Six Degrees of Networking — Wayne Kimmel, SeventySix — Full
Wayne Kimmel, Managing Partner at SeventySix Capital, talks about his decision to become a venture capitalist, raising his first fund, his advice on building your network “one business card at a time” and his new book, ‘Six Degrees of Wayne Kimmel.’
(Key takeaways from this episode of StartUp Health NOW can be found here.)
[00:04] Steven Krein: Welcome to StartUp Health NOW! The weekly show celebrating the Health Transformers and changemakers reimagining healthcare. My name is Steven Krein and on today’s episode we have one of my closest friends, Wayne Kimmel. A venture capitalist, an entrepreneur, an author, and philanthropist, who is talking about his secrets to networking his way to success.
[00:21] Music Intro
[00:59] Steve: Welcome to the show.
[01:00] Wayne Kimmel: Steve, thanks so much for having me.
[01:02] Steve: It’s great to have you here and it’s great to really be able to spend so much time with you, Wayne, but for the listeners, I want to give everybody a sense of who Wayne Kimmel is, and then we’re going to dig into some good healthcare venture capital talk, funding talk, and industry talk.
[01:15] Wayne: Well, you know, I’m managing partner of SeventySix Capital. I describe myself as an entrepreneur, a venture capitalist, and an aspiring philanthropist, and now author. I sort of add that to the repertoire of things that we have going on now.
[01:2] Steve: We’re going to talk about your book, but take everybody back to who Wayne Kimmel is from the beginning. Where did you grow up, what led into venture capital. How’d you get to where you are today?
[01:38] Wayne: Sure. I grew up in Wilmington, Delaware. After that, you know, after going to school in Delaware, went to the University of Maryland with you. We were fraternity brothers, right? Then also went to law school together. My whole plan in life was to be a lawyer and things changed. Things changed because of people like you and what was happening in the mid-nineties.
[02:00] Wayne: What was happening in the mid-nineties was that there was this amazing new, this revolution that was occurring, and people were trying to change the world. This whole internet thing was happening. And, I just had to find my way in, and thanks to people like you and other great friends, have sort of, helped me get into this world and there’s no looking back.
[02:19] Steve: So, you talk about this in your book, but your story, how you decided to become a venture capitalist. I mean, a whole bunch of other things you could have done in the startup world. Why venture capital?
[02:28] Wayne: You know, I was completely fascinated when I would go to these startup events and I would see all these people crowding around this one person, in many of these different events I would go to. I would say who is that person? Like, why are they all standing around there? And, they’d go, “Oh, that’s a venture capitalist, that’s an angel investor, he invests and then helps us make these companies happen.” I said, you know, I’d love to be one of those guys. I didn’t know how I was going to do it, but I knew I wanted to be one of those guys.
[02:57] Steve: You didn’t take venture capitals in college?
[03:00] Wayne: They didn’t have that class back then. You know what was crazy? Mark Cuban wasn’t on TV, you know, with his “Shark Tank” show telling people how to do all this stuff. So, you know, it just was like a, it was an amazing time. It was an amazing time in those mid nineties when young people were just trying to change the world. I said I have to be in that space. I have to be in and around those people. And, I did everything I could to break into that world.
[03:26] Steve: So, first venture fund was ETF Fund. How did that come about? I mean, raising your first fund?
[03:35] Wayne: So, I was 29 years old, and as we said, I wanted to get into this industry, and I wanted to start a fund. And so, you know, fortunately I was able to go out there, find some great partners, and then go out and just network, and meet people, and find investors. And, I raised twenty million dollars for my first fund.
[03:54] Steve: How many people you think you pitched to, to get the 20 million dollars?
[03:57] Wayne: Hundreds, hundreds of people that I talked to, to try to get that money, initially. and I was just really, really fortunate to find a great group of investors that believed in me, believed in the fact that I was able to go out and identify entrepreneurs who are trying to do amazing things. Fortunately, we found some really great entrepreneurs and they did the things that they said they were going to go do and we did really well together.
[04:24] Steve: So, I want to go back to the fundraise part of that. First pitch to the last pitch. What changed in your thinking, in your pitch, in your style?
[04:34] Wayne: Well, I think one of the things that I had from the very beginning, that I always talk about, is as an entrepreneur, you know, as an entrepreneur trying to start a venture capital fund, right? That’s really, that’s why I always describe myself as an entrepreneur first. Because, I didn’t have a venture capital fund, I didn’t, wasn’t, didn’t walk into a venture-capital, that venture capital fund, I created that. So, I always think about myself as an entrepreneur and I think that one of the things that I always talk about is this idea of having air cover.
[05:03] Wayne: You know, how can you have air cover? How can you find partners, friends, advisors, mentors, people that can, sort of,surround you to give you the credibility that you need to sell whatever you’re trying to go sell. Luckily, when I was getting started, I had companies like SafeGuard and the CEO of SafeGuard, and the other venture capital funds in the greater Philadelphia region, and other, kind of like, major people in the industry that were not only saying that I knew what I was doing, but they were also investing with me. And, having their support and having that air cover around what I was doing was was really big.
[05:48] Wayne: I would add one other piece. I had a really great partner. Had a really great partner who, his name was Ian Berg, and..
[05:55] Steve: Ian.
[05:57] Wayne: You know Ian, and you gotta, great opportunity to work with him as well, and, you know, certainly means a lot to both of us.And, I learned so much from him. I was 29 he was 59. Our joke was that he knew the dads and I knew the sons. We went out there and we just did a lot of great things together.
[06:15] Steve: I want to talk about Ian a little bit later, but tell me about a couple winners, couple losers, in the first fund.
[06:20] Wayne: Sure. Well, I always like starting with the winners. We had three really great wins. Really big wins. Some, you know, SeamlessWeb which, you know, every time I come to New York City and I walk around the Wall Street area and I see the old SeamlessWeb stickers, you know, just reminds me of back you know brings me back to those board meetings with Ian, and Jason Finger, and Paul Appelbaum, and we would sit there in this freezing cold pizza shop where we have our board meetings, because we didn’t have a boardroom. We didn’t have the beautiful office at the time and half the time the guy at the pizza shop will try to throw us out because we we would sit there for more than an hour and then we’d have to buy another Diet Coke or a pizza or something like that just to stay there longer to continue the board meeting.
[07:06] Wayne: But that was a huge success. We ended up selling that company and it’s public today as Grubhub and it’s on the New York Stock Exchange. Nutrisystem was a huge win for us, top performing stock in America for five consecutive years. Also, you know, in the healthcare field StartUp Health is going to be one of my next really, really big ones. We’ll talk about that, but, I mean, Take Care Health System was just a super idea. This idea of putting in healthcare clinics inside of pharmacies, staffed by nurse practitioners to take care of people’s common ailments.
[07:38] Wayne: When people would say, what, I’m going to walk into a pharmacy and get checked out? It’s the craziest idea ever, I would never walk into a pharmacy and do that. But, you know, the founders of that company, Hal Rosenbluth and Peter Miller were amazing, and they made it happen, and we ended up selling our company to Walgreens, and our major competitor, MinuteClinic, was sold to CVS, and we were the two big winners in that whole convenient care space.
[08:01] Steve: What are some of the ones that, maybe, you learned a big lesson from? Wasn’t a screaming success, didn’t work, but you thought it would.
[08:08] Wayne: You know, I’ll tell you, the one thing that really, the key for us in every investment we make at SeventySix Capital is, it’s all about the people and who these people are. We talked about the idea that, you know, we look to invest in smart and nice entrepreneurs who are trying to change the world. The key for us, is really, that word nice. We look for people, and it’s not just that you’re the nicest guy in the world. Yeah, you gotta be nice.
[08:32] Wayne: But you also have to make sure that you have relationships with people, that you understand how to deal with people, and that’s a key piece for us. So, you know, I would say, ninety percent of the investments, or even more than ninety percent of investments, we invested in nice people that were good people. They were trying to do everything right, but things just, in some cases, didn’t work out. Whether it was the market. Whether it was situations where we had a great company, but like, it was pre-iPhone and we were trying to do things on a dumb phone when we really needed smartphones. But, it was right. And, what’s amazing is I know companies today, they’re doing the same thing that are doing very, very well.
[09:14] Steve: It’s all timing.
[09:15] Wayne: It’s all timing. So, timing is something that I think is was it was a big factor.
[09:18] Steve: What was your biggest lesson learned? Maybe, in fund one, as you went to fund two. What was the biggest lesson learned that you didn’t know when you started in 1999?
[09:29] Wayne: I think that the biggest lesson was, the biggest lesson we learned from beginning to the end was, really, the idea of just making sure that we work with the best people possible. I mean, that was the key. It’s always the key. I mean, it comes down to the people, it comes down to this idea that, you know, I always think about, when I’m making an investment in a company, would I want to answer my phone at eleven o’clock at night after spending a whole day working on everything that we do in the venture capital, entrepreneurial world? When I come home and I kiss my kids, and they’re already asleep in bed, and I see my wife, and she’s about to fall asleep, maybe she’s watching Bravo. You know, she loves Andy Cohen, you know, so we get to sort of see, by the way, hell of an entrepreneur, hell of an entrepreneur that guy. Unbelievable what he’s done there.
[10:22] Wayne: But just think about, you know, and then the phone rings, right? It’s eleven o’clock at night the phone rings, and I say, am I gonna want to answer the phone and talk to this entrepreneur? Because, many times when that phone rings at that time at night, it’s not about the company, it’s not about the business. It’s maybe, something personal. Could be their mom, their dad, their sister, their brother, something that’s personal. By the way, a lot of times it’s health-related. Fortunately or unfortunately, that’s what it’s about. Do I want, will I want to help that person? So, for me, that’s the biggest lesson. The biggest lesson is work with people that are good people. That are nice people, and try to do great things with them.
[10:58] Steve: Fund two. What’s different about fund one and then what are some of the big bets you made in fund two?
[11:05] Wayne: Well, I think, you know, again not much has changed other than the sense that we look for, we’re all about these great people. So, we’re very fortunate to have some really, really good portfolio companies. You know, to date, we’ve sold a number of companies already in this portfolio and we have some more really good ones today. Including StartUp Health. IndieGoGo is a great company. I mean, really super management team. I mean they’re the world’s leaders in crowdfunding.
[11:32] Wayne: Whistle Sports, doing just spectacular things in the sports media world today. You’ve got companies like Lindi Skin, which is in the StartUp Health portfolio, which is doing things to, you know, help people who are going through cancer treatments and their rashes, and their burns, and their skin. It’s amazing every single day. It’s in my book as well, you know, where I talk about it in my book and people tell me I just read in your book about Lindi Skin, and unfortunately, just yesterday, someone told me their daughter used it and it really helped them. It helped my father, you know, when he was going through his cancer treatments. So, to have a company like that, that’s really doing something to help people, means a lot. To have companies like Hal Rosenbluth’s next company, CareCam Health Systems. We’re very excited about that.
[12:16] Wayne: To be involved with StartUp Health. I mean, for us, this is awesome. First of all, it’s great being on the show with you, it’s great being here in the StartUp Health studios. I mean, to see what’s happened over the last five years with StartUp Health is amazing. It’s absolutely amazing. Over a hundred and sixty companies in your portfolio today is spectacular. To be with the largest, you know, have the largest healthcare portfolio in the world is unbelievable. It’s unbelievable, and to be part of it, to be on the board with you, with Unity, with Jerry, with Nick, is great, and I know we’re just getting started.
[12:57] Steve: Yeah, we are just getting started. I want to dig into healthcare little bit. So, you’ve done investments outside of healthcare. You’ve obviously done both investments in healthcare and done well with some of your investments in healthcare. Why are you so passionate about healthcare? Why do you think it matters so much? So many venture capitalists are either afraid of healthcare, stay away from it, intimidated by it. What are your view, what’s your worldview on healthcare investing?
[13:20] Wayne: Well, as I said earlier, you know, at SeventySix Capital we’re all about investing in smart and nice entrepreneurs who are trying to change the world. If you want to change the world, healthcare is the place to go.I mean, it really, truly changes the world, right? If you’re going to change the world, make people’s lives better, you’re gonna make this place a better place. I mean, as I always say, you know, it’s all about making the world, making the world that you want to live in, right? You want to make the world you want to live in. That’s what it’s all about. So, if you’re not healthy if you’re not able to be healthy, then how can you, it’s, how do you live, right?
[13:57] Wayne: So, to me, it’s a no-brainer to be in the healthcare industry and especially, I agree one hundred percent with what you and the team here at StartUp Health talk about, is being the Golden Age of entrepreneurship. It absolutely is the Golden Age of entrepreneurship for healthcare. For all the reasons that you described. I mean, whether it’s the technology, whether it’s the government piece of it, whether it’s, you know, just all the major corporations with their interest in innovation.
[14:26] Wayne: It’s amazing today how many chief innovation officers reach out to venture capitalists like me and want me to come in and talk to them and talk with them and share our ideas and share the way we look to invest. And, what we’re thinking about the world. And, what do I tell them? Go call StartUp Health. I just tell them to call StartUp Health.
[14:43] Steve: That’s where all the inbound come from. Thanks for doing that way. So, I’m always intrigued by people who turn their wisdom into written form in books. You chose to take the last 20 years of your career and pack it into a book. Tell me why?
[15:01] Wayne: I wrote the book, I wrote my books, Six Degrees of Wayne Kimmel, because, I talk about, all the time, entrepreneurship, and networking, and how important that is. But, the third pillar that I really talk about is giving back and helping other people. I felt that over the last 20 years of being in the venture capital industry, being around amazing entrepreneurs, seeing what’s next. Being involved with people who are doing what’s next today. It was my turn to try to help others and do more. Do more and give back to entrepreneurs, to just people who are looking to do things to to change the world.
[15:44] Wayne: If I can give people a few tips, a couple tricks, maybe. A couple ideas, a couple stories. Then, it makes me feel great and I really, you know, look, as you know, I’m all about making this world a better place. This is one of my ways that I wanted to try to help make this world a better place.
[16:01] Steve: So, tell me about the name Six Degrees of Wayne Kimmel. What does it mean? Why’d you choose it? Why did you put your name in there? I want to hear a little bit about your thinking around it, because I think it’s actually interesting to see how you packaged yourself, your wisdom, and your world view.
[16:14] Wayne: Well, I call the book Six Degrees of Wayne Kimmel, because a lot of my success has been around this idea of networking and this whole idea of Six Degrees and being able to figure out relationships and matching people together and putting people together. I’ve seen how that’s worked and how that succeeded and helped a lot of my companies. How it’s helped and succeeded in, help me succeed in my own business, and I want to share those those ideas and those tips with people all around the world. So, for me, networking is one of the key things. If you want to be a successful entrepreneur, if you want to be successful in life, you have have a network. You have to be able to know how to do it. But, here’s the thing. So many people say, just go out of network.
[17:02] Wayne: What I talk about in my book, Six Degrees of Wayne Kimmel, is actually how to go do it. Where to go do it. What do you say. What you do in the morning. Every single morning, I wake up and I fill my right pocket with business cards. My goal is to empty my right pocket and fill up my left pocket with people that I meet. Cards of people that I meet. That’s what it’s all about. It’s all about building your network.
[17:24] Steve: All right, so, what do you do with those cards in your left pocket when you come home. Most people throw them on their desk. What do you do?
[17:29] Wayne: Well, great, great question. When I get these cards, I consider them my gold. Ok? Back in the day I used to put them in my shoe box. Because, you know, back then, there was, like, there was a Rolodex. There weren’t all the amazing, you know, digital networking solutions that are out there today. So, you know, what I do is, I get those cards. I send someone an email. I say, it was nice meeting you. Thanks for your card.
[17:52] Steve: Does everyone get one? Or do you actually tier it and say these are the important ones, these are the ones I don’t really want to talk to?
[17:57] Wayne: No, everyone gets it. Everyone gets it, and I also then look to see if I can connect with these people, on, whether it’s on LinkedIn, or Facebook, or Twitter or Instagram, or whatever, whatever the platform is. Because, here’s the thing. You never know. You never know who you’re going to meet. You don’t know even even know who you’ve met and where they’re going to go in the future. Look. We thought we were going to be lawyers. You know, that was the plan. Certainly, I was going to be a lawyer, that was the plan, I was going to be for the rest of my life.
[18:30] Wayne: But now I’m in this industry and that happens with a lot of people, as well. So, if you can then take those contacts, create a relationship with people, and then stay in touch. You never know what’s going to happen, and you may find out that one of your contacts that became a relationship, all the sudden has become the CEO of a major corporation, and maybe you can end up helping each other in the future.
[18:52] Steve: So,what’s your favorite story of the person you met randomly that turned into something important or impactful for you, or one of your company’s?
[19:00] Wayne: One of the stories I talked about in my book, in Six Degrees of Wayne Kimmel, is about how I met someone walking down the street while I was walking my brothers dog. Actually, you know, she was chasing after me with her, with a flyer, and she was running for office. I had no idea who this person was, and I actually was probably not that nice when I grabbed this, you know, leaflet out of her hand and stuck it in my pocket. I was walking down the street and I felt badly afterwards. I called her, we ended up having breakfast, and lo and behold, she become one of my top investors. So, you just never know. You just never know who you’re gonna meet and I tell people that all the time and I say, you know, look, it comes back to my overall philosophy.
[19:40] Steve: Which is?
[19:41] Wayne: Which is, you just gotta be nice to people. That’s what it’s all about.
[19:45] Steve: So, your view, you know, a lot of people talk about networking, so you practice it. You believe it’s the key to your success. You actually have a methodology for it. People read the book. What can they go out and do the next day?
[20:00] Wayne: Well, I think the thing you can do the next day is, really simply, you wake up every single morning and you fill your right pocket with your own business cards and you go out there and your goal that day is to empty that right pocket and hand out your business cards to people and collect other cards and fill up your left pocket. The next day you can go do that.
[20:17] Steve: What percentage of people respond to your initial email after you meet them? When you send them a note after getting their card?
[20:24] Wayne: Most of the time, they respond. Especially, if they give me their card. But at the same time, it’s also, there are situations where, you know, I still wanted to go out and meet people and network with people that maybe I don’t know. So, I’m constantly reaching out to people, because I want to meet interesting people. I want to meet people that I think that I can help. Maybe, people that can help me or help my company’s. So, the larger the network that I can create, I think I can help my company’s even more.
[20:55] Steve: So, I want to shift gears a little bit to entrepreneurs. You know, flip this around and people use your strategy I’m sure, you know, towards you. All of a sudden they meet you, They’re following up, they want funding. What’s the biggest mistake you see entrepreneurs making when they contact you?
[21:10] Wayne: I think the biggest mistake that entrepreneurs make when they reach out to a venture capitalist or to a company, is they just send a cold email. In today’s world there’s no reason to send a cold email. You can easily find out a connection. Some kind of connection. Whether it’s, you went to the same school. Or, you grew up in the same hometown, or you have a mutual friend. Something. There’s something out there. Or, you like the same sports team. There’s something out there that you can find out about somebody.
[21:47] Steve: What if you don’t like sports?
[21:51] Wayne: Ok. I mean, there’s always something. There’s always something that you can find that is a mutual ground.
[21:59] Steve: Right. So, you’re saying, I know you write about this in your book and I’ve known you long enough to know that’s part of your strategy. You think it’s lazy when they don’t do that? Is that a fair way of saying it?
[22:09] Wayne: I don’t think they’re trying hard enough, and if they’re not trying hard enough, then why should I try as hard, right? I mean, I say it all the time, you know, and, you know, you have you have to do these things. You have to do these things.
[22:25] Steve: When you think about what entrepreneurs do right. What are the ones that you’re seeing that, you know, you told me about IndieGoGo, you talk about the CEOs of the Whistle Sports, and ReverbNation. What did these entrepreneurs, what did they do to get to you? How did they meet you? How did they get your funding?
[22:41] Wayne: These entrepreneurs are the ones that, I see them, they make an effort, right? They make a real effort. But most importantly, in their business, and could see that they’re trying to move things forward. You know, I say, you know, one of the keys to success is just to get off the couch. Just get up and get off the couch and go make it happen. Like, it’s amazing how many companies and how many people that I know, or people that I’ve gotten over the years, who are tinkerer’s, I would call them, or just technologists, and they’re sitting there on the computer all day long just tapping away, fixing the business plan a little bit better, making the logo look a little bit better. You know, rewriting this, rewriting that. Now, you just gotta go. You gotta get up off the couch and gotta go make it happen. That’s what I see. Those are the kinds of qualities that I see in these entrepreneurs that are just out there. They’re constantly learning. They’re constantly trying to figure out what’s going to work.
[23:35] Wayne: Because it’s not, whatever your first, whatever your first pitch is, it’s not going to be the one that you’re going to succeed with, most likely. You know, it’s like, you’re going to get doors slammed in your face. You’re going to be called crazy. You’re gonna get called crazy as an entrepreneur. And you know what? If you’re being called crazy you’re probably moving in the right direction. You’re probably moving in the right direction if someone calls your crazy, because that means you’re doing something that’s out there. You’re doing something that other people can’t see. You’re doing something innovative, and that’s what I love to see in entrepreneurs.
[24:07] Wayne: That they’re doing something that’s like, you have to really sit back and go, wait a second. Can that, I’m not sure, is that really gonna happen? That’s what I look to invest in. Because, if I invest in stuff that’s just obvious. Five years ago, was StartUp Health obvious? Absolutely not. Absolutely not. But, it was a heck of a goal to create this amazing army of Healthcare Transformers. That’s big. That’s exciting. That’s the kind of stuff that I like to get involved with.
[24:36] Steve: I love that and, you know, when you look back at SeamlessWeb, back when food ordering was, you know,
[24:42] Wayne: Steve, let me tell you about that. I mean, look at this. How many people told me you’re out of your mind as an investor to invest in a company that allowed people to order food online. This is in 2000. Seven years before the iPhone came out. People would say to me, Wayne, come on. You just could fax in your order. You can call it in. What you need, and now, now I tell that to people, especially young people, and I say fax, and they don’t even know what I’m talking about. I mean, it’s amazing. They had the vision. They had a vision and they they just kept moving, and moving, and moving forward.
[25:15] Wayne: As my business partner today, his name is Jon Powell, and Jon talks about, sort of moving the pebble, moving it forward. Moving things forward. You’re always moving forward. When you have entrepreneurs that are just always, they’re tough, and they could just know they can move things forward. And you know what? You know this is an entrepreneur. There’s dark times, it’s not like it’s, everything is rosy. You’re gonna get doors slammed in your face. You’re going to get, all sorts of things are going to happen. I mean, people are going to tell you you’re out of your mind. Your mom’s going to tell you you’re crazy, it’s all crazy. But, you know what? Just keep moving forward.
[25:49] Steve: But that’s the thing. When I look at all the companies that are succeeding, where I’ve succeeded that you backed, I look at, whether it’s Seamless or Take Care, of Nutrisystem, or Reverb, or StartUp Health. You know, each of these things, they all were doing things before it was obvious. And, you backed the crazy people who actually had this vision and this persistence to figure it out. You’re a unique venture capitalist. You’re, you know, clearly a little animated out there. You get in front of people a lot. What would you want to leave people with, in terms of something they might not get from your book. Something they might not get from reading your newsletter or seeing you out, you know, speaking at an event? What do they not know about you?
[26:34] Wayne: Well, I think the one thing that I would say to all entrepreneurs and just all people out there, is to try to help other people. You know, help others. Because, it will come back in the end. So, if you’re out there and you have an opportunity to help someone and to make their life better. Go do it.
[26:56] Steve: Great having you on the show. Always great having you. Thank you for everything you do for StartUp Health, for our portfolio companies, for me as a friend. It’s great to watch you and your book succeed, and really, just so incredibly happy that you’re now getting the word out into the world and hopefully people will read it and learn just a couple things from you. Make a difference.
[27:15] Wayne: Thanks.
[27:16] Chime
