Q&A: General Catalyst’s Bilal Zuberi on “The Next Generation of Entrepreneurs”

Through Greenough’s work with companies across a wide range of industries, we’ve had the pleasure and honor of working with innovators whose passion for disruptive technologies drives their success.  One such entrepreneur is Bilal Zuberi, formerly the VP of Product Development at GEO2 Technologies and now a Principal responsible for cleantech investments at venture capital and private equity firm General Catalyst Partners.  To get Bilal’s perspective on what he’s looking for in the next generation of entrepreneurs, Phil Greenough recorded a one-on-one podcast with Bilal: Download Greenough_podcast_Bilal_Zuberi_2-25-09_final  We recommend listening in, but if you’re short on time, here’s a recap:

 

Phil Greenough (PG): Take a minute to talk about General Catalyst and its mission.

Bilal Zuberi (BZ): General Catalyst is a Boston-based VC private equity firm and we manage roughly 1.7 billion dollars.  Our motto is “entrepreneurs investing in entrepreneurs,” so unlike some of the other firms, every single investing professional here has been an entrepreneur in the past.  I guess if you had to talk about philosophy, it will be having empathy with the entrepreneurs and understanding what they’re going to go through on this journey.

 

PG: What do you look for in a potential entrepreneur and how do you try to help entrepreneurs based on your experience?

BZ: I think an entrepreneur, by nature, is going to be passionate about what they are doing.  There are a whole lot of fights that they will have to fight along the way.  What I look for is that passion and dedication, and that spark of something that I would consider to be genius; something that’s new, something that I haven’t thought of, whether it’s a technology, a business model, or a capitalization on an opportunity that could be short term or long term.  It’ something that’s unique and something they feel really passionate about.

 

PG: How do you begin to assess the landscape as you look at new investments?

BZ: Every VC should have a set of criteria that they understand and pursue.  We have similar ones ourselves.  We have particular views on the marketplace as it’s shaping up, and we have particular views on certain technology trends and the trajectories they are taking.  And that means not just capitalization now, but the road to commercialization and the exit for the VC firm.  What we look for is the reality of execution.  At the end of the day, it may be a great idea, but what makes someone an entrepreneur and not just an inventor is that they understand how to execute.

 

PG: How do you see the market unfolding and what are the right first steps for a successful company launch?

BZ: General Catalyst invests largely in early-stage companies, and for these companies, it is extremely important to have short, medium and long-term visions.  In the short term, you’ve got to get your product out the door.  Second, while it’s good to be green and it’s good to be clean, you’ve got to make money.  Third, you need scalability.  If you’ve got customers standing outside your door, can you scale? That’s what venture capital is all about – a scalable business model.

 

PG: Has the passing of the stimulus changed your thinking?

BZ: I would never invest in a company that had to depend on government subsidies for a long period of time. Government subsidies have a role to play in catalyzing the market, but they can’t be the sustaining factor.  That being said, what we are seeing is that certain markets can grow faster and quicker than we would have imagined without the stimulus package, and that changes the investment horizon so certain things start to become more attractive.

 

PG: What about your thoughts on “game changers” and “disruptive technologies?”

BZ: “Disruptive innovation” is a term that the venture industry holds rather sacred, and I adhere to that.  If you’re not disruptive – if you’re just incremental – it’s not worth it.  But you have to be very careful in understanding the marketplace. New business models are obviously very interesting, but the best companies come from teams that combine “outside-the-box” thinkers with people that really understand the market.

 

PG: What do you see as the right fundamentals for successful marketing programs?

BZ: Above all, you’ve got to be genuine and honest.  What are the metrics you should be judged by and how do you adhere to those? If you don’t meet those metrics, it hurts both the company and the industry in general.  Let’s be honest with the society that we’re trying to influence to use cleaner, greener products; authenticity is absolutely important because it’s our credibility that’s on the line.

 

PG: How do you see social media playing role in how companies establish authentic presence?

BZ: If I really want to know what’s happening in the industry I go to blogs, I go to podcasts, funky things happening on Facebook.  I think all of those things are becoming much more important.  It’s a very fast world, and I think people realize that the only way to keep up is to log into your Google reader and have twitters going all the time.

 

PG: How do you find people who are up-to-speed on the latest trends and how do people get up to speed?

BZ: I think one big problem in the cleantech industry right now is the availability of the human resource.  While there is the expectation that the “white knights” will appear, meaning brilliant thinkers who can also go deep on a particular businesses, what will happen is you’ll see more pairings. You’ll find incredible entrepreneurs out of the software or IT industries pairing up with “gray hairs” from the energy industry and launching ventures together. And you’re already starting to see that in any organization that has scaled.

 

PG: What about the value of face-to-face connections in this day and age, especially as social media continues to proliferate?

BZ: Face-to-face connections are so important.  For example, the whole goal of conferences and events is to bring people together – the interaction provides a broader view of many verticals, and one of the things General Catalyst does is build that face-to-face ecosystem around us.

Thanks for listening (and reading), and a special thanks to Bilal Zuberi.  To keep track of Bilal’s wisdom as it unfolds, visit his blog at http://bznotes.wordpress.com/.