Lily Lyman is a General Partner at Underscore VC, a leading Boston venture capital firm known for its Underscore Core Community of proven business builders helping each other succeed. She is also a Board Director for the New England Venture Capital Association, MIT Sandbox Funding Board, and is a leader of the Boston All Raise chapter.
Lyman has a background as a founder, investor, and operator. She came to Underscore VC from Facebook, where she worked in product strategy focused on the international growth of core products including Facebook, Instagram, WhatsApp, and Messenger.
Prior to Facebook, Lyman held a variety of strategy, operational, and entrepreneurial roles. Through it all, she has gained a truly global perspective, having lived and worked in more than 75 countries.
At Underscore VC, Lyman leads investments on Future of Work, AI/ML, Insuretech, Commerce, and more. With experience that spans the globe, she spends her time identifying investment opportunities and guiding startups that will define new digital categories, reshape industries, and change the world.
On this episode of Boston Speaks Up, we chat with Lyman about her lessons from the past, her bets today and her predictions for the future.
Where did you grow up? And how would you describe your childhood?
I grew up in New York City. I’m one of the middle children in a family of four, so we always had a lot going on in our household. I’d describe my childhood as an environment of high energy, high activity, and very people focused. I also have always had a “work hard / play hard” mentality, even as a kid. I was a competitive gymnast starting at a very young age, so I spent a lot of time at practice. I wanted to be an Olympic gymnast.
Who were your role models growing up?
I admired Amelia Earhart as a pioneer and an explorer, unafraid to push boundaries.
And my grandfather was a role model for me in many ways - he was very involved with his community and its institutions. His sense of service to lend time and talent to make community institutions better has stuck with me and influenced my interest in engaging the in broader tech ecosystem, particularly here in Boston.
What is the first career you remember wanting to pursue?
I wanted to be an astronaut because I wanted to explore the unknown.
Then I wanted to be a teacher, to use my ability to help others learn and grow, a sense of purpose I still hold.
What is the biggest challenge you’ve overcome getting to where you are today?
What do you love most about helping startups grow?
I love to help empower founders to realize their full potential to build businesses that fundamentally change the way an industry operates. Specifically, I get greatest joy out of creating connections between people - whether it is an advisor, a critical hire, a customer, an investor - but I love bridging a connection that has an impact.
I also love partnering with founders as an extended teammate or sounding board. Coaching and working through problems together gives me the most energy and joy.
What characteristics of a founder do you find to be the biggest differentiating factor for those who succeed vs fail?
Pace of learning. Ability to identify and attract A+ talent. Grit + Hustle.
According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, roughly 80% of small businesses survive the first year. Only about half of small businesses survive past the five-year mark. Only about one in three small businesses get to the 10-year mark and live to tell the tale. What are the most important characteristics of those who make it to that 10-year mark?
Solving a real problem; an enduring problem - figure out how to solve it better and more effectively than everyone else
Build a good team - bring A+ talent around the table
Ability to learn extremely quickly
Having worked with so many startups and founders throughout your career, do you have any advice for young people that are hoping to start a business of their own someday? Where should they start?
If you’re going to start a business, focus on what problem you want to solve, and what you can bring to the opportunity to solve it that is unique or advantaged to you. Ensure you stay focused on the problem (versus getting attached to one specific solution) – then get scrappy in how you learn to solve it. Be clear about your hypotheses and how you’re going to test them along the way to see if this is a viable business (that you are excited to dedicate 10 years of your life to working on). It’s also important to understand your “why” - startups are hard, take a long time, and require grit. Understand your motivation for embarking on this journey.
Regarding your time at Facebook, what did you like the most about your role? What was not so great… Any profound learnings from your time there? Anything you wish you knew before you joined?
I worked with some great people who are still friends and mentors today. I worked with very smart people there who know how to get things done.
I was motivated by the size of the problem we were trying to solve and believed we were uniquely positioned to solve it. It is humbling to work on a product that touches billions of people and many aspects of social, economic, and geopolitical life globally.
I worked on a global team - truly global - and we shared adventures all over the world (I basically lived on a plane for years). I learned how to work with all different kinds of people, from all cultural backgrounds - how to connect, collaborate, and build trust to get hard things done. This is an invaluable learning that I carry with me.
In terms of other learnings, I worked with a few product leaders who were hyper-efficient with their time. They knew how to focus on the most important issue at hand and cut out the noise. They also were excellent at extreme clarity in their communication. These are strategic and tactical lessons I’ve carried with me. Some examples include “Don’t waste time on beautifying internal presentations” or “the best emails can be responded to in 1 character.” The Facebook motto of “done is better than perfect” and to get it shipped I think is a good one (in most scenarios).
Things I wish I had known before include recognizing that with big companies often comes politics and how much wasted time and energy consumption can go into that. I disliked any time wasted on “getting credit” for impact (especially since I’m a very team oriented person). I’m grateful to now be at a firm that is the antithesis of that culture - we strive to be extremely team focused and centered around our founders and the community versus individual achievement.
You’ve lived and worked in 75 countries. What is your favorite city abroad and why?
Puerto Varas, Chile has a very special place in my heart and history, as I lived there for two years after college when I worked for Endeavor. This is where I fell in love with entrepreneurship which has led me to where I am today. I am lucky to have many close friends who are like extended family to me still there, and it’s just an incredibly beautiful part of the world.
Bagan in Myanmar is one of the most magical places I’ve visited (and the few times I’ve been to Myanmar have been during very historically significant transitions for the country). It’s a country with so much potential, incredible people, food, and economic potential, but burdened by such challenging political, cultural, and leadership challenges.
What makes Boston so special that you’ve chosen to lay your roots here?
Boston has an unparalleled concentration of talent and tech development given the universities based here that make it a true hub for innovation (and real innovation). It is also a collaborative ecosystem (and I’m a competitive person as a middle child and an athlete, so I particularly appreciate the collaborative nature and mentality of wanting Boston collectively to win).
It’s a great place to raise a family (we now have 3 kids under the age of 5) and I love the easy access to the outdoors.
What companies are you most excited about today?
Within the Underscore VC portfolio, I’m particularly excited about:
Hi Marley - A Boston company with an incredible team culture. They’re building an intelligent communication platform for insurance that’s already earning customer love from 25% of the top 50 insurance carriers.
Tetrascience - This Boston company is on a mission to accelerate scientific discovery and improve and extend human life through their Scientific Data Cloud. The company's growth strategy is already taught as a case study at Harvard Business School given the company's best-in-class metrics.
Pagos - Founded by former PayPal and Braintree executives, Pagos is delivering AI-enabled payment infrastructure. Their product lead growth strategy and exceptional early product are earning them some seriously impressive early customers.
Some companies that I’m excited about that are not in our portfolio include: Ripplematch and Percent, both have great founding teams, important missions, and huge market potential.
Any big predictions for 2023?
Our Underscore VC year in review was just published and it includes some great predictions from our investment team. In my view, the uncertain times ahead for 2023 will make collaboration even more paramount to how companies survive and thrive. Hybrid is here to stay and requires a blend of software and rituals to be successful. Corporate conversations and collaboration will fuel the truly sticky use cases of AI. Legacy industries - insurance, healthcare, supply chain - are waking up to the importance of having collaboration embedded in the software that transforms the business. Conversations will be digitized, spitting off data that will fuel the AI applied to change how work gets done. How we work will get more predictive, collaborative, and focused on employee experience.
Additionally, there is a flight to quality in the funding market and soon enough unicorn valuations will actually mean something.
FINAL QUESTION: We like the idea of ending our episodes with a challenge for the listeners/readers. Whether it be reaching out to an old friend, reading 5 pages a day from a book, creating a new healthy habit… what is one challenge you have for the listeners?
Make time for old friends. People and relationships are everything. Invest in them.