Chamillionaire and Mark Suster Visit STL and Talk Tech Startups, Investing & Snapchat

Estimated reading time: 7 minute(s)

There are a few ways you can announce a launch, but when Grammy-winning rapper Chamillionaire shared that he’d founded his own tech startup via Mark Suster’s Snapchat account from Wash U’s campus, it was certainly noteworthy.

According to Business Insider, the startup will provide “downloadable software applications for streaming communications with entertainers, politicians, and celebrities,” something akin to “Twitter with more live streaming baked in.”

In town Thursday to visit Washington University’s School of Engineering and Applied Sciences, Suster, a successful entrepreneur himself and the managing partner of Upfront Ventures in Los Angeles, has had a working relationship with Chamillionaire for awhile now. Chamillionaire serves as an EIR at Upfront and the two co-invested in Maker Studio, which has since been sold to the Walt Disney Company.

After a morning at Wash U, Suster and Chamillionaire gave a talk at Venture Café St. Louis, where we were able to sit down with both to talk about tech, funding and social media.

Chamillionaire, a Grammy award-winning rapper, and Mark Suster, a partner at Upfront Ventures, the largest venture capital firm in Southern California, discuss entrepreneurship on Thursday, April 14, 2016 in Brauer Hall at Washington University in St. Louis School of Engineering and Applied Sciences. (Photo © Whitney Curtis)
Chamillionaire, a Grammy award-winning rapper, and Mark Suster, a partner at Upfront Ventures, the largest venture capital firm in Southern California, discussed entrepreneurship on Thursday, April 14, 2016 in Brauer Hall at Washington University in St. Louis School of Engineering and Applied Sciences. (Photo © Whitney Curtis)

Chamillionaire, you announced today that you’ve founded a company. How did the idea for the new venture come to be and what can you tell us about the technology?

Chamillionaire: It is actually something I’ve been thinking in my head for a long time. I was advising companies and just got frustrated with the process of talking to other people and watching them trying to accomplish a vision that ultimately wasn’t mine. Then it was like, “You know what? The only way this is going to be done right is if I do it.” 

Right now we are in stealth mode, so we aren’t saying much about what we’re doing, but it is public information that I am building a company. A lot of people haven’t seen me put out music in a long time, so they’re wondering, “How come you’re not releasing music?” and it’s like, I have other aspirations and other problems I want to solve and I want to build a different type of company. So now I’m hiring developers and bringing in people to help build this tech company with me and it’s just a different experience, and I’m excited for the journey. 

Mark Suster: The first thing is, Cham had the concept awhile ago. He spoke earlier at [Wash U] about solving problems that you authentically know and experience first hand, so that was the genesis. He saw a particular problem and articulated to me how to build it, with whom, what features it should have. So I said to Cham, come out and do it. If you come here as an EIR, we’ll help you recruit engineers, build a product team, have advisors; you can learn how economic models work; we can help you network. He took us up on that offer and week in, week out, he sat in the company pitches, responding, giving us feedback, sometimes helping us with due diligence and sometimes co-investing as an individual.

[For his own startup] he actually has a working product. It’s not public, it’s not launched, it’s not available, but it is working—I have a copy on my phone, he has a copy on his phone. The real issue is, when is it ready for prime time? Now the hard thing about being Chamillionaire is, anyone else can just create a product, put it out there, test it with a bunch of people and slowly fine-tune it. But when you’re well-known and you put out a product, he has a higher bar because if he just puts it out there then you’ll get all the negative reactions because people want to find everything wrong with startups and he’s refining it in private. 

Chamillionaire, a Grammy award-winning rapper, and Mark Suster, a partner at Upfront Ventures, the largest venture capital firm in Southern California, discuss entrepreneurship on Thursday, April 14, 2016 in Brauer Hall at Washington University in St. Louis School of Engineering and Applied Sciences. (Photo © Whitney Curtis)
Grammy-award winning rapper and entrepreneur Chamillionaire chats with Aaron Bobick, dean of the School of Engineering and Applied Sciences at Washington University in St. Louis. Photo credit: Whitney Curtis

With your work with Upfront Ventures and now this new startup, where does music fit in? 

ChamillionaireThe music thing is what most of the people who know me know about and it’s what I’ve been asked about the most. And to be fair, I haven’t retired from rap, it’s just that in order to be successful in what I’m trying to do, it takes a certain level of commitment. You can’t play around with it, and it’s tough to toggle between putting out an album, going on tour and trying to please fans and then running back to a startup when ultimately, people don’t look at entertainers as really serious people.

So many people [in entertainment] are coming to the tech world and they’re like, “Oh there’s this cool tech thing going on and people are making money,” and they treat it as a thing they will just moonlight with. I’m trying to prove that I’m really serious. That’s why I can look Mark or any other investor in the face and say, “Hey, I’m different than these guys, I’m all in.” So, I plan to put out music, but I just want to be able to do it on my terms, and that’s kind of what I’m doing now. 

In your role as an EIR at Upfront, what is the most common issue that startups came to you with and what was your advice? 

Chamillionaire: A lot of time when they’re coming to me, it’s because they are trying to find a way to get people using something. They have great technology and they’re trying to figure out how to get people to understand that this thing is out there. So they often ask me about ways that they can promote it or market it. When they ask me to invest, normally it’s not just about a check, it’s about, “How can we get Chamillionaire involved and use his strategy and the things he’s done in the past to help things grow with us?” Startups for the most part are just trying to get people to know they exist. 

Mark Suster: So let me push beyond humble Chamillionaire: I introduced him years ago to our startups and they all approached him for the same reason: “Hey, maybe I can get him to promote us.” And that’s the first thought for anyone who has reach with an audience–it’s promotion. And then Cham would come back and say, “So I looked at how your App integrates with other people’s apps or how hard user registration is,” and he kept coming back with advice on products. And I think that’s the thing that people don’t realize about him. He has a background in visual design and formerly used to be an artist, so he really thinks about usability. He’s just driven by products and product usage. He knows how to engage audiences and that’s part of what he does. 

Now the big challenge will be, can he recruit, motivate and retain a really talented team beneath him to develop a product that’s world class, and time will tell. 

How was your time at Washington University this morning, meeting with students? 

Mark Suster: If I could use one word to describe the students I interacted with it’d be serious. It wasn’t a frivolous day. People were engaged. A lot of people were already working on startups and thinking of building things. I know it’s a very quality engineering department and that’s something that matters to us. We really try to work with world-class engineers, and people were taking things pretty seriously. 

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Chamillionaire announced the launch of his tech startup on Mark Suster’s SnapChat account on Thursday from the campus of Washington University.

Mark, you’ve become known as a strong voice on Snapchat, and using it for more than just, “Day in the life of a VC” posts. What about the platform do you like so much?  

Mark Suster: So I have this great audience, they are really engaged, there’s no bullsh*t, we’re doing this live. I think people like to feel like they’re connected. 

With blogging, it takes me 45 minutes to write a post. I think it takes most people a little longer, but I don’t worry about spelling or editing, I don’t have advertisers, so I don’t have to be perfect. I just write for 45 minutes and then hit publish. But it does take time.

On Snapchat yesterday, I was about to come down to St. Louis from Chicago and I had five minutes. So I got a napkin and a pen out and I drew a chart about the innovator’s dilemma and how that drives a lot of my investment thesis, and it took five minutes. Now, everyone in the hotel lobby thought I was strange, but it was great and it got 7,000 views in less than 24 hours. I like the immediacy, I like the intimacy. And here’s the thing, my target customer for the most part is 22-34 and they’re all on Snapchat. And no VC knows how to use Snapchat. So I’m like, “Hey man, I got this swim lane to myself, why not?” Being early to a platform matters. I have 250,000 followers on Twitter, if I started today, I couldn’t get that, I don’t have any famous rap songs—yet. [Looks to Chamillilonaire and laughs.] 

Cham: He’s the VC of the millennials. 

Mark, what advice do you have for startups not located on the coasts? 

Mark Suster: That’s a great question I’m asked all the time. Number one is, if you want to stay in St. Louis and build a company here, you have a great advantage, which is great engineering talent that will be cheaper because cost of living is cheaper and a much higher retention rate because if you’re building an interesting company. It’s not like there are 2,000 others at your footstep, like in the Bay Area.

The problem is that investors have a harder time committing early-stage. The reason is not that I mind coming to St. Louis, but do I want to come eight times a year? Again, nothing against St. Louis, but I go 8-10 times to New York, I go 14 times a year to the Bay Area. So if I add another location it would just kill me unless it was a company at the next level. 

I just invested in a company in Toronto, I won’t give a name yet, but we’ll be announcing in 30 days. And what I said to them was, “If you’ll do board meetings in New York and LA, I’ll come once a year to Toronto.” So it’s taking that issue off the table; a lot of people don’t know to do that.

Anyone a startup pitches in New York, San Francisco, LA, their first thought is, “Do I want to go to St. Louis eight times a year?” And they’re also thinking, “Can I really provide you enough advice and have enough interactions to make a difference?” So if you say, “I’m on the coasts all the time anyway, every time I come I’ll come see you and you’ll have plenty of access,” then now you’ve taken that issue off the table and I can focus on your business. 

Can you both talk about your relationship, what do you get from each other? 

Chamillionaire: I like to call Mark my Mr. Miyagi. When I was trying to get into the tech industry, I would look at tech blogs and I would go to tech conferences and just try to find out what was happening with investing and startups, because remember, I’m coming from a whole different industry and trying to navigate the waters. I saw Mark as this guy that was giving away so much information and it was all very entrepreneurial, friendly stuff. That’s the real reason I felt he was really trustworthy, because he’s already shown that he wants people to have information. That’s how I got interested in investing.

Mark Suster: Cham is an authentic human being. He knows how to engage audiences, he is a very sincere and humble person. It’s been great. We involve him in investment decisions we’re trying to make, and he’s very curious and thoughtful, always wanting to know why, why does it work that way, but why? Which is my favorite response. 

I think, coming from the music industry, initially he was very much like “What’s Mark’s motive? What does he want out of this?” Because when he came to be an EIR, he kept asking and I told him, “I don’t want anything, I just want to see you succeed!”

Chamillionaire: I’m guy coming from an industry where you have believed that a wolf is always in sheep’s clothing. So I’m just waiting for the wolf the whole time. 

Mark Suster: I just want him to succeed. He’s been talking about doing a startup for the past couple of years; it’s time that he do it. JDFI. Now if he succeeds, we do own equity, and one of our largest shareholders is Wash U, so they own part of his company. My job is to drive returns, and I take my job very seriously and I wouldn’t just give money to anybody. But truly, authentically, my goal is to see Chamillionaire succeed as a tech entrepreneur and be an inspiration for a thousand people behind him who may choose to be tech entrepreneurs rather than wannabe rappers or sports stars. Not that there is anything wrong with that, but there are other options out there.