these guys that Pittsburgh's been in the spotlight for the nation in the world. For all good reasons. And you should really be proud of yourselves. We all are so round of applause to everybody in Pittsburgh. All right. I, you know, my kind of TLDR is I've been in tech, you know, for the past two decades. The first decade built a bunch of startups, five startups. Most of them failed. A couple of them succeed. A couple of them that, you know, we learned the most from from our failures, of course, and my very first startup was with another Pittsburgh native, right? We were just talking about and Vj chata. Great, who's my best friend college roommate. We started a business out of our dorm room, senior year in 1998 1999. And that was a spectacular failure in 2001. We actually had to file for bankruptcy as like young, young Indian, you know, sons of Indian immigrant with 22 year old entrepreneurs like we were like the laughingstock. Actually, it's a funny story, because divali is our Indian cultures are big holidays next weekend. And, you know, it's the Festival of Lights, and it's our new year. And we used to joke that like at the Diwali parties in 1999. We were like the head of the party. And in 2001 all the Auntie's were like don't talk to him, he filed for bankruptcy, you know. So it was a pretty, it was a pretty humbling experience. Looking back on it now. You know, vj and I talked about this all the time, you know, it was the best experience because to face failure, especially at that young of an age and to kind of have to dust yourself off, you know, and pick yourself back up is the number one tenant of being a good entrepreneur, it's that grit is that resilience, and we were very lucky to have failed first and, and failed fast. And now I'm on the other side of the table, you know, as an investor and I often tell entrepreneurs to fail fast. I do. We're not on our dime, like failed way before we invest. But oftentimes, you know, when we meet serial founders, and they failed before, it really resonates with us. Because you accumulate this muscle memory and this scar tissue, whether you're conscious about it or not, you know, you see around corners, you don't make the same mistakes, like your body doesn't let you do that. And so, you know, that's something that we look for and really value having felt it ourselves. So yeah, so first decade I was building and, and failing at startups, second decade started investing. You know, some of the companies you've heard of Airbnb, Uber, attentive, ox vungle. You know, there's a bunch of zeros as well, of course, that's the way that startups work. But over the past, I think since 2005, since I started, angel investing in the fund has been around now for 10 years. I probably invested in about 200 companies, about 120, through ENIAC and others, you know, through previous to ENIAC as an angel. So that's kind of my really brief history as an entrepreneur and an investor.

Look, so can I ask you just a question about that first failure, which our third bankruptcy with Well, what was that idea?

So it started as a vj. And I actually were DJs. on campus, we were we were the cool kids, believe it or not, this is way before the wife and the kids and the dog, we were actually, you know, we're actually the cool kids on campus. And we used to, you know, we used to throw events and parties, and we used to know kind of where the where the coolest events were. And we started started with an email list. And we used to email our friends where to go and then we just said, Let's stand up a website, because that was the cool thing to do in 1998. And so the website was called Philly tonight.com. And that's what we raised money for. We spent the money very wisely as well, we had a billboard on 95. Like, in between Philly and Delaware. We had commercials on MTV produced by the roots. So you know, we spent that we spent the money, we raised very well, without any without any money. And the other column, which is the revenue column, we have a lot of, we have a lot of money in the expenses column. But um, but yeah, that was a business was called Philly tonight.com. And then we ultimately expanded to a company called the urban group, which was like 20, Philly two nights all over the world, that we would either own or partner with. And the business model was, it was it was very ambitious, because it was pre Google, but it was a national ad network that would distribute as locally. So the vision was, we would go to a Pepsi or, or a national brand, and actually be able to disseminate ads across the network. And, you know, at that time, ad sales was all very manual, there were no networks that could backfill your inventory. Right? This is pre Google. So obviously, now that's a little bit easier to monetize those businesses, but back then it was just literally dialing for dollars and showing up at people's doors to collect collect cash, which, you know, to small Indian guys, we're not really good at so.

So you could you you went bankrupt, right? Yeah. Very, very severe. Yeah. How did you bounce out of that?

You know, it took it took a lot of time, actually, it was it was definitely looking back was definitely a period of depression for for Vgi. I mean, you know, so this was an A one, interestingly enough, you know, the entire market collapsed, you know, obviously 911 the.com market, the stock market. And, you know, we blamed ourselves for like, the.com crash where, like, You crashed, you crash the market? Ah, and, you know, it turned out, you know, there are thousands of other startups that went bankrupt too. But, yeah, you know, we both went and kind of had to recover from that. Veatch went back home to Weirton, West Virginia, right and ended up working with his with his dad to create the first Sikh national seek exhibit at the Smithsonian in DC. So he's, he's seek and that was an incredible effort, you know, especially coming from that sort of experience. And then we actually ended up starting a nonprofit called Ahimsa that post 911 immediately started benefiting Victims of hate crimes. So if you remember after 911 a lot of a lot of six, a lot of Muslims, a lot of brown people were targeted, you know, through these horrible hate crimes and so we ended up you know, throwing events and and back to our roots DJing, right, to help raise money for their families. And so we created a nonprofit called Ahimsa that's still alive and well today. But you know that that came out of that, that came out of that period of depression. One of the things that I did, we actually built a interesting piece of technology at Philly tonight an urban groove, where we would text you. And this is way before SMS was cool. We would text you the event of interest that night to your phone. And we built that at Philly tonight. And so when we filed for Chapter Seven, I actually bought back the asset, because I thought this technology would be would be interesting to do like to keep iterating on. And so I ended up moving to San Francisco in 2001. I'd actually lived there for a summer in college, working for Microsoft. And I was there in 98, actually, and that's when I saw the big Yahoo Billboard. And I was like, Oh my god, this is like we're all the techies live, I need to be here. And so I knew I had to go back there. And this was a good reason to do that with you know, with nothing and just kind of build from the ground up like a lot of other people were at that time in 2001. But I had this interesting piece of technology with me. And so started iterating on it. and ended up creating a new company and leveraging that tech to help businesses reach their customers. So instead of a b2c application, like Philly tonight was making b2b. And so we started working with record labels and artists. And then eventually, we're working with McDonald's and Starburst. And eventually, we're pairing campaigns like American Idol. Remember, in 2002, you could text in 2003, actually, you could text into vote on your favorite contestant. That was our technology that eventually would power these, these amazing campaigns. So that was, and of course vj. After the nonprofit, he discovered his true passion and I think niche in life, which he's absolutely incredible top point 000 1% marketer and publicist, as you know, he was doing all the PR and, you know, affiliates night and urban group. And so when this new company was launching, of course, we partnered with him. And he became his first client in his new PR firm. And so this company was rocket ship, it was called IP, IP sh. Actually VG and I bought the domain as DJs. Because that's the sound of record makes when you scratch it IP record for those that you are listening, who are listening who don't know what I'm talking about is a circular is made of black plastic, and it has grooves in it. Fascinating. It's crazy. It's, uh huh. It's like the future of technology. And you put a needle on it, and it creates sounds. And so anyway, when you scratch your record,

it made this sound it should we bought the domain name, of course, the genius of V he, later on he backfill, the acronym for the company became instant power single handed. But anyway, yeah, we grew that up and then ended up selling that business to Omnicom a large ad holding company in 2005. And so that was like my first run at startups, checkered, you know, bankrupt, bought the assets and then built a successful company, but it was a nice, you know, essentially seven year run through those companies. That was my first cycle of entrepreneurship.

And so here you are, at on the other side of the house now doing investments and some great investments. Mind you. So what talk about that hat and talk about what the priorities are that you have? What do you look for?

Yeah.

What's been luck? What's been intentional?

Sure. So, you know, one thing I have to say is, you know, my partners are incredible. We also all met in college in Philly. As as engineers, and and the four of us, myself included, all had that kind of same experience our first decade of our careers founding an operating startups. bunch of them failed, a bunch of them succeeded. Then we started angel investing together and said, Let's, let's do this together. And the namesake of our firm is from the first time Automated computer that was actually built at the University of Pennsylvania in the 1940s, that computer called ENIAC, and we're very interested in the future of computing, and how that will disrupt traditional businesses. And so that, you know, that's been the overarching theme for 10 years. We're investing in startups that leverage computer science or leverage code to create very dramatic, disruptive businesses. We love to look for kind of the the unsexy or the business, the sexy or they are to us. So you're looking at prop tech, construction, tech, fin tech, healthcare, health tech, you know, nobody gets out of bed faster than we do when somebody says, Hey, we have a new way to automate claims recovery for healthcare payers really like what you do, you know. So you know, that that's the kind of stuff we're doing. Now, I think the best type of computer science these days that we're really excited about that straight down the middle for us is machine learning. Which, of course, in your backyard, you have one of the best centers for at Carnegie Mellon, and applied machine learning to you know, these very large kind of trillion dollar GDP categories. So I mentioned some of them, but you know, real estate, construction, healthcare and tech, etc. So that's what's that's what gets us really excited. Historically, we've been half and a half kind of consumer enterprise. I think, in the past few years, we've been more enterprise SAS, we just think there's, there's wider lanes for companies to to grow faster and build bigger companies, they're not kind of inhibited by the incumbents on the consumer side, that combined network effects like Google and Facebook and Apple, there's so much more vast playing field on the b2b world to build unicorns. But yeah, you know, we've been investing in about 10 companies every year, you know, or more for the past 10 years. And, you know, you can go to eniac.vc to see some of our portfolio.

So what's the range of investment? What's that? From? Eva? I mean, because you mentioned that all of you, I'm imagine tabel, as well. And are angels?

Yes. Oh, yeah. So we actually now as of probably five years ago, have a pretty strict ownership. Target. So we're seed stage invest investors. So we're investing when there's a team, and there's a product, there's usually little traction. So these companies are not generating throwing off cash flow generating tons of revenue. But there's a little bit of traction, because we like to dig in on engagement during our diligence. But the team founding team is certainly fully formed. And the team is, you know, more than three quarters of the signal for us, you know, we remember as entrepreneurs, right, going back to our stories, it's about that grit and resilience. And if we can find a team, ideally, that's done it before together. That checks a lot of boxes for us, right, we say, if you've had your hands around each other's necks before, and you want to work together, again, that means the world right for us. You've been through the peaks and valleys before. So anyway, we're leading these seed rounds, these are typically one to $2 million checks. And typically three to three to $4 million rounds. Our ownership targets these days is around 12 to 15% ownership. So that's where we're entering this is the round before the series A usually the first institutional round of funding. So these days, there's a pre seed round. That's a relatively new concept from 10 years ago, didn't exist. But it's the first 500 to 1.5 million, it's at the company. And these are angels, friends and families. There's also pre seed firms that can facilitate those investments. And proceeds usually used to end up creating a product prototype getting some engagement, then the company raises a seed round, that we're ideally leading. And so we'll leave that round, take a board seat, and our job is to get to the series A as quickly as possible. So we're really working with the founders to get through product market fit, doing all the dirty work, you know, recruiting, product distribution, business development, sales, customer discovery, and then working really hard to raise that series at and when we raise the a, you know, it's, it's a relay race, we're handing the baton off to Bessemer Excel Sequoia lightspeed, whoever might be at the A, and we're usually coming off the board at EA certainly at the B so that we can just focus on that to a stage. So that's the strategy

before I switch into another topic. Like, I just want to know what has anything changed? Any changes that you've seen since the pandemic at all? Like just change? company changes and engagement? Yeah, number?

For sure. I mean, I think COVID is, as I'd say, largely accelerated the software sector, especially the b2b SaaS software sector, I think companies are, enterprises are spending more and more against software that can that basically can't get COVID you know, COVID freaks, COVID, free software and automation to make things more efficient and more productive. And we've seen this trend for years, I mean, decades, right. But, you know, tapped into Dallas had two years of digital transformation in two months, we think it's been 10 years of digital transformation in some sectors. This year, I mean, sectors that never had to consider a digital strategy. Now have to or face dying, right? So before it was kind of like maybe a nice to have, you remember, like, in the early 2000s, like, I'll maybe we'll get a website, you know, when iPhone came out, oh, maybe we'll get a mobile app. Now. It's like, Okay, if you don't your debt, you know, if you're a restaurant and you don't offer, like takeout and delivery, you're not online, you're dead. You know, if you're a doctor, and you can't do telemedicine, you're dead. So this was a big forcing function. For many industries, and I think, you know, ourselves, but a lot of early stage software investors, our portfolios have have accelerated, you know, pretty dramatically because of, because of, because of COVID. I think there's definitely companies on the other side, I mean, we have companies selling into, like the physical office. Well, nobody's at the physical office. So those businesses will have to, you know, think about another strategy right now. But anything that has to align with telecommuting, you know, teleworking, healthcare,

you know,

so many different verticals are being disrupted. We actually published my partner, Vic wrote, and are associated Christian Christian wrote a great blog post, it's on our website, under the blog section on accelerates and decelerates in COVID. And it's a big thought experiment. If you're a founder today, like where you should invest your time and energy. And, and so yeah, we've been thinking about that a lot.

on your website. That's right. Okay, so we can go on to your website. So yep. You and vj actually, your co founder, you're working on this project. I just want to talk about a little bit. Yeah, it's called the hundred k pledge. So you want you want to talk about that?

Yeah, of course.

So, you know, link out to I think it's what is it? 100 k pledge.org?

It is the hundred k pledge? Calm?

oh.com. Okay.

I think it's a.com. fee. I'm putting it in the chat. Okay. Yeah. And, you know, since I himsa, we've always been, which the charity we founded after 911, we've always been pretty. Yeah, that's the site. Right? We're 46 billion. That's huge. So I'll talk about that in a second. But, you know, we've been, you know, fairly active in social justice and, you know, active in a lot of different respects. But, in particular, we're very passionate about social justice. And I think one of the things that happened this summer, you know, post George Floyd, and the Black Lives Matter movement that we didn't see, you know, after rodney king or even Trayvon Martin, as much was this incredible, you know, response from the tech community, and community at large on on solutions that various companies and entities were going to try to put forth to solve or help address the systemic racism in this country. And we noticed these incredible acts of generosity that were living on Twitter or people's websites or blogs, but they were kind of fragmented, they were like all over the place. And we just had an idea that very simply aggregate all of these pledges so that they could be in one place. So you can actually do a grand total of pledges created that essentially represent a pledge for You know, economic justice for the black community at large. And let's put them in one place. And that not only gives folks an idea of how much a total number is pledged, but also help with accountability. Because there's a lot of corporations that we want to make sure this is not just lip service for, you know, we want to make sure this is not just a blip for,

you know,

many large fortune 500 businesses said, Hey, I'm gonna pledge 500 million bucks and pledge a billion dollars. And oftentimes, okay, lip service, as time goes up, they can help recruit some more folks, but like, are you really putting that money in the right places, right. And so we threw it up a website, and you can go there, the hundred k pledge calm, and you can see, we're 46 billion aggregated right now. We're collecting new pledges every day. And we're basically scraping pledges that exist. But we're also facilitating an interface for anybody that wants to create a new pledge. So if you're just a regular, old human being that wants to contribute $100,000 over the next 10 years, like you can go to the website. And you can just pledge that you're going to hire somebody, from the black community, you're going to don't donate to an organization, you're going to invest in a black owned business. And we're not asking for specifics, but you're going to pledge kind of the amount in what areas and you know, we're gonna follow up every quarter every year for the next 10 years, just to show progress here. But it was a pretty, pretty easy thing that's been up. It's what we what we've been doing for 20 years, right since filming tonight creating websites and and so yeah, that went live last month, it really felt good when working on it all summer, since the summer, really thought felt good to get it out to the world.

No, it was great. It's a great link, he put it out there. I pledged to the tech Council on there to make it Thank you very much, very much in alignment with what we've been doing in terms of listening. We've been doing a lot of listening sessions across our community. So my hat's off to you and vj on this. So tell us, you know, as we wind down, I think you're married to someone that we might want to, you know, hear about? I hate to say that too, you know, yeah, we do want to hear about?

No, it's all good. Listen, like I said in the beginning, I'm happy to get when I was speaking I'm happy to talk about my stuff for like, 5% of the time because she's much more interesting. So yeah, Russia is the founder and CEO of Girls Who Code. And she started girls in code eight years ago. And now, you know, has taught over 200,000 girls in all 50 states how to code. And she was inspired. To start it, actually, she ran for office 10 years ago, and here in New York City here in this district in Manhattan. In 2010, was the first South Asian woman to run for US Congress and pollster said, we get 1% of the vote. We got 19 times that we got 19% of the vote, we still lost. But during that experience, you know, she visited a lot of schools, and she noticed something was very wrong. In the computer labs, you know, in labs that had decent computer labs, decent setup, there was a roomful of voice. And very few girls, and we've been talking about our pipeline, and the future of technology and our engineering pipeline, in particular, with regards to stem. And she knew right away that she needed to do something to move the needle, that there needed to be more girls in this in this room. And so that was her inspiration, you know, to serve Girls Who Code and now it's the largest nonprofit, by operating budget and by actual results in the country focused on computer science education. So yeah, she's you know, she's a living, breathing, you know, inspiration to many. And I had nothing to do with Girls Who Code even though I I claim that I came up with a name or built the first website, but we actually, we looked at the receipts, and I had nothing to do with it. So it's all it's all. It's all her and, you know, the organization is, is doing great, you know, COVID was tough, I think for a lot of nonprofits this year. Especially those that were dependent on, you know, large grants from either the federal government, local government or a few companies. The great thing about grocery code is it has so Many different donors, from Twitter, to Google, to Microsoft to Apple to Verizon, and a donor base is so fragmented that it was really able to survive and thrive during this period. And I think now, especially with the new administration, and with more of an emphasis being put in on education. I mean, there's an educator in the white house now, right? That we hope that that these efforts will continue to accelerate.

Well, you're lucky Do you have a I mean, is your better half my heart, we put the link out there. So what about people in Pittsburgh who are starting companies and have ideas and our founders?

Yeah, yeah, listen, reach out. Yeah, I love We love nothing more than to meet great entrepreneurs as early as possible, you know, my job is to help them get to a place where we can invest. And 80% of the entrepreneurs I meet are, like, way too early for our stage. But they're just thinking about something. And, you know, reach out to me in the hall@eniac.vc. And I'd love to, I'd love to be helpful. You can also, I'm probably more responsive, I'll get back to you an email, but I'm definitely more responsive on Twitter. And I'm just gonna put that in here to add a helmet on Twitter. But, you know, one of the things I remember as a founder is the most impactful meetings with VCs are ones are definitely like passed on us. But but they would be incredibly generous from their network, their Rolodex, we're joking about this earlier, nobody knows what that word means anymore. But to provide that one introduction of value. And I can remember in my career building startups are probably met on 1000 VCs, right, as a founder, over these five startups. And there's probably only like 12 memorable meetings, where an investor and none of them ended up investing, but they would end up making that introduction to me, that would literally change the trajectory of my business. And I can remember each one of those moments, and that was very inspiring to me as a founder. And I want to try to recreate those moments for other founders as an investor. And so what I try to do is, is make at least one introduction of very high of high value from our network, to everybody we meet, and, you know, hopefully, it's helpful. And anyway, you know, that's, you know, we're playing the long game. I mean, you know, I say life life is life is short, but it's also long, and I feel like, you know, when you can connect people in a very meaningful way. It can, it can result in amazing things. And so that's, you know, that's my number one job as an investor, just connecting people that that deserve to be connected.

So last thing is, do you think your wife will try to run again?

You know, I think she's reinspired to be honest. But if instead of happened these past few days, I think, I think those speeches on Saturday night inspired a whole new generation of leaders as well. So, yeah, I mean, I think, like I said, life Islam. So, you know, I think that's what she's, I can hear downstairs now. You know, we're also working from home. I think she's on the phone talking to somebody about it right now. So great. Yeah, yeah. Well, we'll see. And you guys will be the first to know. So

yes, we want to be. So just Brian points out, and we're going to wrap up. But in terms of how connections really work, we met me Hall, through Rob vescio, who's a pittsburgher introduced us to his sister, who did some work with us at the tech Council. She's now an Uber exec, who introduced us to a marketing firm who introduced us to vj. And who introduced us to you.

So, yep, that that's how life works. And you know, post, post COVID, too, it's very hard to say it's very hard to meet met new people, you know, net new relationships, I think a lot of us have focused inward, ourselves, our immediate family. But like that external connection is dramatically been limited. And so I think the more that everybody can open up their networks, you know, the better, right? And if it has happened over email, or zoom, or text or whatever, but yeah, that's, that's what I'm here for. So please don't hesitate to to hit me up.

Thank you. Thank you for taking the time with us. Thank you for doing the work and the spirit in which you do your work. It's inspiring and important. I think people forget that. They think sometimes it's only about the money. It's about helping other people build their lives, and the prosperity just gets contagious. So really appreciate y'all joining us today and being proud of Pittsburgh all the time, and we have your way to access you. He said Twitter's the best way, I guess through dm on on Twitter, even though he shared his email, and stay safe. Happy Holidays, happy new year as it comes up next weekend. And hats off. We'll be trying to track down your wife as well. And really appreciate all that you do for the world.

Thank you guys so much.

We, we have a good list this week. What's going on, Jonathan?

Well, tomorrow is gonna be a really good show. We have two Life Sciences companies that are in hiring mode, just talking about what we're doing when it comes to hiring people in this pandemic environment. So some good tips and tricks there plus can learn what they're hiring for. So if you're looking for a job in the life sciences industry, please tune in.

Okay, great, everyone. Stay connected. Stay safe. See you tomorrow.

Transcribed by https://otter.ai