How have the first nine months or so been?
It has been a terrific learning experience. When I came on board at Tyson Ventures I really did not know very much about the space. I have learnt a ton in the first nine months. I tell people that I know 10 times more today than I knew when I started, and I will probably know 10 times more in another nine months.
What has been the trickiest part switching over from Motorola to Tyson, in terms of both relative age of the funds and industries?
What was really exciting to me is that it is a whole new industry for me. I am a great believer in always challenging myself, always trying to learn new things. This was a great opportunity for me to step into a role and be part of a founding team in a completely different space. One of the biggest challenges for me was that after 28 years at Motorola, and Motorola Solutions, I knew everybody. I knew where to go to ask a question about a particular topic. At Tyson, I am working with a new internal team. I think we have made great progress over the first nine months, but it is still something that I am working on, continuing to build and strengthen my internal Tyson network.
I went from being a veteran to a rookie almost overnight. When I left Motorola last June, Motorola Solutions Venture Capital had been in existence for 18 years, with a great reputation in the industry. What intrigued me about the Tyson Ventures opportunity was twofold. One is that it was a startup. Even though I had contributions and great success at Motorola Solutions, I was not part of the founding team. I was offered the opportunity to be part of a founding team and build the portfolio and this team from the ground up, which was really attractive.
The second thing I liked was that it was a totally new space to me. I did not want to get into anything at this point in time that could conflict with Motorola Solutions in any way. I have got too much respect for them to do something like that. This gave me the opportunity for a clean slate.
Tyson Ventures pursues themes of sustainability and the internet of food. Of these two areas, what emerging technologies and trends excite you most?
As an individual, under sustainability, we talk about alternate proteins. I knew a lot about plant-based vegetarian burgers. I had been eating them as part of my diet for three years. But, for example, cultured meats like Memphis Meats, one of our portfolio companies, is something I knew nothing about until I joined Tyson. It is really interesting and exciting, as an investor and an individual.
The other thing that excites me is the connected kitchen. I have always been a gadget guy. I was known at Motorola as the gadget guy. It is amazing how many different kitchen gadgets there are out there. We have invested in Tovala, a company that has created a smart oven. The oven has three cooking methods – broil, convection and steam. There is a barcode that you scan, push the button, and it goes through those cooking cycles and cooks a perfect meal in 15 to 20 minutes.
You have spoken about getting to know the people at Tyson Ventures, and you are clear that it is a strategic firm. How has that process worked?
We are definitely lean and mean right now. Tyson Ventures is really two people – myself as managing director and my partner Tom Mastrobuoni as chief financial officer. We are out there building the network, building the pipeline, executing transactions. We report to Justin Whitmore who is our executive vice-president of strategy and chief sustainability officer at Tyson Foods. That organisation gives a lot of visibility to the fund and that is of real benefit to us.
Having broad visibility, as we are part of Justin’s staff, has definitely helped us open some of these doors and build the internal network. But neither I nor Tom is shy. We have taken a lot of time to reach out, introduce ourselves and have a dialogue about what we are doing at Tyson Ventures. There is a lot of genuine enthusiasm throughout the company for what we are doing and that is extremely gratifying to me.
There can be a lack of understanding between parent and corporate venturing unit. Is that a problem at all?
I do not think communication is going to be an issue. We have taken the approach that we will overcommunicate, if anything. We have fairly regular meetings with the three heads of our businesses. Tyson Foods has three business units – fresh meats and international under Noel White, prepared foods under Sally Grimes, and poultry under Doug Ramsey. Those three have a seat on the investment committee on a rotating basis. We are really going out of our way to make sure that everything we do is communicated and understood, all the way up the chain to our CEO, Tom Hayes.
What can Tyson Ventures offer those business units?
I am a huge advocate for corporate venture capital. For large companies, it is an absolute imperative. For Tyson Foods, Tyson Ventures can offer the perspective of the external entrepreneurial US ecosystem that the company cannot get without having that capability. Often the question comes up: “Why not partner versus invest?” For me, there is an analogy: “Why not just date a person rather than get married?” It is that way with investing in companies. You get a very deep view of that part of the ecosystem that you are not going to get without sitting in a boardroom. It is a lens into the ecosystem that you cannot get any other way.
What are your goals for the unit, and what will success look like?
In 2016, I was awarded Global Corporate Venturing’s Lifetime Achievement Award from. Ten years from now, I would like to get my second, for what we did at Tyson Ventures. I want to turn Tyson Ventures into one of the top respected well-known corporate venture units. Tom and I share that vision, and Justin shares that vision as well. We do not want to be just another corporate venture capital unit. We want to be a unit that people admire, respect and want to work with. We are going to achieve that by doing right by the companies we invest in, and by doing right by the investors we work with.
We are already building a great network of co-investors, and we have got a great pipeline. We have three announced companies in the portfolio as of today. I have already mentioned Memphis Meats and Tovala, but we also have another exciting company, Beyond Meat, which is a plant-based meat alternative. In addition, we have a fourth company, the transaction for which will probably be closed in the next few weeks. In the next six months, we are going to get this portfolio up to six or seven companies. Over time, we want to build the team a bit. We are not going to go crazy but we do want to bring in some additional resources as the portfolio grows.
How would you characterise your investment methodology and how has it different from Motorola?
I do not know that it is totally different for me, from the standpoint that when I look at a potential investment candidate, the first thing I am thinking about is what the strategic fit is. How could Tyson work with this particular company? Which is very much the methodology I used before.
Once I am comfortable that there is a real potential strategic fit, I would say that Tom and I have the same level of discipline on the financial side as any financial investor. If something is not financially viable, it cannot truly be strategic. Conversely, if we can make an investment in a company, and we can work with them, we validate their solution, give them credibility in the market and give them opportunities for new distribution channels. All those things greatly increase the value of the company overall. That is what I mean by “doing right by the company” and “doing right by the investors”.
Why have the number of deals involving consumer enterprises dropped year on year since 2015?
Maybe the VCs are just not seeing the level of innovation they were five years ago, when everyone was talking about “going mobile”, e-commerce platforms and so on. If you come back to the food space, I would argue that if you look at things like the meal kit companies, which has been a big trend, those are e-commerce platforms. There is certainly a lot of life out there still.
