Why Venture Capital
Coming off a seven-year stint as CEO of Data Domain, the question presented itself: What’s next? It was a serious question. Data Domain was such an incredible ride. It was hard to part ways even after the business was fully integrated into EMC, which acquired Data Domain in the summer of 2009 for $2.4 billion. I was tempted and flattered by interest to run other companies, but I could not easily see topping the experience of Data Domain. I needed a completely new challenge.
I found one: In February I’ll be joining Greylock Partners. I’ll still be continuing on at EMC as an advisor but will be a full-time partner at Greylock, investing in enterprise technology start-ups.
So why venture capital? I am a passionate advocate for free enterprise as a societal good. Venture capital has been and continues to be ground zero for economic growth and job creation. It renews our economy, takes it to successively higher levels of prosperity and productivity. Venture capital is economic development in its purest form. If you need to get up every day any way, you should get involved in something that matters, and matters to you more than your personal economy. Now, with our national and local economies sputtering, venture capital is as important as ever.
My most profound and lasting reward from the Data Domain experience was far more important and lasting than the money that was made by investors, executives and founders. (You get used to that pretty quick!) It was seeing how the growth experience affected every last one of our one-thousand-plus employees and their families. It changed all of us forever. Our people and their kin were at a time and place in life where they never thought they would be. It is a touch of magic. There was no centrally directed guidance or public mandate: just a bunch of people who chose to combine their energy and their talent to create something awesome.
If only I could scale the experience! As a CEO you are 200% committed to just one company at a time. In my next role I would like to ‘scale’ my involvement to many more companies so I can be there to help other startups experience the exhilarating thrill ride we had at Data Domain.
Football analogies get a little stale this late in the season, but what I’m doing is making the move from being a player to a coach. Successfully transitioning from playing on the field to the providing guidance from the sidelines is not a given. Many great players have tried and gotten nowhere as coaches. As a coach you sure hope to benefit from having been a player but it is a very different gig and requires different skill sets. Still, I’d like to think I have learned enough lessons about building companies to provide valuable coaching and guidance to up-and-coming entrepreneurs.
Why Greylock? Greylock was one of the two founding investors of Data Domain so I had many years of exposure to the firm from the other side of the table. The Data Domain band of brothers combined with Greylock’s capital and management care created a venture that took in $27M of capital and 7 years later turned that into a $2.4B exit. I had a great experience working with the team at Greylock, especially Aneel Bhusri, who was there from the beginning and continued on as our chairman until the acquisition. In all fairness I am also quite respectful of Data Domain’s other venture capital investors.
There were other factors at play, as well. Greylock has a storied past as the second oldest venture firm in the country and is one of few firms that have managed to stay ahead of emerging technologies and continue to make high-profile investments in companies that are now household names. Greylock is a relatively small firm with a handful of investing partners. They are informal and highly flexible in how they go about their business. Greylock can afford to be patient, highly selective and keep the powder dry until the optimal time comes to deploy it.
At the end of the day, after all the analyzing and rationalizing was done, I was left with a ‘gut check’ and I went with it!
So, if you’re an entrepreneur with a great idea in the enterprise tech sector—whether that’s storage, software or some other technology that lives in a datacenter—I’d like to hear from you! You can email me at email@example.com.