Navin Chaddha On Selling His First Company To Microsoft, Building A $3 Billion Business, And Now Managing A $3 Billion VC Firm

In a recent interview, Navin Chaddha, a seasoned entrepreneur and venture capitalist, shared his journey from the vibrant streets of Delhi to the heart of Silicon Valley. His story unfolds as a captivating narrative, weaving through the technological shifts and entrepreneurial challenges that defined his career.

Naveen currently managed Mayfield venture capital investing in companies like Poshmark, Mammoth Biosciences, Lyft, and SolarCity

In this episode, you will learn:

• The journey underscores the resilience needed to navigate challenges, from dropping out of a Ph.D. program to thriving in the dynamic world of startups and venture capital.
• The dot-com era taught valuable lessons about the importance of sustainable growth, a direct go-to-market strategy, and the impact of market dynamics on startups.
• Successful startups, like Vxtreme and iBEAM Broadcasting, showcase the lasting impact a well-executed venture can have, influencing technologies like Windows Media.
• Mayfield’s investment philosophy revolves around people, emphasizing values alignment, emotional intelligence, teamwork, hunger, and an unwavering focus on solving customer problems.
• The vision for AI is the next transformative wave, altering human-computer interactions and unlocking new possibilities, with opportunities spanning applications, copilots, autopilots, and foundational picks and shovel technologies.
• Navigating the venture capital landscape requires a clear vision, strategic focus, and a unique value proposition, emphasizing the need to define a north star (North Star).
• Whether starting a company or entering venture capital, Navin’s overarching advice is rooted in the understanding that success comes from treating the journey as a marathon, not a sprint.

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About Navin Chaddha:

Navin leads Mayfield as Managing Partner. Under his leadership, Mayfield has raised eight U.S. funds and guided over 80 companies to positive outcomes.

He has been named a Young Global Leader by the World Economic Forum and has ranked on the Forbes Midas List of Top 100 Tech Investors fifteen times, including being named in the Top Five in 2020, 2022, and 2023.

Navin’s investments have created over $120 billion in equity value and over 40,000 jobs.

During his venture capital career, Navin has invested in over 60 companies, of which 18 have gone public and 27 have been acquired.

Navin was one of the earliest Silicon Valley investors to leverage the promise of tech in India. Navin is an active philanthropist who supports education, diversity, equity, inclusion, and food scarcity groups.

As an entrepreneur, Navin has co-founded or led three startups including VXtreme: a streaming media platform, acquired by Microsoft to become Windows Media; Rivio/CPA.com: a SaaS provider for small businesses, and iBeam Broadcasting (NASDAQ:IBEM): a streaming media content delivery network.

Navin holds an MS degree in electrical engineering from Stanford University and a B.Tech degree in electrical engineering from IIT Delhi, where he was honored with the distinguished IIT Alumni Award.

Connect with Navin Chaddha:

• Crunchbase
• NFX
• LinkedIn
• PitchBook

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today. We have a really exciting founder and now investor I mean he’s saying done everything build it scaled it financing exited you know he’s built companies that were valued at a time three billion I mean. Everything that you can think of but obviously that perspective of being on both sides of the table is quite remarkable. So today. We’re going to be talking about what are some of the patterns that he has seen on some of the companies. What he typically looks with his firm in founders. Also what to do if you are Abc. You know, thinking about getting started putting your firm together and also as a founder if you’re a first time founder. What do you do? Where do you start? so without further ado. Let’s welcome our guests today Navin Chaddha: Chada welcome to the show. So originally born in India Navin Chaddha: .

Navin Chaddha: It’s a delight to be here with you today? yeah.

Alejandro Cremades: Yeah, racety in Delhi give us a walk through memory lane. How was life growing up.

Navin Chaddha: Ah, life growing up was a lot of fun. There were no phones. There were no televisions. They were just cows on the street. We used to play cricket and it was just a lot of fun so essentially did my undergrad in India. After graduating from high school went to Indian Institute of technology in Delhi and graduated in electrical engineering and from there came to the us in 92 to be at Stanford University to pursuee grad school.

Alejandro Cremades: And how was that was it like you were seeing it in the movies I’m sure it was quite shocking the the culture around innovation and getting getting going with startups and things like that. How how was that.

Navin Chaddha: It was actually fascinating right? like basically when I came to the United States in 92 ah, we were in a time of a slowdown right? and jobs were hard. People were saying like hey it’s a great time to study. Ah, don’t know what will happen and then suddenly in ninety four ninety five the internet happens and the entrepreneurial energy around Stanford everybody is thinking of solving a big problem in and around the internet. And that’s what I ended up doing I ended up working in my ph d on how to enable video streaming over the internet and that led to me leaving Stanford starting a company and we’ll talk about those things so it was a fascinating period went into allow. And then suddenly the browser gets discovered and the whole world changes. So I was at that seminal moment at Stanford with me doing a startup Yahoo guys sitting next to me the Google guys being around everybody’s thinking about a company. was just fascinating. Ninety six ninety Five ninety Six was just fascinating

Alejandro Cremades: That’s incredible now in your case I’m sure that making that phone call back home and saying that you’re gonna go and leave and and start your own business. We ended up being v extreme I’m sure that was not an easy you know, ah leap of faith. No. The first time that you would ever. Venture into the venture world. How was that for you.

Navin Chaddha: Not easy, not easy because I had to drop out of my ph d program and coming from India ah, where like education is so important people don’t drop off things you go complete things and at that point. When we had to make the decision in 95 whether in 96, we go start a company or not was not easy because who wants a label I dropped out of school. It wasn’t fashionable at that time but I got good advice. Ah, from my professors and they said hey take 1 year leave of absence your ph d work is already done. Go try it and see what happens and I never look back but it was not easy I wasn’t worried about whether the venture succeeds or fails. Just the idea of starting on something and not completing it. And remember for immigrant founders I was on an f one visa I didn’t even have a green card I was not a citizen so take the risk to go from a student visa into a job visa of h one when you have nobody here. No family. It’s not easy, but you know. And life when opportunity knocks you have to take the risk otherwise you’ll just regret it.

Alejandro Cremades: That’s right? And that’s why you did so with vexstream. Actually you know first company first outcome that was successful. You know the company ended up getting acquired by Microsoft now how was. First and foremost what were you guys doing there and how does Microsoft you know come knocking.

Navin Chaddha: Yeah, so we extreme right? like when the internet happened Netscape had come up with the browser to browse the internet and we extreme said why can’t you do the same with video. Why not all the. Video content that is available on Cds that is available at tvstudios is in corporate. Why can’t it be put online. So let us build a server and a video browser and that thing just took off and Microsoft. Was trying to build a product of its own to go after this market opportunity and they realized it was just very very hard. So ah, they came and said like hey we want to acquire you eighteen months into our company formation. So that’s what happened. Ah, they pursued us because they thought putting streaming into windows will just change the world and that’s what happened.

Alejandro Cremades: So then so then here you get the company acquire incredible. You know outcome you know for you I mean the first company you know to get it. Acquire is incredible I guess what kind of visibility did that give you into the full cycle of a company.

Navin Chaddha: Yeah, so what? I would say is the first time around. Ah it just taught me what does it take to start from an idea on a paper in pencil napkin. How do you take that idea pitch to vcs. How do you assemble a team. How do you focus launch. The first product get product market fit get initial sales and then start scaling. So the first company and I did 2 companies after that. So the first company I would say got acquired early. We had just raised one Cd drowned and 1 series. A we had probably like hundred customers 10 plus million downloads. So it was early but at least it showed me when you have a raw idea. How do you create a team. How do you pitch? How do you build a product. How do you launch it? How do you get initial customers but we didn’t go through the 2000 to 10000 customers on our own but I was very young I was 25 then when I did my first company.

Alejandro Cremades: And then also talk about impact because Microsoft acquires the business and then you know that ends up being windows media which is something that probably everyone you know or almost everyone that is listening right now has encounter directly or indirectly so tremendous impact now. As part of this as they say once an entrepreneur always an entrepreneur. No. So um, the second company came about which is ibeam broadcasting and in this case, it’s a company that you ended up taking public and that they you know at the peak had a valuation of 3000000000 then it ended up getting acquired later. how how I guess here what were you guys doing and then also how differently was the approach of being an operator of a private company versus now being an operator of a public company.

Navin Chaddha: Yeah, so I wasnt the Ceo of ibeam broadcasting and neither I was the Ceo of v extreme at those days when you’re young when you know technology your title is founder and chief technology officer right? because I was always told like hey. You don’t have enough gray hair. Do you have a lot of hair today. It’s a little bit different as you can see I have a lot of gray hair and also less hair. So what I would say is the first company we built the extreme slow methodically step by step. Second company actually started towards early ninety nine and an ipo in eighteen months so whatever we could do wrong. Not only us the entire industry did which is we just grew. Really really fast and went from like 2 to six hundred employees zero to 50000000 in revenue and growing extremely fast and went ipo. And most of our customers were dot com companies who were putting video on the internet and the market crashed and then at the end of 2000. You have to figure out what’s next. So it was a different kind of learning. How.

Navin Chaddha: What not to do nobody knew we were in a bubble but we did everything and taking those lessons to today is what I’m able to help entrepreneurs and say like hey have seen the movie before you can get carried away. Company building is a marathon It’s not a sprint take your time build it slowly build it methodically and grow at the rate which you can grow so it was a different lesson right? like basically on and we saw that in 202021 right? A lot of those companies have disappeared post. Um, being public so it was a different phase hyper scaling what people call Blitz scaling then the bubble bursted What do you do and a lot of things. Ah you learn in that experience.

Alejandro Cremades: So Obviously as as they say you know you always either succeed or you learn you know, always now in this case, you know when it comes to lessons learn and and then next chapter the next stop in your journey as a founder and I mean that was review. So Rio You actually got started there in 2000 you know with when all the craziness was still. You know going On. So What were you guys doing there and what ended up being the outcome and the lesson that you took with you.

Navin Chaddha: Yeah, so I think the hype wasn’t still over rivio was building a saas company at that point people didn’t know how to spell Sas because in 2000 it was so early and we went after. The neglected masses which was the small businesses companies with less than 100 employees getting distribution to them was very hard. So we said let’s partner with anybody who has a small business customer base and grew. Again, extremely fast. All the telecom companies in the us all the banks. Anybody who had a small business customer ah essentially was white labeling our platform to provide applications to their customers. Ah post nine Eleven no company was built the right way. Post Nine Eleven all the channels disappear because we didn’t have a direct go-to-market strategy we were relying upon partners to take us to customers. It was a big lesson which is hey you need to control your own destiny and not just depend upon. Partners to essentially get to your customers. So what we did is in 2002 we ended up merging with a company called cpa.com. The company is still around the companies called. It’s like Webmd. But for the cpa profession.

Navin Chaddha: And through cpas we distributed all the review products. So I was there till the end of early 2003 and that’s when I joined the venture business. So I’ve been in here for 20 years

Alejandro Cremades: So tell us about tell us about the venture business because I mean it’s same is quite remarkable here that you have been a founder you know up until you know. Obviously you’ve been running Mayfield since 2009 but up until the moment that that you had done that. That that transition with riy all you know was the founder side. What what caught your attention from the investor side that make you that made you want to make that switch.

Navin Chaddha: Yeah, it was accidental right? I was an accidental entrepreneur and I was an accidental venture capitalist. So I actually came in into the venture capital business first as an entrepreneur in residence to start my fourth company and this time I thought. I’ll do a crossb border company between us and India so rather than providing just software. Why don’t we provide business process outsourcing similar to what paychecks does for payroll processing are it’s a continuum of review review is providing software. Can you package and provide it as a business process and 1 thing led to the other I started traveling a lot back and forth to India and ah we realized wow India is going to be a great startup opportunity. And I got roped in to essentially become a venture capitalist and I said okay, let’s try it. Let’s take all the lessons I’ve learned as an entrepreneur of 3 startups saw the internet boom the internet bust and now the world is becoming one. So in 2004 as a vc I started my journey of planting our flag of investing in India so that’s how I entered the venture business and the opportunity was again as an entrepreneur to build the practice of investing in India build a team so it was again entrepreneurial.

Navin Chaddha: So that’s how I grew in this business so it was a new new thing. You don’t have a business plan. You don’t know where to invest you don’t have a team again building. That’s what I love so that was my entree into venture.

Alejandro Cremades: And.

Alejandro Cremades: And and now you know since 2009 you’ve been running Mayfield so how big is Mayfield for the people that are listening.

Navin Chaddha: Yeah, so Mayfield ah was established in 1969 ah, currently we have been in business for over fifty four years we are managing $3000000000 earlier this year in may of. Ah, 2023 we announced nine hundred and fifty five million dollars of new funds five eighty million of it is focused on seed and series a and 3 75 is focused on leading investments in companies at the series b stage. And then we followed up in the fall and announced a seed stage fund of two hundred and fifty million dollars to focus primarily on seed stage companies in the ai space. Ah so that’s where we are as a company in our history. We have. Invested in over five fifty companies one hundred and 25 of which have had Ipos and another ah 2 25 have been acquired so we’ve been very lucky to have partnered ah with the right entrepreneurs over the years and we are broad-based investors in both.

Alejandro Cremades: No.

Navin Chaddha: Information technology and bio-based companies.

Alejandro Cremades: Now your hit rate is quite impressive I mean for the people that are listening. We’re talking about 60 companies that you invested in 18 of them when Ipo and 27 have been acquired. You know that’s really incredible now I guess when you are looking at investments. What are you know? perhaps some of the patterns that you see and what do you look for in entrepreneurs.

Navin Chaddha: Yeah, so I think like first and foremost right? that success is a lot of luck and I would give all the credit to the entrepreneurs who make those companies successful. So my investment approach is. It’s focused on people as you might have noticed I’ve almost invested in everything from semiconductors to lighting to solar to software to chips to hardware to consumer companies like Lyft Poshmark so I’m a people-based investor. Because my belief is people build companies. It’s not the other way around. So I spend all my time. really really really really understanding what are these people made off and can they really build a great company and. Do. They have the desire in them to do the impossible then of course once the people are there, you look at the problem they’re solving and that is essentially the market opportunity. So if you’re there on people. And directionally you’re aligned that 1012 years from now this is going to be a big market. You just roll the dice and most of my investments are at the inception stage which is paper and pencil having done those on my own.

Navin Chaddha: Not to your question. Ah, what do I look for in founders. The first thing is ah company building is a marathon is going to take 10 to 12 years I want to spend time with these founders and want to see if they’re willing to spend time. In return or are they looking at fundraising as a transaction Mayfield Naveen is investing in a relationship for 10 to twelve years or even longer are they going to do the same. So. The first thing I try to look at for is what are their values really understand. Like what you’re doing with me their stories. What did the learn then I try to look at is do they have eq everybody of course who’s trying to be an entrepreneur is extremely smart but do they have the emotional caution are they secure. In their skin. How many times. Do they use the word I versus we because company building is a team sport so are they going to be willing to know if they have high eq what are their strengths. What are their weaknesses and on their weaknesses surround themselves with excellence. They need to have the hunger to go through any wall any wall and grit and pereverance is going to be.

Navin Chaddha: Most most important skill and then finally what I would say is how obsessed are they about solving problems for customers and building products for them versus. Just saying I know this is what it is I’m going to build a product for myself because I know where the world is heading so I would say those are some of the things I look for values alignment High Eq secure in their skin surrounding themselves with excellence meaning their team players. Hungry to go through any wall cry and perseverance.

Alejandro Cremades: So there’s probably ah, ah, quite a bit of entrepreneurs that might be listening to us now and and that this is the first time that they go out it either people that are already in it and it’s their first time or people that right now are maybe at their corporate job right now thinking? Oh my god you know i. I would love to get into you know, becoming a founder and and and taking the leap of faith. What would you tell them.

Navin Chaddha: So first and foremost right like I would tell them on the positive side. It’s a great time to be an entrepreneur and the reason is the biggest and the best companies are created during times of crisis during. Times of when things are not good for the general economy and the main reason is when that happens big companies cut back on r and d they focus on what is making them money they’re going to be layoffs. So talent will be available. Third we sees will pull back. So fewer me too. Companies will get funded. So this time is the right time to be starting a company plus we are going through innovation in Ai which is going to be probably bigger. The mobile and cloud eras but at the same time my advice to them would be company building is a marathon It’s not a sprint if you come to me I’m going to ask you? Why do you want to do this so make sure. Company building is not just straight up to the right. There’ll be lots of ups. There’ll be lots of downs just make sure the opportunity is there. You just can’t be doing it for money right? So do you have the crit you have the persevereverance to go after this opportunity. So that’s what I would tell them right? like basically.

Navin Chaddha: Ah, hey make sure the award is going to be there. But do you have it in yourself to run this marathon and and then I can get into right? like basically what would be my advice and maybe I should do that. Ah, if they do decide. To be an entrepreneur and they have it in them to go for the next decade ah and if they agree company building is a marathon not a sprint first thing I will tell them is go right? Down. What’s the mission and values of your company. So always start with the vision the mission and the beliefs of the company. Secondly I’ll tell them. It’s all about people. So once you know what your company mission believes. Values are what the people. Not a swallow sport. You’re not playing individual tennis. This is a team sport. So what are you going to be doing about the people. The third thing I would tell them is make sure the product you’re building is a painkiller not a vitamin for. Your customer because you have to rise above the noise. The fourth thing I tell them is hey startups die of indigestion not starvation so focus. You’ll have a lot of ideas become the best at something.

Navin Chaddha: And another way to say that is if you’re going and drilling into mother earth right? Go miles deep not six inches deep and then finally it’s not just going to be about technology. You have to innovate across the value chain. So sometimes just not think about the tech and the product also think about how you want to deliver it. What’s your business model. What’s your go-to market and build it into the product and this becomes the blueprint the architecture on which you go build your company. So those would be the things once they are sure those would be the 5 things I would tell them to go do.

Alejandro Cremades: And what about for the people that are on the other side of the table that are on the same situation that are thinking about launching their own Vc and running it.

Navin Chaddha: Yeah, So I think like the venture business right? like if building startups is a marathon I think this is Marathon Squared. It’s marathon times Marathon So ah. The first thing I would say if you’re looking at starting your venture firm. Ah you need to figure out and this applies to companies to what I said earlier is you need to figure out What’s your not star. Why do you exist right? Once you do that You have to start. What’s your vision. What’s your mission.. What’s your beliefs then come up with the strategy you’re going to raise a certain size of the fund where do you focus? is it sector focused is it stage focused. Are you going to be doing a lot of companies. Are you going to be doing a few companies so nail your Strategy. It’s a competitive world if you nail your strategy. How are you going to source unique deals. What value are you going to provide to entrepreneurs focus on this business is not about. Paper valuations paper gains build your business like a real entrepreneur does focused on real cash on Cash returns and then figure out right? like what kind of terms you want to offer to your lps.

Navin Chaddha: And what teams and sectors are you going to be investing in so the company building part remains the same but there are some nuances in order to apply to venture but making money in venture is not easy making investments is easy. It’s hard. It’s hard because you’re relying upon somebody else to essentially make money for you but the company building principles remain the same.

Alejandro Cremades: And then what about what about Ai too because I mean you guys are really looking into this space and there’s a lot of noise where is opportunity right now in Ai.

Navin Chaddha: Yeah, so I think like ah it’s the next bubble as people say but if I take a long-term perspective over the next decade to 20 years massive opportunity to create. New companies. So what I would say is having invested in all prior technology waves whether as a firm whether it was desktop computing whether it was internet. Mobile cloud social clean tech and now Ai I think what I would say is ah our thesis is for the first time 2 things are going to happen one. Our mode of interacting with computing devices is going to change. It will become more conversational and second technology will be able to perform cognitive tasks that augment or amplify human capabilities. So our belief is if Ai is used in the right way human plus ai is going to be human squared and humans will perform at superhuman’s levels. What does that mean that means everything and anything we do.

Navin Chaddha: Ai is going to be an ingredient technology in that and having invested for over fifty years as a firm our belief is we go back to the technology stack and say there are 5 layers where they’re going to be opportunities clearly. The world is going to create Ai enabled applications which we have seen with chat gpd. We are seeing it with Microsoft Copilotts everybody has to do that over the next ten years if your website app service doesn’t use Ai what are you doing? It’s like saying I don’t have a website or I don’t have a mobile app so that’s the end game but the difference is this is not about cutting costs. This is about doing net new things that humans weren’t able to do I call that. Applications copillot and autopilot layer things that humans will be interacting with in order to do that. You need picks and shovels technologies the bottom 4 layers it starts with semiconductors and systems. Companies like Nvidia have pioneered Gpu and Ai processors. But there is a need for other semiconductor technologies in and around what Nvidia is doing the next level up from semiconductors and so.

Navin Chaddha: Systems is the infrastructure on which all this will run and there we have the 3 big cloud providers but newer ones are starting but there are problems to be solved around Ai security at the infrastructure level networking. Storage. So those kinds of companies are being formed the next layer up is data infrastructure and operations because to run Ai you need data. So there’s a lot of things which are happening at the data layer the next layer up in the picks and shovels is the actual model. Which again foundational model exists open model exist and the layer in that where you need help is all the middleware the developer tools and things you need to do to be able to use these models. So I think the next wave. Of innovation is going to be investing as a we see in the picks and shovels of the Gen Ai Era which is going to enable everybody to put ai in their applications ai in their service but anything we do like the browser came. App became web enabled mobile came it became. There was an Iphone app and Android app Ai2 things 1 interaction will be like chat gp conversational with everything we do and second the machine will give you things.

Navin Chaddha: And answer things for you which only other humans could do and together. We’re going to become better as a society as human Beings. So Massive opportunities similar to what happened in the Internet Era the mobile and Cloud Era that. X Stack is being reimagined.

Alejandro Cremades: So I’m sure and I mean that they there’s a lot of people that are listening and that are super inspired with your journey with your story Also with the way that you think about things and that we love to reach out and say hi. What is the best way for them to do So I mean.

Navin Chaddha: Ah, the easiest is write me an email I’m always on Naveen at mayfield.com

Alejandro Cremades: Easy enough. Well Navin Chaddha: thank you so much for being on the deal maker show today. It has been an honor to have you with us.

Navin Chaddha: It’s been a real delight I’m so glad we are doing this.

*****

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