Your Personal Assistant: Rearden Commerce CEO Patrick Grady (Part 4)

SM: How long did your efforts to revamp venture capital go on?

PG: I did it for almost a decade. In 1988 I sat down with Burt and told him I was tired and despondent, which was completely against my nature. I was not helping my companies or doing anything I set out to do. I only spent 10% to 20% of my time with entrepreneurs. I spent the rest of my time with regulatory bodies. Burt told me that Congressmen would never understand capital formation, but he did encourage me to become a venture capitalist. He them told me I needed some operating experience to be a truly great venture capitalist.

SM: Good entrepreneurs don’t want to work with people who do not have that experience.

PG: Very true. It was incredibly hypocritical of me in my 20s to do what I was doing, try to advise companies, when I had no operating experience. I have come to resent those very same kids now. I look at them and tell them they need to at least run a lemonade stand before they try to tell me how to run my business. It is like being a doctor without going to medical school.

SM: Unfortunately, the Valley is full of them.

PG: It is Harvard business school degrees as far as the eye can see with no operating experience. It is reckless. Burt told me to look at companies in which I had already invested and find one in which I could take an operating role. It could be a CEO or product management. I met with a couple of the boards and teams that I had funded, and two of them wanted me to come in and run the company. I ended up choosing one of them, and it was an epiphany for me. Within a week I was sitting there asking how I could have pretended to be a venture capitalist advising people on their business operations.

After my first week I could not imagine running that company of 50 employees. I could never imagine being an investor again. It is like comparing players and coaches. Coaches are important but it is nothing like being the player.

SM: What kind of company was it?

PG: It was a sales force automation company called Borealis. It was based out of Nevada, of all places. It had great architecture and was inherently a mobile architecture for traveling sales folks. When I came in it was in big trouble. It was a public company that was running out of money. Ultimately, I had to shut it down after about a year and three months.

SM: However, you gained experience.

PG: Invaluable experience. Immediately after that, within days, I started writing the business plan for Rearden Commerce. I had read “The Fountainhead” when I was 18. I read “Atlas Shrugged” every summer.

SM: What was your idea when you sat down and wrote your business plan?

PG: The idea behind Rearden is really not mine. I had the benefit of meeting early people at General Magic when they left Apple. It was one of the most talented teams ever assembled in Silicon Valley. They had raw talent and intellect. They had a bold vision but were a decade ahead of their time. They had to build their own hardware. They partnered with Motorola, Sony, and others.

SM: There were major flaws in their go-to-market strategy.

PG: True. Around 1993 Charlie Bass and I used to invest in deals together. We were both passionate about some of the same macro trends. We felt back then that the workforce was going to become more mobile, distributed, and remote. Workers would use virtual offices, not cubicles, with technology being the enabler. Charlie and I sat in his office in 1993 disaggregating the general management stack, realizing they were completely vertically integrated. That, however, did not take away from the fact that everyone would love to have a personal technology assistant helping them manage their business lives and personal lives.

This segment is part 4 in the series : Your Personal Assistant: Rearden Commerce CEO Patrick Grady
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