The 7 Questions Interview Series: Data and Venture Capital
The 7 Questions Interview Series: Data and Venture Capital “The 7 Questions Series” is an investigative content series where we seek out key leaders in a specific industry and/or subject matter expertise area and ask them 7 key questions that inquiring minds want to know in terms of how they view data as part of their investment process. However, there is a twist to these questions: we provide the interviewee with a hypothesis for each question to help frame and set context for their answer.
Data and Venture Capital Series Objectives
The objective of this series is to establish direct connections with venture capital organizations, angel investors and M&A specialists across the globe and ask them the same set of 7 questions regarding their orientation when looking to invest or investing in companies. We want to derive insights from their direct experiences and expertise that will help companies, both B2B and B2C, at all stages of their evolution. We are also curious to see if their answers are similar or different. These interviews will be featured on their website as part of an ongoing series.
Interview with Ben Wilde, Impact Team at Georgian Partners
Ben Wilde is part of the Georgian Impact Team where he is responsible for market strategy and analysis; he also acts as the firms Chief Marketing Officer. In his work with portfolio companies, Ben assists with market opportunity assessments, competitive analysis, product strategy, customer value propositions and go-to-market strategy, and provides input to overall strategy including product management and product marketing.
Ben has over 15 years experience in the software industry, including senior product management and strategy roles at IBM, Informix and a range of early and growth-stage start-ups. At IBM, he helped to define and lead the company’s strategy for its Master Data Management and Information Integration business. Prior to IBM, Ben held product management and marketing roles at Informix Software, where he played a key role in defining Informix’s Java strategy. Since leaving IBM he has worked with a range of growth stage and start-ups in North America and New Zealand and has taught as an Adjunct Professor for Northeastern University. Ben has an Honors degree in product development.
Robin Smith: Tell us a bit about you and your firm.
Ben Wilde: At Georgian Partners our investment mandate is focused on growth-stage companies in the US and Canada. Specifically we’re investing in companies who have gotten to or past around $500,000-$600,000 in MRR (monthly recurring revenue) as in our experience that is a good indicator maturing into that growth / expansion stage of a business.
Importantly, in addition to that financial and geographic perspective we look at investments through the lens of three major technology trends and their impacts on a market: Artificial Intelligence, Security First and Next Generation Messaging. You can read more about these three key technology-led investment themes here.
Robin: What types of companies, industries and areas are you investing in today? In the near future?
Ben: Our investment strategy at Georgian Partners is anchored around the idea that companies who exploit certain technology shifts can create significant competitive advantage in their markets. Applied analytics has been one example of such a shift and we’ve invested in a wide range of companies around that investment theme over the past few years. And before applied analytics the market saw significant value created around the shift to cloud computing and mobile. And like cloud and mobile before it, applied analytics has become a foundational part of the strategy of almost every company we speak to. It is now very unusual to come across a company building solutions that are not built around applied analytics, cloud and mobile.
The result is that we are looking for companies building competitive advantage from the next wave of technological shifts. Specifically we’ve identified three that we believe will have the biggest impact over the next few years:
- Security First. Security breaches cost companies billions of dollars every year. In the months and years ahead, companies are going to have to incorporate security into all aspects of their business and do it from the ground up. We are already seeing examples of companies in a range of industries including software infrastructure, education, healthcare and financial services that are rethinking the entire architecture and design of a business system to be secure.
- Messaging-based interfaces. Texting has become a natural and ubiquitous form of communication. Consumers are going to expect to be able to interact with businesses through messaging-driven interfaces via text in particular. We’re seeing this take off right now in both the business world with platforms like Slack, and in the consumer space with the emergence of ‘chat’ based services such as Facebook Messenger.
- Applied intelligence. Most applied analytics focused companies are already widely embracing machine learning to help analytically optimize their businesses. The next wave of innovation will come from companies already starting to use a wider range of artificial intelligence techniques to drive more intelligent automation of their business processes. We believe that this type of ‘applied intelligence’ will quickly become one of the key competitive battlegrounds in software.
Robin: How valuable is data collection to today’s venture capitalist?
Ben: Everyone is in agreement that data is critical, but what isn’t yet widely appreciated is it’s not just what you can do with the data, but also the processes around that data to protect and manage it. So while we always like to see the upside of data we also want to understand how a company is handling the security, governance and privacy issues associated with that data. Data represents a significant opportunity to most businesses, but also a risk if they are to lose access to, or control of, that data. We like to see companies taking a proactive stance in thinking about these types of issues.
Robin: Does a company’s technology matter when choosing to invest?
Ben: Technology is important and that is why we’ve had a Chief Technology Officer (CTO) as part of the Georgian Partners Impact Team from the beginning. However for us it is less about the specific choice of technologies and more to do with the engineering / technology team, issues such as development process maturity, and the level of technical debt an organisation has. So for us the focus is on understanding how well the engineering organisation is working rather than second guessing technology decisions.
Robin: What industries are leveraging technology and data in order to innovate, grow and disrupt? Are there any industries that aren’t leveraging data that should?
Ben: We’re seeing companies in almost every industry embrace technology and data. What varies is the extent to which an industry has embraced that disruption. But there is no doubt we’re seeing technology-enabled disruption in every industry including education, healthcare, agriculture, government, transportation, financial services, infrastructure, etc. There really are no industries ‘safe’ from technological disruption at this point.
Robin: Why are some SMBs late in adopting technology? Does this hinder your investment decision?
Ben: SMBs are adopting technology; it is just that they have often been slower out of the gate compared with larger organisations. That has all changed with the rise of Software-as-a-Service (SaaS) models that have driven down cost and complexity of business software.
We’ve also invested in a number of companies that have had a strong focus on SMB including Shopify (Commerce), Signpost (CRM & Marketing Automation), Freshbooks (Cloud Accounting) Silanis (eSignatures) and Terapeak (Merchant Analytics). In each case the focus is on making it easy to adopt technology to drive efficiency in the business, and to do so at a competitive price. We expect to see a lot more SMB technology adoption over the next few years and we’re positive on the market as a whole for sure.
Robin: Are you seeing more data centric startups? Might there be more in the future?
Ben: Almost every company we speak with is investing in how they acquire, manage and exploit data and we expect that to only increase in the future. As I said earlier it’s almost ‘table stakes’ now to have access to data and a strategy for exploiting it. Going forward it is going to be the companies that invest in the skills and capabilities to exploit and protect that data which have the best chance of breaking out. It certainly isn’t enough just to have interesting data; companies have to be able to apply it.
About Georgian Partners:
Georgian Partners is a growth equity firm investing in expansion-stage enterprise software, Internet and information companies. Founded by successful entrepreneurs and technology executives, Georgian Partners leverages its global software expertise to be able to directly impact the success of companies.
Ben’s Social Outposts:
Stay tuned for more expert interviews as part of VL’s ongoing 7 Question Series!
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