While best known as co-founder of Flickr, the popular photo-sharing site, Caterina Fake has blazed a multifaceted business trail as inventor and investor. At 41, the no-nonsense entrepreneur describes herself as always "self-directed, self-motivated and self-employed." While she chose to work for Yahoo after the search giant acquired Flickr in 2005, it wasn't long before she returned to startup mode. In 2009, she became co-founder of Hunch, a website that builds taste profiles of Internet users.

Fake is in constant search of the next creative learning experience, a focus she honed early on as an English literature major at Vassar College. Today she serves in an advisory role at Hunch, while investing millions in other startups as a founding partner of Founder Collective, a seed-stage venture capital fund.

In this interview, Fake opens up about her journey as an entrepreneur, what a startup needs to get her attention and her appetite for risk. Edited interview excerpts follow.

Why my role changed at Hunch: I design what a product does, the user experience, and how we learn about each individual person. Hunch is going through a pivot. The consumer-facing side became less important, and the backend became more significant, so I haven't worked on the product in six months but I'm still involved on a regular basis. A co-founder is like being somebody's parent: You want to make sure your offspring thrive.

Inspiration comes from… paying attention to a lot of different fields. I stay up on current events. I read The New Yorker and The Economist. I go to community meetings to see what concerns the people in my neighborhood. I studied literature in college, so I also continue to read poetry, literature and novels.

Favorite poets: Wallace Stevens, Shakespeare, and Emily Dickinson.

A must-read for entrepreneurs: The Innovator's Dilemma.

On working for someone else: I approached Yahoo as a learning experience. Everything at every stage of the game affects what you do next. At Yahoo, I learned a lot about social search and met a lot of amazing people -- some are now entrepreneurs with companies I subsequently invested in.

Tip for starting a second venture: People tend to be more wary of taking risks the second time around. Don't fall into that sophomore slump. If you built a successful company the first time, it's really important not to fall into the trap of resting on your laurels and doing the same thing the next time. It's stepping into the unknown that enables you to create something fresh, new and innovative.

On being an 'angel:' It's important for entrepreneurs to stay active in the startup world and be an angel investor, if they can. Looking at other companies and their challenges keeps you thinking [like a startup] all the time.

How startups can get my attention: Build a great product. I became an angel investor in Etsy just by receiving an email from [founder] Rob Kalin with a link to his site. That's all you need.

Startup advice: Pick a good market. The idea for approaching that market may change, but find a meaty problem to solve. You can try to attack it a bunch of different ways. Don't be too narrow.

On growing an online community: Paying attention to social interactions offline really informs interactions online. Observe communities to learn how people behave. Basing your online community on offline communities is the best way to build a social media site. The real world is a bottomless source of inspiration for what you can build.

Social media tip: When somebody posts on your [Facebook] wall or responds to you on Twitter, think of them as customers standing in front of you in your shop. If you ignore them, they won't come back. Respond the same way online as you would offline. Engage with them and be yourself.

Related: Caterina Fake shares her top picks to follow on Twitter.

What keeps me up at night: Technology is changing so rapidly, you're very quickly obsolete. What you thought you were building six months ago is no longer relevant. You have to constantly be alert to what's changing in the world, be able to adapt and not get too attached to what you're building.

Earliest entrepreneurial memory: When I was around 5, I sold my drawings to my parents for 10 cents or a quarter, depending on the size of the drawing.

Secret quirk: I'm a big risk-taker, but when I find a dish I really like at a restaurant, I order the same thing every time. There are restaurants I've been going to for years, and I have no idea what else is on the menu. My life is all about trying new things but sometimes when you find something you really like, why change it?

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