EP004: Developing Remote Muscles is Critical, A Venture Capital Perspective

Stephen Marcus from Riot VC is the founder of six hardware + software companies and an investor in dozens of others. He manages a pre-seed and seed portfolio of companies that have a combined enterprise value of $15 billion and generated revenue of more than $600 million in 2018.

 

He joins Tony and Ron to share his insight on how startups are dealing with the COVID-19 crisis and what issues they face. How do you onboard strangers? What about managing a workforce reduction? What do you do with employee stress remotely?

 

Tune in for an in-depth chat about the realities of adopting a remote workforce as well as the implications of an off-site future in terms of building company culture as well as mental and emotional health.

 

Key Takeaways

 

[1:35] Tony welcomes listeners and introduces today’s guest. Stephen Marcus has been an entrepreneur for 20 years and a VC investor for a few years now. Having gone through three crises (2001 bubble burst, 2008 recession, and now this), both as an investor and business operator, gives him an interesting perspective on what the future may hold from an investment standpoint.

 

Nuclear winter incubator [7:20] In March of this year, investors pulled back, however, venture capital invests for longer periods; history, and experience, have shown Stephen that the best time to invest for the long term is during nuclear winter.

 

Stephen shares some practical advice in the face of this pandemic lockdown: Triage your portfolio and see who has enough cash to make it through the turbulence.

 

This kind of setting is particular in terms of business; it gives people time to work on new products and reduces team size, talent is abundant, and costs of business go down.

 

Liability [12:50] Requesting that employees come back to the office may in and of itself be a liability when there is a risk for them to contract a virus. So it is likely that they will choose remote work long term but if you’re not used to it, it’s hard. How do you set up your environment to be effective?

 

Developing remote muscles [14:27] Nothing beats the high bandwidth of face-to-face interaction. When it comes to building culture, Stephen has found that you have to have opportunities to socialize in different settings; find a way to let down your hair.

 

Onboarding virtuals [20:55] How do you hire people you’ve never met in person? How do you onboard them and efficiently blend into the team? Those are some of the issues raised by Stephen’s portfolio.

 

Band-aids [22:06] How do you manage employee stress and the bad news cycle that comes with reducing your workforce? Companies have had to take stock and, in certain cases, cull. Stephen speaks to what he’s seen in his portfolio when it comes to reducing workforce.

 

He offers that the answer to a lot of the issues is communication, keeping people abreast of the why — Tony proposes an interesting caveat.

 

Dropping shoes and sleepless nights [26:46] Ron talks about his own startup and what decisions he has had to take in this highly unpredictable situation. He touche