Sean Byrnes | Field Notes

Sean Byrnes | VC Hunted!

Listen to “SEAN BYRNES | | What is Your Data Saying? – On Acquisition of Flurry – Full Transparency!” on Spreaker.

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Hating on the 1980s? Common man! | #VCHunted Twitter Story
Sean is transparent. He leads by example. I love this.

We’re all about hunting for the untold stories of venture capital. I see ‘venture capital’ in a broader spectrum to include those that are a part of that ecosystem, whether it be a founder who is venture-funded and even angel investors like Kevin Lee (immi) and Jeff Haynie (Pinpoint). Sean Byrnes is all that and more.

I knew our conversation was going to be awesome. Reason? I’ve been following Sean for a good while now and even heard good things years ago when he was getting his company Flurry acquired by Yahoo! Not only that, he’s a man with opinions and through his writing, has shown that he’s earned every single battle scar he has. I can appreciate that as a founder and wanted to dig a bit deeper into who Sean is and what he’s building today.
Sean wanted to do much better than his last. Values and culture first! is a company that is a response to the plethora of data that companies have to sift through and understand. While modern dashboards and development tools are great, they’re only as useful as the questions you ask.

“The founding principle of Outlier is ‘how do you know the right questions to ask?’ We need a new generation of tools that can look at vast amounts of data to bring us the questions we need to be asking.”

Sean Byrnes | VC Hunting S2E8

So how is Outlier making sense of all this raw consumer data today as it all lives in different systems that an organization has, from databases to data warehouses? It makes sense that Outlier uses lots of machine learning and artificial intelligence to extract the data, but what’s the secret sauce?

Sean Byrnes is here and he’s ready for action!… or data science. Same same.

Outlier is special as they have designed their systems with privacy in mind. With all the data privacy issues today, you can’t just extract personal data from all these different systems. Outlier grabs the data as it is and is able to leverage it without compromising any privacy needs of the user or organization.

“All major business decisions start from change. That change might be an opportunity or a problem, but it’s always a change. Outlier is designed to produce insights the same way a human would. For example, if you change your website, it changes the way you sell, it may also affect customer support requests, it might affect how your inventory system is tracking things. The kind of things you’d expect a human to do is what Outlier does automatically at scale. A person would be able to look at a little bit of data, while Outlier can go through all of it.”

Sean Byrnes | VC Hunted S2E8

So how did Sean get to building this type of data analytics company? It turns out he’s just the perfect personality for a founder: He enjoys the multidisciplinary requirements of being a founder. Getting his hands dirty learning lots of different things. He never felt like he could fit in a corporate job where they want you to learn how to do something really well and then repeat it over and over. After successfully building Flurry to acquisition over a 9 year period, he got to meet a lot of the 500K customers that were using his software for their apps. One of the most common questions he got from them is: “Sean, how do I know what to look for in all this data?” – This became the seed of Outlier as Sean sought to find a solution to this very apparent problem (and opportunity)!

Just a small example of the very intentional language used on the website!

One of the things that struck me about Sean was his candor, from speaking about his experiences having an acquisition to identifying that he created many bad habits during the process of building a company, to make sure that his next company was built on principles and values that really mattered. And here’s the thing. I actually believe what he wrote on the website. You see, many websites have the exact same ‘values.’ But when push comes to shove, those values are merely just great art pieces on the wall. For Sean, I can tell (from reading his blogs and digging deep on him) that he really did mature a lot from his first startup. He grew, learned, and has realized that a great company starts with the leaders.
Join a company of mature and responsible people. Sounds pretty great to me!

“We started the company with the idea not just to solve a problem, but can we set an example for other tech companies that you can build a business in a healthier more sustainable way, and accessible to people in all stages of life (those with kids and those kids who are willing to work 20 hour days). This is a big asset for us as a company.”

Sean Byrnes | VC Hunting S2E8

I especially loved his answer to my question about his blog post from 2015, the three (three and a half) best words as a CEO to say: “I don’t know.” When was the last time he said that and what did he learn?

“I think the challenge of being a founder when you’re sitting in front of an investor and you’re trying to pitch them, you want to have the answers. You want to be the person that has all the information. Some part of you thinks the investor wants you to be the person with all the answers, as they’ll invest in you if they think you know what you’re doing. At this point in my career, I’m ok with saying ‘I don’t know.’ I tell that to my team and [they know] I’m being honest with them and that’s the best way to build that trust with them.”

Sean Byrnes | VC Hunting S2E8

I love this. It really shows Sean’s leadership maturity and I’m certain the culture at Outlier is really special.

We’re laughing about how startups almost killed us.

Pivoting a bit to venture capital talk, I was curious about Sean’s opinion of the venture capital landscape today. He had to have some great opinions on it as he’s been through the entire lifecycle. What I found was that his ideas around how venture capital is broken today very much align with my feelings as well. So how is venture broken? According to Sean:

  1. Venture capital is not a transparent industry – If you go to a venture capital fund website, there is no information on their process of evaluating deals, how they source deals, what do they look for, and if they have a consistent process for evaluating deals. You never know what the next step is in the process! Why is this true? I believe none of these are on VCs websites because there is no consistent process. Every deal is different. There is a lot of judgment going on in each deal process. With that type of inconsistency, how can the fund be sure they are sticking to their principles, values, and thesis?
  2. There is not enough diversity – The problem is very deep and systemic. How do women and people of color get access to venture capital? How do you open up that sourcing? So many founders of color have completely different networks. They don’t overlap in the slightest with venture capitalists networks. There must be a way to bridge that gap!
  3. Misalignment of incentives – Venture funds have a portfolio of investments. It’s irresponsible for you as a VC to not invest in lots of companies. However, each founder is only invested in one company, their own. What happens is that the 1 out of 10 companies in the portfolio is doing well. So the VC will push that one company to do the most aggressive strategy possible to get an outsized return for the entire portfolio and push founders to take risks that they otherwise might not take or aren’t ready for. As a founder, they just want to have a return, period. No matter the size. What VCs don’t tell the founder that there are only a few ways to really receive a huge return (that they are looking for). The founder is therefore net-worse off for having raised money.
  4. Venture capital is a capital class of industry that is driven by supply, not demand – Venture funds have swelled in size. We’re seeing a venture capital bubble and we’re seeing ridiculous valuations. Valuation is a side-effect of financing not a driving force. When an investor invests in your $10M company and wants 25% as an ownership target, then suddenly your company is worth $40M! Just like that! Since venture funds have swelled, they can no longer make small investments.

I’ve written and spoken about these exact issues for years now (Maybe that’s one reason why I finally got off my butt to do something about it)! Did I feel good being validated by Sean’s analysis? You better believe it.

Why would Sean tweet publically something I believe is so private?
Is this how Sean de-stresses? No, it was part of his plan to become a better person.
Sean is just dead wrong here. The 80s were the fucking jam!

From here I wanted answers to 3 of Sean’s tweets from the past. I don’t need to type out his responses, it’s just better that you listen to it yourself. I will say though, that if you listen to Sean’s answers, you too will hear a man who has clearly been through the darkest of days and best of days and come out of it a better man. His candor, honesty, transparency, and authenticity shines. To be frank, that’s kind of why I wanted to interview Sean. I knew he would be able to answer my questions with truth.

What more would you want from a leader?


Sean Byrnes | VC Hunting Retrospective

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Sean Byrnes is tells us that you can learn to build a better business. Growth! #venturecapital #vchunted #proofofvc #startups

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Whatsh do you want? Can’t you shee I’m trying to drinksss here? Pour yourshelf one.

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