On scratching the surface of online marketplaces, never giving up, and the challenges of venture capitalism.
FORTUNE — Boston-bred, Dartmouth-schooled Jeff Crowe never planned on moving to Silicon Valley — but the pull of technology’s mecca was too great. In 1980, he made the move; years later, he had an MBA from Stanford University in hand. After several years working for the conglomerate Siemens, he went on to co-found the software company Edify, which he sold to S1 Corporation in 1999. (That company was later acquired by ACI Worldwide.)
Crowe is quick to admit that the entrepreneurial bug bit him, but he eventually determined that he might prefer to engage in the activity from a different vantage point: that of the venture capitalist.
Crowe joined Norwest Venture Partners in 2004, and has since invested in companies such as Admeld (acquired by Google), Jigsaw (acquired by Salesforce.com), Nano-Tex (acquired by Crypton, Inc.), The Echo Nest (acquired by Spotify), and Tuvox (acquired by West Interactive). He has also served on the boards of more than a dozen companies, including RetailMeNot, a popular online coupon company.
Crowe, 57, spoke with Fortune.
1. Who in technology do you admire most? Why?
I admire any entrepreneur who has been successful at both founding a company and scaling it to something significant.
The first example is someone I knew early in my career, Ken Oshman. He was the CEO of ROLM, which later merged with IBM. It takes very different skill sets to found a company compared to scaling it to a very large enterprise. Obviously you see people now like Dave Duffield of Workday who has done it a few times, or even [Mark] Zuckerberg. It’s exceptionally hard to do.
I have a few CEOs in my portfolio who are now in the process of scaling, like Renaud Laplanche of Lending Club, Bill Demas at Turn, and Cotter Cunningham of RetailMeNot. It’s a very difficult transition to make, but those are the folks who I admire most in technology.
2. Which companies do you admire? Why?
I admire companies that both deliver an enormous benefit to the consumer and at the same time, can demonstrate profitability in today’s market environment. Obvious examples of this include LinkedIn, Google, and Lending Club. These are the kinds of businesses for which I have the most respect.
3. Which area of technology excites you most?
Online marketplaces. I think we’re just scratching the surface of online marketplaces in the American economy. Very successful examples of that would be Airbnb and Uber.
I think we’re going to see online marketplaces explode across all sectors of the economy. We’re seeing that with women’s clothing, where women are selling clothing out of their own closets. There has also been tremendous growth in online marketplaces for people who design things like stationery or art.
There are online marketplaces all over the global economy, and we keep looking for these types of businesses because they can scale to be very large and have powerful network effects.
4. What advice would you give to someone who wants to do what you do?
I think if you want to become a successful venture capitalist, it’s great training to be a successful entrepreneur first. If you’re going to invest in, bet on, and advise entrepreneurs, it is really helpful if you have been one yourself at an earlier point in your career. So I think it’s tremendously valuable in becoming an impactful and helpful venture capitalist.
5. What is the best advice you ever received?
I’ve probably received the same advice multiple times over my career: “Don’t give up. Never give up.” When I started my company, I can remember early on that we missed our objectives the first year, and it was pretty demoralizing. My board was great at saying, “Don’t give up,” and we eventually started doubling our revenue every year thereafter.
A couple of my early investments, frankly, weren’t all that successful. However, I received the same advice from the partners at Norwest Venture Partners to not give up. When I first applied to business school, I didn’t get in. The best advice I received was, “Don’t give up,” and I eventually got into Stanford. So this “never give up” advice all along the way in different aspects of my life has been very helpful to me.
6. What’s the next big project you want to tackle?
I became one of the three managing partners at Norwest last year, so that’s been a really big project for me. When you’re a venture capitalist, you are very focused on your investments and your portfolio companies. When you become a managing partner, you’ve got a responsibility for your firm as well as your investments. Looking after the firm as a whole is really a big project. It’s a fabulous firm with 50-plus-year history, so I take that stewardship and responsibility very seriously.
7. What challenges are facing your business right now?
There are a number of challenges in the venture world. Number one, there is a proliferation of investment dollars available to entrepreneurs available at all stages — early, mid-, and late stage. That proliferation means it’s exceptionally competitive for venture investment these days.
That competition leads to a second effect: Decisions are made very quickly in investing, which means you really have to be on top of trends — which companies are succeeding, the entrepreneurs that you like — because you don’t have months to make investment decisions. You have weeks, sometimes days. So you really have to be on top of your game.
8. If you could have done anything differently in your career, what would it have been?
I love teaching, and I think if I could have done anything differently, it would have been to weave teaching into my career while I was an entrepreneur and now as a venture capitalist. I lecture at business schools about venture capital and entrepreneurship, and I really enjoy doing this.
I’ve always liked teaching. I did a lot of that while I was in high school and college. If I had to go back and do it all again, I would figure out a way to teach more. There are a number of VCs who teach courses at Stanford business school, and I’ve never done that. I’ve lectured, but I’ve never taught a full course.
9. What was the most important thing you learned in school?
I learned the value of hard work in both high school and college. I went to a very demanding high school in the Boston area, and then I worked very hard in college as well. I learned the value of hard work, but at the same time, I also learned that if you don’t have fun along the way and you don’t enjoy the journey, then you question whether it’s worth it in the end.
So when I started my company, Edify, I made a big deal out of the company culture and the fact that while we were all working really hard, we also had to have fun along the way. It was important that as a company we celebrated our successes. Our company meetings were a lot of fun. We held goofy contests and gave out creative awards. We did a lot of things to make it fun. It was that powerful combination of working hard but still enjoying the journey. In college, I figured that out.
10. What do you do for fun?
Living a balanced life comes from some of the things I do outside of work. I’m very active in alumni affairs at Dartmouth and Stanford. I really, really enjoy being around young people and mentoring them. I find this to be tremendously energizing and a lot of fun. It’s one of the reasons why I’m in venture now and why I work with entrepreneurs.
Even outside of work, I love doing this, and I spend a lot of time with recent grads from Dartmouth and Stanford. I just had two separate calls from young Dartmouth grads. One is starting a really cool company and wanted my advice on his go-to market strategy. For fun, I love golf, biking, skiing, and travelling with the family. I’m also a diehard sports fan of the Boston sports teams. I read the Boston Globe sports page every night.
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