#TBT: Is the Era of the Technical Founder Ending?
Why Quotidian Ventures’ Rick Webb values industry expertise over coding ability
When Rick Webb began investing in startups, it struck him how much the tech community had a bias towards founders with an engineering background. In his talk at IWNY 2014, Webb questioned the wisdom of this bias, offering a vision of the future where industry expertise is valued over technical savvy and the role of engineering begins to look like accounting does today.
Webb wondered if engineering has become more a mindset than a skill set — a way of looking at the world through the lens of efficiency or algorithms. He said in the early days of technology, only developers looked at the world through these lenses since they were closest to it.
“Now we all have a smartphone in our pocket, we’ve seen what’s happened with Airbnb and Uber we’ve watched industries been disrupted…and we’re wondering why our industry hasn’t been disrupted yet,” he said. As part of the team at Quotidian Ventures, he’s seen non-technical founders come forth with truly disruptive ideas more often. These founders tend to have specialization in a non-technical industry and see a need technology could solve that an outsider might not be aware of.
“It’s not like the other industries have been unaware of the disruptive power of technology anymore. We’re all aware of this, and that used to be something that was primarily in the head of engineers,” Webb said.
Webb mentioned the famous Marc Andreessen quote, “software is eating the world,” explaining the context as the Internet and technology disrupting certain industries and beginning to disrupt others. He started thinking about why engineers had a built-in advantage and realized that disruption doesn’t necessarily equal the technology itself. anymore, and can also be centered around a business product, design or organization — areas developers don’t necessarily have an advantage in. “Engineering is one side of a coin, with industry expertise on the other,” he said. He used Airbnb as an example of a disruptor whose engineering, a marketplace technology with payment systems and booking, isn’t particularly impressive, but whose disruption of an established business and process is. Along with Uber, the company’s greatest challenges lie not in tech, but in legislation and policy. These observations of the changing nature of disruption lead to Quotidian’s philosophy of preferring founders who come from industries they’re disrupting. He said startups are moving in a direction where “the product is disruptive but the tech isn’t, necessarily.”
From a VC perspective, Webb sees his firm’s role as adding value, but recognizes that Quotidian’s small team can’t offer expertise in every industry. While some large VC firms have begun adding industry experts to work with their portfolio companies, Webb believes it’s easier for any firm to focus on teaching what is in their wheelhouse, such as marketing, sales, PR and coding, to founders that are already experts in the industry they’re disrupting, rather than trying to teach an entire industry to a founder whose main expertise is coding.
“Someone who knows a lot about an industry is better than someone who just knows how to code … but doesn’t actually know anything about the industry.”
As more people learn how to code, understanding the principles and what it can do will become more important for founders than personally coding, Webb said.
“Slowly this could become something akin to accounting. When you go and get your MBA, you have to take a basic accounting class and you understand the principles of accounting and you understand why it matters as a CEO in a company, but you’re not expected to actually do the accounting in your company, and I think that’s really where we’re going to start seeing tech going.” Webb also said it’s startups’ early days when the narrative of the technical founder is told most often but that as a company grows, founders tend to code less and, eventually, build teams that don’t even want them to code anymore.
Webb cited an example from Quotidian’s portfolio, Field Lens, a company digitizing the construction industry. The founder has no coding expertise, but saw a need for disruption while project managing the construction of the New York Times Building.
“He had an idea, he knew people at the largest real estate firms and construction firms, Webb said, “but he don’t know a thing about technology.”
Quotidian helped him find developers and product people and taught him about sales and SaaS models. The company recently raised a Series A round. More importantly, the founder has credibility within the construction industry, which helps with product adoption within a change-adverse subculture.
“As things are changing, we can invest in people that understand their industries and teach them the star up stuff in a way that’s a lot easier than teaching the industry to an engineer,” Webb said.
Watch the full session here:
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