The Exchanges

Q So what, what do you think we can do? Can we, can we, uh, encourage, uh, female, you know, coding and development through heavily subsidizing it for college entries or, or, Or what, what would you suggest? Do you have any suggestions in mind? Right.

A So, so part of it is, is that increasing the supply And one of the, um, there are many more women who are qualified to work in the industry as developers than there are, uh, in the percentage who graduate with a computer science degree, strictly speaking. So, um, for example, numerous, so women tend to be a majority of the graduates, both at the undergraduate and the graduate level, in wet sciences, in the biological sciences. Um, many of those women now Are capable computer scientists as well, right? But they may not have a resume that has computer science as part of their degree, but, but actually programming and big data analytics, um, have become, you know, a cutting edge part of many other scientific disciplines now. So number one is companies can look Not just for the, you know, BSCS, but for, um, specific coursework that has women qualified, um, to work as engineers. They can employ, um, more, uh, they can employ interview and sourcing and evaluation techniques, uh, that can help remove or mitigate implicit bias. So doing things like, um, Blind, you know, like the blind auditions in the voice, or what, what helped change the ratio in, for example, um, orchestras, where orchestras used to be a hundred percent men, and the people making the judgments about, uh, new, um, musicians, you know, believed men were better, and so they, they moved to having the auditions take plac…

AI assessment note: “companies can look Not just for the, you know, BSCS, but for, um, specific coursework”

Q Now, moving on slightly from, from gender bias to geographical bias, what are your views on investing outside of the valley, and what do you think is necessary for a startup to be successful outside the valley?

A Yeah, so startups definitely can be successful outside the valley. It's one of the strengths, I think, of scale venture partners, even though we're a single location firm, so we have one office here in Silicon Valley. Uh, we have startups in 18 different states in the U.S., and we've backed companies that have gotten started in other countries and raise capital to come scale in, in the U.S. So our investment strategy is purely U.S. focused. We don't invest, you know, in local market Companies for local markets. Um, but you have, you know, there, the, the Silicon Valley has no monopoly on smart people and good ideas, and a lot of times the customers for new ideas are outside of Silicon Valley, so a lot of innovation happens in other regions. Um, I think one of the, one of the challenges Is for companies that are outside of Silicon Valley is to be someplace where they have access to extraordinary talent. You know, one of, one of the really great things about being in Northern California is just how many people there are who have Had the experience of building a startup, scaling a business, and so when, if a company is here, and it comes time to get the next level experienced sales executive or marketing executive, you know, there are a lot of choices here. If you're scaling a company in Utah, Boston, New York, you know, the Southeast, all Indiana, all places where we've had wildl…

AI assessment note: “startups definitely can be successful outside the valley. It's one of the strengths”

Q You have now arrived at your destination. Could you tell us a little bit about how you got into the industry and made your transition into the venture capital industry?

A Sure. So I've been here at Scale Venture Partners for about 15 years, and before that I have sort of two professional past lives. I started my career as a consultant at Bain & Company, and then made the transition from there to working in marketing in the technology business, and specifically in software. Um, and I loved both of those businesses. Number one, the big picture, sort of plate tectonics, industry strategy, and then being an operator and building products and, and building teams. And, um, So about 15 years ago, I was trying to figure out how could I keep contributing at a, at a senior level. At the time, I was the officer of a public company in the peak of bubble one point oh, uh, how could I keep working hard, contributing at a senior level, yet not have to travel internationally as much. So my, both of my business, uh, past lives had required a lot of travel, and I had at the time young kids.

AI assessment note: “how could I keep working hard, contributing at a senior level, yet not have to travel”

Q believe, and I think that's the highest number in the industry, um, leading me to ask, with the scientific studies coming out that women Controversially or not, uh, are proven to be better investors. Why, why do you think there is gender misrepresentation in the industry, and do you think there are any strategies that can be done to improve female equality in both the VC and the tech industry?

A Um, yes. So, so Scale Venture Partners has three female partners, which is, I am sorry to say, the most in the U.S. of any firm that has more than two hundred million dollars under management. Um, and I think part of the reason why we've been successful having a fairly diverse partnership and indeed throughout the organization here is because, um, We started that way, and the existence proof of success, both to candidates who come from diverse backgrounds, as well as from the existing employees is a very important part of changing the ratio, um, toward a more diverse workforce. So, um, In, you know, in both tech and venture capital, there's, ah, a lot of shorthand for what, um, that, that often is referred to as pattern matching about what, ah, a successful candidate would look like, and, you know, for the people who've been here who are largely white males, they think of the people who've been successful who are largely white males, and we even, you know, in technology use Guy as the sort of standard gender neutral pronoun, and, um, those, those kind of mental shortcuts introduce an implicit bias that makes it more difficult to conceive of having a woman in the role, and for women or people of color, more difficult for them to conceive of being successful in the role. Um, so I think both the technology business and the venture capital business, um, you know, have become acutel…

AI assessment note: “those kind of mental shortcuts introduce an implicit bias that makes it more difficult”

Q Now, moving on slightly from, from gender bias to geographical bias, what are your views on investing outside of the valley, and what do you think is necessary for a startup to be successful outside the valley?

A Yeah, so startups definitely can be successful outside the valley. It's one of the strengths, I think, of scale venture partners, even though we're a single location firm, so we have one office here in Silicon Valley. Uh, we have startups in 18 different states in the U.S., and we've backed companies that have gotten started in other countries and raise capital to come scale in, in the U.S. So our investment strategy is purely U.S. focused. We don't invest, you know, in local market Companies for local markets. Um, but you have, you know, there, the, the Silicon Valley has no monopoly on smart people and good ideas, and a lot of times the customers for new ideas are outside of Silicon Valley, so a lot of innovation happens in other regions. Um, I think one of the, one of the challenges Is for companies that are outside of Silicon Valley is to be someplace where they have access to extraordinary talent. You know, one of, one of the really great things about being in Northern California is just how many people there are who have Had the experience of building a startup, scaling a business, and so when, if a company is here, and it comes time to get the next level experienced sales executive or marketing executive, you know, there are a lot of choices here. If you're scaling a company in Utah, Boston, New York, you know, the Southeast, all Indiana, all places where we've had wildl…

AI assessment note: “have to know your pipeline of talent and have recruited far in advance”

Q believe, and I think that's the highest number in the industry, um, leading me to ask, with the scientific studies coming out that women Controversially or not, uh, are proven to be better investors. Why, why do you think there is gender misrepresentation in the industry, and do you think there are any strategies that can be done to improve female equality in both the VC and the tech industry?

A Um, yes. So, so Scale Venture Partners has three female partners, which is, I am sorry to say, the most in the U.S. of any firm that has more than two hundred million dollars under management. Um, and I think part of the reason why we've been successful having a fairly diverse partnership and indeed throughout the organization here is because, um, We started that way, and the existence proof of success, both to candidates who come from diverse backgrounds, as well as from the existing employees is a very important part of changing the ratio, um, toward a more diverse workforce. So, um, In, you know, in both tech and venture capital, there's, ah, a lot of shorthand for what, um, that, that often is referred to as pattern matching about what, ah, a successful candidate would look like, and, you know, for the people who've been here who are largely white males, they think of the people who've been successful who are largely white males, and we even, you know, in technology use Guy as the sort of standard gender neutral pronoun, and, um, those, those kind of mental shortcuts introduce an implicit bias that makes it more difficult to conceive of having a woman in the role, and for women or people of color, more difficult for them to conceive of being successful in the role. Um, so I think both the technology business and the venture capital business, um, you know, have become acutel…

AI assessment note: “those kind of mental shortcuts introduce an implicit bias”

Q And talking about startup valuations now, we hear a lot of talk about a tech bubble occurring at the moment, leading me to ask, as an investor, is it impossible, well, is it possible to make money in an environment with such large amounts of capital forcing valuations so high?

A Yeah, it's definitely possible to make money because Part of what's driving the extraordinary evaluations is actually extraordinary performance by some of these companies. I mean, some of it is disconnected from reality. Uh, yet, yet, most of it, I would say, especially when you get into the enterprise space, is driven by real Traction with the companies and real revenue, and, you know, that's driven by massive technology disruptions that are happening right now. So, for example, you know, 1994, I think, was the last year that the last Fortune 500 company got a, got its domain name and got on the web, right? And that's, that spurred on five years of extraordinary IT spending, um, of companies getting web enabled, and, you know, coincidentally, also YT So you had this huge spend on, um, on new information, you know, new IT platforms. Um, and that, that fundamental growth became highly overvalued. So just as an example, I was the, you know, I said earlier, I was officer of a public company in Bubble Uh, with a four billion dollar market cap in 800,000 dollars in trailing revenue. So, you know, that, that, that bubble, that equals bubble. Yeah.

AI assessment note: “Yeah, it's definitely possible to make money because Part of what's driving”

Q So what, what do you think we can do? Can we, can we, uh, encourage, uh, female, you know, coding and development through heavily subsidizing it for college entries or, or, Or what, what would you suggest? Do you have any suggestions in mind? Right.

A So, so part of it is, is that increasing the supply And one of the, um, there are many more women who are qualified to work in the industry as developers than there are, uh, in the percentage who graduate with a computer science degree, strictly speaking. So, um, for example, numerous, so women tend to be a majority of the graduates, both at the undergraduate and the graduate level, in wet sciences, in the biological sciences. Um, many of those women now Are capable computer scientists as well, right? But they may not have a resume that has computer science as part of their degree, but, but actually programming and big data analytics, um, have become, you know, a cutting edge part of many other scientific disciplines now. So number one is companies can look Not just for the, you know, BSCS, but for, um, specific coursework that has women qualified, um, to work as engineers. They can employ, um, more, uh, they can employ interview and sourcing and evaluation techniques, uh, that can help remove or mitigate implicit bias. So doing things like, um, Blind, you know, like the blind auditions in the voice, or what, what helped change the ratio in, for example, um, orchestras, where orchestras used to be a hundred percent men, and the people making the judgments about, uh, new, um, musicians, you know, believed men were better, and so they, they moved to having the auditions take plac…

AI assessment note: “employ interview and sourcing and evaluation techniques uh that can help remove or mitigate implicit bias”

Q And finally, what's your most recent investment, and why did you say yes?

A Yeah, so the, um, the most recent investment that we've announced is a company called CloudHealth. Um, it's based back east, and it is, so it's exactly on that theme of new platforms. Um, cloud health lets their customers, um, manage all their spend on cloud technology. So, you know, just moving technology out of your data center into the cloud, um, Doesn't mean that it's free. Um, and in fact, you know, some of the services are quite expensive. So, so this lets them see all the, all the different services that they utilize, uh, what their spend is, and optimize that. So we thought that that is an essential part of core, of moving core enterprise businesses to the cloud is the ability to, you know, I just want to manage and control, which is the overarching enterprise IT system. Uh, urge.

AI assessment note: “most recent investment that we've announced is a company called CloudHealth”

Q And talking about startup valuations now, we hear a lot of talk about a tech bubble occurring at the moment, leading me to ask, as an investor, is it impossible, well, is it possible to make money in an environment with such large amounts of capital forcing valuations so high?

A Yeah, it's definitely possible to make money because Part of what's driving the extraordinary evaluations is actually extraordinary performance by some of these companies. I mean, some of it is disconnected from reality. Uh, yet, yet, most of it, I would say, especially when you get into the enterprise space, is driven by real Traction with the companies and real revenue, and, you know, that's driven by massive technology disruptions that are happening right now. So, for example, you know, 1994, I think, was the last year that the last Fortune 500 company got a, got its domain name and got on the web, right? And that's, that spurred on five years of extraordinary IT spending, um, of companies getting web enabled, and, you know, coincidentally, also YT So you had this huge spend on, um, on new information, you know, new IT platforms. Um, and that, that fundamental growth became highly overvalued. So just as an example, I was the, you know, I said earlier, I was officer of a public company in Bubble Uh, with a four billion dollar market cap in 800,000 dollars in trailing revenue. So, you know, that, that, that bubble, that equals bubble. Yeah.

AI assessment note: “Yeah, it's definitely possible to make money because Part of what's driving the extraordinary evaluations”

Q Um, now focusing on the market as a whole, if you were to choose one sector, which you're most excited about, what would it be and why?

A Yeah, so I think the whole, um, you know, when you think about what has caused, you know, the bubbles, the big peaks in venture capital returns are, um, a hundred percent correlated with shifts in platform technology. So, you know, The mini computer, PC, web, and now you have mobile. Um, so the, the whole theme of the development stack being up for grabs, uh, because every application has to be refashioned for a mobile experience, both all the back end and then all the front end. Um, and this is aligned with that, with that whole idea of, uh, software eating the world, but the, but the mobile developer space, um, is very fundamental, and because so much is different about the way software interacts, either on a mobile device or also over the air, um, Um, to the back end, and so lots of new things have to be invented in there, and lots of new things are possible because of the device that, that's, um, the end user is using. Um, you know, I think about it, I, uh, I have a portfolio company called Applause. It's actually based in Boston, um, outside of Silicon Valley, and they provide, um, Software and services that help their customers, um, create the highest level quality applications, because in this world, also, consumers can rate and review applications, and so no long, you can no longer have a website and snipe it as beta and expect your customers to find your bugs. If you d…

AI assessment note: “the mobile developer space, um, is very fundamental”