Introduce yourself and your role.
I started the corporate venture department group at GCI [Alaska’s largest telecoms provider] about two and a half years ago. Before that I was in M&A at Dell and had come to Dell actually through an acquisition. Before Dell, I was the general counsel and corporate secretary of a company in San Jose called SonicWall, an IT security company. Before that I was with a large law firm in Seattle called Davis Wright Tremaine.
So I, traditionally or historically, was a corporate lawyer and tax lawyer. That is where I started my career.
Would you say that is an unusual profile for somebody in corporate venturing?
I think so. When I left the law firm I was not very interested in technology, so I thought the best way to get close to technology as a lawyer would be to be a lawyer in a startup. And that is absolutely true. I learnt so much about the way that startups work. How do you build a product? How do you work with engineers? How do you go to market? How do you deal with investors? How do you raise the money? And then eventually, how do you sell that company? Which is what we did. And then I just happened to do that three more times and stay with the acquirer.
Give us a brief introduction to your fund and the relationship to the parent organisation and the innovation areas you work in.
I started about two and a half years ago. It was a new initiative. We have a sub-committee of the board that decided obviously there is a lot that is changing in telecommunications and we wanted to be looking at new technologies that would be affecting our business. We invest off the balance sheet and, from an investment perspective, it is the usual suspects, I like to say – internet of things, cloud, big data security – very focused on over-the-horizon technologies that are going to impact our business in the future.
How has the venturing and fund approach been evolving over that time, and what are the new insights you have?
What is interesting is much of the value I bring to the organisation, or the activities of the venture group brings to the organisation, is the opportunity to learn. So I look at probably about 100 companies a year and out of that maybe make a couple of investments. That is, I think, on par with a lot of VCs or traditional CVCs.
So what is the opportunity for the company and those 100 other companies or 99 or 98 other companies that I look at? I see a lot of other companies that may have applicability to GCI but are not good candidates for investment. So I have worked very hard, I would say, on learning and creating a strong relationship internally.
What is the size and plan for the investments?
Traditionally we have just been a very opportunistic investor, so I would say if there was a good fit with respect to the technology that I am seeing. It could be anything from earlier stage. Even today I would say a series A is very different that what a series A was four years ago.
We like to see companies that have a product, that are on their way to profitability and certainly our customer base.
There is often a tension between the organisation and the relationship between the objectives of the corporate venture unit and the more corporate approach and M&A. How do you see that difference when you do deals?
We just had a panel about this specifically [at the GCV Symposium] called The Uneasy Relationship Between CVC and M&A. As we went around the roundtable of corporate venture capitalists, talking about this topic in particular, there were many variations on where CVC and M&A fit within the organisation. I think that is really what creates the uneasiness.
I report to the CEO and he also is the founder and CEO. He founded the company about 30 years ago.
So you have support right from the top?
Exactly. What is really exciting is to have a CEO who is also an entrepreneur. As a result I have the opportunity to see both CVC candidates for investment as well as potential M&A opportunities.
What key technologies and new business models do you see as being an opportunity or a threat for the business?
As a telecommunications company, a lot is changing in our sector, where traditional telecommunications companies really need to pivot and change.
The really good thing about GCI that makes us quite unique is that we are in Alaska, and as a result of that obviously we have a geographically diverse network. We have challenges that are unique to an Alaskan market, again from our geography. So when I see technology that I think will particularly benefit us, that is when I am really excited about introducing that technology to the company.
People are so central to corporate venturing. Introduce us to your team and how you try to engage them with the core business?
I would say that is incredibly important. I am lucky to have two fantastic people working with me. One is Chris Martin, who was previously at Starbucks in Seattle. He has a strong technology and investment M&A background, and then Adrian Smith, who is a partner with Ignition. He is a venture partner with me on the venture capital side.
By seeing those 100 companies a year, what we try to do is bring those companies up in a formal process quarterly, so if we see interesting ideas we will meet with business units where we think there could be a fit and we talk with them specifically on a quarterly basis, and then informally as those opportunities arise.
Taking the governance perspective, how do you work with people in the organisation regarding validating investments, connecting with the investment portfolios and the business units?
From a governance perspective we have a sub-committee of our board that I update monthly, both in written form and in a more formal call, and that is my investment committee. With respect to validating investments, I am very lucky again. GCI is a very diverse telecommunications company, so we have incredible radio frequency engineers, we have incredible satellite engineers, we have amazing IT people, we have people who are in broadcast and in content.
Just about anything I am looking at I can call on somebody within GCI who has amazing expertise and ask them: “Hey, would you mind looking at this for me or giving me your opinion on this particular technology and whether or not you think it would be useful to GCI at some later stage?”
So you have new technologies and business models, creating what I describe as innovative new value chains. These are a challenge to the core business. Can you give us some insights into those key challenges, how the business and customers are changing their business models?
One that really stands out that everybody is seeing right now is the concept of everything as a service – customers really wanting on-demand services that they pay for on a use basis, That changes capital expenditures to operating expenditures and customers are really demanding that, and we are pivoting to be able to offer that to our customer set, both on the consumer and on the commercial side.
How do you relax?
I love to ski. I live in Seattle and I always feel grateful to go to Alaska and be in the mountains. When it is not ski season, just being outdoors and hiking is an excellent fit for me. I just love being outside.