Q&Z with Peterson Ventures' Zhenni Liu

Zhenni Liu is an investor at Peterson Ventures, based in Salt Lake City, Utah. Prior to Peterson, Zhenni was at Sephora and oversaw the organization’s transition to an omni-channel, experiential retail. Zhenni started her career as an associate consultant at Bain & Company and previously co-founded a career coaching startup, AdvisorYou. She’s also the founder of SoGal Salt Lake City. You can follow her on Twitter: @imzhenniliu

What attracted you to venture capital and working with startups?

I grew up in Silicon Valley and my father’s an engineer. I was curious and drawn to technology at an early age, but it wasn’t until I returned to San Francisco after college, seeing the vibrant tech ecosystem, that I saw a potential career path in tech for myself. Although, I had taken the less risky path by becoming a consultant, I was intrigued by the possibility of building a company. I started playing around with my own entrepreneurial ideas, and after working at Bain for 2 years, I left to launch a career coaching platform called AdvisorYou. While the company never really took off, one thing it allowed me to do was take inventory of my skill sets and made me realized I still have much to learn about operating before I can run a company.

So, I took a step back and joined Sephora, where I was in a Chief of Staff role to the SVP of Digital. She was promoted to Executive Vice President of Omni Retail during my time at Sephora, and I followed her. I worked on Sephora’s evolution towards becoming a omnichannel and experiential retail company and got to know the business of retail intimately. I was also involved with Sephora’s Innovation Lab. The exposure to innovation from a corporate perspective stimulated my intrigue with startups and entrepreneurship. I was antsy to get back into that world and when the opportunity came to leverage my previous experiences at Bain, AdvisorYou, and Sephora as an early stage investor, I knew I had to take it. Peterson Ventures is small and lean team, I not only get to grow as an investor, I also have the autonomy to grow and develop the fund. It’s the type of firm where you can have an idea and just run with it.

What did you learn from each role that make you a stronger investor?

It sounds cheesy, but every job I’ve taken has allowed me to build on existing skills and knowledge, and sometimes the oddest roles I took on had the most profound impact on my growth.

For example, while I was working at Sephora, I moonlighted as a sales associate at Athleta and Outdoor Voices (at different times, of course). My day job was in a corporate setting, so my approaches to retail strategy and metrics were institutional and vulnerable to groupthink. I knew that if I wanted to truly understand the anxieties in retail, I had to be in the stores. I wanted to live and breathe the energy of the industry and that meant selling, restocking, and folding clothes. Sephora taught me the foundations of retail—I built business models, analyzed our P&L, defined metrics of success, and assessed drivers of consumer behavior and our business. But, it was at Outdoor Voices, where I evaluated how a fresh D2C startup approached retail versus a more established brand like Gap (Athleta) or Sephora that gave me a direct understanding of retail and ecommerce frictions. Not only do I feel like I have a good grasp on the beauty market, I feel confident in my ability to assess consumer businesses and what it takes to win.

Looking back at my other roles, at Bain, I learned how to think strategically and for myself. I mastered business frameworks and learned how to get up to speed fast and often on new markets. When I talk to entrepreneurs and investors, the Bain brand reinforces my credibility. It’s also fantastic from a network point of view. I can call on my ex-Bain colleagues who are industry experts and interested in advising founders.

You reported to the EVP of Omni Retail, and at the same, you were involved in Sephora’s innovation lab. Can you tell me more about the overlap. What projects did you work on?

The innovation team is somewhat new- the team reports to the EVP of Omni Retail. With the powerful Sephora brand behind them, the small team has access to test and pilot upcoming retail technologies and trends. Some of the projects that came out of the group included Sephora Virtual Artist (where you can try on makeup virtually), voice commerce via Google Home, Sephora Facebook messenger bot, and several more that I can’t disclose yet.

The innovation lab also took on spreading the spirit of innovation across company. We ran design thinking workshops, Shark Tank style competitions, and attended conferences/events such as CES, NRF, and F8.

I used to tell people my job at Sephora was to dream about the future of retail. My involvement with the innovation lab gave me additional exposure to the startup world and created a desire in me to be at the pulse of innovation with the capital to make things happen.

What do you (and Peterson) see as the future for D2C brands?

Peterson makes seed stage investments across all industries. However, we do have unique perspectives on consumer and B2B SaaS, a stronghold for Utah. As early investors in Bonobos, who pioneered the D2C playbook, and Allbirds, the latest D2C unicorn, we’ve seen the evolution of DNVBs. Today, it’s become easier than ever to launch a consumer business. There are a plethora of tools, platforms, and playbooks. There are now countless companies using the same branding agencies, leveraging identical customer acquisition strategies. As a result, there’s a lot of noise. For us to truly be excited about investing in a D2C brand, at a minimum, we look for product differentiation or a company addressing an underserved market.

What challenges have you faced as a junior investor?

Similar to most junior investors, without years and years of experience, my pattern recognition just isn’t as strong as someone who has been investing for decades. In addition, I must build credibility and confidence in the eyes of entrepreneurs, without an extensive track record.

To accelerate learning and growth, I’ve invested a lot of time investing in building meaningful relationships with entrepreneurs and investors. I’ve founded a non-profit organization, SoGal Salt Lake City, to build a community of diverse founders and funders. Through this, I’ve found a platform to expand my network and gain credibility. We recently kicked off with a networking event in January, and with no marketing, tickets were sold out within the first day. I had to open up additional tickets on Eventbrite three times to accommodate for the demand. People often overlook Silicon Slopes as a place to start a company, but there’s diverse, top talent in Utah, and I want to build a community for that.

What advice would you give to young women who want to enter VC - on the investing, operations, or platform side?

First of all, I’d say let’s chat! I want to be helpful and encouraging because as I reflect on my journey, I realized there is no clear path into venture, and that can be disheartening. I truly believe if you want to invest, there’s a way to making it happen. You have to put yourself in the position that’ll get you in front of the right people at the right time. And it doesn’t hurt to have a few champions along the way 😊

Rapid fire 🔥

Your top request for a startup?

I’m excited about and for the future of femtech. Women’s health has often been overlooked and neglected. There’s not only a large market opportunity here, having personally experienced this, I personally want to see more companies address the wellness and health of women.

A mobile app you can’t live without?

Instagram. Stories and posts not only keep me connected to my friends around the world, I’ve also found Instagram as a great channel to study social and consumer behavior. I have a throwaway account where I follow random dozens of accounts that give me visibility into pop culture and social trends.

Favorite account?

I love Eva Chen (@evachen212). She’s Head of Fashion Partnerships at Instagram, and formerly editor in chief at Lucky. I’ve been following Eva since she was beauty editor at teen vogue in 2004. She’s played a critical role in Instagram’s growth and was instrumental in getting Stories off the ground. No one knows how to build an authentic build and leverage the Instagram platform better than she does.