The Future of Everything: Bo Peabody

Mar 17, 2018

9

min read

B

ased in New York, Bo complements his Greycroft work with his continued serial entrepreneurship, most recently as the founder and CEO of Guestfriend, a platform offering chatbots-as-a-service to small businesses.

Bo was co-founder and Managing General Partner of Village Ventures, an early stage venture firm as well as the parent company of LeverPoint, a financial services platform for venture, private equity, and real estate funds that was sold to Hamilton Lane in 2016. In 1992, Bo founded Tripod, Inc., one of the original social networks. Tripod was sold to Lycos in 1998. Bo was the Founding Chairman of Everyday Health (NYSE, sold to Ziff Davis); and he also co-founded VoodooVox (sold to UpSnap) and HealthGuru (sold to Propel Media). Bo also co-owns Mezze, Inc., a hospitality group consisting of two award-winning restaurants.

While at Village Ventures, Bo co-invested with Greycroft in Pump Audio (sold to Getty), DigiSynd (sold to Disney), and Babble (sold to Disney). Bo’s prior investments also include Quirky and Purch. He has been featured in major business and consumer publications and has received numerous honors. Bo wrote a book for entrepreneurs called Lucky or Smart?, which was published by Random House in January 2005.

A graduate of Williams College, Bo resides in New York City and is a Trustee of The Academy at Charlemont.

1. How did you get started in the wonderful world of VC?

I always say that there are two ways that you can get started in the venture business. The first is to move up the ranks of becoming an associate, and then a senior associate, then a principal, and then a partner.

The second, which is the way I took, is to hijack your way into the business. And how that’s done is typically by having been an entrepreneur, and having been a part of a successful exit or two. That way, you know what it looks like and what it feels like, and more importantly, you have credibility with entrepreneurs as an operator. That’s the way that I got into the business.

In 2001, I started a firm called Village Ventures with my partner, Matt Harris. We ran that firm for 10 years, raised a couple hundred million in capital across two funds. And then when the financial crisis really hit us we decided in 2010 that we were not going to raise a third fund. And then I went to Greycroft, and have been at Greycroft ever since. That’s been a great move.

2. What is your methodology for defining and selecting the companies and entrepreneurs who are going to create the future?

I think that the great thing about the early stage venture business is that everybody has a very different style for how they approach it.

I think as you get into later stage investing, it tends to be more driven by numbers, and by analysis of hard facts, whereas in the early stage, in many cases, certainly at the seed stage, you don’t have many facts, and so you need a methodology that graphs well to that reality.

I don’t like the term thesis-driven investor, but I do think that that is the closest explanation for my methodology. I think that the way that I arrive at a thesis is less scientific than most people who consider themselves a “thesis-driven investor.” I tend to arrive at it organically, through personal experience.

I’ll give you two examples from Greycroft. When I first got to Greycroft, I had been doing a lot of consumer internet investing, and I was a little tired of it, to be honest. I wanted to do more B2B investing. And so I started thinking about this thing that was happening which was the “consumerization of the enterprise,” where applications like Google Apps being the first and then Slack being the most popular, were being downloaded by individuals first, and being used at the enterprise level, rather than the paradigm that we used to live in, which was the IT administrator sort of blessing a certain product, making one decision and then telling everybody they have to use it.

So, the consumerization of the enterprise was something I felt like I could understand, because I understand how consumer products are adopted, and what the right metrics to look at are, when you’re thinking about making an investment. But I didn’t invest until this company, BetterCloud, came into the office, and pitched me through a connection. And sure enough, it was directly aligned with my thesis, and so that ended up being one of my best investments, and solidified that was I was thinking about, was on the right track.

3. From an investor’s standpoint, being the one who gets to invest in the “future of everything,” what can we expect to see in a 5–10–15 year timeline?

I believe in the old adage that technology does more in 10 years, and less in two years, than you think it’s going to. And so I think two years is a really hard time frame. I actually like to think in five to ten year blocks, because in any two years, it doesn’t really feel like there’s that much change. But I think that ten years from now, a lot will be different.

One thing I’m really interested in is Finance 2.0, and the cryptocurrency, blockchain stuff. I don’t know quite exactly where it’s all gonna go, and I’ve been doing a lot of thinking about it, but I really believe that the financial system is outdated. It isn’t consistent with the borderless nature of the internet. It’s still based on physical geography. And I think that needs to change. I don’t know exactly how it’s gonna change, but it’s certainly coming.

4. What themes, trends, or sectors are you primarily interested in and why?

I really feel like there’s almost too many to name. For me, it’s all really passing interests, until a deal galvanizes it for me or entrepreneur comes into my office and proves my thesis right. I’m interested in blockchain. I’m interested in AI and chatbots. I’m interested in autonomous vehicles. I’m interested in the evolution of the food system, and soil science, and the on-demand economy. I’m interested in all of it. That’s my job. But until I meet an entrepreneur, and until I see a company that really makes me believe that it’s “real,” I don’t make any judgments about … I don’t stack rank them.

5. What moonshot are you most excited to see solved?

The thing that would impact my life greatly, would be this notion of really understanding, at a granular and verifiable level, the providence of food.

Being able to know with every ingredient, where it came from, what it is, how it’s made, and being able to do that very easily, on your phone. I think that would radically change the decisions that I make, and that others make about what they put into their bodies.

6. What problem or challenge is under-funded and why? What sector needs more attention?

The venture capital ecosystem is so well-funded. I could say overfunded, but I don’t believe that, because I think that the benefit that we’re getting from the global concentration of wealth is enormous.

So, where are these people who have $30 million, $40 million, $50 million and more, where are they gonna put money so that they can generate yield and enjoy doing it? And the answer is, the innovation economy.

That’s where that money is going. And so, when you do that, the upside is that every idea that’s even remotely good gets funded. The downside is that there’s a lot of ideas that are only remotely good that are being funded. Is that a problem? I happen to think that it’s not a problem, because the innovation that’s being created is good for the globe, and the money that will inevitably be lost is being lost by people who can afford to lose it.

People complain all the time about, “Oh, there’s too much money in venture capital,” and blah, blah, blah. And I say, yeah, you know, it’s become a much harder business than it was 10 years ago, or 15 years ago, where there was just a very small number of people who were in the business and making money. It’s definitley become much harder, and I think the average venture investor is making a lot less wealth than they used to. But I think that that is a small price to pay for the fact that the innovation economy is just humming so overall the sector allocation is pretty good.

7. What is the role of venture capital in creating the future? What responsibility does VC have to help improve the lives of others, and ultimately the world?

I think the role of venture capital isto responsibly and thoughtfully put capital to work behind great entrepreneurs that are pursuing great businesses.

I don’t believe that venture capital necessarily needs to have a philosophical underpinning sort of beyond that.

I happen to believe that individuals who are benefiting from the growth of the innovation economy, that we have an individual responsibility to donate a lot of our wealth to causes that do have philosophical underpinnings to improve the lives of others, but I don’t believe that mixing both is a good thing.

I’ll give you a perfect example. In my own life I believe that changing the food system to where people are eating better food is something that I’m passionate about and that I donate time and money to, but I have an investment in a company that helps to facilitate the delivery of certain brand of Pizza to anybody who wants it. I don’t know if that certain brand is good, bad or indifferent. I’m pretty sure that the majority of the food that that company facilitates the delivery of to consumers would not be considered consistent with my ideal of what people should be eating, but it’s a great business.

I think we’re going to do well in that business and I think that the business deserves to be around, but it’s at odds with a philosophical idea that I have, so I have to separate those two things and compartmentalize them and say that backing that business is something that I have a responsibility to do because I believe that that’s a good business and I want to return capital to my investors by backing a great entrepreneur, but it’s not exactly consistent with how I feel I should be devoting my personal time and attention.

8. What company or investment in your portfolio are you most excited about and why?

I’m by far the most excited about BetterCloud. I’m obviously excited about many of the deals that I have, but I think BetterCloud has the biggest vision of any company that I’m involved with. I think David Politis, the CEO, is an extraordinary leader and I think they are really out to change the way the entire industry thinks about a problem and they’ve got the product that actually delivers on that vision.

It takes a long time to get companies to that point and BetterCloud is a five year old investment for me, so that’s partly to do with it, but I’m just extremely excited about the path that they’re on and the problem that they’re solving.

9. What does an ideal future look like for you?

Well… I’m looking forward to a time when we can really understand how we can impact the environment and … I mean I know the little steps that we can all take, but it does still feel like we’re not yet galvanized as a culture around the big things that we can do that are relatively simple and agreeable to change what’s going on with climate. I hope this more action taken toward this, so we can all leave in a peaceful, positive, sustainable future.