Insights from Venture Visionary Mike Maples, Jr. of Floodgate Fund

Welcome to Venture Visionaries, a brand-new series brought to you by Outlander VC. Hosted by Paige Craig, Managing Partner at Outlander VC, this series explores what sets these investors apart and provides unique insights into their perspectives on the startup world. Join us as we sit down with some of the most influential investors in the industry, uncovering the secrets behind their success and learning how they navigate the ever-changing landscape of investing. 

From their investment strategies to their predictions for the future, we’ll bring you inspiring conversations that’ll resonate with aspiring entrepreneurs and anyone curious about the world of venture capital. So, grab your headphones and get ready to be inspired by the visionaries shaping the future of innovation! 

First up, we have Mike Maples, Jr. from Floodgate! Mike is a renowned venture capitalist known for his keen eye for breakthrough startups and his ability to identify successful founders. We’ll dive deep into the key characteristics that make founders successful and the traits that set breakthrough startups apart from the rest. Mike will also share his insights on the role of an investor as a co-conspirator, working closely with founders to drive their success. In our conversation, we cover: 

• The importance of “pattern breakers“, individuals who think and act differently, challenging the status quo and proposing new ways of doing things.
• The role of inflections, such as technological advancements or societal shifts, in creating opportunities for startups.
• The significance of product-market fit in the success of a startup.
• The increasing efficiency of the venture capital market, leading to more opportunities for entrepreneurs.
• The importance of maintaining high standards and discipline in investment decisions.
• The latest trends in the AI industry and what lies beyond.

If you’re ready to dive in, listen to our full conversation now to hear Mike’s thoughts on successful founders, breakthrough startups, and the future of venture capital. Alternatively, keep scrolling to discover our three biggest takeaways from the episode, key quotes from Mike, and more exciting content below. 👇

Takeaway 1: Invest in pattern breakers, not pattern matchers

In our conversation, Mike Maples, Jr. emphasized his investment philosophy of backing pattern breakers—individuals who propose a new way of doing things which challenges the status quo. He believes that a great startup forces a choice, not a comparison, and is essentially a challenge to the established norms.

“My job is to invest in pattern breakers,” Maples stated. “A lot of people say that venture capital is about pattern matching, and I actually somewhat reject that. My job is to find the people who propose a new way and say, hey, the way that you’re used to doing things isn’t the best way. There’s this radically different way.”

He further explained, “The pattern breaker engages in pattern breaking thinking, the pattern breaking actions.” Maples believes the pattern breakers are distinguished by their thoughts and actions, often acting in ways that make others uncomfortable, but leading to innovation and change.

Takeaway 2: Inflections are vital to startup success

According to Mike, inflections play a critical role in a startup’s success. He believes that a powerful inflection point is a precondition for success in a startup, as it provides them with the ability to wage asymmetric warfare on the present.

“I look for, on the ideas front, are they harnessing inflections?” Maples said. “An inflection is kind of like a surfer has to have skill, but they have to pick the right wave. And a good wave is a precondition for success at surfing. And I believe that a powerful inflection is a precondition of success in a startup,” he explained.

He also emphasized that timing is a significant risk factor, and thus, understanding inflections can help in evaluating whether an idea is well-timed or not.

Takeaway 3: Influence of AI and digitization on future startups and businesses

Maples shared his fascination with the rapid advancements in generative AI and its potential implications on various industries. He also discussed the concept of “digital twinning,” where a product’s usage and potential issues are simulated and tested in the digital domain before being built in the physical world.

“The thing I find interesting about AI is there’s so many inflections and they’re happening so quickly and they’re so unpredictable that one thing displaces the next thing from one week to the next,” Maples said.

“It’s not how I would have normally thought about things in the past,” he said, discussing digital twinning. He added, “You start to wonder if more and more products will have a digital twin that is specified, and then that digital twin will simulate lots of different corner cases.”

Key quotes

• “A startup is a provocative act. By definition, a breakthrough startup says, “Hey, the present as it is now isn’t as good as it could be.’”
• “In the 0 to 1 phase, there’s really only one focus, which is to get product-market fit as soon as possible. Because if we get product-market fit and do everything else at B+ level, we’re going to succeed, but if we get A+ plus at everything but that product-market fit we will not succeed.” – Mike
• “A great startup idea forces a choice and not a comparison.”
• “In all investing, you have to get paid for the risk that you take. And if you pay a high price, even if you’re right, sometimes you don’t make money on these things.” 
• “You’ve got to decide if you want to perform close to the average or if you want to be an outlier performer.”

Meet Mike Maples, Jr.

Mike Maples, Jr. is a co-founding Partner at Floodgate. He has been on the Forbes Midas List eight times in the last decade and was also named a “Rising Star” by FORTUNE and profiled by Harvard Business School for his lifetime contributions to entrepreneurship. 

Before becoming a full-time investor, Mike was involved as a founder and operating executive at back-to-back startup IPOs, including Tivoli Systems (IPO TIVS, acquired by IBM) and Motive (IPO MOTV, acquired by Alcatel-Lucent.) Some of Mike’s investments include Twitter, Twitch.tv, Clover Health, Okta, Outreach, ngmoco, Chegg, Bazaarvoice, and Demandforce.

Mike is known for coining the term “Thunder Lizards,” which is a metaphor derived from Godzilla that describes the tiny number of truly exceptional companies that are wildly disruptive capitalist mutations. Mike likes to think of himself as a hunter of the “atomic eggs” that beget these companies.

Mike is the host of the Starting Greatness podcast, which shares startup lessons from the super performers.