With the pandemic impacting so many aspects of our daily lives – both personally and professionally – I was curious to find out how it is affecting how things in the venture capital space.  And last week I had the opportunity to speak with Scott...





Scott shared how his experience as an entrepreneur and later at Salesforce as SVP in product management has helped shape his approach to being a VC, and how COVID-19 has impacted how he operates.  Below is an edited transcript of a portion of our conversation.  To hear the full interview click on the embedded SoundCloud player.




smallbiztrends · Scott Beechuk Of Norwest Venture Partners – Lots of optimization left in the buying experience


Scott Beechuk: It was one of those things where I’d spent probably more of my career as an entrepreneur. I spent almost seven years at Salesforce, but I love building companies and it’s always been something that I’ve enjoyed. I was a software developer out of undergraduate and thought maybe I could build software myself.  I turned out not to be the best software developer in the world, sitting behind a screen for too many hours at a time, I kind of lose my mind, start popping up out of the cubicle like a gopher and looking around to try to find somebody to talk to. That’s when I realized, I just really love building companies. And so we went on about a 15-year journey as an entrepreneur and built three companies in a row.

We sold our last company and it led me to Salesforce, but I knew someday I wanted to get back into the building company mode. You can either do that as an entrepreneur, which was definitely on the table, but VC, especially with Norwest, which is a great platform, just gives you the opportunity to work with a lot of great companies and a lot of great entrepreneurs. And so it seemed like a logical next step. I love it every day and just love the entrepreneurs that I work with. Sean Whitely, just jumping in there a second ago. He’s one of the co-founders in the portfolio. It’s always great to see smart people, creative people doing innovative things and being part of that.

Small Business Trends: What were your expectations about going into VC and how were they different from what it actually was?

Scott Beechuk: I’d always been on the other side of the table. I was the entrepreneur who was pitching and having the VCs on the other side of the table basically telling me no most of the time, and tell me all the reasons why that company that I was building was never going to be a big category. We were a feature, not a company or I was a 24 year old who just didn’t know what I was doing. That was the feedback, and then that was my experience with VCs. But there were like 5% of the VCs that we worked with that invested in us that were incredibly helpful. They brought more than just the capital to the table. They brought a network, they brought customers, they brought experience.

They helped me avoid the massive potholes that a lot of early entrepreneurs make, that just haven’t been around the block a few times. Just that advice, guidance, and just help at the board level was just so incredibly powerful. I thought maybe one day I could be one of those people who is in that 5%, now I’m three and a half years in at Norwest. I love the companies that I’m working with right now, I think are the best companies that I’ve seen in a really long time.

I feel great about that side of it. I’d like to think that I’m adding value, but that’s my job, to constantly try harder to give back to the companies that I work with. I like to treat myself as an employee of the companies that I invest in. If they can see me as an extension of their team, then I’m doing my job.

Small Business Trends: What were your expectations and how were they different from what it actually was?

Scott Beechuk: I’d always been on the other side of the table. I was the entrepreneur who was pitching and having the VCs on the other side of the table basically telling me no most of the time, and tell me all the reasons why that company that I was building was never going to be a big category. We were a feature, not a company or I was a 24 year old who just didn’t know what I was doing. That was the feedback, and then that was my experience with VCs.

But there were like 5% of the VCs that we worked with that invested in us that were incredibly helpful. They brought more than just the capital to the table. They brought a network, they brought customers, they brought experience. They helped me avoid the massive potholes that a lot of early entrepreneurs make, that just haven’t been around the block a few times. Just that advice, guidance, and just help at the board level was just so incredibly powerful.

I thought maybe one day I could be one of those people who is in that 5%, now I’m three and a half years in at Norwest. I love the companies that I’m working with right now, I think are the best companies that I’ve seen in a really long time. I feel great about that side of it.

I’d like to think that I’m adding value, but that’s my job; to constantly try harder to give back to the companies that I work with. I like to treat myself as an employee of the companies that I invest in. If they can see me as an extension of their team, then I’m doing my job.

Small Business Trends: So talk about how the pandemic has impacted your outlook and your approach to what you do. If you could take us through, if there are any significant changes, has it changed the kind of companies you’re looking for or the kind of criteria that you’re looking for?

Scott Beechuk: I think that’s the billion dollar question; how has the pandemic and just the nature of working remote and the nature of engaging with people when you’re not face-to-face, how’s that going to manifest? Are there tailwinds that we can look for?

Obviously you see the video communication companies, seeing huge tailwinds, that’s kind of the most obvious answer. I start to look for what are the companies that are enabling us to connect and just sort of build relationships at a distance. Sometimes building relationship is actually a little bit… It can lead to transactions as well. I look at online commerce and I look at the way that digital transformation has manifest in all kinds of industries. Retail is a really, really important one because a multi-trillion dollar industry and how the retail companies that were behind and had planned to go through these multi-year transformations to build this ideal scenario online, where they got this incredible presence, mobile and web, and just like every touch point with their customer.

Now they’re snapping their fingers going, okay, we got to make this happen now. And so there are a lot of really interesting enabling companies that are helping retailers get to market faster with a digital solution.

Sometimes that’s as simple as an e-commerce site. Other times, it’s ways to engage with customers in an omnichannel way, they hadn’t prioritized before, because if you’re a retailer or a CPG company of any kind that relied on brick and mortar locations, you might’ve been actually doing pretty well before the pandemic, but now all of a sudden you realize, Oh my gosh, that’s just not what the future holds now, probably a year from now and who knows maybe indefinitely into the future. So they’re scrambling and trying to find ways to solve that problem.

I would say the remote work side of things is really interesting and all the enabling companies and technologies there, but then all of the enabling companies that are allowing, not just retailers, but certainly retailers as a huge category, but anyone who has to transact, there’s a commerce portion to what they do, helping companies accelerate that digital transformation.

Small Business Trends: Are you seeing any other relationship patterns or changes between, different kinds of enterprise applications, particularly around CRM-ish kind of things, and how that’s impacting the decision-making to go after this kind of company or that kind of company?

Scott Beechuk: I think there’s a lot of optimization left around, just the entire buying experience. It’s not just a digital problem. I was just discussing this the other day with somebody, about the fact that there’s so many ways that we can create an Amazon-like experience for any retailer in the world, because Amazon is obviously pioneered the idea of owning the entire supply chain from the beginning of sourcing products, sometimes even creating their own products all the way through the delivery of those products to your home, with Amazon delivery trucks and then even retail locations, through Amazon Go concept.

It’s a great model, but in order to make that happen for all kinds of other retailers, it has to be built in a more easily consumable way, in a more generic way that can really broadly across multiple industries work and plug in quickly.

I think the logistics industry is an interesting one, because historically you haven’t seen too many companies focused on this, how do we enable same day delivery for any retailer? How can we offer that as a service? It’s an interesting problem, when you ask yourself, it’s a lot of mechanics, it’s warehousing, inventory management, it’s logistics of actually transportation of the products. It’s predictive stocking and warehousing of products. It’s geographic models around products demand. Those are a lot of the things that obviously Amazon has been working on.

But when you start thinking about building horizontal companies to serve the needs of thousands and thousands of other retailers, to enable that same thing to happen. It’s a pretty interesting problem set, with not one single company to come out and solve it. There’s going to be a slew of new and interesting companies coming on market. So those are some of the companies that I’ve been focusing on lately.

Small Business Trends: What role does their community play in that? And also, what about the ecosystem surrounding that company? How do those things play into your decision making about whether to go, try to invest or whether to pull away?

Scott Beechuk: I think community is more important than anything right now, in terms of how companies and retailers have had to transform, because it used to be that you could actually… Especially specialized products, this is a category that I’m particularly fond of right now because products… I’ll just use one example like outdoor sporting goods.

The communities that are built around outdoor sporting goods are vast and deep. People get super passionate about things like snowboards and skis and snowmobiles. All of these sporting products that are extremely complex, you could have a community of people that really just talks about ski poles. Now ski poles seemed like a really basic product, but when you dig into it, the materials, how they’re made, where they’re made, where you combine, which kind you should be using, the types grips, you can get the kind of custom… There’s this one company, I forget the name of it. That’s actually making wooden ski poles, and there’s some advantages to those, believe it or not. Taking us back a hundred years.

We know that customer reviews drive intelligence and create better transactions. In other words, I become more informed as a consumer and I can engage with a brand and then make a more informed decision about a product that I want to buy. But, now that things are moving more and more online and more quickly, I think the idea of community becomes incredibly more important. And so what I’m what I’m looking for and what we’re thinking about right now are, how do we bring more communities into not only the buying process, but the research and browsing and just awareness and discovery process, because that’s where communities become extremely valuable.

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This article, "Scott Beechuk of Norwest Venture Partners: Lots of Optimization Left in the Digital Buying Experience" was first published on Small Business Trends

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