How Mark Suster became a go-to guy for tech start-ups
The gig: Mark Suster is an entrepreneur, angel investor and managing partner at Century City venture capital firm Upfront Ventures, formerly known as GRP Partners.
A vocal proponent of L.A.'s growing tech scene, Suster has become known as the go-to guy for early-stage technology companies looking for funding. His current investments include Adly, Maker Studios, Moonfrye and Pose. Suster also founded tech accelerator program Launchpad LA and writes a blog, Both Sides of the Table, in which he shares his views on tech trends and offers advice to start-up founders.
Education: Bachelor’s degree in economics from UC San Diego and MBA from the University of Chicago.
Personal: Suster, 45, and his wife, Tania, live in Pacific Palisades with their two sons, 10-year-old Jake and 7-year-old Andy.
Starting young: Suster caught the entrepreneurial bug early. In high school, he designed T-shirts that students would wear in the cheering section at basketball games. He sold them cheaply but marked up the price for individual letters that could be printed on the backs of the shirts.
“Everyone wanted the T-shirts. I sold hundreds of them, made nice profits,” he said. “Being in high school and having an extra thousand dollars to spend was a lot of money for a kid from Sacramento.”
Computer geek: Suster became interested in computers at an early age and taught himself how to use his mother’s IBM when he was 14. “I always liked tinkering with things, and I tinkered with it and learned spreadsheets,” he said. “TV was boring back then.”
In high school he worked at a computer store and taught a computing class at his school.
Unexpected business training: “One of the things that prepared me best was that I was president of my fraternity. Much more than my course work,” Suster said. “I had to raise money; I had to convince people to attend meetings; I had to solve the problem of what to do with my constituents who didn’t pay. I had to worry about spending, legal liabilities, people.... It’s a mini business.”
After college: Suster was hired as a programmer in Los Angeles at Andersen Consulting, which later became known as Accenture. He went on to become a tech consultant for the company, a job that allowed him to live and work in Italy, the south of France, Spain, Britain and Japan.
Start-up success: While living in London, Suster started his first company, a cloud-based software platform for large-scale engineering and construction projects called BuildOnline. Six years later he sold the company and moved to the Bay Area, where he founded Koral, a document management and collaboration tool. Koral was later sold to Salesforce.com.
Lessons learned: Suster said he created his first start-up “for all the wrong reasons.” Although he had wanted to build a text-messaging platform in the late 1990s, a lack of interest from venture capitalists led him to instead create BuildOnline with a friend.
“I made every mistake in my first company: I wasn’t passionate about the idea. I raised too much money. I hired people too quickly. I overspecified my product. And I charged too much when nimbler companies charged much less.”
Still, BuildOnline did $20 million in annual sales before it was sold.
Jumping to the “dark side” of VCs: In 2007 Suster left Salesforce, where he was vice president of product management, and joined GRP. “I loved my time on the court, but then you get to the point where you can’t hit the 3-pointer anymore and here are all these young kids who are faster and better,” he said. “At some point you realize, ‘I can actually coach people.’”
Pitch tips: Entrepreneurs should design a slide deck to tease out a back-and-forth dialogue with potential investors instead of monopolizing the conversation, Suster said. “I call people who do all the talking ‘crocodile salespeople.’ The goal of a VC pitch is to have a discussion or a debate.”
Also, he said: “‘I’m not ready to show product’ is an instant black mark for me.”
New name and new digs: Last month GRP changed its name to Upfront to “represent the fact that we’re upfront with you, we’re transparent,” Suster said.
Upfront, which has 15 employees, recently signed a lease for a new office in downtown Santa Monica. The company is in the middle of designing the top-floor space, which has sweeping views from downtown L.A. to the ocean, and plans to move in February.
Why he hates the name Silicon Beach: “By putting ‘silicon,’ we’re being derivative of Northern California, and ‘beach’ is the worst stereotype of Los Angeles,” said Suster, who thinks the region doesn’t need a catchy name. “Why come up with a brand that plays into the stereotypes of what people don’t like about L.A.?”
Advice for young entrepreneurs: “Network a lot. Ask a lot of questions. Meet with people who are one or two years ahead of you. Always be learning. Try your best to not listen to all the hype. If you’re doing it, do it for the right reasons. Because most likely, you’re not going to make a quick buck.”
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