Cloud Crunch
Cloud Crunch

Episode · 2 years ago

S1E09: COVID-19 and a Venture Capitalist’s View

ABOUT THIS EPISODE

 We welcome very special guest, Matt McIlwain, Managing Director of Madrona Venture Group, to get a venture capitalist's view on the current market environment, the outlook for the market, and technological effects in relation to the COVID-19 pandemic. Since 1995, Madrona Venture Group has helped technology entrepreneurs launch and grow world-class companies.

Involve, solve evolved. Welcome to cloud crunch, the podcast for any large enterprise planning on moving to or is in the midst of moving to the cloud, hosted by the cloud computing experts from Second Watch, Ian Willby, chief architect cloud solutions, and Skip Berry, executive director of cloud enablement. And now here are your hosts of cloud crunch. Hey everybody, this is Ian Willoughby. Was Second Watch here and I'm joined with my co host Skip Berry. On today's episode we have a very special guest with us, Matt Macawaene, Managing Director of Madrona adventured group who, since one thousand nine hundred and ninety five, has helped technology entrepreneurs launch and grow world class companies. Matt is an investor and software driven companies with the focus on cloud computing, intelligent applications and intersections of the digital and physical world. Prior to joining the DRONA in two thousand Matt held roles as VP a genuine parts company and as a strategist for Mackenzie and company, focusing on technology driven sectors, and has also been an investment banking with credit sueete. Matt has been a lead investor in a number of companies with successful outcomes and recognized for those achievements as a top one hundred venture capitalist by CB in sights, The New York Times and Forbes Midas list. Along with being an alumnus of Dartmouth College, Matt earned his MBA from Harvard business school and a masters in public policy from Harvard Kennedy School of Government. Today we're going to hear Matt's thoughts on the current market environment, given the covid nineteen pandemic, and the outlook for the market, particular for venture investments. Matt, welcome to cloud crunch and thank you for joining us a day. It's my pleasury and awesome it wilcome out. Yeah, skip, good to have you back as well. Thank you and Matt, as you know, I've got to know you over the last two or three years through various meetings out there in Seattle and you've been a board member of Second Watch and since your investment from two thousand and twelve. So thank you for that and helping get second watch going. And obviously, as we record this Midmay, two thousand and twenty still in the middle of the upbreak of covid nineteen. So wow, what an imprecedent time. So it'll be interesting to have some of your insights from this. From a very high level, Mat's seeing public cloud as an you some hero and supporting companies from almost everyone working remote now, companies like zoom and others, and all the web conferencing companies. What are you seeing out there as far as the remote workforce and what are your thoughts of this growing trend? Well, you know, it's super unfortunate that we're having to see this rapid adoption of digital transformation in cloud as a result of a very dangerous global pandemic and specifically the the the covid nineteen virus. You know, I first learned the appreciation of the magnitude of it in late February it because I'm the chair of the Board of the Cancer Research Center in Seattle, the Fred Hutch and some of the folks on our leadership teams sat me down and said, you know, we're going to have...

...a real big issue here, and we mently started to think about how do we help our companies, how do we help the ecosystem? And I think that's been one of the great things generally about the technology sector is that a lot of people have been coming together to say how can we help make a difference in one of those ways, you know, that first obvious one that you reference with, whether it's zoom or teams or some of the older platforms like a Webex and go to meeting, that people were able to communicate and community in staying communication to do whatever they were trying to do, whether that was basically shutting down their offices or figuring out how to work from home or, in many cases, collaborating on trying to figure out, you know, what are the ways we can prevent and cure covid nineteen. So what I'm seeing specifically now is that there is a pretty massive tailwind, not just at the communication layer but really across a whole bunch of sectors. You know, take things like tell a health and tell a learning. You know, the number of students that are able to learn from home, the number of doctors that are being able to do consults with their patients. You know, think about a cancer patient. Cancer patients are immunocompromise. You know, it's always a bit of a risk for them to be coming into the to the your clinic or to the hospital. anyways. It's especially a risk in a covid nineteen time. And there's the not all, but many, many of those consults that can now happen over a telehealth capability set. And and on the one hand it's putting more opportunity for better care in the hands of the doctor in the patient, it's also stretching those networks, you know, those cloud computing operations and the applications that live on top of it. So we're seeing many examples of, you know, kind of cloud first operations and I think you're going to see an acceleration of digital first, cloud first automation in the in the months and quarters ahead. Yeah, and where you are in the Seattle area, obviously you all were impacted first. So I think you've seen a growing tread. Not only you have just the technology companies around you, but obviously just everything around you. And thanks for your work in the cancer front. That's fantastic. Thank you. Yeah, I was going to segue into just ask about stocks like Amazon, Microsoft, Zoom, etc. How does a remote workforce benefit them? How will they come to terms with the remote workforce? From your vantage point? Well, we have a pretty close view of Microsoft and Amazon, since they're all our neighbors here in Seattle and, you know, their stocks have performed incredibly well because people are turning to, you know, these cloud, digital and automated workflows. So I think companies that are right at the center of doing those sorts of things are going to have, I think, you know, continued strength into the into the, you know, the further months of this year. Now the real question is, are they at the right levels? I mean, there's a difference between it being a stock I like for the long term in the stock that's at the right price right now, and I think that's a little bit what's harder to say because while we've had, as Satya said on the last earnings call from Microsoft, you know, two years of technology adoption within two months, you know, are we going to keep at that pace or is there...

...going to be an inevitable slow down as we start to move from a basically work from home only posture to sort of a hybrid work from home and Modified Office posture? And what is that going to mean for some of these different kinds of stocks? I think in the medium the long term, a lot of them are going to perform very, very well, and so if you wanted to think about doing something. You could go by like the, you know, the triple q index or something that's a lot of as a tech heavy index of mostly NAZADAC stocks that you know, are probably going to, you know, be just fine. I think what the question, though, is is, you know, across all these different kinds of you know, stocks, what order is it can happen. You know, communication was early, but I think we're going to start to see even more in the months ahead. Collaboration. One thing is to be able to talk with my peers, the other thing is to get stuff done with them, and so you start to think about you know, stocks like it last see and with their Gira product or a smart sheet, with, you know, their modern collaboration for teams products, you know, or even some of the you know, software as a service offerings that are, you know, more broadly, you know, kind of enabling people to to adapt and collaborate and coordinate and and around specific work processes, you know, cash management as an example, or spending, your procurement or or, you know, even sales. You know, one of the things I think that's going to be most interesting is we're going to step back. I think is a lot of businesses and say what, what could I do in a digital only posture and then layer back on the physical world meetings that are absolutely essential that to happen. And so if you've got something even, as you know, a little old school as a sales force, or more new school like a Clary, which is in a related space to sales force, you know people are going to be living first in these digital experiences all the way from lead generation to closing business with something like Docu sign. And then there will be that Oh we absolutely necessarily have to have a physical world meeting, and that will be peppered back in as it becomes more able and safe to do it. But I think we're going to see a lot of digital first experiences and that's going to serve quite a number of these technology stocks well. It's interesting. Yes, thank you very much for that answer. Yeah, and it's interesting it tools that your reference to actually kind of lend themselves to a lot of develops culture as well, and so I'd be interesting to see, in my opinion, if maybe those types of development environments could be applied, just the whole agility and agile models, to a lot of business practices, because you know, of the daily stand ups and those types of interactions. Maybe we can all learn how to collaborate a little better. So I want to get into a little bit of your portfolio of companies and how it's been impacting and be seen any scalability issue is or challenges related to that, and then as the public cloud really helped meet some of these needs. Yeah, it's it's an interesting question and what I would say is it this has been a great time for the public cloud and and companies that have their businesses and their workflows built on top of it to really shine. Let me give you a couple of examples. I mean,...

...you know, we have a company like a crowd cow. This is kind of a counterintuitive company, right, but they do is they go to, you know, farms that are really specialty farms and higher end meets and they source directly from them and then hip directly to consumers houses. Guess what, it's exploded. I mean, you know, there's certainly been a number of consumer companies negatively affected, but this business is just many, many times greater and growth than the revenue run rate they exited last year on and and they were doing quite a nice business at the end of last year. So will they have all kinds of systems, you know, Sass Systems and cloud systems that support their business and you know, companies like that have really not missed a beat because of the agility in the scalability of these cloud systems. You know. You know similar some of the softwares of service companies. You know, I mentioned smart sheep before and there's a whole bunch of them in our portfolio. And what's interesting is because they've been supported so well by this underlying infrastructure, they've also been able in many of these cases to meet their meet their goals. You know, companies like Snowflake, which is more in the in the modern kind of cloud native data warehouse world, or Cumulo and cumulose an interesting company. This is an enterprise quality file system that runs across on premise and in the cloud, and so their big customers might be big biotech companies or big digital media companies. You know NBC and CNBC. You know, if you step back and say how are they pulling this off, that they can have all their anchors at their houses and they're finding ways to process all that information, put it all together real time and then broadcast it will accumulo, with their modern file system, is helping them do that and those are just amazing things to think about and in candidly, if you know, NBC was advantage because they had been working with a company like Cumulo in advance of all this hitting. So they were prepared, with that public cloud scalability, to be able to address this not only volume that they're seeing in a pick up a people watching television, but the complexity of the workflow that's changed as a result of all of their anchors having to work, you know, remotely. It's interesting. So do you think that you kind of touched upon this on my other question, do you think it will ever come back to what it was prior to the virus, or do you think we're just, you know, never looking back in a sense, or what are your thoughts? They're well, I think that a lot of things are going to change. You know, whether they come back, they'll be aspects of coming back, but I don't think it'll ever be the same. And so what I mean by that? Let me give you a couple of examples. So we talked about kind of this digital first workflows. You know, a lot of companies that heretof thought that they had to have sales reps out there meeting the customers and prospects in person several times, are now being forced to a digital only experience. Do I think it's going to stay all digital only? No, I don't, but I think the defaults going to be what parts of the process of completing a sale can we do digitally, and then how...

...do we how do we have to pepper in the real important human interactions, the real trust building interactions that, you know, are just harder to do in a remote virtual environment. So that's an example. Let me get, you know, what we talked about, this telehealth example briefly earlier on. You know, I've talked to a number of doctors, given given my role at the Fred Hutch, and what I'm hearing people say consistently is, you know, in different ways in our business there's a number of these consults that are actually better, they're safer for the patient. But another example is, you know, a patient can then choose to have more of their family members participate in the consult you know, and so I might be able to have my brother or my sister or my mom or my son join in with the doctor and me. You know, on my chemotherapy check in, and folks are finding that to be both comforting as well as helpful in terms of their overall care. So once we've experienced these things, you know, it's the genies out of the bottle, as it were. I don't think people are going to, you know, really want to go back. And let me give you one more example. I think there's going to be an open by default mindset as well. Now, I'm not just meaning about open source. That's a little bit of a different topic, you know, but what I'm thinking about is open data. And we've seen all of these scientists and researchers that have a bunch of artificial walls around how they share data, that are now sharing data and collaborating to try to figure out is this anti viral work? What about this antibody? What's the strategies that we can pursue? How do we really understand the projections of how many, you know, hospitalizations and patients we're going to indesth we're going to have from covid and by having that open first, you know, open by default approach, we're actually getting two answers and solutions much more quickly. Why would we ever go back. Now there's going to there's some natural constraints. I'm not saying again it's going to be kind of open with no boundaries, but I think the people are realizing the benefits of greater collaboration and sharing, including around open data. Yeah, yeah, great points. I'm actually encouraged with apple and Google working on just the nearby the whole that whole aspect. That's that's really encouraging. Yeah, no, I've actually spoken to folks both at apple and Google about that project and, you know, on the one hand, I think to your point skip, it highlights the opportunity that they are kind of trying to collaborate together set some Common Bluetooth Standards and common kind of application pointers so that that some an application can more easily work across their respective android and IOS operating systems. Now out there's also, understandably reasons for concern, you know. You know, because if they were to be able to take all of that collaborative kind of technology at the infrastructure level, you know, are the things that they could do that would be very much in the interest of their companies? There's always that risk. Or, furthermore, are the things that the government could do that you wouldn't want to do from a personal privacy personal freedom perspective. So again, I'm not saying there's no boundaries here. There needs to be boundaries, but the fact that some of these things are artificially created boundaries that we've now realized are more artificial than not, and now we can have a...

...discussion about which are the boundaries. That makes sense, because innovation could be really beneficial to all of us. Excellent well said. Yeah, agree. Yeah, that speed of innovation just seems to continue to accelerate at an unbelievable rate. I think we're at a point now that we've seen technology get launched that would have taken near as before. Now it's getting done in a matter of weeks with these tech giants. Just very, very encouraging. Now let's shift a little bit to what you think maybe in the future some of the opportunities are the cloud for these companies, you know, all companies, essentially, some in your portfolio and obviously just on the whole enterprise market. You know there may be other events that may occur. Do you think that people are going to be a little bit more cognizant of the fact that there are other risks the businesses going forward? And then just overall, what do you think some of the trends are that you're going to see as enterprise as a dot, more of this newer technology? Well, I think that this time of covid nineteen, in a way that probably a lot of us, and anticipaint fluting myself, has tested what we might think of as business continuity. How can we keep doing our business when some big disruption happens? Now we all probably thought it would be some different kind of a disruption, you know, maybe an earthquake, maybe another natural disaster, whatever, but we we got a we got a pandemic to deal with and and I do think it has tested and, as we were saying earlier, generally shown that, you know, you know the public cloud and software as a service offerings, it off and run in the public cloud. Have you enabled at least the sort of the office worker capabilities? I mean, certainly understanding that we've had quite a bit of challenges in terms of small businesses and local businesses, but a lot of the office workers have been able to continue to do their jobs and to do their jobs in some cases, I think, even more productively. Then then in you know, kind of the kind of the old school office. We could talk about the future of the office too. So I think that that's one thing. And what I think that is also going to happen is, as much as you know, we've all lived in this world of, you know, the cloud transformation over the last several years. A lot of enterprises are only, you know, in the early innings of their move towards both on premise cloud workloads but even more so, kind of hybrid workloads and public cloud work was. I absolutely believe this is going to accelerate that transition, you know, from more on premise to more public and hybrid, you know, workloads. Architectural does signs ways that you, you know, kind of manage for both agility but also for business continuity, that you know, the kind of dimission critical applications that help you run your business. You think they're too mat that there's an opportunity to obviously, securities always top of mine for everybody, but really, you know, I don't want to say for once and for all gets security behind us, but how do you think that plays out into that evolution, if you will, security? I think that security there's a group of enabling technology security, I think, is the number one on this list, but I would also mention things like identity. You know, think about companies like OPTA or technologies like active directory from Microsoft.

You know, that's a very important area. I think performance. I think about companies like data dog and new relic and and, you know in our portfolio, and extra hop, which does both performance, you know, network in application performance, as well as security. I think these are companies that are all big winners here, because you've now got this, you know, kind of architectural outline that you've got, you know, and users that want to be able to work in the office work in other places will call that the home. You know, could be working at, you know, kind of another remote building, and that's just going to expand that their desire and the need for flexibility. They're also connecting into on premise workloads, cloud workloads, ass workloads. There's apis between those workloads. So this combination of security per formants and identity is a very good secular trend and companies that are just world class in that. OCTA is, you know, as I mentioned before. Off The zero is another very good one, and identity that are going to, I think, continue to have a Tailwin. And so it's your specific question about security. You know, the companies that are out there, whether it's the Palo Alto networks, which have historically been thought of as a firewall business, but of you know, really invested heavily in a much broader template of capabilities, you know, kind of end end or the crowd strikes that are starting from endpoint detection but trying to move, you know, you know, kind of for the proof points and others too. I think that those, you know, those budgets have always been the budgets for those kinds of things have always been disproportionately large because people, you know, that does the existential risk of having the major security breach is is highly problematic to the CIO and the C cell, and I think that they will be even greater because the demand will be there even more because the work coolds are going to be more distributed. Sure, great. Yeah. Now, looking at your fund looking at Madrona particularly, are you developing any new investment theories based on current environment or just kind of holding the line or change? Anything changing there? Yeah, well, we are thinking a lot about what are the implications here? I think that one of the areas we haven't talked about as much yet is we do think, and it kind of goes to this open day to idea, is that the opportunity to have data that shared across different date that things that used to be called data silos, and be able to bring that data together and make more intelligent, predictive kinds of applications, and application that's going to look in security, for example. You know, in security one of the opportunities is having an application that can just send you the alerts that are really high probability to be problematic. And so if I can take all the data of what's on the network and say, well, Gosh, this server talking to that database, that's a super unusual behavior, especially since it just happened a thousand times and thirty seconds, you know, that's...

...a problem and we need to be able to fire off a high priority alert to, you know, the Security Operation Center folks to consider some actions that need to be taken there. So I think we're going to see, in compliment to the digitization element, we're going to also see some more intelligent applications, both at the level of things like security, but also at the level of you know, I'll give you another example. We have a pretty young company called to Sorio, and what they do is they apply data intelligence to cash management. Well, you can imagine in this era right now where there's a lot less certainty on my top line, you know, revenue for a lot of kind of traditional businesses, you know, they're really trying to figure out what, how do I manage my cash flows? In this company is developed some sort of predictive techniques to help chief financial officers with their with their cash list. I think those kinds of data intelligence gerven solutions are going to help, you know, businesses and there's going to be a greater and greater adoption of them. You know, the other thing that I think is going to be quite interesting is, and kind of extends that example, is what does this mean for retailers over time? I mean the Amazons not just, you know, kind of skyrocket in its stock price the last few months because of the use of its cloud, although that was up, you know, you know, thirty percent plus again this past quarter, but their decore business has been overwhelmed with demand. In fact, they've said that we're not shipping certain kinds of products, you know. So there's a certainly a secular shift to online and direct a consumer kinds of businesses. But I think over time that we're going to see again is that if I'm a brand that really understands my customers, if I'm a starbucks, if I'm a McDonald's, if I'm a, you know, Nike, you know, you know, what can I do to bridge the gap between when I interact online with that customer and then when I'm trying to interact with them offline? Now I might be interacting with them through a mobile phone, but they're in the physical world, and so this coming together of my customers identity, that they're going to give me permission to interact with them as a big brand offline and online, I think that's going to be another big area of opportunity and change, personalize it. I who is doing a good job of that right now. Really interesting. Yeah, yeah, what keeps you up at night right now? Yeah, that's a great that's a great question. You know, I think the thing that's going to keep us up at night for the next, you know, couple of quarters is to really two buckets, and one is that the the health, you know side. I mean the reason this is all scary for all of us is because it's just a lot of uncertainty. You know, this is a new virus. You know, is this a virus that, once you get it, you are immune forever, or are you immune for a while? I mean, how does it spread? Why does it seem like it, you know, disproportionately affects older populations versus younger populations? Why does it actually disproportionately affect you know, older men to older women? I've heard plenty of both anecdotal and some early research on you know, they're trying...

...to understand that, because it's definitely a trend. So there's a so much uncertainty on the health side. And then's the real consequence, is the real lives lost and families, you know, kind of there are suffering from that. I mean, they're all human beings. Is going to keep this up at night? The other piece is the economic piece and, you know, in light of whatever's happening on the health side, how can we, you know, safely, smartly, securely, get people back into a mode that their business can work in this environment? Whether there are restaurant, whether there are a barber shop, whether they're whether their software company, you know, whatever that might be, what's going to be the new normal, the new methodologies for them being back to work productively so we can spreak in on the growth. The third piece I guess I'd say to add in is, you know, how are we going to deal with the kind of economic consequences of, you know, on the one hand, you know, I applaud our federal government from moving quickly on a number of different things, but boys, they to spend a lot of money, you know, to try to bridge this gap, you know, in this quarter and they, you know, kind of imposed a bunch of rules on Americans that Americans aren't really used to having that kind of heavy rules. In the states have done the same. It was the right thing to bend the curve. It was the right thing so that we can manage the capacity and hospitals. What how are we going to both pull some of those things back and do that smartly, but hopefully with the relatively rapid bias, and also deal with the economic consequences of what we've had to spend to kind of fill the gap during this difficult time? Really Yeah, I think it's also showing us that all technology mainframes and cobal may need to be upgraded to the cloud as well. So I think you're I think you are going to see some of those things. It's pretty hard, but some of the things. Think about some of the IBMI series and what we used to, you know, call as four hundreds and all of them back in the s. A lot of those things actually can move into the cloud and I think you're going to see companies that, you know, in this notion of both business continuity and agility, move more workloads more quickly into the cloud because they've seen the benefit of the workloads they had in the cloud or could rapidly move into the cloud or fail over to the cloud actually serve them very well. I mean you, but you haven't heard, you know, in the last couple months is I haven't heard really maybe any stories of Oh, you know, the cloud X or cloud why? Really let me down right. I mean you just haven't been hearing that, and that tells you something that they were relatively ready for this. You know, this pandemic education wide. What do you think they're in that space? Is there any opportunity out there in the education world to have a consistent platform, forget the curriculum? That could be a political debate. Yeah, yeah, but just anything. They're out there. That what comes to your mind. I think education is one of the most complicated ones, and partly because of probably been some artificial constraints to innovation and education over time, and some of those...

...some places and unfortunate. I think this has been more true on private schools versus public schools, you know, and you just talk to your friends and some kids go to the public schools, some go to the pride was the private schools have generally been more agile and more ready and, to be fair, probably more of their students have more accessibility to reliable broadband and computing devices. But those learning experiences have been pretty darn good in this in this cycle, and you know, I would say that, in contrast, that's not always been the case in some of the public schools. But what I think we have is the existence proof that education can be significantly changed in terms of how it works to be more collaborative online and it's in its nature, and that that's going to be quite positive in terms of the cost, in capabilities and quality of how education can get delivered. And look, it's going to be a specific it's got to be situation specific, but I'll give you. You know, I've got a son who just finished up his semester at college. You know, the back half of it was schooling from home. I've another son who's in high school and these, you know, kind of schooling remotely and they're on a good cadence and they're learning a lot. He seems to be doing okay and adjusting to it. So a different examples. We have this company called go one, and think of go one is sort of spotify for corporate learning, and what's clever about their approach is that they they help you with all the training and employee on boarding learning classes. So everybody gets used to using go one. But then they've got a lot of other learning that you, as a employee in your field or your function might want to learn and they make that available as well. And so once the systems up and running in your familiar with a lot of folks, just say hey, Ye, I'm going to get go on. So, for instance, you know, Microsoft a customer and Microsoft's asking to roll it out even faster, you know, in this time because it's a lot of their employees working from home and want to take advantage of some of the learning assets that are at the the go one platform. So think about that as it translates into different college and high school and Elementary School use cases. I mean I know that my university son is going to take an extra course in the early part of the summer before his remote internship starts because they're, you know, they're now getting more facil with these online learning courses. Now, I do again, I don't think that what you know at any of those ages. You know you're going to replace in class, in person teaching and university and high school experiences, but I do think you're going to have more flexibility. Yeah, be interesting to see how it plays, I hope. I hope so for all, if I have not a parent, but for all the frustrated parents out there. Evolved, Yep. Yeah, I have two in college and one in high school and my youngest is and still in high school at a title one school system here in Atlanta and it's been great to see how quickly they've they've been able to move to help the last privileged people that are maybe not as equally access to technology. So I give a lot of credit...

...for that. Yeah, and like Amazon, which doesn't often get the credit it deserves on things, they they donated eight thousand computers to the Seattle public schools so that any kid that didn't have that computer to be able to do schooling from home was able to do that. So, you know, there's a lot of a lot of things that are happening from a positive philanthropic and, you know, and in partnership perspective on those kinds of fronts. Oh yeah, absolutely. Now want to talk a little bit about if you could share with our audience a little bit about what Madrona labs is all about and maybe also the opportunity to share how they've been affected as well some of the companies and opportunities in there. Yeah, so, but DRONA has had it for a long time what we call a lab, and this is a startup studio where there's a group of dedicated people that work for MADRONA and they're a part of an ideation team that helps work with, you know, potential entrepreneurs on ideas and prototyping and really we kind of joke the idea is to kind of try these ideas with the goal of killing them and if somehow one is just too good, it kind of keeps getting through all the filters and all the hoops. Then we'll spin it out into a company and we might end up spinning out one or two companies a year, you know, from the labs methodology, you know, and and bringing with the entrepreneurs together and and so that's kind of the idea. It's a startup studio and a lot of their work has been done. We have a whole space at Madrona for the labs team and some of the entrepreneurs and residents that are working in that group and they've all been working remotely for the last couple of months and again, I think there's a lot that you can get done in that regard, but it's it is harder. Interestingly enough, we're about to spin out a company, you know, from labs and it's been in process for, you know, several months, and so it was kind of coming to its maturation and kept passing through these hoops and milestones. So they'll be a they'll be a covid birth company, you know, in the in the MADRONA labs. But the core idea there is, you know, one of the things about cloud computing that gets missed sometimes is the agility and the ability to kind of spin things up, test things quantify whether they work or not and then, if they do work, you can make some incremental steps without having to go buy a ton of servers and rack them and manage them and you know, and you could you don't have to be a professional, you know kind of surveying person you gives, buy survey monkey or whatever and do some little testinal so you can really learn a lot pretty quickly of is the merit of this idea worthy of taking next steps. And when that really came to be, which was probably six seven years ago, we step back and said, well, maybe there's a way that we can process through a lot more ideas quickly. And of course ideas are so much cheap anyways. It's all about the teams and their passion for solving the problem better than it's ever been solved before. But we've had a good bit of success with with labs and lab lab like businesses. If you go back aways companies in our portfolio like redfin that many of you have experienced, our or rovercom, which is a peer to peer...

...dog sitting in Dog Walking Service, came out of the MADRONA labs before it was formalized as Madrona labs. That's really cool. That's really cool. All right. So closing thoughts for IPOs. Over the last three years, twelve years average IPO. What's your most sedimental when? And I have to ask you, what your toughest loss? Oh, that's good, I'll tell you two stories on this. So I think my most sentimental win is this company called smartsheet. We I mentioned it earlier. The thing that's neat about that is this was a company that we first invested in in two thousand and seven and in two thousand and nine, in the last big crisis, the financial crisis, the company was realizing they built a great back end, they built the wrong front end and so they weren't getting the customer adoption and they were having too much customer turn and so we're like, well, what are we doing now? You guys are basically out of money. You don't have the right front end, you know. But it was a great team. It was a super gritty team and they said, well, we'll throw in a few dollars and we said we will throw in a few dollars. Let's build the right front end and we'll just we'll just buckle down to see what happens. They did they came through that time. They were super scrappy, they started to build momentum and here they are to day, a public company with a five billion dollar market gap. Yeah, that's all, you know, that's just it's, you know, every company has its near death experiences. But that's kind of a fun story for me because it was, you know, the last big crisis and, you know, betting on them, them believing and partnering with US and the coming out the other end quite successful. The other interesting story is, you know, very early in my venture career, in two thousand and one, which was interally enough, yet another crisis, right, I got I made two investments that you're really talented people. Both companies. All was called Icelon one was called VI or. They both progressed in different ways and they both did progress. You know, they both had, you know, millions in revenue, but vy core got dock at a certain point. They were selling into the aerospace industry, is long sale cycles on predictable sales cycles, ice, along with selling a first generation of storage, kind of like what Cula does. Any rate. The the irony is is literally the same week in December of two thousand and six, ice, along what public vic or shutdown and it just goes. It's that story of you know, great people, you know in this different market factors that's in maybe a little bit of luck that help one get one way in the other another way. It's very humbling, as it been for capitalist. I can tell you that, you know, to see that those kind of the spread Outkan can happen. The NEAT last thing about ice and they eventually got bought by EMC. They're a very big bit you know business. You know within EMC Today. And then the founder of that company is now I got a company that's all based on the intersection of biotech and data science and computer science and how you can do different things to understand not just the Geno but the proteum. But that's a conversation for a different time. Are Together. That's thanks. Yeah, unfortunately, I think our biotech skills on this caller. So we're grown, yes, or challenge, but we're always willing to learn. Last question for you. Do you think the seahawks will be playing...

...sometime in two thousand and twenty? I think the answers yes. In fact, I think the I think the schedules coming out here. It's going to come out really soon, and my understanding is we have some tie to the seahawks. We love the seahawks. Is that they've got a plan A, which is a bit of an optimistic plan, and then they've got another plan which might include some games being played without fans in the stadium and things like that. But I think that, unless you have a big outbreak within the players themselves, which could happen right it happened in the NBA. It's part of why the NBA shut down in March, I these I think you're going to have. You're going to have NFL football, at least in some modified form, you know, for the season, and you know, hopefully the seahawks will be in Tampa next year in February. Fantastic, fantastic, Matt. I want to thank you for your time. As always. Your inside a very valuable and love chatting with you and skip. Fantastic see you as well. Yeah, like wise, he matt, thank you very much, as a pleasure curry to me to pleasures mind. Yeah, thanks everybody for joining cloud crunch. Joined US next week for another episode with Special Guest, and thank you and have a great day. You've been listening to cloud crunch with Ian Willoughby and skip Berry for more information. Check out the block second watchcom company block, or reach out to Second Watch on twitter.

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