In an industry that relies on being ahead of the curve, the ability to see the potential in new innovations is a necessity. Eric Anderson, Partner of Scale Venture Partners knows how to look ahead, and gives us an inside look at how a cutting-edge venture capital firm finds and funds new technology that benefits the everyday user.

Main Takeaways

• The depth of the problem is more important than the solution: According to Anderson, it’s important to come in with the empathy needed to sort out the problem set of any particular company, because innovations are grown out of the solutions. It might be intuitive to think that quick fixes mean quick growth, but Anderson cautions against it. Digging in and finding the deeper problems is well worth it, because longer solutions often lead to more meaningful expansions. 
• Young insiders might be the key to innovation: While anyone can have a great idea, Anderson points out that it might be the younger players in older, “sleepier” industries that wind up being disrupters. He points out how as a child of dental distributors he was quick to see the need for a new way to distribute raw materials and bring in a new solution.
• Software Vs. Content: While, historically, consumers have been more interested in buying content over software, Anderson says that the small sale might change that. We shouldn’t ignore the power of the one-dollar design app you can carry on your phone – it might change the way people value software.

For a more in-depth look at this episode, check out the article below.

Article Notes

Investing in innovative technology requires a certain amount of foresight, insight, and luck – but there are certain things that help new ventures stand out from the rest. Eric Anderson, a partner at Scale Venture Partners, has a great track record when it comes to seeking out new technologies. From Google to Amazon, he’s great at finding new ways to use software to help consumers, and he says there are key things to look for when trying to pan for gold in the B2B landscape. 

“We look for companies who are on the cusp of revenue or have earned their first revenue. I think the risk of a company dramatically drops once you’ve kind of found product-market fit – or, at least a couple of customers. That’s one indication that gets us pretty excited. The other is some level of domain expertise… people who have had problems and wrestled with them, as opposed to someone who has been opportunistically looking to start a company. That passion is able to fuel people.”  

In a recent episode of IT Visionaries, Anderson explained how Scale Venture Partners is disrupting the world of B2B software, and how investors can look forward to a future that is bringing software to the forefront. 

Anderson explained what Scale Venture Partners is looking for, and why it appealed to him – a guy who once found himself wanting to work with his hands to create tangible products. 

“We’re a Bay Area venture capital firm focused on early-stage investments, mostly in B2B software… it’s where our background as partners comes from…it’s also historically been an underappreciated asset. B2B software, enterprise software was boring,” he says, laughing. But, despite the way it has been viewed, Anderson sees a bright future for B2B software. “Maybe we’re trying to make enterprise cool again.” 

And, according to Anderson, there’s a revolution coming when it comes to software. 

“All software used to be sold on-premises…sold as a license – and then there was the SAS revolution for the last two decades. If you [could] bet on anything in the last two decades, it would’ve been software as a service. And so now the question is… is there another kind of revolution like that? One thing we’re keeping an eye on is the use of machine learning… people talk about it all the time, but we actually think that ‘cognitive apps’ – machine learning and artificial intelligence – could represent a similar kind of broad investment opportunity.”

To hear more about how Scale Venture Partners is finding those untapped opportunities and turning them into consumer-centric solutions, check out the full episode of IT Visionaries! 

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