NOTHING VENTURED NOTHING GAINED — RAMZI RAMSEY — FALL 2017
California-born Ramzi Ramsey spent most of his childhood attending international schools in Saudi Arabia, in a small town about a four-hour drive from Doha, Qatar. During the time he spent in the Tepper School of Business undergraduate business administration program, Carnegie Mellon University opened its Qatar campus, and Ramsey found himself there at the end of his senior year. It was on that campus he would meet Jinanne Tabra, BSBA ’08, whom he married in 2009.
While Tabra was in her senior year at Carnegie Mellon’s business program in Qatar, she and Ramsey launched ARABOH.com, an e-commerce and education technology company focused on providing Arabic-language literature and educational tools. The couple decided to sell the business in 2015 after their second child was born.
Now Ramsey serves as a vice president at Technology Crossover Ventures, a growth equity firm focused on investing in both private and public technology companies. He moved his family back to California, planting himself amid the ever-present tech culture of Silicon Valley, where he lives and works alongside many of the companies that TCV has helped to grow and continues to support.
Check out a short video clip with Ramzi Ramsey here: https://youtu.be/Wg0aUqQitKk
What is your elevator pitch?
Technology Crossover Ventures is a growth equity firm that invests in companies around the world that leverage technology to redefine or create new industries. The firm was founded in the mid-1990s and manages over $12.5 billion of capital. We are investing $50 to $250 million to back entrepreneurs in achieving their goals and aspirations for their business.
We have been fortunate to back companies like Netflix, Facebook, Spotify, Airbnb, Zillow, Dollar Shave Club, GoDaddy and many others. TCV’s website has a complete list of all the companies we’ve invested in.
What is your philosophy behind investing?
We have a fairly targeted investment approach focused on more mature businesses. We are investing well beyond product-market fit and are looking to help accelerate the growth of our companies. Many of the businesses we invest in are already generating $50 million or more of revenue, so they are quite established enterprises.
As a result of our focus and because we serve on the boards of about 90 percent of the companies we invest in, we are generally only investing in about 10 businesses per year. We are quite active with our portfolio, and unlike other investors, we are not using debt in most of our investments. We’re truly working alongside founders and entrepreneurs to grow the businesses as much as we can.
Why Carnegie Mellon?
I grew up going to international American schools overseas. When it came to applying for college, I always knew I’d come back to the States, but I had absolutely no idea where I would go. I knew I had a fascination for tech, and I’ve always been a numbers guy. So I looked at the U.S. News ranking of top business schools and applied to the top few schools. It’s not really the most complicated or scientific approach to picking a school, but I’m grateful it led me to CMU. Carnegie Mellon, when I applied, had been a top-ranked school for many years, and when I received a good scholarship, it was pretty much a no-brainer to attend.
What were your pivotal moments?
Oftentimes you don’t realize how life-changing a decision is until you look back and connect the dots. There are probably three pivotal moments for me since undergrad.
The first is deciding to start my career by going into investment banking after undergrad. As I was wrapping up school, I received two job offers: one to work at Citigroup’s M&A group and one at Procter & Gamble. Prior to undergrad, I had always considered myself a ‘company guy’ rather than an investor — I actually did not know much about the world of venture capital and private equity. I always had my eyes set on working for a big firm and working my way up. When I was a freshman, I learned about investing and how banking was a stepping stone into that career. So at the time, the decision between committing to a finance career rather than joining a corporation turned out to be crucial. Had I not chosen banking at that time, I would be on a completely different path today.
The second was when I decided to help teach three classes at Carnegie Mellon in Qatar during my senior year. I have a number of lifelong friends from that experience, but most importantly, I met my wife on that campus, and today I have a 5- and 3-year-old running around my house. To say my life would be different today had I not decided to go to Qatar would be an understatement.
Taking two years out of my career to go back to school [for an MBA] felt like a gamble at the time, and the cost and pause in my career (on top of being a new father at the same time) weighed on me. But it worked out. And then I moved back to the West Coast for my current role at TCV, so looking back it was a pivotal moment and absolutely a risk worth taking.
How has Carnegie Mellon shaped your view as an investor?
As an investor, I value an interdisciplinary approach. It’s something I learned from being close to [University] President [Jared L.] Cohon at Carnegie Mellon. He was a phenomenal leader for the school and an advocate for interdisciplinary education. So the Tepper School is not just the Tepper School, but you’re integrating and benefitting from all of the other schools on campus. That’s important.
In my dorms and my fraternity at Carnegie Mellon I had the good fortune of spending time with entrepreneurs-to-be and technologists early on. I don’t consider myself a technologist, but I wonder if all that time spent with my peers and friends — geeks! — made me appreciate the things they can accomplish. That’s served me well as an investor. I also got to spend time with some of the best computer scientists and engineers in the world, so I’m fortunate that my exposure to such talented individuals came at a young age.
On top of that, CMU truly demands a strong work ethic. When I look at companies and entrepreneurs today, I look for that magic combination of natural talent and strong work ethic. One without the other isn’t good enough to succeed at the highest level.
What sets Carnegie Mellon apart in the entrepreneurial space?
We’ve got the best technology school in the U.S., and the Tepper School is one of the best business schools in the country. I’d really encourage more folks to take that risk if they feel the entrepreneurial itch. The tech talent is there. The business talent is there. People just need to take a leap and trust that they have what it takes to build something great.
What key piece of information gets overlooked when getting started?
A lot of entrepreneurs that we back are generally not out of college or first-time CEOs. I would say a sweet spot is maybe late 30s and into the early 40s. And a lot of these folks already have a number of years of professional work experience and then find an issue they are passionate about, and set everything aside to find a better solution.
At CMU, we want to foster entrepreneurship earlier and encourage people with entrepreneurial aspirations to take risks. Others may prefer to gain operational experience first to experience what a high-functioning business looks like. Both approaches are OK, but in the latter example, you get a case study of a great leader or a great company and you can try to replicate the aspects that you like with your own twist on top of it.
In short, it’s never too late to start something. Sometimes it takes you going deep into an industry to find a quirk or an issue you can build a business around.
What kinds of ventures succeed?
We’ve successfully invested in some very different industries and some very different business models. The hardest thing for us to gauge, and the most important thing, is the grit or attitude of the CEO. I don’t want to say passion, because “passion” is a little cheesy — I’m passionate about basketball, but I can’t really put food on the table with that passion. Passion isn’t enough. It’s really the ability of a CEO to deal with absolutely random events that he or she could not have predicted, and somehow elegantly handle those situations and turn them into fruition for the business. Very few entrepreneurs have that.
For the CEOs I’ve invested in, so many exogenous things we would never have predicted have happened, and I would say the stronger ones recognize the situation immediately and act decisively. The data will never line up perfectly to make you feel 100 percent confident in the decision you’re making.
I’m convinced the CEO role of a startup or a growth-stage business is one of the hardest jobs in the world. Entrepreneurs deal with a lot of stress and paranoia over all the things that could go wrong with their business. The ones who are truly successful, frankly, are somehow able to rise above and calm the noise and have the internal fortitude to navigate both good and challenging times.
Lastly, the very best products are the ones that in retrospect are the most obvious and simple to understand — so obvious, you almost take them for granted. Look at some of the best products in the last 20 years: Netflix, the iPhone, streaming music. Looking back you may think, “Yes, that’s obvious.” But it wasn’t obvious. And making obvious easy is unbelievably hard.
What’s the best advice you’ve received?
In life and in work, I’m meeting with a number of CEOs and founders every week — very successful, very accomplished people in their own right. Multiply that by the number of weeks in a year, and across many years, I’ve been fortunate to come across a lot of fascinating people. One thing I have been taught is to slow down and just listen to other folks. And I don’t just mean to listen to the words they say, but to dig deep behind the meaning of what someone is saying, because everyone’s doing something for a reason. At the senior management level of successful enterprises, most people are not just filling a job for a paycheck. If you dig deep enough, you can see the thread throughout a person’s life that has led him or her to start and ultimately run whatever they’re doing. It’s really trying to understand why they’ve made the decisions they’ve made and, ultimately, trying to predict where this person will go. As an investor, would you put your money behind this person? Are they truly driven? That kind of logic can be applied to so many things beyond just investing.
Does anything keep you up at night?
My kids literally keep me up at night. But more than that, I always think about the fact that we’re trying to raise strong, ethical, driven children. We thought that society and technology moved quickly for our generation, but it will move exponentially faster for the next generation. I think about all the challenges that technology and the internet will throw at us as we try to raise our kids; it’s something entirely new that no other generation before us has faced, so there’s no precedent for navigating the issues that come with it. I have a feeling that will continue to keep me up at night for years to come.
Originally published at magazine.tepper.cmu.edu.