FUND / GROUP
NUMBER OF PORTFOLIO COMPANIES
B2B & Consumer: SaaS, Data, Fintech
Southern California focus, not exclusive
HOW AND WHY DID YOU GET STARTED IN PRIVATE INVESTING?
I’ve always had an ownership mindset, growing up in a family business, and tried to negotiate additional equity in my earliest roles in software companies in the 90s. I got some exposure to private equity and VC investors, and started to understand how they looked at opportunities and where they could and couldn’t add value to the companies. Eventually I started investing in the companies that I would join in an operating capacity, trying to align my time, effort and capital in ways to maximize the return on my investment there. Since I was working in early stage startups, I often met other early startups and began investing directly in some, initially with founders whom I knew and had a strong belief in their capabilities. I’ve learned a ton from both investing behind myself and more passively, and that informs a lot of what I do at Operate.
After my last role as COO of a fast-growing fintech company, which was something like my 10th operating role, I concluded that I had accumulated such a broad array of experiences that could be useful to many different startups, and maybe I could build an organization that invested time, talent and money in a parallel way. My partner and I conceived Operate as a much more proactive partner with founders to help and invest in them in every way we could imagine, so we called it a venture studio. And with a desire to see more startup founders succeed, and let them learn from our mistakes, successes and experiences, a studio model enables us to be more actively involved at the critical times when they need us the most.
WHAT IS THE SINGLE MOST IMPORTANT THING YOU VALUE IN AN INVESTMENT OPPORTUNITY?
For me it’s about the people – I want to love them and what they’re trying to do to impact the world and make it better. My goal is to be as excited as I can be to help them succeed in their journey, see their vision realized, and grow together through that process.
WHAT ARE THE BEST INNOVATION THEMES THAT YOU SEE IN THE MARKET TODAY?
The theme I’m exploring the most is around the increasing complexity of solutions required to make huge leaps forward. We’ve developed a ton of software, and now it needs to be integrated, embedded into hardware and sensors, and oriented to significant outcomes, with more data to process than we’ve ever seen. The knowledge and teams required to do this are varied and multi-disciplinary, and most people are still only looking at smaller incremental improvements in efficiency and productivity that they can see in front of them. I believe these complex solutions will create completely new markets and render others totally obsolete, and that level of innovation will be more disruptive than most has been in this past era.
BEYOND ECONOMIC RETURN, WHAT KIND OF IMPACT DO YOU HOPE TO MAKE WITH YOUR PORTFOLIO?
We want to see founders, their teams and their customers getting significantly smarter through the companies we support. Whether that is better decision making as a founder, improved operations and metrics, and more time spent on higher value activities, or customers receiving increasing utility and value from the solutions because of better designed apps, tools and systems, we believe that effective solutions today get better over time. We also strive to use our venture studio approach as a complement to diverse talented founders, where we can fill in gaps that often exist in their startup team, and enable us to say yes and support many traditionally under-networked founders.
WHAT ARE THE MOST PRESSING CHALLENGES OR PAIN POINTS IN MANAGING YOUR DAY-TO-DAY PRIVATE INVESTMENT ACTIVITY?
The biggest challenges are managing time and a growing family of founders and startups, and balancing their always shifting needs. One day we need more compelling founders, another day we need more investors in our fund and companies, and the following day we need key talent to add to their growing teams. It’s a dynamic challenge every day and we have to anticipate and stay ahead of it as much as we can.
WHAT IS THE HARDEST INVESTMENT LESSON YOU’VE LEARNED AND/OR THE BIGGEST INVESTMENT MISTAKE YOU’VE MADE?
I have so many! But the one that I draw on most frequently was from a startup I co-founded nearly 20 years ago. My partners and I initially founded it while we each had other full-time jobs, and we didn’t make a lot of early progress. My frustration around that led me to quit my job and focus on it full-time, and that created a lot of pressure and imbalance, which we weren’t able to navigate in a productive way. We launched the business and had customers and revenue, but the relationship was strained and we couldn’t repair it, so we ended up shutting down the company before things got worse and more time and money was invested. My key lessons were to make sure all founders are on the same page with their level of commitment, have mechanisms to adjust ownership if that changes over time, and learn from each experience and live to fight another day, even if it’s with a different team next time.
WHAT ARE YOUR FAVORITE INDUSTRY INFORMATION SOURCES AND/OR SERVICES?
I tend to use Twitter (and historically industry conferences) to find original thinkers, many of whom are often on the fringe of their industry and not part of the in-crowd. They may be writers or podcasters and often doing it on their own. As I try to learn about a new industry I like to hear what the divergent voices and leading-edge thoughts are, even if they are unpopular, as they often are close to predicting the future state. It then becomes a question of timing of when and how that may come to be, and that’s the fun exploration that draws me into new spaces.
WHAT’S YOUR FAVORITE NON-BUSINESS INTEREST OR HOBBY?
For the last 17 years my favorite hobby has been my 3 kids and usually involved coaching, watching and cheering on one of my sons in the sport of that season. I’m excited for that to continue for at least the next few years, and then I may have to find something else.
PLEASE LEAVE US A BOOK RECOMMENDATION (BUSINESS OR OTHERWISE).
As a longtime team builder in companies, my favorite and most used business book has been Five Dysfunctions of Team by Patrick Lencioni. It’s been a great resource to build teams from a foundation of trust and alignment and facilitate productive discussions in my startups.
More recently I’ve been validated by a new book – Range by David Epstein – which challenges the notion that specialization is needed. As a lifelong curious learner, I’ve tried and experienced so many things and try to apply that to my investment and company building work, and use that broad perspective to be an effective bridge within organizations and groups