Steve Singh, managing director of Madrona Venture Group, and former CEO of Docker and Concur. (GeekWire File Photo)
The 2021 virtual GeekWire Awards were held this week, recognizing the top companies, innovators, entrepreneurs and technologies in the Pacific Northwest, as nominated and chosen by the GeekWire community — along with celebrity cameos.
On this special episode of the GeekWire Podcast, we’re featuring highlights from a behind-the-scenes conversation with former Docker and Concur CEO Steve Singh, managing director of Madrona Venture Group, which we hosted for finalists in advance of the awards by GeekWire co-founder John Cook.
Listen below, subscribe wherever you listen, and keep reading for highlights.
Reasons for hope
John Cook: This has been just such a tremendously hard year for business leaders, entrepreneurs, and we’ve been dealing with so much. The pandemic, polarized political atmosphere, concerns over climate change, the fight for social justice. Given all of that, what is giving you hope at this moment here in 2021? I know we all could use a dose or two of that.
Steve Singh: It was a grueling year. It’s not quite over. Honestly, I was more encouraged than discouraged over the past year, frankly, by many of the people that are actually on this Zoom. Everyone here, you know because you’re in these jobs, you know how hard it is to lead a business. It’s even harder to find the time and engage in your community.
But, I believe everyone here has a responsibility to lead outside of the workplace. The platforms that you all run, on your corporate platforms, they’re powerful agents to drive change that is sustainable and that, frankly, is good. The beauty of leadership is that you can lead at any level, and the key is really driving an enduring improvement. That’s what I saw in this last year, that’s what gave me a lot of encouragement. …
I think we all feel the pain of others, whether that’s from COVID or from unanswered social inequalities. Frankly, if you don’t, I think you got some issues. But the only way out of this pain, the only way out of these injustices, is we have to invest to put an end to them.
Advice for early-stage entrepreneurs
Cook: Are there specific pieces of advice that you’re giving to earlier stage entrepreneurs right now, in your role as a mentor, or angel investor and venture capitalist?
Singh: We’re lucky we get to see a bunch of incredible companies and bunch of amazing entrepreneurs. We get lucky enough to actually work with some of them. If I think about where I spend my time, I tend to focus on four things with those entrepreneurs.
- Number one is product. Ranging from core trends that drive a massive improvement in value to making sure the architecture is something that can sustain and actually allow you to grow for years to come.
- The second item is obviously hiring the right team, you’re going to find that these things are fundamentally the same, whether they’re in an era of COVID, or before, or after.
- The third is really business strategy. How do you make it impossible or at least difficult for others to deliver the same value proposition that you do?
- And the fourth, and probably the most fun, is really the personal development of the CEO. Everybody who sat in this job, you know this. It’s a damn lonely job. And one in which you don’t really get a lot of opportunity for personal development. And, in my view, the only way you can scale from a startup person with an idea to somebody that’s running a multi-billion dollar revenue company is to invest in your own development.
So, that’s where we spend time. And, obviously, I learned as much from those entrepreneurs as I hope they hopefully learn from me.
GeekWire’s John Cook and Madrona’s Steve Singh during the pre-show conversation at the GeekWire Awards this week.
Key innovations and trends to watch
Cook: In your role as an investor, what are the innovations that are really exciting you right now?
Singh: On a personal basis, I’m excited for myself, my children for humanity, as the innovation around energy and transportation pushes towards clean renewable energy. I’m even more excited about what we call the intersection of life and data sciences. We’re doing this investing aggressively in this area. I think the real benefit is you’re going to see more life saving, life improving, quality of life improving innovation over the next few decades than we’ve ever seen from companies like Nautilus, from companies like Twinstrand and the alike. There’s some amazing innovations that computer science can actually bring to life sciences.
On a professional basis, I love what’s happening in enterprise software. I think you’re going to see massive change in the players that dominate the enterprise software landscape. And it’s going to be driven by some fundamental changes that are brought about by cloud computing, that just weren’t available in the first generation of SaaS companies.
I’m just going to rattle off five or six trends that are important to me.
- Number one is real-time. Look, I want to be able to run my business in real-time, with real-time information about my budgets, how my people are doing, everything about my company. You can do that today, if you spend $100 million on SAP software licenses and 20, 30, $50 million a year in ongoing maintenance. But what about the rest of the world, how do you actually bring real-time to everybody? I think that’s a big area, a big trend.
- Collaboration. And we’re all familiar with how you collaborate in Google Docs or Microsoft Office, but how do you bring collaboration to every enterprise piece of software? And that becomes even more important in a COVID world where you’re going to have a distributed workforce.
- Third is consumption models. In my view, everything will move to a consumption-based model. I realize that’s not a popular opinion but I think it will happen.
- Fourth is open API’s that not just allow people to innovate, but allow people to innovate on top of other innovations. I think machine learning’s going to be integrated into the application workflow, so the application itself gets smarter as it actually runs, which is different than applying machine learning algorithms on top of legacy datasets.
- I think that the process of selling, deploying, adoption, expansion, are going to go digital, and the real value of this is that next-gen cloud native businesses are going to have operating margin advantages of 5% to 15% over first generation SaaS companies. And my feeling is, any great entrepreneur, when you give them 5 to 15 points of extra margin, they’re going to beat the heck out of the prior-generation companies.
- And then the last I would tell you is I think you’re going to see blended economic models. In fact, so much so that I think enterprise software is going to actually go down in cost, and in some cases will actually be free. And so, I’m investing heavily in these trends, so I’m pretty excited — as you can tell — about them. I think ERP, CRM, HRMS, spend management, all of these systems are going to get redone, and they’re all going to be 10 to 100x improvements over the first generation of SaaS companies.
Cook: Across the GeekWire Awards, we have over 60 finalists. And of course you see companies like Highspot and Qumulo, very much in the enterprise SaaS business. I gave you the list of all the GeekWire Awards finalists from this year. What’s one you really, really wish you would have bet on early? Is there’s one investment there that you missed or you think that’s going to be a really hot up-and-comer?
Singh: I missed a lot. But, look, I’ll just rattle off a couple. So, one that is not necessarily an investment that I may necessarily be very good at, but I happen to be a customer of, and I love Rad Power Bikes, it’s a cool product.
I love Remitly, I think it’s an incredible idea, Matt [Oppenheimer] and team are doing a wonderful job executing there. I think Robert [Wahbe] over at Highspot has built an incredible company, one that I wish I thought about. WellSaid, a young company that’s just starting out, Auth0 of course everybody knows about them.
And OctoML, that’s one I kind of feel like, ah, damn, how the hell did I miss that? As far as just an idea as an entrepreneur. Fortunately, I was lucky enough to be able to invest with Luis [Ceze] and team. Those are some. Common Rooms is another kick-ass idea and company.
The cool thing for me is just look, back when I started in software industry, it was in the early ’90s, I thought it kind of peaked at that point, clearly I was wrong. And all I could see today is that the rate of innovation is improving, the opportunities is just bigger than anything I’ve ever seen in my life.
Direction of Pacific NW tech
Cook: When you think about the ecosystem here and how it has changed since the time when you and Raj and Mike Hilton were starting Concur up, what gets you excited about Pacific Northwest tech ecosystem today versus 25 years ago?
Singh: What gets me excited is that there’s an amazing mix of people here. There’s just incredible diversity of talent, it’s frankly a critical mass of talent in the Pacific Northwest. It’s when you get that critical mass of talent, a critical mass of capital of people who are willing to take risks and go start businesses, that’s a magical formula that can create incredible value, and sustainable businesses. That’s what gets me excited. I mean there are things frankly that I worry about in the Pacific Northwest.
This is an incredible community around business. Being able to attract businesses here. Obviously the natural beauty of this place is just amazing. I do worry that we’ll get, like every part of society that gets comfortable with where they’re at. They start to get a sense of, “Hey, it’ll always be this way.” And we lose our competitive edge. I think, look, I’m not obviously just solely focused on taxes but I do think that, things like that take our competitive edge and soften it. The cost of doing business in the Pacific Northwest is actually increasing. And so we got to be careful to make sure that we really keep it competitive. And, look, around that, there’s a subtle point around COVID that I hope we all take into account.
COVID obviously was brutal on the humanity side, but there will be an impact from COVID that actually will drive, in my view, some incredible goodness in the world. Because COVID has helped us understand that you can work from anywhere, that you can work remotely. Well that that distribution of the workforce will actually push economic opportunity into every part of our country, frankly, every part of the world. But, while that’s good for those regions that may not have necessarily been epicenters of opportunity, at least this future generation of opportunities. It’s also an opportunity to create more and more competition.
So if you’re leading a city or a state, you got to look at this and say, “I’m competing against other cities and states, or other countries for the creation of that opportunity.” So I want to make sure we take a balanced approach, meeting the needs of our community but also making sure that we make it incredibly attractive for people to come here.
Cook: What do you think is going to happen to Seattle as a tech epicenter, coming out of COVID? There are a lot of people debating what they’re going to do with their Seattle office space or with the distributed hybrid approach to work, where do you see that playing out for various companies?
Singh: I think clearly it’s going to be a distributed workforce going forward. That said, I do think people enjoy being with one another, I think they enjoy spending time with other people that push the bounds of their thinking. And there’s an incredible value that comes from innovating together.
So I’m really bullish on the Pacific Northwest, Seattle in particular. But again, we have to make sure that that special mix of ingredients remains really compelling. But by and large I feel like we’re in an incredible spot. And not only should we continue to be able to grow. We should be able to actually hopefully grow faster than other communities.
In large part, coming back to that mix of ingredients. The University of Washington is a huge mix in that equation. Capital is a huge mix in that equation, people that are on this call that have the courage to go out and actually start businesses and run businesses, or take a risk on a startup, that’s a huge mix, and a critical ingredient.
Advice to younger self
Cook: Steve, I really wanted to ask you this question. It ties into our Young Entrepreneur of the Year Award. We’ve got some great finalists this year. It’s one of my favorite categories. We’ve got Michael Petrochuk, WellSaid Labs, Kwame Boler and Claudius Mbemba of Neu, six great finalists in this category. If you were to go back to your 25-year-old self. What advice would you give yourself as an entrepreneur at that time?
Singh: If I think about the things I could have done better, and really just avoided a bunch of mistakes, a maniacal focus on product, and the value that delivers — really making sure that you’re objective in that assessment — is probably at the top of that list.
Maybe as a sub-bullet I’ll put, think about the architecture, in terms of, what are the next three or four services you want to build and deliver so that the architecture you’re building is robust enough to keep scaling? I think it’s easy to miss those kinds of things. I wish I sought out more advisors in the early years. People that would have allocated time to me. I was fortunate later on that I found a bunch of advisors that allocated time for me. But my advice is, look be as picky in picking those advisors, as you are in hiring people that you work with.
A lot of this for me was probably I was just too young to know better, and I just made a lot of stupid mistakes, but look I will tell you be human. It takes a great team to build something that endures. Great people want to work for people they love, and that they will run through a wall for. And so I am sure I could have done a better job in many of the early parts of my career.
How can society reboot?
Cook: Steve, the other thing I know you’ve been really involved in here in the last couple of years, well even spanning a much longer period of time is your philanthropy. And I know here in the last year you’ve really picked that up with your involvement in All In WA and Seattle For India. I want to ask you this question in the context of just as a society, what you think it’s going to take for us to get back on our feet, get our mojo back and get restarted and rebooted for this period of reemergence hopefully from the COVID era?
Singh: If I had to put it in simple phrase, I’d say it’s compassionate engagement. We have to have a goal of creating a sustainable model of opportunity generation, not just opportunities to create value, but opportunities for education, for basic health care.
Please don’t take this the wrong way, I’m a capitalist at heart. And I’m blessed to be part of a pretty incredible country. I fundamentally believe a democratic society with a capitalist economic engines is probably the best engine that’s out there.
But you can’t ignore that COVID took a massive toll on our society, especially among the most vulnerable. And look, I think we could have done a much better job. But also not dealing with social inequities, in my view equally tragic. It’s going to take time to overcome these things, and I happen to be an eternal optimist, I believe in people, I believe in our ability to do amazing things especially when we care about one another.
I happen to think on the work front, we’re going to be back to full swing by the beginning of next year. Obviously seemed to be very different than it was pre-COVID. Frankly, I think it’s actually going to be better.
But the answer to the question, what is it going to take: It’s going to take us continuing to be actively engaged in our community, and pushing for what we expect, not just in our community, in our country, but frankly in our lives. And I think everybody here has the power to do that. And in my view, investing in our communities in leveling the playing field is damn good for business. It’s also really good for your soul.
Audio editing by Curt Milton. Music by Daniel L.K. Caldwell.