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Venture Profile: Skip Glass, Canaan Partners
By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search
Angel Mehta: I know you spent a number of years in the operating world before joining Lightspeed Ventures, so it took me by surprise when you left the venture world to go back into an operating role. Tell me what motivated that? Most people who go into venture never go backÖ.
Skip Glass: The operating role is more fun. You get to see results a lot faster, you get to be in front of the customers, you get to deliver product, and you get to build a team. Venture is certainly a fun job but itís more advising, putting the right people in place in the jobs, connecting the dots to the right prospective customers. It is a little easier on the lifestyle because you donít have to hop on a plane every third month of the quarter and spend a month away from home. But venture requires a different set of skills; you have to be able to know when to pull back and let the entrepreneurs run the show.
Angel Mehta: And yet youíve come back into venture capital again? Why?
Skip Glass: Personal reasons, mainly. My daughters are 12 and 13 and they still like to hang out with us, but that wonít be for long. Itís tough to devote the appropriate amount of time to family when youíre an operating executive. But the reality is that Iím just having fun doing what Iím doing right now. Will I stay in venture forever? Maybe. Will I go back on the operational side? Maybe. I still donít quite know what I want to do when I grow up, and Iím kind of hopeful that Iíll never find that out. Ever. Itís more exciting that way.
Angel Mehta: Is your current role more about doing deals, or working with portfolio companies?
Skip Glass: Doing deals primarily and helping Canaanís portfolio companies secondarily. At Lightspeed, it was the opposite. The role of Venture Partner can really vary by firm. It can actually even vary within the firm depending upon whether or not your expressed desire is to become a Partner or not, how many hours a week you want to work, what your strengths are, what your track record is once youíre within the firm, and actually your operational track record even before you joined the firm.
Angel Mehta: What are the three biggest areas you find entrepreneurs need help in after they get financed?
Skip Glass: One is recruiting the right people, and not just at the management level but even at the individual contributor level. There isnít a company that Iíve been involved with where you canít point out 10 to 12 people that really were the difference makers that made the company.
The second area is getting customers. Itís very, very hard to procure new customers with good names and if you can connect your portfolio companies to great prospects, thatís very, very helpful.
The third area would probably be process. They need to ensure that the processes are in place so they can measure the results of any given function. Whatís effective marketing versus ineffective marketing? When are they headed for trouble on the support side? What are the early indicators that theyíre going to have to put more people into support? How do they make sure that they have enough of a competitive view that they know that theyíre continuing to have a differentiable product and a differentiable strategy? How do they make sure, particularly in todayís environment from a finance standpoint, they have an approach that takes Sarbanes-Oxley into consideration when running their business? Many of the bigger companies that are acquiring now, are asking you a lot of detailed questions about your processes, and so you need to make sure that from a finance standpoint you havenít been running too loose, because that could kill a merger and/or an IPO. So those are all process issues, which need to be monitored when youíre growing, as well as to give you early indicators of when to slow the growth, and maybe indicators of when you should consider downsizing.
Angel Mehta: Do those things become less of an issue for you as a Venture Partner once a professional Management Team has been brought in?
Skip Glass: No. I think you need to keep an eye on it because often time professional management may have come from big companies and may overdo the process side. They also may have come from a company that was successful in the dot com era and didnít have to do as effective a job on the process side, and therefore didnít get that kind of discipline in place. You donít always want senior professional management across the board in a company because sometimes some of the better ideas and the freshness come from having young blood in the mix.
Angel Mehta: Thatís interestingÖare there specific positions where you prefer Ďyoung bloodí as opposed to experience? Are there specific roles where you would absolutely insist on a professional manager?
Skip Glass: Well, I would absolutely insist upon a professional manager in the Chief Financial Officer and Chief Executive Officer roles. I might want a COO whoís a little younger and has stayed a little more current on the technology. On the sales side I would like a mix. I think if you have too many guys who have made too much money thatís bad, and if you have too many young guys that donít know how to call high, and how to get someone to write a big check, thatís also bad. You need a mix.
Angel Mehta: What areas of opportunity are you focusing your attention on?
Skip Glass: Well, obviously there isnít much left on the applications side. However, there are business model changes, things with software as a service, things like grid computing and outsourcing, that are driving new opportunities. I did one open source deal with a set of technology where theyíve built some layers between open source and then a layer on top of open source that gets after network monitoring and network management. It is a company called Ground Work. The team saw that 80% of the underlying hard work you can pick up out of the open source community and then add a lot of value on top of that, some of which you can put back into the open source community and some of which you can keep proprietary. Itís interesting, because theyíve built a competing product for one-tenth the cost of a Tivoli, Openview or Unicenter.