Conrad is the quirkiest venture capitalist you will ever meet. Partner at True Ventures based in San Francisco, the firm backing some of the most iconic and inspiring brands of our time: Peloton, WordPress, Madison Reed, Ring, Duo Security, Blue Bottle Coffee, Fitbit, Hodinkee, Glowforge and Makerbot to name a few. Tony is also known as a coffee nerd among friends and packs his drip coffee maker in luggage wherever he goes.
“These missionary founders, they’re embarking on
a new frontier so there’s not really a market. As an example, how do you decide the size of the artisanal coffee market? if it doesn’t exist?”
Passion for coffee, how did you get there?
(Tony Conrad) Growing up in an Indiana farming community, I didn’t know what good coffee tasted like. After college, I lived in Paris and started having higher quality coffee for the first time – not only did I like it, but what was cool about it was the culture of coffee. It wasn’t reduced down to this utilitarian caffeinated drink, it was more a ritual to navigate your day. We’d go to the same little tabac each day, order an espresso or macchiato, it was chill, quiet, people deep in their thoughts before the rhythm of the day took control. I loved the whole vibe of the French coffee scene, they took a break before the day even started! We live in this society now that is so fast paced, we’re always trying to compress time in our quest for efficiency. It’s like we’ve stripped the beauty out of the moment. Coffee can be a beautiful, delicious and centering experience if you let yourself to slow down and enjoy the moment (& coffee!). I think today, this little five to seven minute pause, it’s like meditation or something.
After Paris, I moved to Jakarta and remember there was there was this buzz around a company called Starbucks. They were figuring out that you could create cultural centers, places for people to gather that were novel and different. I was thinking that ‘It’s pretty cool to bring people together that way’. When I moved back to San Francisco, which is one of the epicenters of the artisanal coffee scene, I started going to the farmer’s market on Saturday mornings, and there was this guy named James Freeman (Founder of Blue Bottle Coffee). It turns out he’s widely regarded as one of the most thoughtful coffee drinkers in the world. He had a little coffee cart, doing this handcrafted pour over thing. I loved it, all of it. It’s not like I woke up one day and ‘Ah, coffee!’, it was this thing that I kept bumping into. It had cultural resonance with me, very meaningful and fun. I started learning a lot more about coffee, extraction techniques, single origin vs blended coffees and the more I learned, the more I realized coffee can be amazing. I fell in love with the craft and I fell in love with how James cared about every, literally every detail. I think it’s beautiful, meaningful.
So, I really got involved with it from a passion perspective first, and then from a business perspective. Today, I think Blue Bottle Coffee has become one of the most iconic brands in the world that is being created right now and I’m proud I got to play a small role in its evolution.
“I love it when I get lucky enough to personally get involved with a founder who really have a quirky point of view.”
When you make investment decision, do you follow founder, market value or company’s mission?
(TC) I don’t always get it right but when I do, I experience this perfect harmony between these very missionary founders and their ability to create a new market that didn’t exist. Think about what these visionary founders are doing, they’re typically embarking on a new frontier so there’s not really a market. As an example, how do you decide the size of the artisanal coffee market when it doesn’t exist. What is it really? So, most of the interesting markets where optimal upside exists are very hard to size up. But I think you get a sense of a unique vision, kind of a sniff and you understand ‘Oh, that could be a big market’.
I’ll give you a real time example. We (True Ventures) invested in a company called ‘Better Place Forests’. It’s really different, but I think it has the potential to end up being one of the most exciting and impactful investments that we’ve been a part of at True. They’re looking at the way families honor and celebrate the end of life of a loved one by creating a family memorial surrounded by natural beauty. Better Place Forests makes it possible to spread ashes beneath a personal, permanently protected memorial tree. Beautiful, really beautiful land, Redwood Forest here in California or other beautiful, inspiring locations. Think about how beautifully poetic that is metaphorically, it’s beautiful. So I think this company can be a really special company and we’re only at the beginning of this market developing as a viable alternative to current end of life memorialization options. I mean, I guess there’s the death market and there’s a cemetery market. You can look at it that way, but it’s a totally new thing.
I love it when we get lucky enough to personally get involved with a founder or founders who really just have a quirky, intuitive point of view on what’s possible and they impose that point of view in a very gentle way, but they impose it on you. When I get in a room and I’m there in that moment, it only happens a couple times a year if I’m lucky, but I get a tingling feeling, It’s magic.
“For brands like Blue Bottle or Hodinkee, a slow boil is really powerful. The brand is being built out of passion and love. It is really passion driven.”
Ben Clymer from Hodinkee, when did you know that it was going to be something else?
(TC) I love Ben. Ben is exactly the type of founder we want to partner with at True Ventures. Who would think that there is an opportunity in the traditional, luxury watch space online? As you know, it’s an atypical category online because of the high price points. It’s also a challenging category because you have very established brands, beautiful big brands, some of the most well known luxury brands in the entire world who have done things a certain sort of way for a very long time and it works really well for them. But there is a large audience of potential watch buyers who are more online oriented and are underserved. That’s a great opportunity for Hodinkee to serve both consumers and the brands that want to reach a new audience. When Ben founded Hodinkee, he started off just writing about watches because he’s a genuine watch enthusiast, he simply loves watches. And, as a result, he has an audience because he really knows his stuff and is one of the most authoritative voices in the entire world on watches. He’s brought Hodinkee’s audience along very slowly, it’s very curated. By the time I met with Ben through my partner Kevin Rose, he’d already been doing this for six years and he’d never raised one dollar. It’s counterintuitive but we thought this could be actually a really amazing business. It’s a content driven commerce business and it’s doubling in size each year. I think it’s going to be one of the stand out brands that we’ve got in our portfolio.
What was the reason Ben didn’t raise money for 6 years?
(TC) If you’re working in software or hard core tech, science driven tech, raising money earlier than later makes a lot of sense. But when you’re working with some of these brands like Blue Bottle or Hodinkee, a slow boil is really powerful because it means that the brand is being built out of passion and investing in itself via cash flow. Both James and Ben are good examples of founders who built their brand slowly and around real business models. They had a profitable business before we got involved, figured out how to make a living off these businesses. They’re very good business people. As they grew, the opportunity became clearer and they sought outside opinions and we were able to help them to frame it in a way to take the risk to make their business something more special via scale. Scale doesn’t have to translate to something that’s yucky, scale can actually translate into something that’s really empowering. In the case of Blue Bottle, once we had scale and more money, it empowered the team to work with farmers in a more balanced “win win” manner – we could pay them more money for higher quality ingredients, it really empowered us to do things in the right way. I guess we as a firm, we’ve developed a reputation over time that people trust us. They need us to come in and not mess it up, to respect what they built and then help grow their business in alignment with their value system.
“I have a number ‘zero’, which means I have the watchmaker’s watch, I’m lucky and hugely appreciative.”
You have an appreciation for watches. Do you have specific brand you are collecting these days?
(TC) I actually have a couple of watches that are my favorites. I like small artisanal brands. What a surprise! I love many of the big brands but I don’t have any of those(yet). That’s not my thing so far. But what I really love is, I have this brand Laurent Ferrier and I have a Grönefeld. Both of these watchmakers considered as some of the greatest watchmakers in the world. I’m just really fortunate that I have one from each of them. I have a number ‘zero’, which means I have the watchmakers’ watch, which is rare. To have this, I’m lucky and hugely appreciative (Laugh).
I have two older sons and for the longest time, I had the zero from Laurent Ferrier and I was thinking, how am I going to give that to one of my sons and not to the other? And then I got lucky and got number zero from the Grönefeld brothers. I hope my sons are not seeing this because I don’t want them to start thinking that these are their watches YET. That’s part of the whole thing about watches though, right? Tradition.
Current favorite artist?
(TC) My favorite current artist is Barry McGee, Barry’s work really speaks to me because as you know, I like skateboard culture (I’m on the board of Tony Hawk‘s foundation), I like this intersection of youth and hipness and whimsical kind of beautiful thought provoking art. Barry’s work is just really phenomenal and he is a good friend also. I really like him. I love José Parlá in Brooklyn, Clare Rojas, her stuff is so clean. And there’s this artist, Alisha McCarthy, that I love, I should have named her right away because I think she’s like an ‘artists-artist’. You know what I mean by that, an ‘artists-artist’, or an ‘engineers-engineer’, like a REAL DEAL. You go to a dinner with her and the paint is still underneath her fingernails. She’s the real thing. And Jim Campbell, I have a piece by Jim called the Bible, that is just phenomenal. It’s the first piece of art that I own that I really fell in love with.
Anything you haven’t done yet but want to try in the near future.
(TC) You know, I don’t think that way. I have things that I want to do that are physical. I think that’s probably driven by fear of death. I have a youthful spirit and as you get older it’s fun to test yourself physically. I just walked 170 miles and climbed at almost 19,000 altitude last week, I did that over three weeks in the Northwestern part of Nepal, some would argue the most Southwestern part of China. There’s an area called Limi Valley three villages and about 3,000 Tibetans living. It’s somewhat of a disputed border so we just trekked in and it was really challenging – It was like 10-15 steps and then 30 to 60 seconds to catch your breath because of the altitude and then do it again, I was proud I was able to do it – I love that kind of stuff.
I’d love to learn about plants and growing things. You know the expression ‘green thumb’? I don’t have it. I brought back a bonsai tree from Japan a few years ago and it started shivering. It’s been saved now because I took it to a bonsai expert.
I want to learn about the restaurant business, it is one of the things I’ve been thinking a lot about in the last few years, not because I fancy being a restauranteur but I’d like to figure out how the business works. I think it’s something that I can start to integrate more in my life because I like that culture and I like food, culinary scene. There’s just all kinds of stuff that I’m interested in, fascinated by and wanting learn about.
What is good life?
(TC) What is good life for me? I mean, I’m living it.