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Brianne Kimmel, founder of VC fund Worklife, joins The Final Round to discuss the latest work from home tech the fund is investing in and talks the future of work.
SEANA SMITH: Let's turn our conversation to the VC landscape and how the pandemic has really impacted this space, because we heard from a number of investors here on the program that some of their priorities have shifted because-- or in the wake, I guess, of the coronavirus era. So for more on this, I want to welcome Brianne Kimmel. She's the founder of Worklife. It's a VC fund that's backed by the founders of Cameo, of Slack, of GitHub, of Spotify, and Zoom.
And Brianne, it's great to have you on the show. Let's just talk about your position as an investor, just what's your strategy when you're identifying companies that are going to excel in this new environment in this coronavirus era?
BRIANNE KIMMEL: Yeah, absolutely. So I have a future work-focused fund backed by Zoom. Slack, a lot of these large platforms that have now scaled into public markets and are seeing some large shifts that are happening, you know, pulling enterprise tech from traditional workplace and-- and corporate use cases into seeing this new era where weddings, and fitness classes, and even "Saturday Night Live" are being hosted over Zoom.
And so, you know, in a lot of ways as an early-stage investor, I'm spending time in a lot of these existing platforms that now have, you know, global attention, and more specifically, you know, mainstream America's attention to look at, you know, are there new venture scale opportunities that are being built on top of these existing platforms? I'm also spending time looking at what are the-- what is the core technology that actually powers a lot of great consumer experiences?
So I do spend a time-- a lot of time recently looking at developer-friendly infrastructure. Agora is a great example. They reported 183%, you know, net-- high net dollar retention. You know, we're seeing-- we saw Datadog 153% IPO. And so a lot of these building blocks that power, you know, a great remote work experience, they're API companies that have incredibly high retention, that investors are, you know, competing even at the earliest stages, just given their ability to scale into really large companies.
SEANA SMITH: Hey, Brianne--
BRIANNE KIMMEL: So I would say--
SEANA SMITH: I was going to say that that's interesting, because we heard-- just last hour, we were talking to Jim McKelvey. He's the co-founder of Square, and he was just talking about how a time like this when there is a different type of environment, and then there's a lot of uncertainty and some chaos out there, that it does help foster innovation and new ideas. And I'm just curious, just at a time when there's so much disruption like this, because this is an era that we haven't been in, we haven't seen anything like this before in our lifetimes, have you seen entrepreneurs become a little bit more proactive and identify new business opportunities out there?
BRIANNE KIMMEL: Yeah, that's exactly right. I mean, at the very start of COVID, you know, Microsoft CEO Satya Nadella said two years of digital transformation happened in two months. And so now that we're looking multiple months into an extended period of work-from-home, entrepreneurs are thinking-- they're a lot more efficient with the capital that they have raised. What that tends to look like is, you know, lowering real estate costs, hiring fewer but more senior individuals on the tech side.
I'm also seeing a shift where, you know, quite frankly, now that Silicon Valley has sort of scattered across the country or individuals have gone back to their home country for an extended period of time, you know, Silicon Valley is now at your doorstep. There's more people starting small businesses from home. GitHub contributions are up significantly month-over-month.
And so, you know, people are, you know, readjusting to this new normal. And I think readjusting, especially for the tech population, is starting to contribute to more open source projects. You see a lot of new people starting companies. Not all of them are necessarily venture scale businesses. We are seeing a lot of individuals that are choosing to leave behind a well-paying tech career, and they'd actually rather start a retail e-commerce site using something like Shopify.
And so I think that across the board we're seeing a lot more flexibility when individuals think about where they want to work next and sort of the work-life balance that they want in the future. And so Worklife, since the beginning of COVID, and even prior to-- to the current macro environment, we've been investing in a lot of tools for remote teams, a lot of developer-friendly infrastructure. So it's pretty easy to start a tech company. Like, what-- what do tech companies need beyond AWS? We want to be the first person and first firm that comes to mind for those sort of investments.
And then the third thing is looking at this new creator economy, where just given the strength of the Shopify platform, I think we'll see a whole wave of new types of creator tools where individuals who have their own following or individuals that want to start a business out of their bedroom, that's highly possible today through a number of new technologies.
AKIKO FUJITA: Brianne, you talked about the need for a lot of these startups to lower their capital costs as well. And I've spoken to a number of early-stage startups, founders who have said that now that this work-from-home environment is-- is pretty much very widespread, they can now recruit not just out of the region, but out of the country.
They've had to, in the past, maybe compete for talent for engineers in the valley against the Googles and the Facebooks. They couldn't get that kind of talent. But now they can look to places like Canada, to places like Latin America. Are you seeing that with some of your companies too?
BRIANNE KIMMEL: Yeah, that's absolutely right. I think the one thing I would add to that, as well, is historically founders who are potentially immigrants who recently moved to Silicon Valley, they actually viewed their home country as a competitive advantage, where they would build and have these small engineering teams to lower their capital costs, but they themselves were based in Silicon Valley. I think that was, you know, in the short term a really interesting competitive advantage.
I mean, we've seen that time and time again. I think Stripe is a great example of that. Talkdesk is a great example of that, where when you have international founders who have a Bay Area headquarters and that's where they're spending their time, especially from an investor standpoint, and they have these second and third engineering offices that lower the capital costs, like, that was their competitive advantage. I think now what's different is that with founders being based anywhere and with a fully distributed team, we're actually starting to see very meaningful gains in terms of overall productivity. We're also seeing lower real estate costs and much more capital-efficient businesses.
DAN HOWLEY: Brianne, when you talk about, you know, people working from anywhere or working from home, obviously we're doing it because of COVID now, and some companies are seeing that kind of go forward strategy at-- of working from home. But a lot are still focusing on getting back into the office. I guess, you know, where do you see that kind of percentage line between those who want to have their employees come back and those who don't? Because we just saw Amazon, for existence-- for instance, put a lot of money forward into getting employees in offices across the country.
BRIANNE KIMMEL: Yeah, it's a great question. I think it depends on the size, and the stage, and the scale of the company. For early-stage startups, a lot of them are going fully distributed until they have product market fit, they have a proven proof of concept, and they raise enough capital to support a traditional HQ. And so I am seeing startups stay fully distributed for a little bit longer.
What's interesting about the large tech companies is the fact that they are sitting on a significant amount of real estate, and there are traditional team-based norms where I think that you will always see-- you know, I think a lot about recent college grads. Like, right now is a really unfortunate time to be entering your first tech role, because I think their-- startups, in particular, are less operationalized in terms of how they onboard and coach new employees.
And so I think if anything-- you know, cities are not going away. I think that, you know, there are many companies like-- like Amazon that do share that same sentiment, where the sooner we can get individuals tested, back in the office, you know, in a socially distant way, the more you can continue to have a great place to work, employees feel like they have that face time with their manager, and there's a lot more visibility into even, you know, upward mobility inside of your current company.
SEANA SMITH: All right, Brianne Kimmel, founder of Worklife. Thanks so much for joining the show. We really appreciate it.
BRIANNE KIMMEL: Thank you.