insideHPC: What types of companies/products/ideas/individuals does Battery typically look at for its portfolio?
Adrian Cockcroft: Broadly speaking, Battery invests globally in cutting-edge, category-defining businesses in markets including enterprise IT, software and services, e-commerce, digital media and industrial technologies. And we invest at every stage of a company’s lifecycle from seed to buyout. From there, we are looking for big markets. Entrepreneurs who are building a great team and attacking a huge market opportunity are always of interest to us. We are also watching the tectonic shifts brought on by trends like cloud computing, big data and mobile, and working to identify the companies that are taking advantage of those trends to help define, or in many cases re-define, industries.
insideHPC: What/who do you (investors) track and follow as part of finding opportunity? Everyone is following you, Adrian, so who are your (the VC) influencers?
Adrian Cockcroft: Well, to clarify, I am not in a direct investing role at Battery; my title is technology fellow, and I am more focused on helping our portfolio companies with IT issues, assisting our investment team with due diligence, and following larger technology trends. That allows me to offer high-level counsel to Battery and its portfolio companies about where technology is going. Broadly, though, when our investment team is pursuing an investment opportunity, its first goal is to intimately understand the entire ecosystem of that specific market. So our team members talk to everyone: to the startups themselves, to their end-users, analysts, other entrepreneurs, and even other venture capitalists. It is like putting together all the pieces to a puzzle in order to have a clear picture of the industry and its rising stars.
insideHPC: Does Battery and VC in general take advantage of conferences to go opportunity shopping (like SC14, and its ‘disruptor show case’ for example)?
Adrian Cockcroft: Yes, we definitely see conferences as a great venue to connect face-to-face with company executives and to learn more about how they are approaching their market.
insideHPC: How do VCs interact with/engage startups? Is it luck? Don’t call us, we’ll find you? Pitchfest? Angel Network?
Adrian Cockcroft: It is definitely a mix of all of the above. We do a lot of research into market opportunities and the companies in which we are interested in investing. Sometimes an investment opportunity comes from a cold call to the entrepreneur, during which we express our interest in learning more about a particular company. Sometimes companies come to us through referrals, and sometimes we have existing relationships with entrepreneurs who have been members of the Battery portfolio with previous companies.
insideHPC: Where does an idea or individual go to determine if their startup has merit?
Adrian Cockcroft: Startups are searching for a “product-market fit”: A business concept for which they can find, or create, a market. Entrepreneurs should have a deep understanding of the problem that they are trying to solve. In many cases, the idea may come from a pain point or opportunity that they experienced in their career. The market fit is often harder to figure out. Can you find something that a lot of people need and is it a big enough opportunity to sustain a whole company? To validate an idea, entrepreneurs should find their first one or two customers from their own social network; people who say that if the product is built, they would use it. Venture capitalists will want to talk to the company’s marquee-customer prospects and if the idea looks plausible, they will leverage their own extensive network of contacts to help validate the concept.
insideHPC: We see startups getting funded by multiple VCs with one of them leading? How does that coalition come about?
Adrian Cockcroft: When a company is raising a round of funding, they will usually speak to and pitch multiple venture capitalists. From there, the venture capital firms interested in participating in the round of funding will submit a term sheet, which outlines their proposed financial contribution and conditions of a business agreement. Sometimes, this may be a proposal to ‘lead’ the round—by delivering all, or a majority of, the funding—and other times, it may just involve contributing a percentage of the overall funding. Once the company has collected all its term sheets, they will be able to choose which offer(s) they’d like to accept, essentially picking their lead investor, and then work with the other firms to round out the funding.
insideHPC: At what point in VC investments, and portfolio, for example, is a startup perceived as successful? When does a company advance from startup to ‘mature’?
Adrian Cockcroft: There are several metrics for success as a company grows, spanning from customer adoption and a company’s growth rate, to becoming cash flow positive and demonstrating sustained growth over time.
insideHPC: What would be your top ‘must do’s’ for start-ups?
Adrian Cockcroft: Company names matter more than you think. Most startup founders come from a technical background and don’t have a strong sense for marketing and brand building. When a company is just starting out their initial market is the venture-capital community. Companies need a name that is memorable and somehow related to the product idea. Later on, once the product has been built and is ready to go to market, companies will hire a VP marketing. Most likely, the VP of marketing will pick a new name for the public launch. A great example of this is the company DotCloud that launched Docker the product and then became Docker the company.
insideHPC: How do you see/envision the evolution of high performance computing (HPC) in future—especially with pervasive cloud, etc.?
Adrian Cockcroft: Companies like Cycle Computing provide greater access to computing resources via the cloud. Through Cycle Computing’s software, companies gain access to virtually unlimited computing power. This is the future model of cloud-based HPC.
insideHPC: How would you advise students (and educators) in terms of academic and extracurricular pursuits? Courseworks, study areas, etc.?
The biggest skill shortage in IT today is related to big data and data scientists. Most people in HPC have the analysis and math skills needed to meet this need, but you may need to retool from being an MPI programmer to learning R or Hadoop or Spark.
insideHPC: What advice would you give to individuals—STEM students/professionals—as your top personal/advisory ‘must do’s’ for their own personal/professional development?
Adrian Cockcroft: Get to know the venture-capital community by reading their web sites, learning about their portfolio companies and reading the investors’ bios. Also follow blogs and tweets from key venture-capital firms. Powered by Battery is our own blog, but Marc Andreessen, Brad Feld, Fred Wilson also have blogs to give entrepreneurs insight into how the industry works. There are some good books like Ben Horowitz’s “The Hard Thing about Hard Things”. Your challenge is to find a venture-capital firm and a partner within that firm whose experience and investment thesis match your product idea, and who has the right personal chemistry for you to build a trusting and supportive relationship.
insideHPC: How does someone elevate themselves to ‘your’ level of industry recognition/regard…what’s your recipe?
Adrian Cockcroft: Invest in your own personal brand. Building your brand will not happen on its own, and it won’t happen overnight, but it is a powerful way to position yourself. To build your brand you should aim to create something visible that matters to people. In my case, I wrote white papers and online articles on Solaris performance tuning. These articles eventually became a book on the subject. Being a published author led way to speaking and training opportunities, and helped to position me as the go-to person for hard performance problems.
Learning to present and train people on a technical topic is a great foundation. More recently, I used Twitter to find and join a community of experts on cloud computing, and leveraged the Netflix brand to create my own personal brand as the Netflix Cloud architect. Activity on Twitter matters: The more often you tweet, the more connected you will become. Go to conferences and tweet about the most interesting talks as you watch them; you will end up connecting with other like-minded people. And always be extra nice on social media. It is a good mindset to assume that anything you say on Twitter could be on the front page of The Wall Street Journal tomorrow.
About Adrian Cockcroft, Technology Fellow, Battery Ventures
Adrian Cockcroft has had a long career working at the leading edge of technology. He’s always been fascinated by what comes next, and he writes and speaks extensively on a range of subjects. Currently, Adrian is a technology fellow at Battery Ventures, a venture capital firm that invests globally in cutting-edge, category-defining businesses at stages ranging from seed to buyout. In this role, he advises the firm and its portfolio companies about technology issues and also assists with deal sourcing and due diligence.
Before joining Battery, Adrian helped lead Netflix’s migration to a large scale, highly available public-cloud architecture and the open sourcing of the cloud-native NetflixOSS platform. Prior to that at Netflix he managed a team working on personalization algorithms and service-oriented refactoring.
Adrian was a founding member of eBay Research Labs, developing advanced mobile applications and even building his own homebrew phone, years before iPhone and Android launched. As a distinguished engineer at Sun Microsystems he wrote the best-selling “Sun Performance and Tuning” book and was chief architect for High Performance Technical Computing.
He graduated from The City University, London with a Bsc in Applied Physics and Electronics, and was named one of the top leaders in Cloud Computing in 2011 and 2012 by SearchCloudComputing magazine. He can be found on Twitter @adrianco.