Alumni Profiles Series: Matthew Rhodes-Kropf

Matthew Rhodes-Kropf received his B.A. in computer science and economics and his Ph.D. in economics from Duke University. He is currently a Visiting Associate Professor at MIT Sloan and a managing partner at Tectonic Ventures. Previously, Dr. Rhodes-Kropf taught at Harvard Business School and Columbia University and founded RK Ventures, where he managed two successful funds. His research has been published in leading academic journals and has been profiled in a number of media outlets, including The Financial Times, The Economist, The Wall Street Journal, and The New York Times. Dr. Rhodes-Kropf maintains his connection to Duke as an advisor to the university’s Innovation & Entrepreneurship initiative; he has also served two terms as co-chair of The Graduate School’s Board of Visitors among the many ways he has served Duke as an alumnus.

HOW WOULD YOU DESCRIBE YOUR PROFESSIONAL INTERESTS?

It's funny you ask that. After a few years in the entrepreneurship department at MIT, I had to write a short blurb about my career and explain how it all fit together. At the time, I had no idea what to write—I just did whatever I thought was interesting and cool. I talked to my department chair about it, and she literally laughed in my face. She thought it was hysterical: "Matt, I have never met anyone with a more obvious arc to their career than you. You do one thing over and over again. You are fascinated by startups and will launch anything you can get your hands on.” That discussion really clarified it for me. I'm just fascinated by the founding process. Everything I've done has been about finding the next challenge, the next thing to learn.

HOW DID YOU BECOME INTERESTED IN GRADUATE SCHOOL AND BECOMING A PROFESSOR?

While an undergrad at Duke, I bought the Hideaway Bar in the middle of campus. I wasn’t rich, so I had to convince others to join me in buying the bar. I got together with a couple friends and several guys who were getting their Ph.D.s in economics. They were the ones who got me interested in graduate school, and I ended up staying to get a Ph.D. in game theory. I wasn't really thinking I was going to be an academic. If you had asked me at the time, I would have said that I was going to treat my Ph.D. as a high-level MBA. But then I got an offer to join the finance department at Columbia University. You don't really turn something like that down, so I went to be a professor.

WHEN DID YOU BECOME INVOLVED WITH VENTURE CAPITAL?

I didn’t see myself as staying a professor long-term, so I kept starting companies on the side, helping other people start companies, and did some personal investing. People started asking me what I was investing in and if they could invest too. Things pretty much took off from there. I would say to anybody doing something interesting, "Sure, let’s do it." I helped start a biotech firm with a colleague who was about to license away some interesting technology. I went to a soccer game with another colleague who was looking for outside investors; we teamed up and later sold the company for $850 million. Eventually, I just decided that I couldn't be a full-time academic. So I called up a former student and launched Tectonic Ventures, where we focus on raising relatively small funds over and over again and do early stage [business-to-business] investing.

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DID YOUR ACADEMIC BACKGROUND PROVE TO BE ASSET IN THE PROFESSIONAL WORLD?

Yes and no. My training as an economist helps me to think rigorously and consider every possibility. That helps me every day. But I also have to downplay some aspects of my background when talking to people. Academics are frequently thought of as eggheads who aren’t interested in solving real-world problems. That makes some degree of sense: many of the things we work in academia can appear nonsensical to people outside of academia. If a CEO asks me about my research, and if I start talking about auction theory, information sets, or equilibrium refinements, they will look at me like I'm a crazy person. At the end of the day, the professional world is interested in the motivation for and the high-level conclusions from academic research, but not necessarily the technical details.

WHAT ADVICE DO YOU HAVE FOR CURRENT DUKE STUDENTS?

Pursue whatever you find incredibly interesting and what you enjoy doing, and you'll be fine. There's a million different paths and interesting lives you can live. Regardless of what you do, however, be sure to realize that there's no final destination to be reached. The younger you are, the more likely you are to think there is some final place that you're reaching. People think that about tenure and say, "I'll be happy once I get tenure." Or they might say it about their first job. "Ah, I'll be happy when I get my first job." That, I can tell you, is completely false.

Another point is that, in some ways, what you’ve done up until now is follow the rules. As did I. As did anyone who gets accepted into Duke. You got straight As; you aced your tests; you became an expert in your field—all great things. But what that accomplishes, at the end of the day, is to establish a floor for yourself and for your career. If you happen to love your first job and think it's amazing and want to spend all your time doing it, then that’s perfect. But don't forget that you could be doing many other interesting things.

When an asset has a floor and lots of upside potential, the best way to make it more valuable is to crank up the volatility. You have to think of that in yourself now. Crank up the volatility in your career because you've got an incredible floor as a Duke graduate. There is no world in which your skills aren't valuable and in which you can't find an amazing job. So take those big chances and see what happens. Personally, I've never been upset by all the crazy things that I've done. Even when they didn't work out, it was okay. It didn't matter because it always led me to the next thing.

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Alan Jaske