[Editors Note] Amplero has launched a new editorial series focused on the people who are rethinking the way brands and consumers interact.
It’s a place where core conversations are taking place on the evolution of AI and the modern enterprise along with how it impacts our communities.
Our first conversation is with Ignition Managing Partner Bob Kelly. Bob joined Ignition in 2017, bringing more than 20 years of experience with him from Microsoft where he held a variety of positions, most recently holding the position of Corporate Vice President for the Cloud + Enterprise Business Development and Strategy team where he drove the merger and acquisition strategy and coordination of cross-division strategic planning.
During his tenure, Bob played an integral leadership role in defining how Microsoft goes to market with server and cloud computing, and was instrumental in growing the Windows Server business from a relatively new product to a market leader, and helping to shape Microsoft’s $20+ billion server and tools business. He was also instrumental in the early days of Microsoft Azure, helping it grow into one of the industry’s leading cloud platforms.
Bob recently sat down with Amplero to shares candid thoughts on everything from enterprise software to English literature.
Q: In your experience, what are the most important traits you look for in a startup founder?
I’d say there are four traits to look for in a startup founder.
Persistence – It’s really hard. No matter how excited you are, the truth of every startup is that it’s a series of experiments until you find a market fit. It takes a lot of energy, resilience, and grit.
Naivety – There’s a natural naivety in every successful founder. They actually believe they can do it against all odds. They possess this deep determination that’s attractive and engaging to be around.
Frugality – It’s easy in the startup world to get to an idea to the point where you can raise money. However, it’s crucial that founders are locked on the notion that every dollar that goes into acquiring a customer is intentional and focused on a multiplier. Splunk is a great example of frugality. It may have taken 11 years, but they only raised $40 million in pre-IPO capital, and they’re valued at $11 billion on the public market today.
Humility – A great founder is humble. They know that while they may have initiated an idea, they need to surround themselves with people who are better than they are.
Q: What advice would you provide to a startup pitching to Ignition Partners?
Any startup pitching to a venture firm needs to be rational. Don’t overreach. Every round needs to build on the success of the prior round. If you have higher expectations on valuation and raise, it means you’ll have to always beat that high bar in subsequent raises.
The next thing is to know what you’re looking for. If your company is really exciting, you’re going to have multiple term sheets and you need to understand which VC firm will best support your trajectory and industry.
Ignition’s core competency is that the managing partners have all been operators within major enterprises. Because of this Ignition is a transformative partner to our portfolio companies, investing not only capital but time, expertise and access to an impressive network of technology leaders and decision makers throughout the Fortune 500.
When you’re pitching to Ignition, you’re pitching to pure enterprise software players with connections across nearly every tech enterprise, and the expertise we bring on the go-to-market side is second to none.
Q: What advice would you give to a startup facing adversity?
There is no such thing as a startup founder who doesn’t face adversity. You’re constantly tuning. You have a thesis and you test that thesis with the market.
You’re trying to co-engineer an answer to a market need. You have to be comfortable as a startup founder that you do not have it right. It’s similar to baseball in that regard. A great baseball hitter is someone who may have a .300 average, that is, they get it wrong 7 out of 10 times.
If you really believe in your idea, you’ll learn the right answer alongside the market and your customers.
Q: What is your favorite part of being a VC in the current technology landscape?
The reason I went into venture capital is the flow of ideas. I like meeting really smart people and engaging with them on their point-of-view. My day could be everything from blockchain to healthcare services to building containers.
I’m a bit of a geek that way. It’s super fun to meet smart people with that naivety I mentioned earlier. If you want to change the world, you have to know that people are going to tell you that you’re wrong. Conviction about an idea comes with naivety.
Q: What’s one thing you do every day?
The consistent thing is that I always try to have one conversation that challenges my assumptions. At Ignition, we see a lot of ideas that don’t fit within our investment thesis, but we have an open, curious, and engaging approach, which means our “no” could be proven wrong.
I’ll often take calls from areas that we decided we won’t do, to continually test our “no.” If I can find one of those today, I feel like I’ve accomplished something for myself and the firm.
Q: What’s one thing you couldn’t live without?
If autonomous vehicles become the new norm, and we’re not allowed to drive, I don’t know what I’ll do. I have a 1974 Porsche 911, and you just can’t replace that feeling of the steering wheel. There’s something in the emotional/psychological connection of the road.
Q: With your background in server and cloud computing—specifically, the early days of Microsoft Azure—how has the cloud market evolved in the past five years?
On a macro level, I’ve been through two really important computing transitions—client server and cloud—and they both have a common tipping point in enterprise adoption. When adoption reached about 20 percent, things would tip. That was true of client server and it’s true of cloud.
Next, the pace of acceleration is accelerating. That’s super exciting and wicked hard to keep up with, and puts a tremendous demand on customers. Customers have gotten so comfortable with cheap workloads, transitioning to public cloud, and flipping capital expenses to operating expenses, they’re now moving all of their business SaaS to cloud.
That being said, the real money is in mission-critical core workloads. The old world is still buying for peak consumption and using system integrators for implementations. In the world of the public cloud, you’re now paying for elastic consumption and agile business needs.
The last thing with cloud computing is that it never has been easier in the enterprise world for a startup to gain real disruptive traction. It’s the biggest dustup I’ve seen in my career.
Q: What do you see as the primary difference between the Seattle and Silicon Valley startup ecosystems?
I think there’s a different kind of resilience and grit in the Seattle market versus Silicon Valley. One of the great things about the Valley is that there is so much energy and innovation. However, if you look at the startups, their early traction is based on selling to other companies along the US 101. You have a lot of VC money moving between VC-backed startups.
Seattle startups often have more of an enterprise dynamic. They understand that you have to really learn to sell to customers. In addition, Seattle is the global cloud city with Microsoft and Amazon. As a result, there’s a kind of talent that you don’t find anywhere else.
Q: Where do you see AI/ML providing the most impact in the next two to three years?
AI/ML will have more consumption across every sector over the next two to five years.
While it has been an academic discussion for the past 40 years, we can train models much more quickly and in a more dynamic fashion with the tremendous compute power and network capacity in the cloud.
However, we have to be careful not to cede all of the answers to a machine. I’m a huge believer that we have to be conscious that technology can be used in both good and bad ways. AI is a great technology, but all technology is all about helping humans do what they do better, not doing everything for them. Technology can perform tasks, but it will never replace human creativity.
Q: How has your English literature background affected how you approach technology and VC funding?
One of the extraordinary things about literature as a discipline is that it teaches you about humans and how humans interact. It has led me down a path of pursuing a career where fundamentally I’m very comfortable being dropped into things I know nothing about.
We’re seeing more discussion in the public sphere as far as liberal arts education in business because students are taught how to think through a problem, as opposed to just completing a task.
It really fosters a fundamental willingness to engage curiosity.
Stay tuned for the next Conversations at the Core feature with Julie Penzotti, VP, Consumer Insights at Amplero. To get the latest in AI delivered to right your inbox, sign up for our monthly newsletter here.
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