20VC: Why The Engineer Will Replace The MBA As CEO, Why The Peace Dividends From The Autonomous Car Wars Will Generate More Value Outside of Transport & Why Old and Boring Industries Are The Most Exciting To Build In with Avidan Ross, Founding Partner @ R

Avidan Ross is the Founding Partner @ Root Ventures, one of Silicon Valley's most exciting newer generation of funds dedicated to backing bold engineers at seed. To date they have backed some incredible companies such as Nautilus Labs, Dusty Robotics, Tortuga AgTech and Instrumental.ai just to name a few. Prior to founding Root, Avidan was CTO at The CIM Group, with an aggregate of $15Bn AUM, Avidan was responsible for establishing the company’s technical vision and leading all aspects of the company's technology investment. Before that, he built algorithmic trading platforms as Director of Technology at WHW Capital. In Today’s Episode You Will Learn: 1.) How Avidan went from building algorithmic trading platforms to back the next generation of revolutionary engineers with Root? 2.) What does Avidan mean when he says "the peace dividends of the autonomous car wars will generate more value outside of transportation?" How does the commoditisation of these core components affect subsequent industries? With their commoditisation, does it not become a raise to the bottom on price and margin? 3.) How does Avidan approach the layering on new software products to emerging hardware devices? What does this mean for the margin required both for the hardware and the software? How does Avidan's investor mentality alter when investing in hardware vs software? 4.) Why does Avidan believe "old and boring industries are the most exciting to build software in?" How does Avidan approach the common problem of customer education and selling to a customer base that does not want to talk to you and does not believe in your product? What do founders selling in these industries need to focus on to break through? 5.) How does Avidan assess the current landscape in terms of the quality and quantity of engineer CEOs? Why does Avidan believe the MBA CEO will be replaced by engineers? How has Avidan seen a variance in the background in the entrepreneurs innovating in "old and boring" industries? Items Mentioned In Today’s Show: Avidan’s Fave Book: Drive by Daniel Pink Avidan’s Most Recent Investment: Dusty Robotics As always you can follow Harry, The Twenty Minute VC and Avidan on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  You are listening to the 20 minute VC with me, Harry Stebbings, at H Stebbings 1996 on Instagram. Check it out, I get a huge ego boost when you follow me there. However, to our episode today, and I just love featuring really exciting new managers doing something maybe slightly different. And that's the case today, as I'm thrilled to welcome Avidan Ross, founding partner at Root Ventures, to the hot seat. For those that don't know, Root is one of Silicon Valley's most exciting newer generation of funds dedicated to backing bold engineers at seed. To date, they've backed some incredible companies such as Nautilus Labs, Dusty Robotics, Tortuga Agtech, and Instrumental AI, just to name a few. And prior to founding Root, Avidan was CTO at the C I M Group with an aggregate of $15 billion AUM.

• 0:42Harry Stebbings?

  Avidan was responsible for establishing the company's technical vision and leading all aspects of the company's technology investment. And before that, he built algorithmic trading platforms as Director of Technology at W H W Capital. Plus, fun fact, both Avidan and I are probably the world's biggest espresso drinkers, which may come through in this interview. And I want to say a huge thank you to both Michael Kim at Sendana and Samir Khaji at First Republic for making the intro to Avidan's day. I really do appreciate that. But before we dive into the show today, I want to talk a little bit about Hims, a new wellness brand for men. So although I look positively young enough to be Harry Potter in disguise, doing three episodes a week is stressful. And did you know 66% of men lose their hair by aged 35?

• 1:23Harry Stebbings?

  Ouch. And so you do not want a bald spot to pop up, or do you want to do something about it first and be proactive? In that case, head to fourhims.com, the one stop shop for hair loss, skincare and sexual wellness for men. Why do I love it? Well, there is no waiting room, awkward doctor visits. It literally saves hours by going to fourhims.com. Plus, I'm busy and I don't really want to go to a store either, and so they deliver right to your door. Enough said, they really are awesome, and 20 VC listeners get a trial month of Hims for just $5 today, right now, while supplies last. Go to fourhims.com/20vc, that's fourhims.com/20vc. So if Hims can transform yourself, Terminal can transform your company.

• 2:04Harry Stebbings?

  As we all know, the reality of hiring amazing developers is hard, and it's much, much harder if you only Within a twenty five mile radius of your office and that's where Terminal comes in. Terminal is your dedicated partner in rapidly standing up world-class remote technical teams. How do they deliver both speed and quality? Well, Terminal does this by focusing on everything necessary to successfully source, set up and support these teams. From physical elements like beautiful workspaces and equipment, to ongoing resources like HR, payroll, legal, professional learning and development. But don't take my word for this. Take the word of Eventbrite, Hims and Dialpad, all customers and lovers of Terminal. And you can find out more today at terminal.io. And finally, thanks to my friends at WePay. Let me introduce you to another cool player in the space we love, Joyce.

• 2:48Harry Stebbings?

  Joyce has built the go-to platform for contractors. Designed for ease of use in a mobile world, it enables contractors to professionally handle everyday tasks like estimating invoicing, collecting payments and managing projects. And with more than 500,000 contractors who use the Joyce platform, managing more than 8.5 billion dollars in invoice work in North America, the UK and Australia. And you can learn more at joyce.com. And to learn how you can grow your revenue with integrated payments, just like Joyce did, visit wepay.com/harry. And WePay's got this fantastic case study about how another platform, TeamSnap, is working with WePay to make payments its number one revenue stream, more than its subscription business. Get it at wepay.com/harry. But that's quite enough from me.

• 3:29Harry Stebbings?

  So now I'm thrilled to hand over to the very brilliant Avedan Ross at Root Ventures.

• 3:40Speaker 01

  You have now arrived at your destination.

• 3:43Harry Stebbings?

  Avedan, it's such a pleasure to have you on the show today. I've heard so many wonderful things from Mr. Michael Kim to Anna at Instrumental. So thank you so much for joining me today, Avedan.

• 3:52Speaker 02

  It's my pleasure to be here. Thanks for having me.

• 3:54Harry Stebbings?

  Not at all, but I'd love to get started with a little on you. So tell me, Avedan, we both love coffee. That's a mutual thing we have to start off with. And clearly we both love VC. So tell me, how did you make your way into the wonderful world of venture and come to found Root?

• 4:07Speaker 02

  Well, thank you very much, Harry. I appreciate you taking the call this morning. I am well caffeinated, but I would tell you that you have been my driving buddy to Palo Alto more times than you know. I've thrown your podcast on, 2X Fast Forward, so you're the 12 minute VC to me, but it's been awesome having your show and really just, you know, what you've documented for the world of venture. My path to venture is not exactly the straight and narrow path. I started out as an engineer working in the 90s and 2000s. I was working on cable modems at Excited Home, which was a big collapse in the first dot com boom. I worked on voice over IP handsets while doing my research at Columbia University, studying computer science and embedded systems. I even worked on fax to email gateways at a company called efax or J2

• 4:49Speaker 02

  down in Los Angeles. But after the crash in 2001, 2002, I ended up sort of falling backwards into the investment world, not the traditional venture world, but the much more old school, private equity style investment world from the tech side. So I was head of IT for a small investment firm down in Los Angeles. And I would say I was very lucky to be in the right place at the right time. And we grew from 200 million under management to over 35 billion under management during the eight years I was there. And I rose from being the head of IT to the CTO. And early on, we weren't investing in much that piqued my interest. But over the years, we started doing a lot of investing in energy and infrastructure. So infrastructure is in like water, wind, solar, smart grid, vehicle telematics, building energy management. And while I was there,

• 5:33Speaker 02

  I sort of started to see the writing on the wall that a lot of the big companies we were investing in were more exposed to the tech stack and the tech industry than we had we had otherwise thought. And this all sort of came to a head about eight years ago, I was approached by a team leading Tesla. And they basically said to me, we need $2 million and we're going to build a vehicle telematics company that's basically going to compete with a $200 million roll up we had just done. Not believing them, they said, well, come to Menlo Park and we'll show you. And I got to see the Elon Musk, Martin Eberhard School of Building Hardware, which was the Tesla Roadster. I don't know if you remember the Roadster, but it was awesome. Yeah, it's a beautiful car and Tesla was called a car company. But the great story behind the Roadster was that it was actually a Lotus. They ripped out the drivetrain, built a custom drivetrain, which was no small feat,

• 6:18Speaker 02

  but were able to call themselves a car company. So that's the ultimate MVP, demonstrating your core technology. And the next piece was, you know, maybe the car wasn't pre-ordered on Kickstarter, but it was a pre-ordered car. So the supply chain risks and Minimum order quantities were much more under control. You know, they were using digital fabrication techniques. And most importantly, the car was treated like a rolling platform. Meaning people purchased the car and then upgraded software, added autopilot, did all these things that were simply saying you didn't have to rely as much on the margin of the vehicle because there were other opportunities for gaining revenue downstream. And so that sort of opened my eyes. I went super deep into understanding if there was a capital efficient world of people focusing on legacy industry. And I just had this revelation and turned to my partners and said, we need to do something about the moat built around these companies is neither deep nor wide,

• 7:02Speaker 02

  and it's getting narrower and shallower. And their decision was to go out and raise a distressed buyout fund to buy the companies being exposed. And I I said, I think there's a better opportunity in seed stage. So I took a year off, ended up doing some fun side things like building fire breathing pizza ovens on the Food Network for a show that never made it to air. So that was a blast and then made my way into investing in all these early stage startups that are focused on hard tech and disrupting legacy industry.

• 7:27Harry Stebbings?

  I think we're going to leave the fire blowing pizza ovens aside for one minute and remain on the autonomous cars. And really started on one of your favorite topics being the autonomous systems element. Because when we chatted before, you said to me something that in complete honesty entirely confused me. So the piece dividends of the autonomous car wars would generate more value outside of transportation. So if we kind of break that sentence down, help me out here, Avidan. What do you mean by the piece dividends?

• 7:53Speaker 02

  Yeah, so the piece dividends concept is anytime there's a war, there are oftentimes things that are benefiting the societies that were in war or out of war after the war is complete or even during the war. So a lot of our industrial supply chain around metals and manufacturing were built around World War One and World War Two. So that analogy is then drawn to things that are not as terrible and ominous as actual war, but just deep competition. So Chris Anderson popularized this idea. So Chris Anderson is the CEO of 3D Robotics. And he basically went and started discussing why is it possible for drones to exist today? All the technology existed before, but because of the smartphone wars,

• 8:35Speaker 02

  the war between Apple and Samsung and Google and Nokia and BlackBerry. A lot of the components that you find in a drone became commoditized. Everyone was trying to get a low-cost camera, low-cost accelerometers, low-cost Bluetooth chips and Wi-Fi chips. And what that led to was a very robust supply chain to get all of the components. And people started putting those components together to create other products. You know, one might say that Nest is a perfect example of the same exact thing. Low-cost screens, low-cost touchscreens, low-cost, all of these components that the smartphone companies forced a supply chain to lower their costs on allowed us to build all sorts of interesting IoT and connected products.

• 9:15Harry Stebbings?

  Can I jump in and ask you, in terms of the commoditization of hardware there, does that not just lead to a race to the bottom in terms of margins and pricing when it is so established and available, so to speak?

• 9:27Speaker 02

  Absolutely. The commoditization of these components is the ultimate benefit to entrepreneurs. Because any entrepreneur who's coming in and saying, "I'm going to create the next Wi-Fi chip," we are always asking that question of, "Well, what happens when this becomes a commodity component?" Because no matter what, if someone's simply thinking about it as a line item on their bill of materials, they're simply looking at it as the utility it provides during manufacturing. What we think is more interesting is the fact that all of these things are benefiting from connectivity. So the drones are all Wi-Fi connected or cellular connected. Nest is obviously Wi-Fi connected with multiple radios. And when you're connected, you now have the opportunity to sell services. You get to interconnect your componentry to the internet.

• 10:09Speaker 02

  So think, for example, about a low-cost sensor is sitting out in the field. Now it has unlimited free connectivity into the cloud. The cloud now has extreme amounts of compute. And with that computation, you can now take information coming from the end node or from the edge, connect it to all of the other sources of information out there in the world, and make the most intelligent decision possible, or provide a service to the end node. So that your Nest is doing the ultimate decision-making about when to turn your thermostat on and off, based on knowing not only the weather forecast, but the historic information for how your house performs, based on turning the temperature up and down to optimize for savings. So that is something that... Is not about the commodity component, but instead the ongoing services provided.

• 10:54Speaker 02

  So many people are able to charge a premium for that ongoing service.

• 10:58Harry Stebbings?

  This is so far off schedule, but I'm way too intrigued by this conversation. Does that mean for you in terms of the business model of the future for these kind of hardware products? Does that mean that your excitement lies in kind of the margins that can be made on the services? Post buying the initial product? Or is there still room and leverage for real margin to be made on the hardware itself? And where do you kind of personally get excited by that element?

• 11:19Speaker 02

  Yeah, so we won't invest in something that relies just on margin alone. From our perspective, that's not a venture scalable business. And by the way, it is a great business for many people to build a product that they simply sell for a profitable margin and move on to sell the next thing. What gets us more excited is the ability to stack on recurring revenue or other forms of entrenchment in the business. So whether that is the razor razor blade model of selling a product and then selling disposable items or add-ons. The services model, similar to Dropcam or Ring, selling you video storage for your product. Or the holy grail being building a platform, right? So one of our companies is a company called Particle. Particle is the largest professional IOT development platform in the world.

• 12:01Speaker 02

  And basically what that has built is a huge engineering ecosystem, building applications and services on top of their firmware and IOT distribution and platform. DJI is another great example. They've become the de facto drone platform. So it's not just about buying the drone. It's about applications that run on top of the drone. That being said, we see companies all the time that are great margin businesses. And we often turn to them and just ask the question of why venture? Because the reality is there are so many physical products out there in the world that are just quite simply not that venture scale or backable. And we're very upfront and honest with entrepreneurs building physical products and hardware.

• 12:40Harry Stebbings?

  I'm sorry, I'm too interested again in terms of kind of venture scalable or backable. In terms of differentiating between whether they are or they're not, is it purely that kind of upsell component on kind of software services ahead of purchase? That makes one kind of venture scalable and backable? Or are there other elements where you see and go absolutely this has the potential for a venture?

• 13:00Speaker 02

  Yeah, there are absolutely pieces of hardware or physical products out there that can get to venture scale without the post purchase revenue. But most of them rely on being a very, very heavily branded consumer experience. And the harsh reality is that everybody on our team, all four investment partners are engineers by background and training. And so our empathy lies often with the business unit and our empathy lies often with engineers. So we're more often going to be investing in developer tools over a very fancy branded new consumer AR sunglasses. I mean, no offense to Snap, but I that's not the area that we look at more often. And we know that there's venture returns hidden in there. It's just not an area we spend a lot of time focusing on.

• 13:42Harry Stebbings?

  No, absolutely. I do get you. And I also loved your article on the second fund, a huge congratulations on that. But there was a really distinct sentence in there which said that you're not just kind of hardware focused. It's kind of hard tech focused and kind of differentiating between that. I'm really interested because we spoke about kind of software and hardware there. How does your investment mentality and kind of how differ when investing between hardware and software? Is there a distinction?

• 14:06Speaker 02

  Yeah, so we look at our hardware investments as actually software companies at their core. The definition of these companies is often that the software is the differentiator. But we also make a lot of investments purely in software companies. Now, that being said, many of those software companies are only viable today because of that example of the piece dividends of the autonomous car war. So a great example is a lot of investment has been made in GPUs. Ultra high speed processors that are able to do multi-point graphics processing. So they're very prevalent in video games and Bitcoin mining. And specifically in the world of autonomous vehicles of taking in lots of data and making really intelligent decisions.

• 14:46Speaker 02

  Those GPUs have also made it possible for people to have extreme levels of compute on their desktop. So we invested in a company called Entropology, which builds software for mechanical engineers that are able to generate super complex structures for manufacturing that are function based rather than form based. And that's only possible today because designers have GPUs built.

• 15:10Speaker 02

  into their desktops. Now, it could have worked years ago, but it would have taken hours, if not days, for you to see the results of your computational structures. Now, with a GPU in every box, we're able to run that code directly on the GPU and create a real-time experience, meaning the engineer now has software that operates at the speed that they designed. And that is quite simply just unlocking this entire industry. So whether you're working at a big aerospace and defense company, or you're working at an apparel company and you're a designer, you now have a new set of software tools that were not possible if it weren't for the investment by all these companies into things like GPUs. So the autonomous car wars have generated an entirely new set of sensors, and those sensors and compute have led to an entirely new industry.

• 15:54Speaker 02

  So now, if we take the piece dividends of the smartphone wars and now say, we have autonomous vehicle wars going on between Apple and Zooks and Cruise and obviously Waymo being the first into this industry. What we found is that there's a huge investment going on to an entirely new set of sensors. And those sensors are able to compute what's around us in the physical world. So LiDAR, stereoscopic cameras, radar technology, and then most importantly, the ability to compute massive amounts of data from those huge sensors that are constantly looking around us, constantly surveying the road. And when you combine that with the ability to process onboard through things like GPUs and ASICs, and more importantly, connecting it back into the cloud where you have unlimited compute

• 16:39Speaker 02

  and things like TensorFlow and machine learning stacks and the entire AI world in the cloud, you're able to make extremely intelligent decisions all the way down at the edge because you're making those decisions both at the edge and in the cloud, sending the instructions down to the device at the edge node, AKA the car, and now the car is making an autonomous decision. Well, the beauty of that is all of those components are now commoditized. They're now freely accessible to anybody who wants to build an autonomous system. So when I say that there's going to be more value generated from the piece dividends of the autonomous car war, what I mean to say is that every industry in the world that needs to physically articulate the world around it is Going to benefit from all of that technology stack.

• 17:22Speaker 02

  The ability to sense that physical world, the ability to compute on it both locally and in the cloud and make autonomous decisions, therefore creating the ultimate closed-loop system that we've been unable to see in robotics and hardware at the edge.

• 17:37Harry Stebbings?

  I mean, speaking of kind of every industry there, though, and how it needs to kind of innovate and transition. I love your description of a space that you love, and it's that old and boring industries are the most exciting to build startups in. So how can I not start with that? What do you mean by old and boring? And what are the most exciting elements about building companies in them?

• 17:55Speaker 02

  Yeah, so when we think about the old and boring industries, we're actually thinking about really, really old industries. We're thinking about agriculture, mining, construction, supply chain, logistics, manufacturing. And these are industries that are trillions of dollars in size. But the impact they've received from the technology world has been primarily in the back office. New ERP systems, new CRM systems, they are using software to change their behind-the-scenes workflow, whether it's buying or selling. But the reality is, is out there in the field, the amount of automation they've received has been quite minimal. And that is because we didn't have the ability to make really, really smart decisions out there in the field.

• 18:37Speaker 02

  So what I believe is happening today is that all of these legacy industries are starting to realize that there is an opportunity for them to bring automation out into the field and change the industry as a whole. So a great example is we're invested in a company called Tortuga. And Tortuga builds automated harvesting robots for the agricultural industry. That's a world in which there's been a little bit of automation because John Deere has made bigger and better tractors. But the ability to make hyper-intelligent decisions about which strawberries to pick or which fruits are ready for sale is a very interesting decision. Because you can either make it purely based on its readiness or you can understand the entire supply chain to realize

• 19:21Speaker 02

  that there is a glut of this type of fruit already in the supply chain, leave it on the vine for an extra 24 to 48 hours. And I think that when you look at That way you start to see that there is an entire set of industries out there in the world that have not received the Silicon Valley treatment as far as digital transformation beyond just the traditional back office enterprise SaaS type of tech.

• 19:43Harry Stebbings?

  So I couldn't agree with you more in terms of the excitement around these kind of more traditional industries and how they have been untouched, but I'm constantly faced with the same challenges. And most often it's selling to a customer base that really has got no prior tech knowledge, doesn't really want to speak to you and doesn't really believe that any of your products work or can do what they say they do. How do you think about this kind of customer education process that's so inherent within these industries and really look to overcome it?

• 20:07Speaker 02

  I think it's a fantastic question about the audience and the buyers in the legacy industry. And the reality is, is that they are not digital natives. They are not tech-first thinkers, but they know their business extremely well. And they understand the levers they can pull in order to grow top line and bottom line. And from our perspective, we're looking for entrepreneurs who understand what's technically possible, but also understand how to meet the market where it is. I think a great example of this is an investment we made in a company called Extreme Trucking. So they built a robotically digitally articulated wings to create active aerodynamics for long haul trucks. I mean, this is an industry that has not evolved in years.

• 20:49Speaker 02

  But when you show them a 5% fuel savings, they quite simply say, I don't care about the tech. I care about the savings. I am willing to adopt technology if it's a clear ROI. So I think that anyone going out to sell into businesses has to understand they need to start from a point of a clear concise ROI. And then they get to employ what we call the Trojan horse mentality. And this is our key element to investing in B2B and enterprise. The Trojan horse idea is you bring something into the customer that has a clear ROI. But once they've adopted it, then you can start upselling them or taking advantage of the data you're collecting from being inside of that company or that industry and change the industry as a whole. So another great example is Nautilus Shipping.

• 21:32Speaker 02

  And what Nautilus is, they put a black box on infinitely large container ships and cargo ships and are able to precisely Control the speed of that ship to optimize for fuel savings. Another great example, very close to extreme trucking. But the opportunity lies one step further, which is if you have this box on hundreds or thousands of ships, you now can control optimization of movement of package of all of the goods in the supply chain from end to end. So not only are you going to arrive perfectly on time in Long Beach or in Los Angeles, you're going to arrive on time based on any backlog of cargo that you need to bring back to China. So it might be perfect to arrive on Tuesday, or it might be perfect to arrive on Wednesday.

• 22:14Speaker 02

  And you really get into a very interesting marketplace dynamic that wasn't otherwise possible if you weren't sitting on every single ship.

• 22:21Harry Stebbings?

  Can I ask you, Adam, when you look at the founders that you've backed in these kind of more traditional industries, are there commonalities in their backgrounds, be it kind of existing experience in those spaces, be it parents who've worked in those spaces? I instantly think to Dan at Convoy, who kind of always had parents who worked in logistics. Is there commonalities or are they completely fresh to these industries?

• 22:41Speaker 02

  It's really interesting that you ask that because we were looking recently at our CEOs. And what we end up finding is that the more common trait amongst them is a hunger to learn and a hunger to solve big problems. The reality is, is that when you're investing in big, heavy industry, B to B, it's really difficult to have customer empathy. The reality is, is consumer internet has a ton of investment interest and a ton of entrepreneurial interest because it's really simple to see yourself using the Snapchat app. So you would invent it for your own purposes. Now, the reality is, is that if you're investing in things like mining rare earth materials, the likelihood we're going to meet a spectacular entrepreneur or engineer

• 23:23Speaker 02

  who knows how to solve the problems, but has also worked in a cobalt mine, is extremely unlikely. But what we end up finding that's as good, if not better, is a fresh mind approaching the problem and understanding that they need to spend the time investing and understanding the space. So I think a great example of that is a company we just most recently invested in called Dusty Robotics. And Tessa Lau was the CTO of a Robotics company called Savio and she had spent years and years and years in the robotics industry and was going through a renovation of her house and while she knew very little about the construction industry she saw the inefficiencies going on in construction and dedicated a full year of customer research to the problem

• 24:08Speaker 02

  to discover that she wanted to build a construction focused robotics company and had a extremely deep understanding of what was going on in construction because she didn't take anything for granted. She went in and she asked and she asked and she asked and she asked why multiple times so that she could basically understand what the difference was because the we've just done it this way forever versus there's a very good reason why we do it this way. And so what we would say is it's not a prerequisite. Obviously, we'd love to see entrepreneurs with familial experience or their own experience out in the field. But we also understand that really great CEOs and CTOs are able to look at problems, spend time doing the discovery to understand how that industry works

• 24:51Speaker 02

  and then build an organization around them that can support that industry well.

• 24:56Harry Stebbings?

  Final question before we move into the quickfire and you've mentioned quite a few portfolio companies today and being maybe contrarian, one thought that comes to mind is there's market timing risks there. How do you think about market timing? Is that fair of me to surmise that there is market timing risk when inserting fundamentally new and never seen before elements like robotics into agriculture, shipping and traditional industries? Is that fair to say there's serious market timing risk and how do you think about it?

• 25:20Speaker 02

  So we think about market timing risk a little bit differently. We think about market timing risk as to why now? What about today makes it the perfect time to be investing in deeply technical founders? In hard tech and people focused on complex software problems, complex physical computing problems? And we believe that the timing today comes from the fact that a lot of people before us have paved the way. So we think that big companies like Google, Apple, Facebook, Microsoft have built out fantastic engineering manager programs. So all of these people who have had spectacular experience building solutions are now building teams to build those solutions, which is a great. Great path by which they become CEOs or CTOs or founders of entrepreneurial organizations.

• 26:05Speaker 02

  Because they understand all the things around recruiting and motivation and sales and marketing. And a lot of the building blocks that makes them a technical CEO. And I think the next piece is that a lot of the engineering schools have been cultivating their entrepreneurial studies programs. And so what we found is that a lot of the best engineering schools are now turning out people with amazing foundational engineering skills. But a hunger to build a company, not just build a point solution. And from our perspective, the timing as to why is it today that we're going to see more masters and PhD engineering degrees at the CEO helm of companies than MBAs is because of those things.

• 26:46Speaker 02

  And it's taken a while for engineers like myself to build out positions in the venture capital community. And while it might be slow for the engineers to become CEOs and founders of these companies, we think it's inevitable. We think that having that technical lean at the top of an organization is essential.

• 27:03Harry Stebbings?

  No, I couldn't agree more with you in terms of the excitement and belief around having that technical ability at the top of the hierarchy. I do want to move into my favorite, that as you know from listening to the show, Avidan, the quickfire round. So I say a short statement and then you give me your immediate thoughts. How does that sound?

• 27:18Speaker 02

  That sounds fantastic.

• 27:19Harry Stebbings?

  Okay, so I'm flying to SF. I need a book for the flight. What should I be reading and why?

• 27:24Speaker 02

  So I'm going to give a little bit of an oldie and a goodie. So Daniel Pink wrote a book called Drive, which is subtitled The Surprising Truth About What Motivates Us. And from my perspective, this changed everything about how I worked with technical teams. At the end of the day, it's not about money. It's not about just quote unquote winning. But it's a lot about autonomy, mastery and purpose. And this is how we at Root Ventures motivate ourselves, but we also help motivate our understand the motivations of the founders in our portfolio. Because so many of them are built around purpose, built around mastery of a very complex problem. And want the autonomy, knowing that VCs are the coaches and not the quarterbacks. And so from our perspective, Drive really encompasses a lot of how we think about the market and how our teams are operating.

• 28:10Harry Stebbings?

  What would you most like to change about Silicon Valley and VC being in the kind of epicenter of the ecosystem yourself?

• 28:16Speaker 02

  So I think we don't spend enough time talking about mental health. I think athletes are constantly working out, they're going to the gym and trying to hit peak performance. Silicon Valley is a world of people whose peak performance is around their mental state. Their ability to work extremely hard, think about complex problems, be able to resolve thirty different things in a matter of a day, and that takes a toll on your mental health. I think burnout is a real thing, and I think we need to speak about it, but not to speak about it, but talk about various types of resolution for it. So I think we should spend a little bit more time prioritizing mental health as if we were athletes focused on peak performance.

• 28:52Harry Stebbings?

  No, I really agree with that. I think that's super important. But tell me, biggest lesson as a board member ever, Dan?

• 28:58Speaker 02

  So what I would say is, board members have to remember that they work for the company, and you don't join a board for the prestige or the addition to your resume. You join the board because you're ready to work. You become an extension of the organization, and if you're not ready to fight for the company through thick and thin and work hard for all the shareholders, I think you're in for a terrible surprise when, if markets ever shift, the board is going to be asked to do a lot more than we do today. So be ready to work your butt off for the company.

• 29:27Harry Stebbings?

  What's the biggest piece of advice you give to an emerging manager?

• 29:30Speaker 02

  So I would say make sure you want to do this for the rest of your life, or for at least a very long time, and I know that the rest of your life is going to be a very long time as one of the younger emerging managers out there. But I think that at the end of the day, it's a very long, open loop to find out how you're doing. And so I would say, make sure you invest the time to understand venture and understand that it's something you want to do, because the early days or the honeymoon phase are very, very exciting, and you want to make sure that you're understanding the next steps, understanding what it takes two, three, five years, second fund, third fund, and so just make sure you're ready for that commitment.

• 30:06Harry Stebbings?

  Do you know I've done ten thousand hours on the twenty minute VC now? Fun fact.

• 30:11Speaker 02

  Wow.

• 30:12Harry Stebbings?

  I know, I know. I tried to use it in an LP meeting to claim mastery, but it didn't quite work out. But anyway, tell me, what's your biggest strength and weakness, Avidan?

• 30:22Speaker 02

  So I would say they're both the same thing. I am a loudmouth and I say exactly what I'm thinking. And a lot of people love that. They love the frankness, the direct bluntness. And for some people, they just would prefer I not be such an aggressive with my thoughts. I think the key for me is knowing that these are strong opinions loosely held. And when I put out an opinion, I'm actually looking for somebody to tell me why I'm wrong and explain to me why they're so confident in the other side of it. And it's a pretty aggressive personality to have, but I've been told just be who you are. And for better or for worse, I'm one of six kids and we had to hold our own at Friday night dinner.

• 31:00Harry Stebbings?

  Absolutely. And I think it's about cultivating a partnership where you kind of have that environment of openness and freedom to express those G's. But I do want to finish today, Avidan, on your most recent publicly announced investment. And tell me, why did you get so excited?

• 31:13Speaker 02

  Our most recent investment is Dusty Robotics. And the reason we were extremely excited about Dusty was not just because she's focused on a trillion dollar industry of construction, but the process by which she went through to deeply understand the market and use her background in robotics in order to solve big problems for the industry led to an amazing, amazing solution set that we think is going to change the way that both residential and commercial buildings are built.

• 31:40Harry Stebbings?

  Avidan, as I said, I heard so many great things from Michael Kim, from Anna at Instrumental. So thank you so much for joining me today. This really has been so much fun.

• 31:48Speaker 02

  My pleasure.

• 31:51Harry Stebbings?

  I mean, what an incredible guest Avidan was to have on the show. And I want to say how personally excited I am about the coming years ahead with Root. And if you'd like to see more from Avidan, you can on Twitter at Avidan Ross. Likewise, I'd love to see you behind the scenes here on Instagram at H Stebbings1996 with two Bs. It'd be great to see you there. But before we leave you today, I want to talk a little bit about Hims, a new wellness brand for men. So although I look positively young enough to be Harry Potter in disguise, doing three episodes a week is stressful. And did you know 66% of men lose their hair by aged 35? Ouch. And so you do not want a bald spot to pop up? Or do you want to do something about it first and be proactive? In that case, head to fourhims.com, the one-stop shop for hair loss, skincare and sexual wellness for men. Why do I love it?

• 32:35Harry Stebbings?

  Well, there is no waiting room, awkward doctor visits. It literally saves hours by going to fourhims.com. Plus, I'm busy and I don't really want to go to a store either. And so they deliver right to your door. Enough said, they really are awesome. And 20 VC listeners get a trial month of hymns for just $5 today, right now, while supply is last. Go to fourhims.com/20vc. That's fourhims.com/20vc. So if hymns can transform yourself, Terminal can transform your company. As we all know, the reality of hiring amazing developers is hard. And it's much, much harder if you only look within a 25-mile radius of your office. And that's where Terminal comes in. Terminal is your dedicated partner in rapidly standing up world-class remote technical teams. How do they deliver both speed and quality?

• 33:20Harry Stebbings?

  Well, Terminal does this by focusing on everything necessary to successfully source, set up and support these teams. From physical elements like beautiful workspaces and equipment, to ongoing resources like HR, payroll, legal, professional learning and development. But don't take my word for this. Take the word of Eventbrite, Hymns and DialPad, all customers and lovers of Terminal. And you can find out more today at terminal.io. And finally, thanks to my friends at WePay, let me introduce you to another cool player in the space we love, Joyce. Joyce has built the go-to platform for contractors. Designed for ease of use in a mobile world, it enables contractors to professionally handle everyday tasks like estimating invoicing, collecting payments and managing projects.

• 33:59Harry Stebbings?

  And with more than 500,000 contractors who use the Joyce platform, managing more than $8.5 billion in invoice work in North America, the UK and Australia. And you can learn more at joyce.com. And to learn how you can grow your revenue with integrated payments, just like Joyce did, visit wepay.com/harry. And WePay's got this fantastic case study about how another platform, TeamSnap, is working with WePay to make payments its number one revenue stream, more than its subscription business. Get it at wepay.com/harry. As always, I so appreciate all your support and I cannot wait to bring you an incredible episode on Friday with Ush Magar at Gobble.