News & Views

 

Introducing Madrona’s Newest Strategic Director: Betsy Sutter

We are thrilled to have Betsy Sutter, Chief People Officer of VMware, join Madrona as a Strategic Director.

What is a “Strategic Director” at Madrona? Madrona is fortunate to have a select group of senior operational leaders who mentor talented founders and senior executives of Madrona portfolio companies, advise our rapidly growing companies, and help Madrona navigate key strategic decisions. Our Strategic Directors include Madrona founders, Jerry Grinstein and Bill Ruckelshaus, as well as successful technology company CEOs Steve Singh, Sujal Patel and John McAdam.

Betsy Sutter was VMware’s first HR leader, and she helped the company scale from under 150 employees when she joined to over 21,000 today (not to mention FY18 revenue of just under $8B). As Corporate Senior Vice President and Chief People Officer, she has worked with and advised VMware CEOs Diane Greene, Paul Maritz and Pat Gelsinger – three iconic technology leaders. She brings a unique perspective to Madrona and this role, as she has a keen insight and appreciation for building a strong culture, recruiting and retaining top talent and, critically, how this enables and aligns with business strategy and execution. She additionally plays a role as an industry thought leader and has spoken broadly about inclusion, diversity and building high-performance organizations.

We have already been fortunate to engage with Betsy in a number of different ways. She spoke at our CFO Conference in 2017 and has met with many of our portfolio company CEOs and senior leaders. In every case, our own team as well as our portfolio companies have been impressed with Betsy’s business insight, wisdom, infectious enthusiasm, practical advice, and bias for action. These insights will be incredibly helpful to portfolio companies, whether they are already at scale or at the formation stage.

Betsy has this to say on becoming a Strategic Director at Madrona:

A key element to successfully building the next generation of best-in-class companies is to, at the start, set the key culture and value tenants that will enable innovation. I am delighted to be part of Madrona’s incredible team, and I look forward to sharing my passion for helping companies develop strategies that empower their people, build communities, and ultimately thrive and scale.

Betsy, welcome to the Madrona family! We look forward to working and learning together and to helping to build the next generation of technology company success stories in the Pacific NW!

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Suplari Raises $10.3M Series A Round to Bring AI to Procurement

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This Seattle Startup Is Developing AI Technology that Works for Smartphones

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Accolade Raises Another $50M, Total Funding Tops $200M

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Angels Still Helping Entrepreneurs Take Flight, 20 Years After Initial Spark From Tom Alberg, Bill Gates Sr. and Tom Cable

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Welcome Sudip to Madrona

Today we are excited to welcome Sudip Chakrabarti to Madrona as a Partner on the Investment Team.

Sudip is the kind of team member we look for – someone who shares our passion for helping entrepreneurs build their companies from day one. When we first met, Sudip was an investor at Lightspeed Venture Partners in the valley, a team we have worked with for later stage fund raises for Madrona portfolio companies. His focus on cloud and infrastructure technologies means we crossed paths many times and we were impressed by not only his technical and business expertise in this market but also his approach to working with startups. He gets in and does the work to build companies and help founders succeed in realizing their vision. This is how Madrona approaches company building from day one – to day whatever – we are here to help companies succeed and build the greater Seattle ecosystem.

As a partner at Madrona, Sudip will be focused on investments in the enterprise, infrastructure markets including how open source software and technology is changing the enterprise software landscape.

Prior to joining Madrona, Sudip was a partner at Lightspeed Venture Partners where he led or co-led investments in Streamlio, Serverless, Rainnet, Exabeam and, a Madrona portfolio company, Heptio. He started his investing career at Osage University Partners and subsequently was an enterprise investor at Andreessen Horowitz where he was involved with companies such as Actifio, Databricks, Digital Ocean, Forward Networks, Mesosphere and Samsara.

Sudip also brings the experience of being a founder to the table with entrepreneurs and founders – he started two companies early in his career and understands first hand the triumphs and struggles of company building from day one.

Sudip is our second convert from the valley (Maria Karaivanova joined us from Cloudflare last year) and our first from a Valley VC. Please join us in welcoming Sudip to the Pacific Northwest!

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The Riveter – The Time is Now for this Co-Working and Digital Space

Today we are very excited to welcome The Riveter into the Madrona family. Founded by Amy Nelson just 10 months ago, The Riveter has quickly grown into a premier female forward work and community space.

The Riveter has their first two locations up and running in Seattle, but they are not stopping there. They are expanding to other cities – Los Angeles is next. An important part of their appeal is that they complement the space with programming for their members, and soon will be launching a digital platform to help connect their members even when they are not in the physical spaces.

When we evaluate companies, we look at the entrepreneur, the business model, and the market. The first time that we met Amy, we were incredibly impressed with The Riveter across all of these dimensions. There is an amazing “founder-product fit” between Amy and her company, as well as all of her early learnings on building a great community-driven business.

Amy is everything we look for in an entrepreneur. She is passionate about her business, her customers, and her team. She has a vision and mission rooted in her own experience, and she is building a product that she would want to use. She has built her own path and is now on a mission to help other women do the same thing.

Amy started her career in the corporate world but eventually decided to depart and quickly saw a market need and opportunity that resonated – building workspaces and community for professional women. The Riveter embodies the cultural movement to actively support women pursing their passions, stepping up, and succeeding in whatever they put their minds to, and it is clear that this is resonating, not just here, but around the country and the world.

That brings us to their market and business model. The Riveter creates workspaces that are female forward and different than other coworking spaces. They have more open space, programming focused on the issues women face in business, and some quiet spaces and mothers’ rooms. They don’t have onsite daycare, they don’t have pink furniture, and they don’t have ping pong tables and kegs. These are inclusive, professional environments for meeting and working designed with women in mind.

Women start businesses at a rate five times that of men, and their businesses often look quite different than the companies that occupy other coworking spaces. Their working patterns are often more flexible, as they fit a lot of competing priorities in their day. The Riveter has been able to hone in on this market and design a business model with great economics focused on professional women by offering things like part-time memberships and locations closer to people’s homes. Because of these different dynamics, The Riveter is maximizing their space differently than other co-working locations.

Our investment in The Riveter comes at an interesting time for Madrona as well. Recognizing the need for more innovation space in our region, we leased the floor below us to build out such a space. In that space we will be hosting early technology oriented companies, enterprises looking to see the latest tech being developed and will have a programming schedule that supports the companies and the community. It is very different from The Riveter in the market and goals and shows that there is space for all kinds of co-working spaces in cities around the country.

As we spoke to members of The Riveter in our diligence process, the theme we heard again and again was “I love this place, and I love this community,” and now we are incredibly excited to support The Riveter in their next phase of growth. Please join us in congratulating Amy and her team on their funding and success!

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Seattle Startup Unearth Lands $3M, Looks To Transform Construction Industry

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Welcome Unearth to Madrona!

Pictured in photo:  From left to right, Nate Miller, S. Somasegar, Brian Saab & Amy Hutchins.

Welcome Unearth to Madrona!

It is always a happy occasion to welcome a family member back into the household.

With Madrona’s investment in Unearth Technologies, we are excited to be working again with Brian Saab (CEO/Co-Founder) who we had previously worked with as the co-founder of buuteeq (a former Madrona portfolio company that was acquired by Booking Holdings, formerly Priceline). Brian co-founded Unearth with two other buuteeq & Booking Holdings employees, Amy Hutchins, Chief Product Officer and Nate Miller, Chief Design Officer. buuteeq spurred a lot of entrepreneurial spirit as we have also backed Pixvana – started by another co-founder of buuteeq, Forest Key.

Brian went back to his family roots as he began thinking of his next company. Brian grew up in a multigenerational construction company – a business he, as a technology executive, noticed hadn’t really changed that much despite cloud technologies, aerial imagery, and the plethora of tablets and laptops.  He and his co-founders did some field testing and realized they could change that with their skills.

The construction industry has long been plagued by both low digitization and low productivity from its workforce. A $1.5T annual industry in the US alone and a $10T opportunity globally, the construction industry is projected to keep growing as new infrastructure is required to keep up with the global economy.

Because of the low productivity, the construction industry suffers from large amounts of waste and lost opportunity. For example, 98% of construction projects face cost overruns or delays with the average project delayed by 20 months and 80% more expensive than planned. In the US, this waste equates to approximately $500B lost per year. This is especially evident in large commercial and civic projects that require large teams and extensive communication between the field and office.  This is the problem that Unearth is tackling.

Unearth has built a cloud-native collaboration and communication platform, called OnePlace, for construction and architecture teams to track the progress of their projects in real time. By giving all parties (including project owners and project managers) access to the Unearth platform, everyone is informed every step of the way of the progress of the construction. OnePlace is specifically built to seamlessly handle different data types aerial imagery, 360 images, traditional pictures, plans, and surveys.These are all integrated into the software platform which creates one view available to both office and field teams. After a year in beta and in use on major civic construction projects, OnePlace is open today for sign up at www.unearthlabs.com.

The construction industry is at an inflection point of digitization and software adoption and Unearth is well-positioned to provide a compelling solution for its customers.

Please join me in welcoming Brian, Amy, Nate and the Unearth team to the Madrona family.

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In Shifting Retail Battle, Nordstrom Acquires Two Tech Startups to Further Boost Its Digital Credibility

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AI’s Dirty Little Secret: It’s Powered by People

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Madrona Venture Group Doubles Seattle Office Space for New Co-working Operation

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How a Sports Jersey Subscription Service was Born

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Spruce Up, A Madrona Venture Labs Spinout For AI+Home Designer Service

Pictured in photo:  Spruce Up + Madrona Venture Labs Team

At Madrona Venture Labs we know it’s all about the founders and we could not be more confident in Spruce Up co-founders Mia Lewin CEO and Mike Dierken CTO. Today, they announced $1.5M in funding from backers known for picking winners in marketplaces, AI, ecommerce and consumer — Two Sigma Ventures, Madrona Venture Group, Maveron, Female Founders Fund, and Petersen Ventures.

Mia is everything we dream of in a founder CEO and it is more than the fact she is a three-time founder, has design domain expertise and holds a Stanford GSB degree. Mia is deeply passionate about design at the core and it stems from her Scandinavian roots. Mike Dierken is an incredible complement to Mia with his background at Amazon and McKinsey & Co. and the full-spectrum startup experience. His hands-on experience building ecommerce platforms and machine-learning recommendation systems could not be more relevant. We love this team.

Spruce Up is the smarter way to design your home. By applying data science to the designer workflow, the shopping service bridges the gap between design inspiration to low-cost, highly personalized design implementation. Thematically, the Spruce Up concept fell right into our focus on vertical ML/AI and early on we collectively identified a unique opportunity to do for home design what StitchFix has done for apparel. The DIWM (do it with me) segment of the home design space is a massive $75B+ market and although there are competitors, most are positioned upmarket in the DIFM (do it for me) category.

Our journey with Mia started back in June of last year after a chance meeting at Madrona resulted in her accepting a CEO-in-residence role with MVL. We agreed to explore a nascent concept we were researching in the garden design space which was inspired by Ben Zulauf, engineering partner at MVL. Given Mia’s deep domain and founder experience in design and ecommerce, we quickly realized that if we are going to do anything in this category it should be with her. So we formed a strong team with design and engineering expertise, including Ben Zulauf, Ejiro Akporobaro, and Jason Flateboe (founding designer of two consumer ML, ecommerce startups). Over the course of eight months we interviewed dozens of designers and hundreds of target customers, built several light-weight prototypes to test concepts and on-boarding flows, and pivoted along the way. Jay Bartot, MVL CTO and serial ML startup CTO, rode shotgun on the investor roadshow and outlined the technical vision for the company. Early exposure to the MVL investor network resulted in a lead investor term sheet from our partner Two Sigma Ventures and an investment from Maveron and access to our talent network resulted in co-founder CTO Mike Dierken joining the team. It has been an honor to be part of the earliest of formation days with Mia and Mike and we look forward to supporting them in the future.

This is just the beginning and we invite you to be a part of the Spruce Up movement — sign up now and get a free Spruce Up (personalized interior design advice) when the company launches later this year.

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Madrona Appoints Veteran Talent Executive, Shannon Anderson, Director of Talent

We are very excited to welcome Shannon to the Madrona team today as Director of Talent. The talent and recruiting role is crucial for startups and Shannon will supercharge Madrona’s recruiting efforts to help our companies find the right people to scale their businesses quickly.
Shannon will lead Madrona’s Talent function in three key areas:

  1. Power Madrona’s talent hub. Identify and develop top leadership talent and rising stars that will fuel Madrona portfolio companies, potential new investments, and enhance the Pacific NW startup ecosystem.
  2. Be a strategic HR business partner to portfolio companies, with a strong focus on bringing best-in-class talent acquisition practices to the portfolio.
  3. Be a Talent Advisor inside Madrona, providing a Talent perspective on the firm’s investments and decision-making.

In Shannon, we feel very fortunate to have found a proverbial “unicorn” given her experience in all of these areas. Very few, if any, other people have Shannon’s set of experiences that are so relevant to Madrona. She has been a hands-on recruiter, both in the “go-go” days of Microsoft and in running her own talent firm. She has recruited for leadership, engineering and business roles. She has been a Talent leader inside a VC firm (Ignition), and thus has experience with how a venture firm works and how to engage with portfolio companies. Most recently, at Recruiting Toolbox, Shannon has been training companies “how to fish” and become world-class at talent identification, acquisition and retention. All this is combined with Shannon’s massive network of friends and contacts made during her years contributing to the Seattle technology ecosystem.

We see how the right people can make or break a company – and when you get those people on board it can change growth trajectories – or conversely, can be too much overhead early in the game. Shannon is adept at not only finding people but understanding how companies grow and when certain roles are needed.

As Director of Talent at Madrona, Shannon and Talent Associate, Matt Witt, will partner with Madrona’s portfolio companies to define, develop and refine their talent roadmaps, create compelling employment branding, great candidate experiences and fully develop their recruiting and selection capabilities.

When Shannon approaches training for HR and recruiting teams at startups and mid-size companies, she focuses not only on teaching hiring managers and executives how to find and attract the best talent – but, equally importantly, she teaches methods that enable the interview and selection process to create a great 2-way fit, ensuring happy and productive employees that stay and grow with the company over time. As a recruiter, Shannon did this herself – which helped to create an 80% retention rate for key roles.

“I’ve been immersed in the greater Seattle ecosystem for many years. We are fortunate to have so much talent here – and a lot of new talent coming to the area,” commented Anderson. “My role is to help companies attract and keep the right Talent; that’s what gets me up and excited every day. Madrona has been a crucial component to the startup culture here for a long time, and I’m excited to be on the team and to get involved with our portfolio companies to create even more value and success for the Seattle region.”

Shannon is also a frequent speaker and entertaining blogger on all topics of recruiting, HR, and talent. You can find some of her work on Medium.

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Madrona Expands the Team, Adds Talent Director, Venture Partner and Principal

Veteran Tech Talent Executive Shannon Anderson Joins as Director of Talent, Luis Ceze, a leader in computer systems architecture, machine learning, and DNA data storage joins as Venture Partner; Daniel Li is promoted to Principal

We are so excited to announce today some great additions to the Madrona Team. Each of these people is incredibly talented and will add a significant amount to what we can bring to our portfolio companies and to the greater Seattle ecosystem.

Shannon Anderson is joining us as Director of Talent. We expound on her role here.

Luis Ceze is joining the team as Venture Partner. Luis is an award-winning professor of computer science at the University of Washington, where he joined the faculty in 2007. His research focuses on the intersection of computer architecture, programming languages, molecular biology, and machine learning. At UW, he co-directs the Molecular Information Systems Lab where they are pioneering the technology to store data on synthetic DNA. He also co-directs the Sampa Lab, which focuses on the use of hardware/software co-design and approximate computing techniques for machine learning which enables efficient edge and server-side training and inference. He is a recipient of an NSF CAREER Award, a Sloan Research Fellowship, a Microsoft Research Faculty Fellowship, the IEEE TCCA Young Computer Architect Award and UIUC Distinguished Alumni Award. He is a member of the DARPA ISAT and MEC study groups, and consults for Microsoft.

Luis also has a track record of entrepreneurship. He spent the summer of 2017 with Madrona and has been a vital partner as we have evaluated new ideas and companies for several years. In 2008, Luis co-founded Corensic, a Madrona backed, UW-CSE spin-off company. We are excited to have him on board, continuing and building on Madrona’s long-standing relationship with UW CSE, and working formally with us to identify new companies and work closely with our portfolio companies.

Last but definitely not least, we promoted Daniel Li to Principal. Daniel joined us nearly three years ago and has been an incredible part of the Madrona team. He works tirelessly to not only analyze new markets and develop investment themes that help us envision future companies, but he also dives deeply into his passions. He has built apps that we use internally on a weekly basis at Madrona as well as given a Crypto 101 course to hundreds of people over the past year. He has also proven to be an indispensable partner to entrepreneurs, leading the Madrona investment in fast growing live streaming company, Gawkbox, last year. In addition to digital media and blockchain, Dan has done significant work in investment areas from autonomous vehicles, machine learning, and AR/VR. Dan brings an energy, curiosity and intelligence to everything he does and epitomizes what Madrona looks for in our companies and our team.

We are excited to continue to build the Madrona team to even better help entrepreneurs and further capitalize on the massive opportunity to build world-changing technology companies in the Pacific NW.

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What It’s Like to Use Wrench, the ‘Uber for Auto Repair’ That Sends a Mechanic to Your Car

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Introducing Pulse Labs, a Platform for Voice Designers

L-R Abhishek Suthan, Maria Karaivanova, Dylan Zwick,  – not pictured – Akansha Mehta

Today we are very excited to announce our investment in Pulse Labs, a startup that is helping designers and developers understand how real people interact with their voice applications – and how to leverage this understanding to build better apps. We are joined in the $2.5 million seed round by the Amazon Alexa Fund, Bezos Expeditions and Techstars Ventures.  We are joined in the $2.5 million seed round by Amazon Alexa Fund, Bezos Expeditions and Techstars Ventures.

Each year the team at Madrona develops and presents investment themes that we revisit frequently and use to guide our investment strategy. One of the areas we are very excited about, is the emergence of new user interfaces that enable multi sense interactions between humans and technology. Over the past few years, voice has become a natural extension of how humans interact with technology and thus, the next frontier for application developers. According to Google and Bing, one in four searches is conducted by talking, not typing, a figure comScore predicts will reach 50 percent by 2020.

We believe the shift in human-computer interaction towards voice will be as fundamental as the shift from the command line to the mouse click, or the shift from type to touch in mobile computing. This shift will be as pertinent for the enterprise as it is for consumers, and in fact will serve to further blur the lines between productivity and social communication. Having Amazon in our backyard is a great way to interact at the start with technologies like these – and we were happy to become closely involved with the Alexa Accelerator Powered by Techstars that ran last year in Seattle.

When we first met Abhishek, Akansha and Dylan, the co-founders of Pulse Labs at the Alexa Accelerator last year, we knew right away that they were building something special. It was their second week at the Accelerator, and they only had a prototype but it was addressing a huge need for anyone building voice applications. Fast forward six months, and the Pulse team launched a platform to help brands understand how real people interact with their voice applications through a rigorous process of live testing and data analysis. They enable voice app developers, or voice designers as they are typically called, to quickly see how consumers want to interact with their app and get data on which prompts work and which don’t. In that short time, they’ve assisted in the successful launch of more than 20 Alexa skills for top brands, and they are just getting started.

You may be wondering what’s so different about voice apps. Turns out that developing apps for voice requires a significantly different process than app development on other platforms. As workflows and interactions shift away from the more traditional platforms like mobile and mediums shift from touch and type to speech, voice designers face a whole new set of decisions and there is a lot of room for error and interpretation. Moreover, users have different expectations regarding how a voice app responds, and apps live and die based on how well their designers understood and accommodated these expectations when building the skill or action. (Alexa dubs voice applications for their platform ‘skills’ while Google calls theirs ‘actions’).

Let’s take this example: “Would you like fries or a shake with that?” It’s a question asked over an intercom thousands of times each day, and the teenagers who are asking don’t think twice about it. But, if you’re designing a program to handle orders on avoice platform, you’ll need to think long and hard about it. You may expect the customer to answer with “fries” or “shake, please”, choosing one option or the other, but what if the answer is “yes”? Does that mean fries, a shake, or both?

Understanding these types of interactions and equipping voice designers with the right solutions is the guiding mission of Pulse Labs. With 56 million smart speakers expected to sell in 2018, according to Canalys, this need is only going to rapidly increase as will voice commerce. The experts from investment firm Mizuho Bank predict that Amazon Alexa powered Echo smart speaker alone will account for $7 billion in voice transactions—or vcommerce in 2020. It is for all these reasons, that we are excited to back the Pulse Labs team.

Pulse is extending their product to Google Actions in the coming months and if you are a voice designer looking for a new challenge, send them a note, they are hiring!

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PlayFab is Joining Microsoft!

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The Next Big Step in the Snowflake Journey

Early last year, we invested in Snowflake, which is quickly becoming the leader for data warehousing in the cloud. Now, less than a year later they have raised a substantial round of $263M that underscores their phenomenal success in building a solution that speaks to a real business problem shared by many, many large business customers around the world.

Having had the opportunity to learn more about Snowflake and see first-hand their customer momentum and their execution both on the product and go-to-market fronts, I am more bullish than ever before about what is possible in the years to come.

In addition to building the world’s best data warehousing solution for the cloud, Snowflake introduced Data Sharing last year.  The ability to seamlessly share data with your customers and partners from within Snowflake opens up a huge opportunity for business customers.  This has been an unsolved problem in the past and is something that is very complex and painful to do.  Snowflake has solved that with their Data Sharing capabilities.

Snowflake has done an outstanding job of riding two important and massive technology trends – the enterprise move to the cloud and the need for accessibility from anywhere to massive amounts of business data + analytics.  They have built a fantastic product on the cloud and for the cloud that is resonating extremely well with a broad set of customers.

For all of the above-mentioned reasons, we are very excited to invest in this latest round of fund raising by Snowflake.  We are very much looking forward to furthering our partnership with Bob Muglia and team to help them scale and see the kind of success that we are confident they will achieve.

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