How Data Insights Are Reshaping Venture Capital Strategy with Jon Lehr
From Morgan Stanley to the world of venture capital, Jon Lehr has a unique background when it comes to the nuances of utilising data to make strategic and successful business decisions.
Jon is the Co-Founder and General Partner of venture capital firm, Work-Bench. He’s also the Founder of the New York Enterprise Technology Meetup (NYETM). He’s made a name for himself in enterprise tech by growing his side-hustle network from zero to a jaw-dropping 8,000 members – in just eight years.
Meanwhile, in the venture capital world, Jon has leveraged his knowledge of IT, banking and enterprise technology to rethink traditional models and grow companies at scale, by accessing insights not available to other investors.
He tells our podcast host Jason Dorsey all about how his career path has shaped this fresh approach to data, strategy, and business growth in this fascinating episode of Leading with Data.
Hit play on the player above or read on to find out more.
Reshaping Venture Capital Data Strategy
When starting in an IT role in the Office of the CIO at Morgan Stanley, Jon had access to hundreds of start-ups per year. The goal was to figure out which aligned with Morgan Stanley’s pain points from a business and technology point of view, so that they could be sold into Morgan Stanley as vendors.
Jon explained “Many people don’t realise this, but Wall Street tends to be the earliest and largest adopter of enterprise software, so it’s an incredible training ground on enterprise technology.”
As a regulated bank, Jon’s role meant he would review the financials of each start-up. He had a front-row seat to exactly how they were scaling, and it showed that there was potential to grow businesses in the enterprise.
“It shone a light on what an incredible opportunity it would be to be an enterprise tech-focused venture capitalist.”
With this opportunity right in front of his eyes, Jon started the New York Enterprise Technology Meetups. He realised that start-ups were flying in from the West Coast to New York to meet with early adopter buyers like financial services, pharmaceuticals, and media, and began to create his enterprise-tech network.
It was through this that Jon was introduced to Jessica Lin, formerly of Cisco Systems, now Work-Bench Co-Founder, and in 2012 their venture capital fund was born.
“We were brought together to launch Work-Bench and then given a blank slate to create this strategy.”
Driving Decisions with Data Strategy
Work-Bench’s strategy is to entirely rethink the enterprise venture capital model from an IT perspective. While most venture capitals investing in post-seed enterprise start-ups look at traditional SaaS metrics, Work-Bench’s background in corporate IT exposed to them a metric that is invisible to most other investors: customer appetite to buy.
“We regularly engage with that IT executive community to understand what are their top of mind pain points, and where their budget dollars are flowing.”
It came as a surprise to Jon that nobody at Morgan Stanley was already doing this, giving Work-Bench the edge.
“That is the crux of our model. By regularly engaging with an IT network this deep, not only do we identify interesting markets and sectors to invest in, but we can get feedback from an end customer.”
Work-Bench’s unique selling point goes one step further though. By accessing this network, initial introductions can be made to the right person, at the right time, saving weeks – if not months – of effort.
Predicting the Future of Data
Jon believes that a lot of west-coast technology is going to eventually fundamentally change the way Fortune 500 companies operate.
There have already been examples of AI companies moving in on businesses that use models based on historical data because COVID-19 has disrupted their useability.
“Humana is working with AI company, Arthur, that provides explainable AI software model monitoring because COVID-19 threw off all their models that are based on historical data.”
New efficiencies and capabilities will come with the use of more widespread clean, automated data, which could be transformative for industries like financial services, pharmaceuticals, and media.
Unfortunately, Jon also predicts a rise of high-profile incidents involving AI systems going horribly wrong, potentially with catastrophic effects. The silver lining will be people learning from the incidents, and taking preventative measures.
The Most Important Aspects of Being an Effective Leader Now
Jon explained that agility is essential, because uncertainty is inevitable.
You have to be able to run various data tests and experiments, and respond quickly to the insights.
It’s really important to measure what is best for the business and try not to get emotional.
How do Founders Grow at the Same Rate as Their Business?
Jon explained that at Work-Bench they are very much investing in the founder, and they take a community approach to assist founders helping them to leverage time and delegation.
They run lots of events not just for founders, but for key roles in the business e.g. for the VP of Marketing, VP of Sales, VP of Customer Success. The events focus on peer learning, and learning from later-stage experts – all of which are designed to leverage time.
They also help founders to not get too overwhelmed, by promoting delegation. This is achieved by sharing many best practices from other successful companies, as well as arming founders with relevant advisors very early-on.
“Seeing the founder, him or herself, also as a leader growing… that feeling to see the company make their impact, to see the leadership team grow, to see the whole company grow, it makes the job so much fun.”
How Data has Shaped Work-Bench’s Leadership Strategy
Data is at the essence of everything that Work-Bench does.
“We continually stay true to the customer network that we have of corporate executives; it’s continually asking that one additional question. When we spend time with execs to really build our thesis, we try to get as granular as possible to understand what’s truly going on and what the drivers are, and what we need to look for in start-ups that we think can break-out”
Jon’s Long-lasting Leadership Mantra
Jon and Jessica have experienced the highest highs and the lowest lows of running a start-up, but there’s always one mantra they come back to:
“It’s actually a Yiddish term, the word is ‘bashert’ which means: it was meant to be. So, we give our all on the team and sometimes the outcomes are great, but sometimes, in the short term, they don’t appear to be in our favour.”
“But what bashert means, in this case, is things always have a way of working out. We take that optimistic view and know that we’re doing the right things, fighting the good fight, and in the long run, it’ll all work out.”
We can only predict things will keep working out for him in future.
For more from Jon, visit www.work-bench.com and sign up to their weekly newsletter to get top business and technology enterprise news, and information on events in the enterprise start-up world, or find him on Twitter, @fendien.