Nov 5, 2018 · 34m · 20vc
20VC: Why The Engineer Will Replace The MBA As CEO, Why The Peace Dividends From The Autonomous Car Wars Will Generate More Value Outside of Transport & Why Old and Boring Industries Are The Most Exciting To Build In with Avidan Ross, Founding Partner @ R
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Avidan Ross, founding partner at Root Ventures, about investing in early-stage hard tech, the economic benefits of technology peace dividends, and why technical founders are increasingly taking the lead as CEOs in traditional industries.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 31.8% of the talking time here. How this is scored →
Harry as informed peer 4.5 Guest teaching 5.2 Guest disagreement 2.2 Harry pushing back 4.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 25:20 Reframing market timing risk
Avidan directly rejects Harry's framing on market timing risk, reframing the topic to explain why technical founders are now uniquely positioned to succeed as CEOs.
Hardest push from Harry ▶ 24:56 Challenging market timing risk in legacy sectorsHarry pointedly asks whether inserting unproven robotics into traditional sectors like agriculture presents severe timing risk, refusing to accept early-stage optimism at face value.
Biggest teaching moment ▶ 7:53 Explaining peace dividends of technological competitionAvidan educates Harry on how smartphone component wars drove down supply chain costs for accelerometers and cameras, enabling entirely new IoT categories like drones and Nest.
Harry holds his own ▶ 19:43 Pressing on customer education and sales frictionHarry demonstrates strong practical knowledge of enterprise sales dynamics by confronting Avidan with the reality of selling to buyers who lack tech background and resist operational change.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Avidan Ross's Path from Engineering to Venture Capital | 2 | 3 | 1 | 1 | The conversation starts warmly with light rapport, where Avidan jokes about listening to Harry's podcast at double speed. Avidan summarizes his transition from engineering in the 1990s through private equity at CIM Group to founding Root Ventures. Harry asks standard open-ended background questions without challenging the narrative. | |
| The Peace Dividends of Technological Competition | 5 | 6 | 2 | 5 | Avidan explains his concept of 'peace dividends' from technology wars, showing how smartphone component competition lowered hardware costs for drones and smart devices. Harry interjects to ask if commoditization creates a race to the bottom in margins, showing solid industry comprehension. Avidan clarifies how connectivity enables recurring software services on top of cheap hardware. | |
| Evaluating Venture Scalability in Hardware and Hard Tech | 4 | 5 | 2 | 3 | Harry probes into what makes a hardware business venture scalable versus a non-venture outcome. Avidan educates Harry on software upselling, recurring revenues, and platform models like Particle and DJI. The exchange is highly collaborative and educational. | |
| Software Differentiation, GPUs, and Autonomous Systems | 4 | 6 | 1 | 2 | Harry quotes Avidan's recent article regarding hard tech versus hardware. Avidan breaks down how advances in GPUs and sensors from autonomous vehicle development unlock complex computational software applications for physical engineering. | |
| Transforming Traditional Industries with the Trojan Horse Strategy | 6 | 5 | 2 | 6 | Harry raises a key market barrier, asking how startups overcome resistance from non-digital native customers in conservative legacy industries. Avidan acknowledges the challenge and explains his 'Trojan horse' investment strategy of securing initial ROI before expanding into data services. | |
| Technical Leadership and the Rise of the Engineer CEO | 6 | 6 | 5 | 7 | Harry explicitly challenges Avidan on the serious market timing risks of deploying novel robotics into traditional sectors like agriculture and shipping. Avidan rejects the premise of risk by reframing market timing around 'why now' and predicting the inevitable rise of technical engineer CEOs over MBAs. |
Statements from this episode (9)
Smartphone wars created the low-cost component supply chain for consumer IoT
“Because of the smartphone wars, the war between Apple and Samsung and Google and Nokia and Blackberry, a lot of the components that you find in a... Everyone was trying to get a low-cost camera, low-cost accelerometers, low-cost Bluetooth chips and Wi-Fi chips…”
Connected hardware value comes from cloud services, not commodity components
“And when you're connected, you now have the opportunity to sell services. You get to interconnect your componentry to the internet. So think, for example, about a low-cost sensor is sitting out in the field. Now it has unlimited free connectivity into the clou…”
Root Ventures avoids hardware startups relying solely on product margins
“We won't invest in something that relies just on margin alone. From our perspective, that's not a venture scalable business.”
Root Ventures evaluates hardware investments fundamentally as software companies
“We look at our hardware investments as actually software companies at their core. The definition of These companies is often that the software is the differentiator, but we also make a lot of investments purely in software companies.”
Autonomous vehicle R&D dividends will transform all physical industries
“There's Going to be more value generated from the piece dividends of the autonomous car war. What I mean to say is that every industry in the world that needs to physically articulate the world around it is going to benefit from all of that technology stack, t…”
B2B startups should land on immediate ROI, then expand via data
“The Trojan horse idea is you bring something into the customer that has a clear ROI, but once they've adopted it, Then you can start upselling them or taking advantage of the data you're collecting from being inside of that company or that industry.”
Engineers with advanced degrees will inevitably replace MBAs as tech CEOs
“The timing as to why is it today that we're going to see more masters and PhD engineering degrees at the CEO helm of companies than MBAs is because of those things. And it's taken a while for engineers like myself to build out positions in the venture capital …”
Silicon Valley must prioritize mental health with professional athlete rigor
“So I think we don't spend enough time talking about mental health. I think athletes are constantly working out. They're going to the gym and trying to hit peak performance. Silicon Valley is a world of people whose peak performance is around their mental state…”
Startup board members must work for the company, not for prestige
“Board members have to remember that they work for the company, and you don't join a board with For the prestige or the addition to your resume, you join the board because you're ready to work. You become an extension of the organization. And if you're not read…”