Month: July 2013

Google vs. The Teamsters

/ Adam Nash / 15 Comments

Yesterday, Google launched Chromecast, a streaming solution for integrating mobile devices with TV, part of another salvo against Apple.  Google vs. Apple has been the hot story now in Silicon Valley for a couple of years.  Before that, Google vs. Facebook.  Before that, Google vs. Microsoft.  Technology loves narrative, and setting up a battle of titans always gets the crowd worked up.

Lately, I’ve been thinking about the next fight Google might be inadvertently setting up, and wondering whether they are ready for it.

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Self-Driving Cars or Self-Driving Trucks

It turns out I’m not the only one who noticed that Google’s incredible push for self-driving cars actually has more likely applications around trucking.  Yesterday, the Wall Street Journal wrote an excellent piece about Catepillar’s experiments using self-driving mining trucks in remote areas of Australia.  It had the provocative headline:

Daddy, What Was a Truck Driver?

This is the first piece in the mainstream media that I’ve seen connecting the dots from self-driving cars to trucking, even with a lightweight reference to the Teamsters at the end.

Ubiquitous, autonomous trucks are “close to inevitable,” says Ted Scott, director of engineering and safety policy for the American Trucking Associations. “We are going to have a driverless truck because there will be money in it,” adds James Barrett, president of 105-rig Road Scholar Transport Inc. in Scranton, Pa.

The International Brotherhood of Teamsters haven’t noticed yet, or at least, all searches I performed on their site for keywords like “self driving”, “computer driving”, “automated driving”, or even just “Google” revealed nothing relevant about the topic.  But they will.

Massive Economic Value

The statistics are astonishing.  A few key insights:

  • Approximately 5.7 million Americans are licensed as professional drivers, driving everything from delivery vans to tractor-trailers.
  • Roughly speaking, a full-time driver with benefits will cost $65,000 to $100,000 or more a year.
  •  In 2011, the U.S. trucking industry hauled 67 percent of the total volume of freight transported in the United States. More than 26 million trucks of all classes, including 2.4 million typical Class 8 trucks operated by more than 1.2 million interstate motor carriers. (via American Trucking Association)
  • Currently, there is a shortage of qualified drivers. Estimated at 20,000+ now, growing to over 100,000 in the next few years. (via American Trucking Association)

Let’s see.  We have a staffing problem around an already fairly expensive role that is the backbone of a majority of freight transport in the United States.  That’s just about all the right ingredients for experimentation, development and eventual mass deployment of self-driving trucks.

Rise of the Machines

In 2011, Andy McAfee & Erik Brynjolfsson published the book “Race Against the Machine“, where they describe both the evidence and projection of how computers & artificial intelligence will rapidly displace roles and work previously assumed to be best done by humans.  (Andy’s excellent TED 2013 talk is now online.)

The fact is, self-driving long haul trucking addresses a lot of the issues with using human drivers.  Computers don’t need to sleep.  That alone might double their productivity.  They can remotely be audited and controlled in emergency situations.  They are predictable, and can execute high efficiency coordination (like road trains).  They will no doubt be more fuel efficient, and will likely end up having better safety records than human drivers.

Please don’t get me wrong – I am positive there will be a large number of situations where human drivers will be advantageous.  But it will certainly no longer be 100%, and the situations where self-driving trucks make sense will only expand with time.

Google & Unions

Google has made self-driving cars one of the hallmarks of their new brand, thinking about long term problems and futuristic technology.  This, unfortunately, is one of the risks that goes with brand association around a technology that may be massively disruptive both socially & politically.

Like most technology companies in Silicon Valley, Google is not a union shop.  It has advocated in the past on issues like education reform.  It wouldn’t be hard, politically, to paint Google as either ambivalent or even hostile to organized labor.

Challenges of the Next Decade

The next ten years are likely to look very different for technology than the past ten.  We’re going to start to see large number of jobs previously thought to be safe from computerization be displaced.  It’s at best naive to think that these developments won’t end up politically charged.

Large companies, in particular, are vulnerable to political action, as they are large targets.  Amazon actually may have been the first consumer tech company to stumble onto this issue, with the outcry around the loss of the independent bookstore.  (Interesting, Netflix did not invoke the same reaction to the loss of the video rental store.)  Google, however, has touched an issue that affects millions of jobs, and one that historically has been aggressively organized both socially & politically.  The Teamsters alone have 1.3 million members (as of 2011).

Silicon Valley was late to lobbying and political influence, but this goes beyond influence.  We’re now getting to a level of social impact where companies need to proactively envision and advocate for the future that they are creating.  Google may think they are safe by focusing on the most unlikely first implementation of their vision (self-driving cars), but it is very likely they’ll be associated with the concept of self-driving vehicles.

I’m a huge fan of Google, so maybe I’m just worried we may see a future of news broadcasts with people taking bats to self-driving cars in the Google parking lot.  And I don’t think anyone is ready for that.

Challenges of Being an Executive in Residence (EIR)

/ Adam Nash / 3 Comments

This is the fourth post of a multi-part series on being an Executive in Residence (EIR). The initial post outlining the full series can be found here. The previous post was “How do you get an Executive in Residence (EIR) role?“

If you’ve made it this far in my Executive in Residence series, you might be thinking, “This job sounds like a dream come true.  What could be better than a role where I’m working with intelligent people, meeting brilliant entrepreneurs and given time to think carefully about my next company?”

I’m a big fan of the Executive in Residence (EIR) role, when it’s taken for the right reasons and with the right firm.  That being said, the EIR role is one of the more unstructured positions out there, and can easily lead to an unproductive outcome for both the executive and the venture firm without the right perspective and motivation.

Time Management

There is no question.  The biggest lurking challenge around being an Executive in Residence is time management.

For an operating executive or CEO, you likely have gotten used to the implicit structure imposed by running an operating business.  There are people and teams who report to you, guidance you give regularly on talent and strategic decisions, key results you are responsible for.  If you’ve worked for a company of any scale, your biggest issue previously was likely paring your calendar back regularly to give yourself time to think.

You know what greets you as an EIR on your first day?  A calendar full of empty.  More importantly, while there are meetings all the time, you aren’t actually required for any of them.

As a product manager, it’s second nature to think backwards from your goal, and create a set of milestones and checkpoints.  As an EIR, I’d recommend thinking about the following milestones, within a rough timeline of one year:

  • What’s your investment thesis / area of focus?
  • Are you going to be an investor or an executive?
  • Are you going to start something or join something?
  • Are you going to look at companies outside your firm’s portfolio?
  • What stage of company and role are you looking for?

Investment Thesis & Focus

The first thing that happens when you join a venture capital firm is that you realize the world of successful startups is much broader and more diverse than you thought.  This goes beyond simple descriptors of “consumer” and “enterprise”.  Given your unique experience and skills, you may find yourself fascinated with marketplaces, collaborative sharing, mobile communication, next generation CRM, big data infrastructure.

The problem is, no one can be deep on everything.  It’s all too easy to find yourself broadly exploring an ever increasing number of sub-segments, business models and industries.  In a partnership, you’ll find that every partner has levels of expertise and exposure on multiple domains.  As an EIR, you could potential spend time digging into any one of them.

Some of this is good, to be sure.  One of the perks of the EIR role is the time and access to broaden your horizons.  However, the challenge for an EIR is that, in a limited time frame, you have weeks and months to explore, not years.  Most successful EIRs come to an opinion fairly quickly (within 6-8 weeks) of the rough dimensions of the currently exciting areas of innovation to focus on.

Investor vs. Executive

Being at a great venture capital firm inevitably forces even stalwart operators to ask the question of whether or not they want to be an investor.  Most likely at this stage in your career, you’ve already started to take advisory roles or participated in seed rounds as an angel investor.

EIRs rarely transition to investing partners, but it happens more often than you might think.  (Most recently, Simon Rothman transitioned from an EIR role to a general partner at Greylock).

The real issue is one of time frame and priorities.  In the end, the process that investors go through to evaluate companies and opportunities has very different dynamics than finding a good fit for a CEO role.  While most EIRs have this internal debate at some point, the sooner you can resolve the issue with confidence internally, the sooner you can optimize your efforts towards a successful outcome.

Let’s face it: defining success is a big part of achieving it.

Entrepreneur vs. Executive

Alright.  You’ve figured out your investment thesis and areas of focus, and you’ve got confidence now that while you respect venture capital quite a bit, you’re an operator.  The next challenge that rears its head: are you sure you don’t want to start something yourself?

Meeting with successful, passionate entrepreneurs day-in and day-out does a funny thing to you.  It’s addictive.  Their energy is tangible.  And when you work with a great firm, more often than not, you meet superlative entrepreneurs, many at later stages of company development, proving that not only can it happen, it actually happens more often than you thought.

In my first post, I tried to explain the differences between an entrepreneur-in-residence and an executive-in-residence.  As it turns out, however, at most firms, there is a lot of flexibility around this issue.  At least in Silicon Valley, no one is going to talk you out of building something from scratch if you get set on doing it.

I hate to be cynical, but watching a number of colleagues go through this, the pattern is fairly predictable.  The reality is, most people actually have the answer to this question before they start their role as an EIR.  What actually happens is that EIRs tend to forget this fact quickly, spend some time debating it internally, and then realize that their initial assessment was correct all along.

Navigating Firm Bias

Another challenge that confronts EIRs is firm bias.  By taking a role with a specific venture capital firm, a number of questions are raised:

  • Will you only look at companies that fit the firms / partners current investment thesis?
  • Will you only look at companies that the firm has invested in?
  • Will you engage with recruiting partners from other firms or third parties?

Underlying these questions is an implicit misalignment between the EIR and the firm.  The firm is investing time (it’s most precious resource), reputation and knowledge with you.  At the same time, as an EIR, finding the right fit of company, stage, product, team & timing for a CEO role is exceptionally difficult.  Spreading the net as far as possible definitely can increase chances for a successful fit in a given time frame.

For most EIR roles, the answer to these questions is best resolved directly, with the firm, before joining.  Personally, I was fortunate enough to be an EIR at Greylock Partners, where the firm’s perspective was that any area or company that was interesting enough for me to engage with was by itself a strong vote of confidence.  Greylock is one of the oldest and most successful early stage venture capital firms, and sees its network as extending, through people, more broadly than just to the specific companies where they are currently invested.

By the way, for this reason, it’s not unusual to see EIRs split their role between two firms, just to signal strongly to both the firms and the outside world that they are not committed to a single firm.  While I don’t believe this is necessary for a successful EIR role, I do personally recommend that EIRs broaden their network to companies and opportunities beyond a single firm.

Company Stage & Role

This might be one of the biggest challenges an EIR faces in their search.  What are you actually looking for?

  • Are you interested in a startup that is pre-product/market fit?  Or do you operated best when product/market fit has been established?
  • Do you add the most value at a 20-person company going to 100+, or a 300 person company going to 1000+?
  • Are you willing to consider a COO role, or only a CEO role?
  • Will you consider GM roles or functional leadership roles at larger companies?

To some extent, you have time to entertain and consider a wide variety of roles.  There is significant learning, both about the company and yourself that takes place when you engage on a potential role.  That being said, spending time on roles you are not inclined to actually take is expensive, for both you and the company.

Tell Us Your Story

In the previous four posts, I’ve tried to remain objective and incorporate lessons from other EIRs that I’ve had the opportunity to both know and work with.  Due to popular demand, however, my final post in this series, Did you like being an Executive in Residence (EIR)?, is coming up next.

How Do You Get an Executive in Residence (EIR) role?

/ Adam Nash / 3 Comments

This is the third post of a multi-part series on being an Executive in Residence (EIR). The initial post outlining the full series can be found here. The previous post was “Should I be an Executive in Residence (EIR)?“

One of the most mysterious aspects of the Executive in Residence role is the relative obscurity about how these roles come into being in the first place.  After all, you’ll never find a job posting on LinkedIn for an EIR, and as a result there is no obvious description of the requirements or the process to get one of these roles.

However, a simple search on TechCrunch or Pando Daily reveals a fairly regular stream of people joining top tier venture capital firms as Executives in Residence.  How did they get that role?

Relationships Matter

Venture capital partnerships value relationships, and so it’s rare that you’ll find an Executive in Residence that doesn’t have some direct relationship to the firm that brings them onboard.  The three most typical ways executives form these relationships are:

  • They were an executive or founder at a company backed by that venture capital firm.
  • They worked with one of the partners at the venture capital firm in a previous operating role.
  • They sat on the board of directors of a company with a partner from that venture capital firm.

There are of course exceptions to these examples, but in most cases the most likely way to get an Executive in Residence role will be from one of the venture capital firms that you’ve personally worked with in the past, where they have a high opinion of your capabilities as an executive, your relationships in the entrepreneurial community, and your expertise in an area that the firm has prioritized.

Situations Matter

The Executive in Residence role is typically opportunistic in relation to timing.   There is some event, some inflection point where a talented executive ends up potentially free from an existing role, and yet will be looking for time to assess the market and decide on their next operating role.

The most common events that lead to this situation are:

  • Acquisition of a company. During acquisitions, executives either leave on completion of the acquisition or after some reasonable transition period.
  • Reorganization of a company.  As companies grow, they periodically will hit strategic shifts or management inflection points where it makes sense for some executives to leave the company.
  • Long tenure / Company size.  Sometimes as companies grow, executives who prefer earlier stages of company culture and growth will decide they want to pursue a role a new startup, but don’t necessarily have visibility into the full field of opportunities.

Once again, while there are exceptions to the above, you’ll find that almost all Executives in Residence come from a situation that generates a need to leave their current role, without sufficient time for the research and match-making process involved in placing a CxO.  These situations can also generate the catalyst for a venture capital firm to take the opportunity to deepen their relationship with a talented executive.

Reputations Matter

In the end, venture capital firms bring on Executives in Residence in order to bolster both their access to talent as well as their relationships in the startup community.  As a result, the reputation of the executive matters quite a bit in terms of getting an offer to join a firm as an EIR.  Common attributes are:

  • An executive with a well known reputation, or strong ties to a recent, well-known successful venture-backed company
  • An executive whose reputation will be compatible and additive to the brand of the venture capital firm
  • An executive whose existing relationships in the technology community will be compatible and additive to the venture capital firm.
  • An executive with expertise in an specific market or technology sub-sector that the venture capital firm is strategically interested in going forward.

You Don’t Ask, You’re Offered

The Executive in Residence role is, by its nature, a fairly opportunistic hire on the part of the venture capital firm.  If you are a founder or executive at a venture backed company, and one of the situations described fits your condition, make sure you are investing some of your time in relationships and being “top of mind” with venture capitalists you’ve worked with.

My next post in the EIR series will attempt to answer the question: “Challenges of being an Executive in Residence (EIR)“

EIR Series: Should I be an Executive in Residence (EIR)?

/ Adam Nash / 4 Comments

This is the second post of a multi-part series on being an Executive in Residence (EIR). The initial post outlining the full series can be found here.  The previous post was What is an Executive in Residence (EIR).

The most common question in relation to the Executive in Residence role has been a simple one:

Should I be an Executive in Residence?

The truth is, when people ask me this question, they are very often asking two similar, but different questions:

  1. Is the Executive in Residence Role a good opportunity?
  2. Is the Executive in Residence Role something I should pursue?

The answer to the first question is fairly simple, but it has an over-arching caveat.  Like most things relating to venture capital, the quality of the partnership that you’ll be working with and the expectations of that partnership around the role are paramount.  As long as there is strong alignment of expectations between the partnership and the executive about the expectations for the role, the Executive in Residence role can be a unique and fantastic opportunity.

The second question, however, is much more complicated.  And that’s because it implicitly brings up some of the most difficult career questions we have to ask ourselves.

What Do You Want From an EIR Role? 

Last year, John Lilly wrote a simple blog post about leadership and the key questions to ask when you’re asked for advice.  If you are at the point in your career where you are qualified to be a CEO, then the question of what you want from your career becomes increasingly dominant.

What are you optimizing for?  Is it passion for the product you’re building, particular technology or a target market?  Are you looking for a particular business model, corporate culture or lifestyle? Are you looking to join the ranks of the Forbes 400?  Are you looking for power & influence and if so, in what industry / sector?

These questions can become increasingly difficult as you progress in your career because to be uniquely qualified to lead a company, there needs to be incredible alignment between your values and goals, and the goals of the company you want to lead.  Put another way, matchmaking for the right company actually requires a deep understanding of your own motivations, values & priorities.

Benefits of the EIR Position

The Executive in Residence role offers a lot of unique benefits.  These include:

  • Create, Build & Grow Relationships.  It’s an incredible opportunity to make new relationships, re-establish dormant relationships, and deepen existing ones.
  • Broaden & Deepen Your Knowledge of the Market. When you are in an operational role, you tend to become extremely deep on the companies related to your market and space, and tunnel vision sets in.  The EIR role gives you the opportunity to explore a much wider range of product categories and sub-sectors, and learn more deeply what strategies and tactics have been successful outside your specific niche.
  • Learn about New Companies.  We all like to think that we’re in the flow of knowing the important, successful private companies being built in Silicon Valley.  The truth is, there are a shockingly large number of amazing private companies that you haven’t heard of.  The EIR role gets you fantastic exposure to a large number of companies you haven’t heard of.
  • Platform for Thought Leadership.  Top tier venture firms have great reputations, and EIR roles offer a unique opportunity for you to nurture, develop & grow your own reputation around specific topics and issues.  The venture firm benefits from its association with thought leadership, and the EIR benefits from its association with the firm.  The end result can be magnified opportunities for both parties.
  • Try Before You Buy.  The EIR role gives you an exceptional ability to spend time with portfolio companies.  They are usually extremely happy to get additional help, and the time spent can help both parties figure out if it’s a potential good fit or not.  The best part about the role is that if it isn’t a good fit, the time spent was without firm commitment, and can be easily ended at any time without few (if any) negative relationship or reputation effects.
  • Self Discovery.  The EIR role is structured to give you time to ask the hard questions about what you are looking for in a company, a product, a market, a culture.  It’s structured enough to provide stimulus and ideas, but unstructured enough to give you gaps to ask (and answer) the hard questions.

Problems with the EIR Position

While I’m extremely positive about my experience as an EIR at Greylock Partners, I’m one of the first to caution people who ask me about the role that there are real issues to consider.

  • Firm Lock In.  When you are immersed in the people & culture of a particular firm, it’s very easy to de-prioritize networking and intellectual debate outside the firm.  Venture firms tend to discuss their own successes and failures, and the burden is really on the EIR to ensure they broaden & deepen their relationships outside the firm.  This is why, for example, some successful executives will take EIR roles at two different firms.
  • Paradox of Choice.  We are all human, and humans don’t do well with a massively expanded selection set.  The more companies, industries, products & concepts you are exposed to, the harder it can be to assertively make a choice to pursue a single company.  This is why, for example, successful EIRs will often frame their time in waves – spending weeks or months on a particular area or topic, and then shifting to another, rather than trying to explore and pursue everything at once.
  • Portfolio Work vs. Discovery.  Working with portfolio companies takes a certain amount of time and effort to be effective.  If you are going to spend 1-2 days a week with a company, you’ll quickly run out of days of the week.  As a result, it’s important for EIRs to find a system that allows them to balance networking & discovery time with active engagement with companies.  6-12 months can pass unbelievably quickly, and in the end, your goal is to find that next great role.
  • Operating Skills / Credibility.  Technology moves incredibly quickly, and it’s amazing how even in a matter of months the landscape of ideas and tactics can change.  Venture capital firms tend to be comfortable places, but never forget that you always need to be learning & growing, most likely by engaging and helping entrepreneurs with real challenges they have today.  The lessons from 2012 are interesting and useful in 2013, but the half life of those lessons can be shorter than you might think.

So, Should You Do It?

I’m colored by own personal experience, which was with a great firm and a great outcome (I’m exceptionally happy with my role at Wealthfront).

If you are looking for either your first CEO role, or your next CEO role, and you have the opportunity to be an EIR with a great firm, I believe the Executive in Residence role can be a unique & excellent opportunity.  Going into it, however, you need to do two things to be successful: be prepared to take advantage of the unique opportunities of the role, and be extremely cognizant of the potential pitfalls and issues inherent with the position.

Going forward in this series, I’ll be focusing on the Executive in Residence role. My next post will attempt to answer the question: “How Do You Get an Executive in Residence Role (EIR)?“

EIR Series: What is an Executive in Residence (EIR)?

/ Adam Nash / 5 Comments

This is the first post of a multi-part series on being an Executive in Residence (EIR). The initial post outlining the full series can be found here.

One of the first things I learned when I accepted the role of Executive in Residence at Greylock Partners was that almost no one actually knows what that means. (I can hear my father asking me now, “You’re a resident now? Like a doctor?”)

In fairness, the role is rare enough that, outside of the Silicon Valley venture community, you might never run into it. It’s almost pathologically designed to be cryptic. Not only is it rare, but it’s also designed as a short term role, not a permanent one. If that wasn’t tricky enough, it turns out that there are a few flavors of “EIR” just to add a good dose of acronym confusion to the mix.

So before discussing the details of the Executive in Residence role, let me clarify the three different types of EIR you may come in contact with. (As a side note, the following definitions and examples are certainly biased towards my recent experience at Greylock Partners.)

  • Entrepreneur in Residence. The original EIR role, the Entrepreneur in Residence role is designed for entrepreneurs who are actively working on both the conception & execution of their next company. These roles are generally structured as 3-6 month engagements without compensation, but the entrepreneur is given resources & a place to work, and significant time & exposure to the investment team at the venture capital firm. The entrepreneur benefits from the constant challenge & framing of world-class investors, and a higher than average likelihood of funding from the venture capital firm. The firm, on the other hand, gets a significant degree of proprietary access and influence over the new company.

    Notable recent examples: Nir Zuk, co-founder of Palo Alto Networks (PANW, $3B+), Josh McFarland, founder of TellApart.

  • Executive in Residence. Sometimes referred to as an XIR, the Executive in Residence role is designed for executives, typically CEOs, who are in between companies. These roles are typically structured as 6-12 month engagements with limited compensation (well below typical executive salaries). The executive is given an office, with an expectation that they will split their time between working with portfolio companies, helping with due diligence on potential investments, and completing their own search efforts for their next role. The executive gets a platform for broadening their strategic thinking, networking and inside access to a number of extremely promising companies, while the firm gets inexpensive support for their portfolio companies and disproportionate access to top executive talent.

    Notable recent example: Jeff Weiner, CEO of LinkedIn (LNKD, $20B+)

  • “Something Else” in Residence. Behold, the age of the SEIR. In recent years, there have been a few top venture capital firms experimenting with other “in residence” roles. There have been designers, engineers, data scientists and even growth strategists in residence. The basic proposition for this role is similar to the traditional executive in residence role, with a notable tilt towards work with portfolio companies and PR to help build the reputation of the individual and the firm.

    Notable recent examples: DJ Patil, Data Scientist in Residence, Andy Johns, Growth Strategist in Residence.

There have been quite a few good blog posts on the pros & cons of the Entrepreneur in Residence role. On the other end of the spectrum, it’s probably too early to talk categorically about the plethora of new “in residence” variants as a class.

Going forward in this series, I’ll be focusing on the Executive in Residence role. My next post will attempt to answer the question: “Should I be an Executive in Residence (EIR)?“

The Executive in Residence (EIR) Series

/ Adam Nash / 11 Comments

It’s hard to believe, but it is now exactly six months since I left my role as an Executive in Residence at Greylock Partners, and joined Weathfront as COO.

Diving into a startup is all encompassing, but over the past few months quite a few people have asked me questions about the Executive in Residence (EIR) role.  Some of these people have had offers to become EIRs, others are curious about the role and whether they should pursue it as a career option.  For most, however, it’s just genuine curiosity  the EIR role is largely a low volume, undocumented role that is very unique to the private equity & venture capital ecosystems.

One of the guide posts for this blog has been a dedicated effort to take the questions that I receive regularly, and translate them into thoughtful and useful content to be broadly shared.  So before my experiences of 2012 fade into the shrouds of history, I’ve decided to write a quick series about my experience as an EIR, and the most common questions I’ve received.

The series will cover the following questions:

  1. What is an Executive in Residence (EIR)?
  2. Should I be an Executive in Residence (EIR)?
  3. How do you get an Executive in Residence (EIR) role?
  4. Challenges of being an Executive in Residence (EIR)
  5. Did you like being an Executive in Residence (EIR)?

As always, I’m hopeful that the information will be both interesting and even useful.