Ariel Winton is a Vice President at OpenView, a VC firm based in Boston. Prior to OpenView, she was a Product Manager at Yesware and a Partner at Dorm Room Fund representing Northeastern University. You can follow her on Twitter @arielrwinton.
What drew you to VC and working with startups?
My journey into VC wasn't intentional. At the beginning of my freshman year of college, I went to a bunch of meetings for campus organizations to figure out which ones interested me most (as many freshmen do). One of the first meetings I went to was for Northeastern’s Entrepreneurs Club. It was one of the biggest student groups on campus. The students behind it ran an accelerator program for student-run startups, matched student-run businesses with student interns who were interested in startups, invited local entrepreneurs to speak about their experiences launching and running businesses... I won't rehash all of college, but it was joining the Entrepreneur’s Club that made me realize I was interested in startups and plugged me into opportunities in the startup community. That’s how I found my way into product – first at a startup called influencers@, and then at Shyp and Yesware.
After almost three years at Yesware (where I ended up working as a PM throughout most of college), I had my sights set on continuing to do product after graduation. But a couple days after I picked my head up to start exploring roles my senior year, OpenView serendipitously reached out. To be honest, I was skeptical at first… all of my friends were operators, and I knew little to nothing about VC. But I decided to take the conversation to learn, and I loved the people I met so much that I decided to take the plunge. And here I am at OpenView almost three years later!
Few VC firms have more than one junior investor. I know OpenView has numerous associates. Was having peers important to you?
Not necessarily. I didn’t think about it at the time, but in hindsight, I really like having peers below the partner level. There are few enough of us that we each have a high level of responsibility and ownership and work closely with the partners, but enough of us that it never feels like we’re on an island. We all support each other and help each other grow.
One of the interesting things I’ve observed from my many interviews is that there's no playbook for what a junior investor does. When you first started as an associate, how did you find guidance and create structure around your role?
It was uncomfortable at the beginning.
We have a couple of mid-funnel goals that help us keep tabs on whether or not we’re on track, but the one main goal for an Associate at OpenView is to do one deal a year. At first, that can feel disorienting because you don’t know where to begin. I remember having a conversation with one of our partners two weeks into the job… he said something to the effect of, “you’ve asked me in five different ways what you should be doing, and I’m not going to give you an answer. I want you to find your way of doing things, not copy mine.”
He was right. He could’ve told me what to do or how he spent his time, but his approach wasn’t necessarily “right” for everyone. I had to figure it out for myself. I took a first principles approach to identifying and building relationships with interesting companies. As I tried things, I asked myself, “what’s an effective use of my time? What's leading me down an unproductive rabbit hole?” I scrapped the things that weren’t working and iterated to do more of the things that were working. It’s a constant work in progress.
Now that you’ve iterated on this model of a few years, what is your gold dust for finding startups?
I don’t have a magic wand, but what I’ve found is that searching the internet for hours on end and sifting through unfiltered lists of companies isn’t the most productive (or enjoyable) use of my time. Instead, I spend most of my time with people who are close to interesting companies – operators at tech companies who have a pulse on the communities around them, buyers who keep close tabs on up and coming products, other folks in venture who look at similar companies as OpenView… it helps cut through the noise.
I agree. Speaking from my own experience, I was talking to some healthcare startups and realized they were using the same startup for healthcare data.
Exactly. Especially at the Series A or B (where we make most of our investments), these companies are known quantities. Finding the best ones is a matter of picking up on the right signals – great operators seeking to work with them, discerning buyers considering them… those sorts of things.
OpenView invests in early stage B2B. Was enterprise always interesting to you given your prior experiences?
Not necessarily. I chose to join OpenView because of the people and the opportunity to step outside of my comfort zone and learn a tremendous amount. The enterprise focus has been a great learning opportunity, though. It has allowed me to dive deep into industries I knew nothing about: real estate, insurance, financial services, manufacturing… you name it. It gives me a better understanding of the world around me.
The most applicable learnings from my prior roles have been less about enterprise software and more about building startups. I was lucky to get a lot of exposure to different strategic initiatives at Yesware, and that exposure had made it easier for me to put myself in teams’ shoes and empathize with the challenges they’re facing.
People often talk about pattern matching being important as an investor. Nassim Taleb, to the contrary, writes about the black swan and criticizes pattern recognition for failing to suss out the diamond in the rough. Do you think that applies to VC?
I think that depends on what you mean by pattern recognition. It’s factual that the majority of startups won’t be grand successes, so disregarding a startup because it’s dissimilar to others you’ve seen doesn’t make for better investment decisions. But understanding the efficacy of certain facets of a business based on past experience is, in my opinion, the only way to improve at the craft of venture capital… the alternative is purely guessing.
Let’s talk about some of the communities that you're involved with in Boston! Northeastern clearly made an impact on your career. You were in Dorm Room Fund. Are you still tapping those communities?
Many of my friends from college were in the Northeastern entrepreneurial community, and I remain close with them. I’m not super plugged into what’s happening on campus anymore, likely because I became less involved with the Entrepreneurs Club after my sophomore year of college.
Dorm Room Fund has made a concerted effort to ensure that alumni stay engaged and part of the community, so I definitely feel plugged into that world – both via Slack as well as events such as informal happy hours, summer retreats, and annual summits. I have some sort of contact with the community at least monthly. It’s an incredible group of young entrepreneurial people – from founders to operators to investors!
Are there any investment areas in particular that you're interested in right now?
I’m spending the majority of my time looking at product-led businesses: those that use their products to drive customer acquisition, retention, and expansion. Calendly is a great example – its main acquisition channel is customers using its product to schedule meetings with their contacts and innately sharing the product in the process. These sorts of go to market strategies are wildly efficient and allow dollars otherwise spent on manual labor with eventually diminishing returns to drop to the bottom line. It turns out that product-led companies like Slack, Trello, Dropbox, Expensify, Calendly, and others end up generating >2x the revenue and being worth >2x the value at scale as compared to their non-product-led counterparts.
Going back to your question earlier, this is one example of pattern recognition via a certain facet of a business. The team at OpenView sees how well product-led growth strategies have worked for Calendly, Expensify, DataDog, and others in our portfolio, and we’re doubling down on investing in companies that take a similar approach.
Are you already thinking about the exit when you make an investment?
Before we make an investment, we ask ourselves whether the company could be a standalone public company and if there are logical acquirers, and we typically have a point of view as to whether the company is more likely to go public or sell. If there are obvious strategic acquirers, we many times broker introductions in order to get the conversation going as these relationships typically develop over many years. But in terms of timeline or a prescribed path, we don’t get into that. At the end of the day, it’s a founder’s decision when they want to exit, and we’re not going to stand in the way of that.
You probably also see a lot of B2B companies that have a great product but aren’t venture backable. How do you know when those businesses don’t make sense for OpenView? What kind of advice do you give?
Absolutely- that happens all the time. Usually they’re companies operating in product markets that are too small to produce venture returns. When that happens, I try to be honest with the CEO. If they ask for advice at that point, we’ll talk about alternatives – bootstrapping, taking out debt, etc.
Now let’s talk about some challenges you’ve faced. What are you grappling with as an investor?
The toughest thing about this industry for me is the fact that we have to say no much more than we say yes. At OpenView, we each make 1-2 investments per year which means >99% of our time is spent digging in on companies with whom we don’t end up partnering. It can be frustrating to celebrate only once a year in that respect. But I try not to look at it that way. Instead, I find it more fulfilling to think about the different types of impact we’re able to make throughout the year– helping portfolio companies work through strategic challenges, making advisor or candidate introductions to folks inside and outside of our portfolio... when I zoom out and think about the broader span of impact, it’s easier to feel a consistent sense of purpose.
What advice would you give to young women interested in breaking into VC?
Most firms infrequently hire, so when they do hire, they want to make sure they’re finding the “right” candidates. In my experience, they often lean heavily on their networks to source these candidates as they’re looking for validation from a trusted source. So the best thing you can do to break into VC in my opinion is to be the first name that VCs think of when their own firms or their peers’ firms are hiring. Doing that requires building genuine relationships with folks well ahead of when they plan on hiring or when you hope to join. The more you can show how valuable of a resource you are ahead of the process, the more likely you’ll be to stand out amongst thousands of applications they’ll likely receive. You don’t need a network to start getting to know folks, either. A genuine relationship can start with a cold email... many of mine have!
Rapid Fire 🔥
Best life hack?
Constrain your workday. I’ve found that if I block off a certain number of hours to get my work done in a day, I force myself to prioritize more ruthlessly and focus more intently. It also keeps me sane by saving time to cook dinner, go to the gym, relax, sleep, etc.
An app you can’t live without?
One Medical! It’s honestly a life saver.