Throughout his 9 years as chief digital and know-how officer for JetBlue Airways, Eash Sundaram typically spoke of how to “future-proof” the airline enterprise, which is notoriously vulnerable to perilously skinny revenue margins and frequent bankruptcies.
For JetBlue, future-proofing meant diversifying past passenger flights by investing in journey and hospitality tech startups. So, when JetBlue Know-how Ventures launched in 2016, Sundaram took on a twin function as founder and chairman of the funding committee.
“JetBlue Ventures has now had 3 profitable exits in a five-year-old fund, which is an excellent end result,” says Sundaram, referring to portfolio corporations that had been bought or issued IPOs. He retired from the airline final 12 months to focus on enterprise investing and function an working government at Tailwind Capital, a mid-market non-public fairness agency. He serves on the boards of a number of different corporations as properly, from startups to a $17B Fortune 200 world provide chain supplier.
His longtime affinity with the VC world, because it turned out, was future-proofing his personal profession technique.
“It’s so rewarding and inspirational to work with these early-stage startup founders. You’re feeling so fortunate to be a part of their dream,” Sundaram says of this subsequent chapter in his working life, which incorporates beginning his personal funding fund Utpata Ventures, named for the Sanskrit phrase for defying gravity and flying excessive.
I caught up not too long ago with this CIO Corridor of Famer-turned-VC tech investor to speak about working with VCs and early-stage corporations, serving on public boards, and launching his personal funding fund.
Maryfran Johnson: Past serving as beta prospects for brand new tech merchandise, what advantages can CIOs carry to the world of VCs and tech traders?
Eash Sundaram: Many of the entrepreneurs I’ve met in startups aren’t as skilled in enterprise as a lot as they’re younger and energetic. They know how one can carry a giant thought to a sure level, however they’ll’t translate that into execution. When you’re inside as an investor, you carry experience on how one can scale up a product. You additionally carry a larger-company integration mindset, and as a technologist, you’ve been hands-on in delivering the type of IT success that fuels enterprise progress. There are such a lot of roles a CIO can play as an investor and a startup accelerator.
JetBlue Know-how Ventures has thrived since 2016, funding 40 startups and dealing with dozens of founders and entrepreneurs. What had been the most important classes you realized throughout your 5 years as chairman of the board?
My No. 1 lesson realized was that you just’ve bought to consider within the founder and the imaginative and prescient. You don’t change that imaginative and prescient, which is one thing many traders will attempt to do. Folks with cash aren’t at all times sensible! Entrepreneurs assume out-of-the field, and your job is to mentor them to allow them to develop and scale the enterprise. We realized that within the early days the place we tried to alter the scope of a product, and we shouldn’t have.
No. 2 lesson: Your job as an investor in a enterprise fund is to search out alternatives to assist and to scale the corporate by leveraging your connections. Not each investor has the correct connections to assist an organization develop. VC varieties typically have extra slim networks. The distinctive alternative you’ve got as a CIO or CEO investor is to leverage your broader connections. For instance, we had a partnership ecosystem at JB Ventures. We might usher in different airways and hospitality manufacturers to have a look at our investments and make introductions to assist portfolio corporations scale up.
No. 3: Know while you’re able to be a shopper of your product or your funding. These younger corporations mature otherwise. In some instances, the merchandise we invested in will not be enterprise-ready for a very long time. You might assume you wish to be first, however you don’t have to make use of the whole lot you spend money on.
You additionally function a director on two public firm boards, one in every of them being SolarWinds, the community software program supplier so catastrophically hacked final 12 months. What was that have like?
I’m chairman of the cyber and know-how board committee, so I led the committee that assisted with the investigation. It was actually a really painful six months. We had an excellent crew of Solarians and third-party specialists who guided the board via the course of the investigation. Beneath the management of our new CEO Sudhakar Ramakrishna, we have now made vital progress in strengthening our inside panorama, embracing “safe by design” product rules, and driving vital enhancements in buyer satisfaction. We did that by being clear, offering them with the required instruments to mitigate any dangers, and confidence in our capability to safe their infrastructure. The CEO (and his crew) rebuilt the entire platform in lower than a 12 months. SolarWinds buyer retention stays very excessive, which speaks so properly of the way in which the corporate dealt with the disaster.
What classes did you are taking away from the SolarWinds hack?
Folks assume most cyber incidents are internally centered, however in a related world like ours, know-how goes so deeply into many components of the group, the magnitude and breadth of a provide chain assault is way bigger than you’ll think about.
Top-of-the-line outcomes from such incidents is the way it drives simplicity into your infrastructure. It’s a must to keep present on software program upgrades and decrease contact factors. When you have 5 techniques doing one factor, you retain solely the one. And you progress to the cloud, which offers a better stage of sophistication and safety past what you’ll be able to handle your self.
What applied sciences are you investing in with your personal enterprise fund?
I invested in 7 startups final 12 months, in cybersecurity, conversational AI, B2B logistics, and new technology cloud improvement. Most of them are Collection A stage corporations now.
You play a distinct function while you’re serious about beginning a enterprise fund. It’s huge cash, so the choices you make are excessive affect. Angel funding is a most dangerous proposition, however I like investing in nice individuals—and I wish to be first!
This text first appeared in CIO’s Profession Strategist e-newsletter.
