If you’ve used an Amazon Kindle you’ve used tech pioneered by Russ Wilcox and co-founders at E Ink. Russ is now a VC who remembers well the trials of being a founder and is a deep well of useful knowledge about building startups. I learned a lot.
Highlights include:
The founding story of E Ink
The mistake of focusing on a financing strategy rather than product development
Burning $2 million per month but clients hated the product
Golden Lesson for Founders: don’t kill your company by sticking to an unrealistically high valuation; propping up valuation is self-delusion
Beware liquidation preferences (jargon-free explanation)
Comparison of VC funding to debt
Pillar is a seed-stage VC firm founded by people who have started companies
Pillar’s “phantom partners” are 22 startup CEOs who put money into the fund and roll up their sleeves to help
Write checks of $1 to $2 million in rounds of $3 to $4 million
Put in a lot of time and energy to support founders
Emotional support is provided by the Pillar CEO investors
Cool Portfolio Company: Kula Bio which has a really clever way to make earth-friendly fertilizer
Cool Portfolio Company: Higharc creates 3D plans for your home without needing an architect
Russ Wilcox’s wisdom on platform technologies
Sal talks about his portfolio company Akili Interactive that has a game to treat ADHD in children and invites accredited investors to join his syndicate.
What Russ learned from his post-exit world tour with his family
Golden Lesson for Founders: look for a co-founder first
Transcript of Pillar VC
GUEST: RUSS WILCOX
SAL DAHER: Welcome to the Angel Invest Boston podcast. I'm your host Sal Daher, an angel investor who delights in the fascinating tech companies being built in Boston's singular startup ecosystem. Because of the unique concentration of great universities here, Boston is a massive exporter of great startup ideas and a huge importer of capital. That creates a capital-poor and idea-rich environment, which gives me the opportunity to fish in a very rich pond of interesting companies. Now, one of these companies, for example, is a company called Akili interactive. We'll talk about it later on, but right now I'd like to introduce my really exciting guest, and we're doing this for the first time via a Zoom recording because of the contagion that's going around. We're keeping it generic, because maybe by the time this is launched, it might be another contagion. So, it is Russ Wilcox, a repeat founder and a venture capitalist.
RUSS WILCOX: Hi, Sal. Good to see you.
Brief Bio of Russ Wilcox
SAL DAHER: Hey, Russ. Good that you're here virtually. Russ Wilcox co-founded and eventually led E Ink Corporation to a $480 million acquisition. If you've ever used an Amazon Kindle or a Barnes and Noble Nook, you've used the electronic paper that Russ and his co-founders brought out of MIT's media lab into the market. Now, Russ studied applied math at Harvard and worked as a strategy consultant, then came back to Harvard for an MBA focused on entrepreneurship. He's now a general partner at Pillar VC, a VC company, which is a firm that tries to be friendly to founders, because Russ had a very painful life as a founder, ultimately successful. He's a general partner there, and I consider Russ really one of the three most thoughtful VC's in Boston. The only hint I'll give you is one of the other ones has been on this podcast, and there's a third one out there that I'd like to get some time.
But Russ is a person who I listened to his interview with Keith Klein, who by the way, I'm trying to get on this podcast. Keith, VentureFizz. He works with human resources. He also has a podcast here in Boston, and I listened to Russ on that and I was like, "Oh." I knew Russ before, but I have to get him on the podcast, because this is such a compelling story. So thanks to Keith Klein doing that podcast. You guys should listen to that as well. I have Russell on. I have a great privilege of having him on. Russ, let's start out directly with the E Ink story. Explain what it was and what led you to believe that electronic paper was an important thing?
The Founding Story of E Ink
RUSS WILCOX: So, the origin of that story involves going over to MIT Media Lab and meeting professor there who thought he would the world of publishing. This is about 1997, so publishing was how everybody got their information, and the problem was that pieces of paper are very easy to read, but they don't change, so most of the news got the people on physical newspapers. Joe had this concept that you should be able to push a button.
SAL DAHER: This is Joe Jacobson?
RUSS WILCOX: Joe Jacobson, who's, at that time, an assistant professor at the MIT Media Lab. He's got tenure. He's a key person over there now, but he had this idea that you should be able to push a button and have the entire newspaper rewrite itself, and he had this invention and he was very excited about it, and he asked me to come over and take a look. I got to see this little blinking pixel that had a gray and a light gray, and it took a lot of imagination.
SAL DAHER: Yes. It took a lot of imagination to imagine this thing actually being a useful device in its early days.
RUSS WILCOX: Yes. So Joe had a lot of vision there and sort of a first proof of principle
SAL DAHER: Now, if you could just explain to me what stage in your life where you that you had the freedom to go and look at this device?
RUSS WILCOX: Yeah. How did I have the freedom? I had just gotten out of business school two years sooner and had joined another startup, which went sideways.
SAL DAHER: Care to name the startup?
RUSS WILCOX: The startup was called PureSpeech and was started by Ben Chigier and Jamie Goldstein, so a good team, a good prospect. It was backed by Paul Mater at Highland. Good pedigree. Unfortunately, we made some classic errors along the way, which we can talk more about, but the bottom line was they had to lay off half the company, as it always happens, one week before Christmas, and there I was, Christmas '96, no job, $80,000 worth of business school debt, but determined that I loved tech startups and I wanted to do one.
I began to network around to see what was out there. I talked to an HBS professor, and the first that he wanted me to look at furniture.com, and I was like, "No, no, no. I want to do something that's even bigger, even bolder." He said, "Oh, change the world stuff. You've got to talk to Joe Jacobson. He's at MIT and he's going to revolutionize printing." At that time, $400 billion a year being spent to print information on paper, because the LCD screens of that era were not good enough to read. You would get eyestrain, and you read more slowly. You got more errors.
SAL DAHER: And it was not possible to have them in a permanent state. The LCDs had to have electricity flowing through them all the time in order for them to be displaying characters.
RUSS WILCOX: That's right, and a lot of electricity. It was sort of half the power budget of the laptop was the display, so you really couldn't have a portable device with a big screen at that time that would last long enough to read a whole book.
SAL DAHER: Right now, electronic ink. Let's geek out a little bit. It's actually ink particles, right? That are white and black? Please, please.
RUSS WILCOX: Yeah. So imagine if you will, a snow globe. You see lots of white snow, and if you were to look down, if you can make all that snow come to the top and you look down on it, you would see the color white. Now let's introduce a second type of snow, and let's give the white ones all a positive charge. Then we'll introduce a second kind of pigment that's black, and we'll give it a negative charge. Then if we flip the charge going across the snow globe, all the white snow goes down, all the black snow comes up, and now again from the top, we see the color black, and we could stop halfway and we'd get a nice gray or different types of gray tones. Imagine shrinking that snow globe so small, your eye cannot even resolve an individual globe, and we paint those across the entire surface of the display, and then we put that on top of some electronic so we can put the electric fields across.
It's just the same materials as toner, right? Except that toner gets fused and is dry to the touch. This toner stays wet all the time because it's inside the snow globe, and the snow globes feel dry the touch, but inside the snow globe it's wet. You put that color-changing substance spread out across the display, a very thin layer like a magic paint, and you put on the electronics, and now you can image it. Then if we make the liquid inside the snow globe a little viscous, then once you turn off the power, everything freezes where it is, and that gives you a permanent display that can also easily change with a little bit of electricity.
SAL DAHER: Viscous means molasses-like, if you make it kind of slow moving, so then you can maintain the image without power running through it, which is marvelous.
RUSS WILCOX: That's right.
SAL DAHER: Now let's get back to the business. So you were 13 years at E Ink. Tell us a little bit about the hurdles and the lessons that you learned during that time.
RUSS WILCOX: I should first say that when we got started, we were sure that the demand for this was infinite and that we would be probably the fastest growing startup in the history of mankind. I would say we were certain of that, and we were certain we would. What actually happened was it took about two years to make the science work nicely enough that people thought the image was good, and at the time we could still do very chunky pixels, so we were trying to sell it in these signs that I'd laid off 16 letters. They were giant [crosstalk 00:08:35] displays, basically. But the image was good, good black, good white. Took two years to make that so it would look good, and it took another two years to rechange all the chemistry so it would actually stand up to repeated use and survive under all kinds of sunlight or humidity, different temperatures.
Then we had a good-looking display that worked and was buyable, but then it took us another two years to make the manufacturing supply chain to be able to integrate it into a product to be able to sell it to anybody in any kind of volume. Along the way of those six years, we raised $100 million through four rounds of capital. Two-thirds of it came from corporate alliances. A new display technology can change publishing, electronics, a lot of different industries, a lot of partners. One third of it came from VCs, and after $100 million in six years, we almost had it working when we ran out of cash and had to do our first recap. We shifted down from say 150 people to maybe 70 people, then 60 people, then 50 people.
SAL DAHER: Recaps, for our listeners, means that existing investors get their shares heavily diluted to make it attractive for new people to come in, so they suffer some pain.
RUSS WILCOX: Correct. On the promise of what this could do. I don't want to say hype. That sounds wrong, but let's say on the promise of what it could do.
SAL DAHER: Naïve hope.
The Mistake of Focusing on a Financing Strategy Rather than Product Development
RUSS WILCOX: Our hope. On hope, not hype, we had raised four rounds, $100 million in total, and our post-money valuation was up to about $300 million. In fact, we had Bear Stearns. Bear Stearns no longer exists, but had Bear Stearns offering to take us public at a $700 million valuation.
SAL DAHER: A significant investment bank that just went under during the '07-'08 crisis.
RUSS WILCOX: Well, they were riding the technology boom of 2000 very heavily, so it's instructive that they no longer exist, but they were doing a lot of trade with these kinds of hopeful companies. All we had to do to get them to take us public, they said, was to get up to $5 million in sales. That would be enough to show it was working, we had traction. One of the great lessons I learned from that, Sal, is that never let your financial strategy become your business strategy, because everything at the company became reorganized around how do we generate the paper revenue of $5 million, even if the product was terrible.
SAL DAHER: Ah, disastrous.
RUSS WILCOX: We just had to get enough people to buy it to show the bankers their numbers so that we could do $100 million IPO, so that we could finance our big dreams. So the tail began to wag the dog.
SAL DAHER: Russ, if you don't mind the interruption, I just want to emphasize that point that you made, which is a really important point. Don't let your financial strategy dictate the strategy of your company. Christian Miguel. You know Christian, a venture lane startup hub in Boston? He was involved with various private mobile, like an independent mobile vendor. He set one up in Germany, than Australia. It was very successful, ultimately. We were fooling around the SIM cards before. He was amaysim, Simyo. They all had SIMs in their name. The first company he was involved with was designed to have an IPO in the German open market, what they call it, and it was just like terrible. They never got proper product market fit. It was kind of like Groupon for buying things called Let's Buy It. I think it was Swedish or German. The whole thing was just a setup to fail, exactly the point you're making. It was a financial strategy, not a business strategy.
RUSS WILCOX: Yes.
SAL DAHER: That's worth emphasizing.
RUSS WILCOX: We were too influenced by the capital market's context, and we wanted to do our IPO while the window was open.
SAL DAHER: This was circa what, what time?
RUSS WILCOX: It's 2000.
SAL DAHER: 2000. Okay, yeah.
RUSS WILCOX: Internet boom. In March, we literally had 50 people in a room drafting the S1.
SAL DAHER: And the market crashed in April. Yeah.
Burning $2 million per Month but the Clients Hated the Product
RUSS WILCOX: In April the market began to sink, and I think we had one more drafting session with half the group, and then the next month we realized it was done, and we found ourselves a company that had raised $100 million burning $2 million per month. That's a lot of money to go through in 30 days, and zero revenue, and the product was one that no customer liked. Some were willing to pilot it, so basically we were going to build the $5 million of sales just through pilots basically. What a disaster.
At that point, the strategy that we used was to go outside the U.S. and to go to a Japanese corporate giant Toppan Printing, and Toppan was sort of less embroiled in the market crash. They were a conservative company, and they loved paper and they make colored filters, so they understood displays. It was logical to them. We were paper and displays. We should be something they helped. They gave us another, I want to say $15 million, still at the high valuation, and we kept going another two years even though the market crashed. We were able to kind of ... This is another lesson, Sal, which is if things are going well, as you’re the founder, don't try to prop up a paper evaluation that's higher than reality. I found the one investor who was willing to accept our sky high valuation and keep investing. All we were doing was fooling ourselves, because-
SAL DAHER: Accept reality, take the haircut, the lower valuation, and accept reality, because otherwise, you're going to die on the vine.
Golden Lesson for Founders: Don’t Kill Your Company by Sticking to an Unrealistically High Valuation; Propping up Valuation Is Self-delusion
RUSS WILCOX: Right. In the history from here, I had three recaps in a row, so three of these down rounds, down valuations in a row. Most people are kind of amazed I was still employed by the end of that. I was a little amazed too, but one of my great lessons there is you're really only fooling yourself to prop up the valuation. We should have gone from $300 down to, like, $3, and instead we went from $300 down to $40, so people still didn't ... It didn't look that bad, still preserving some money. The problem with that is that all of the stock options for the management team and the employees are still underneath an enormous amount of liquidation preferences, so since you haven't accepted reality, you still have this overhang of all the money you're supposed to pay back the original investors who lost their shirts. If you don't accept reality-
Beware Liquidation Preferences (jargon-free explanation)
SAL DAHER: The condition of preference means that people get paid first, so there are all these people that we're going to get paid first even though the valuation was down, so effectively the valuation hadn't come down as much as it should have?
VC Funding Is Really a Lot Like Debt
RUSS WILCOX: Correct. I'll just take a little side moment to kind of get on my soapbox about liquidation preferences, if you will. I think one of the great mislabeling in the venture world is that venture capital is described as equity. Really a mislabeling. Venture capital, it's preferred shares, so it's really better if you're a founder to think of it as a loan instead, because you have to repay your venture investors in full before you make any money. That's the way it works, so it's really not someone buying into your company. It's someone loaning you money, and if things go well, maybe they might get to buy into your company, but if things go poorly, they get their money back in full before you make a dime.
They're not really your partners. They're really more of their lenders with an upside interest, and this, I think, bamboozles a lot of first time founders. But I would just point out to you if you wouldn't be happy to get a bank loan to go after your venture, you shouldn't be happy to take venture capital, because it's just a more expensive type of bank loan. I had taken out $100 million in bank loans at that point.
Pillar Is a Seed-stage VC Firm Founded by People Who Have Started Companies
SAL DAHER: That's fine. Let's move on now, since we're a little pressed for time, to Pillar VC. Just tell us what sets Pillar VC apart from other VC firms.
Pillar’s “Phantom Partners” Are 22 Startup CEOs Who Put Money into the Fund and Roll up their Sleeves to Help
RUSS WILCOX: Pillar is founded by people who have started companies, and in addition to me, I've done three. There's also Jamie Goldstein, who founded the speech recognition company we talked about, and Sarah Hodges, who has been on the management team of four different growth companies. In addition, we kind of have a phantom fourth partner, which is equal to these 22 CEO's in the Boston community, including the founders of Wayfair, Neteeza, Fuse, Demandware, DraftKings, TripAdvisor, and a bunch more. All of these unicorn CEOs in Boston came together, helped to fund Pillar, and they together make up this fourth partner, who is collectively able to support all the people we invest.
SAL DAHER: So, they're like formally limited partners, but they're kind of informing you guys on what they're seeing and so forth?
RUSS WILCOX: They're limited partners, but they also receive a portion of the carry, so they really are owners of the fund in a great way, so that they have a great incentive to help. The point is that these are people who've all been founders. We are a seed stage fund entirely focused on Boston, so we live here, we've built businesses here. We're going to turn around and create the next generation of pillar companies in the Boston economy to create jobs and support friends and neighbors and do what we love to do.
SAL DAHER: But we need capital. Two-thirds of Series A money comes from outside of Boston. We need more money here, because there's a lot of ideas bubbling up here.
RUSS WILCOX: If you ask yourself what's the limiting reagent? What's in shortest supply? There is capital, but it's also expertise, and there's not that many people in Boston who have scaled up $1 billion company and have lived through successive generations. We didn't finish off the E Ink story, but that was the ultimate result of it was building a multimillion dollar business that we sold for half a billion dollars. There's just not that many people who've done that, who've gone public as a lot of the founders I mentioned have done. I think that even more scarce than cash is people like yourself actually, Sal, who are willing to sit down and help the next generation to build their companies and give them the advice. That's what Pillar's all about. As I said, it's for people who are just early stage, the first capital they need, just getting started, really almost need help refining the business plan but have a talented idea or product, and then we provide a lot of support after the check is written.
Write Checks of $1-2 Million in Rounds of $3-5 Million
We're typically writing checks of $1-2 million. We're usually joined by some friends, so it might be $2, $3, $4, $5 million seed round, And then we put in a lot of time and energy to support people. That's both content wise with our founder guide and a lot of templates and resources, and it's also emotionally. I think this is an under discussed part of being a founder. It's a lonely job, it's a very stressful job, and you really need other people in the community to help you and to be a friendly face from time to time.
A lot of what we do is have those great CEOs I talked about just take people to dinner. That's our most popular program. Every four to six weeks, one of those people takes out a dozen of our CEOs, plus about half the crowd we bring out are other people in Boston who are also starting companies or interested in the ecosystem or maybe thinking about starting a company. We are generating. We do a hundred events a year, and we're just trying to stir the pot and get great people in Boston to meet other great people in Boston and help new startups bubble up out of that, and emotional support for the founders comes from peers the best.
SAL DAHER: Excellent. Just quickly give me two portfolio companies that you think illustrate the kind of companies you're looking for, concrete examples and explain to me how they illustrate that just briefly.
Cool Portfolio Company: Kula Bio Which Has a Really Clever Way to Make Earth-friendly Fertilizer
RUSS WILCOX: Yeah, so an example of one of them is Kula Bio. Kula is based on an invention Dan Nocera at Harvard, and he and his co-founder, Kelsey, figured out a way to microorganisms and produce organic fertilizer using only sunlight and air, draws nitrogen out of the air and a little bit of salt. From purely sustainable natural resources and in a very low capital way, they can make this fertilizer, which works as well or better than synthetic fertilizer, and it's going to solve the nitrate runoff problem, and it's much less expensive to make than other kinds of manure or other kinds of organic fertilizer. It doesn't smell. It's a great product. He came to us and said, "Out of the last 30 companies for Pillar, 15 of them been spin-outs from Harvard or MIT or some other university, Carnegie Mellon, so could you help me?"
We sat down with him, we helped hire a team. We funded it, put some money in, a little bit of money. Actually as I think about it, in that case we mostly put effort in, not that much cash, but helped pulled together the business team and business plan and got them up and running. They've now raised, I think, over $5 million, and they have a great product and they're off to the races.
SAL DAHER: It will be the electronic paper of fertilizer.
Cool Portfolio Company: Higharc Creates 3D Plans for Your Home Without Needing an Architect
RUSS WILCOX: Correct. Correct. Another one, just the flip side of that, is called HiArch, And what HiArch does is they have a blending of architects and computer video game people and 3D printing, 3D modelers. What those guys are doing is they're creating a tool that lets anybody who wants to build their new home go in and design their home right in their web browser in a way that looks photorealistic, and you can walk through the rooms. It remembers all of your settings, and you can design with a great level of control, but you can't actually do anything. It uses computational architecture principles to make sure that whatever you do design on your screen can be built and will meet code, And then when you're done, you can push a button to get billable blueprints.
You're taking years-worth of architecture and do it right in your web screen with tremendous variety, and it's so fun. That's a product that is in beta, but when it comes out, we've got hundreds of thousands of people every year that try to build from bare lots that usually are buying these $2,000 cookie cutter drawings off the internet. That's why a lot of housing just looks dull. This is going to open up a new era of customization and design.
SAL DAHER: I can see the Wayfair guys being interested in this as well for selling.
RUSS WILCOX: Sure. Once we know for photorealistically what your room layout is, why not drag and drop in furniture. I think there's a lot of architectural product companies that would like to be part of that, and I think I read that in the Blue States, the number one TV show is modern family, but in the Red States, the number one TV show is these home and garden television channel shows. Everybody loves decorating and design, so it really plays off that cultural trend.
SAL DAHER: Excellent. Well, we're kind of running short on time, but I just want to say two things. Number one, on the interview with the Keith Klein, you mentioned a really interesting thing, because electronic ink is a platform technology, and you were at one point fining board members for suggesting new applications for this platform technology, because it distracted people. I invest in platform technologies on the life science side. It really rings true to me. That's an excellent thing to do.
Russ Wilcox’s Wisdom on Platform Technologies
RUSS WILCOX: I think platform technology, you have a choice as an entrepreneur whether you're going to go full stack and actually create a product or product and service or try to be a platform, and you really have to ask yourself, "Are you creating a new market that didn't exist, or are you serving the existing market?" If you're serving the existing market, everybody already knows they what they need from you. Let's say you came up with a better form of Photoshop or something. Everybody already knows what would that, and you can have a platform, you could have plugins, and that would create an ecosystem right away, but if you're trying to do something new, like a new kind of display for a new category of electronics or a new media format that doesn't even exist, right? The more new it is, the more you really need to be a full service, so you can be certain that your end customer gets a wonderful experience. You really can't do that by just the one layer if there's no one coming after you.
SAL DAHER: Do you think it's possible for someone to start out as a platform and then to try to go and create depth in one of those use cases?
RUSS WILCOX: I do. I see a lot of companies that attempt to start a platform. They realize there's no one there to take the Baton forward, so they will shrink their platform to whatever. I think that's a healthy choice that people just skip to. At the end of the day, you have to not just make your widget. You have to make sure the customer is having a wonderful experience, and you have to arrange what's called the whole product. You have to arrange all the different elements, and either yourself or an ally has to provide that so customers are ready to buy. Again, the more new it is, I think the more you are well-served to do the complete whole product experience, so you're smart to be as narrow as you could. We needed to narrow at E Ink, and I think that platform companies, for example, the Kula Bio, the principal of what they're doing could be done for other types of crop chemicals or even to make biofuels, but we're not doing any of that. We're just going to make a terrific organic fertilizer.
Sal Talks about his Portfolio Company Akili Interactive that Has a Game to Treat ADHD in Children and Invites Accredited Investors to Join his Syndicate at https://www.angelinvestboston.com/our-syndicates
SAL DAHER: Yeah. Excellent. Excellent. Coming up next, I'll ask Russell Cox about some of his other intriguing ventures and amazing things that he's done. Really remarkable. However, before we do that, I'd like to tell you a bit about an interesting company in which I'm an early investor, Akili interactive. Are you familiar with Akili, Russ?
RUSS WILCOX: I've heard of them. It sounds pretty interesting.
SAL DAHER: Yeah. They're in the forefront of digital therapies. It's expected that they'll receive an FDA approval for being really the first video game to treat ADHD, attention hyperactivity disorder, in adolescents, and it's really the first time that they treat not the symptoms, but the actual rewiring of the brain. All their data and results from their study were published in the Lancet about a month ago, so it's available out there. It's really amazing stuff.
The reason I mention Akili is to give an example of the kind of company that I get to invest in being an early stage investor here in Boston and investor. I've been an investor for I think about six years. It's taken time, and with this COVID thing, probably people in the FDA are not going to be working very fast. We'll see what happens. Eddie Martucci, the CEO and co-founder has promised to come on to publicize this, so I'm hoping to have another podcast. The point for me here is if you're an accredited investor and you're interested in these types of companies, not Akili. They're not investible now. There might be other ones. Go to angelinvestboston.com, fill out the accredited investor questionnaire, put your name in there, and then let's talk. [Note: Akili’s app was released under the FDA’s COVID-19 emergency use guidance after the interview was recorded.]
What Russ Learned from His Post-Exit World Tour with His Family
But, okay, so Russ, we really are out of time. What's your name in there? And then let's talk. But okay, so Russ, we really are out of time. Transatomic Power. Let's give you a choice. Which one do you want to talk about? Piper Therapeutics, Transatomic Power, or your grand tour of 32 countries.
RUSS WILCOX: I'll talk about the grand tour, because I think that's the most relatable. This comes back to what it's like, Sal, to be a founder and how stressful it is. You've got to remember it's not just stressful for you, it's stressful for your partner or spouse. My wife had watch me be obsessed. I think when you're a founder, you're obsessed, and it's sort of like you're in a constant state of trauma, so I think a lot of times that can be wearing on the spouse. About year seven, we had a moment where she was just saying, "This is tedious for me here, and what are we going to do?" The handshake we had was that, okay, when this thing either succeeds or fails, whatever happens, we're going to do what you want. What do you want? What she wanted to do was travel.
So we said, "Okay, we'll either take six months in a Winnebago, or we'll take a year in a jet plane. Depending on the outcome of E Ink, we're going to travel and you get to live out what you want to do. I'm very fortunate that the result was we did in the end sell the company, and we could do take the year off in and take our kids out of school and travel. Now you're going to do that. It's a big deal to take your kids out of school. All of a sudden, the travel list keeps expanding. Well, we've got to see Botswana.
SAL DAHER: A lot of textbooks.
RUSS WILCOX: Reading a lot of textbooks. It's a big production, so then the list gets longer, longer. We ended up going to 32 countries, traveled 14 months, we saw 80 different locations. Our kids went through fourth grade, and the other went through seventh grade, so a great moment for our family to get back together, back in touch and get close. Really a terrific impact, and I think I'll just take away from that my three observations. If you spend a year touring around the world, what do you conclude?
I saw three big things there. One of which was the plight of women. There's a lot of fights still for women to achieve equality in the U.S., but outside the U.S., I'd say in about two-thirds of the world, it's nowhere close level we've got here. Really, women are treated as a second class in profound ways. Secondly, we saw a lot of corruption and just seemed all across the world people are not really trusting their leaders. I don't know how we fix that, but it is a problem everywhere. Then thirdly, we saw a lot of pollution. Again, you don't really detect in the U.S., which has mostly got clean air, mostly, not all, clean water, a park service and so on. In a lot of countries, people are choking on smog, and the trash bags are in the streets, and there are people burning garbage on street corners, and it's hard to breathe. I was really observant that there's a lot of pollution. I had not really considered myself a green before, but coming back, I was quite aware of how much we're overburdening the Earth's resources.
SAL DAHER: Indeed.
RUSS WILCOX: My second startup, which we don't have time to discuss in detail, was a clean energy company trying to go after that. I think a lot of serial entrepreneurs, if their first project works, their second project is a little bit more of a passion project. I actually think that's a little bit of a trap. That company, Transatomic, also didn't have great commercial prospects. It was more noble.
SAL DAHER: That is such a capital-intensive business that it's just-
RUSS WILCOX: Yeah. Then my third one, as you mentioned briefly, was in the cancer space, and that was fun, but it's a tough road to do drug development, so that's a long shot business. For my fourth act, I wanted to do something where I could really help a lot of companies in parallel and that's how we get to Pillar.
SAL DAHER: Excellent. Excellent. Now, Russ, we're right up against the time here. Is there anything else that you'd like to address to this audience of founders, angels, people who work at startups, people who are interested in startups?
RUSS WILCOX: I want to thank you, because I think that angels are such a vital part of the ecosystem. They're generous people. They give far more than money, and I'm sure you're doing very well return-wise, but it's a long wait for the returns, so this is really an act of service and an act of love for your fellow community members. I am so impressed with you, not just being an angel but then this podcast to help everybody, so I guess I have to say thank you.
Golden Lesson for Founders: Start by Looking for a Co-Founder
Then if I had one little bit of advice, I think for anyone who's listening who's considering to start a company, let's just go to the very beginning. There is a moment of someone saying, "I want to start a company. I'm not sure how." I'll just share one piece of advice to have for that, which is don't think you need to sit in a corner and try to do a brainstorm and put yellow stickies on the wall with all your different ideas. It's very unlikely you'll come up with an A+ idea by yourself, and I like to encourage people who are thinking of starting a company not to hunt for an idea, but to hunt for a cofounder.
Find a person with a deep expertise who's built something and really understands their customer problem or has a new piece of science, or they're a visionary of some store. That person is out there who does have an A+ problem, but they probably are able to get there by themselves, so you go find a person you're compatible with and between the two of you and your backgrounds, the idea will become apparent. Bottom line, don't look for an idea. Look for a person.
SAL DAHER: That is so well said. Ed Roberts, the Sloan School, Chuck Easley of Stanford, they both been on the podcast. They say the most robust result of the study of entrepreneurship is more founders, better, even up to the fourth. Complimentary, they have to work out everything, but it just increases your chance of success.
RUSS WILCOX: Yeah, I totally agree, and I loved Ed's book, Entrepreneurs in High Technology. What struck me about that was if one of the founders is actually sold on commission before, it's like four times the chance of success, because these people understand what it takes to get an order, so definitely try to look for someone on your team who can get an order.
SAL DAHER: Well, Russ Wilcox, you've been very generous with your time to endure all the technological problems that we've had and to be on. I'm really grateful to you. I'd recommend people to listen to the Keith Klein interview as well and get the whole body of work. This is one of Boston's three most thoughtful VCs, and I hope we get you on another time as well, and more extensively we can talk about more things. Thanks a lot.
RUSS WILCOX: Thanks. [inaudible 00:34:37].
SAL DAHER: I would like to invite all our listeners who enjoyed this interview with Russ Wilcox, a venture capitalist, repeat founder, to please leave a review on iTunes so that the podcast can get found. Thank you.
I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.