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October 31, 2016

[Investor Profile] Sarah Hodges of Pillar: A Champion for Boston's Startup Ecosystem

Sarah Hodges recently joined the venture capital industry by joining Pillar a couple of months ago. Pillar is a new VC firm in the Boston area launched by Jamie Goldstein. Over the years, Sarah has made her mark on the Boston tech scene in many different ways. From playing a key role in high growth companies like Carbonite, RunKeeper, and Smarterer... to bring the Boston tech community together through events and charitable organizations. Sarah is also a co-founder of Intelligent.ly, Boston's source for leadership development. 

Keith Cline:  Tell us about your background. Where did you grow up and how did you end up at Scripps College in California?

Sarah Hodges Childhood Photo
Birthday party photo of Sarah. Photo prop homemade by her parents
Sarah Hodges:  In the middle of nowhere! I grew up in a small town called Merced, in the center of California, surrounded by farmland. It’s the kind of town where you spend your summers as a kid running from house to house all day until the sun goes down. My mother was a teacher and my father was a principal. Merced was a simple town - it was a big deal when we got our first Starbucks - so it was a culture shock when we moved to Seattle for high school.
 
Scripps College is a women’s college in Southern California. My grandmother attended Wellesley College, so I grew up hearing about the value of same-sex learning environment and the breadth of a liberal arts education. I fell in love when I visited the school; Scripps is on the National Register of Historic Places, and the campus is framed by sprawling lawns, citrus trees, and a rose garden, where we could cut fresh flowers. Not bad for a college student!

KC:  Tell us about your experience as a Partner at Pavo Real, a women’s clothing company.

SH:  Growing up, I dreamed of becoming Claire Huxtable from The Cosby Show. I was sure I wanted to be a lawyer, and applied to law school during my senior year of college. Two weeks before I graduated, I realized I wasn’t quite ready to grow up, and abandoned my game plan. I moved to Chicago, a city I’d never visited, with almost no money and no job. During my first week, I landed a gig at Pavo Real, a brick and mortar women’s clothing store, with locations across the country.
 
Sarah Hodges and Mindy Brush, Pavo Real
Sarah and her partner, Mindy Brush at the company's Newbury Street store

The store was born in 1978 from a Faneuil Hall push cart, and the founders were based in Boston. When I joined, the owners were slowly closing the retail stores, but the timing was ripe to bring the business online. They took a huge chance on me as a fresh-faced kid straight out of college, and made me a partner in the company. I moved to Boston, where we had a small shop on Newbury Street.

Sarah Hodges on a trip to Machu Picchu
Sarah on a solo visit to Machu Picchu for a work trip to Lima

I launched our eCommerce and direct mail business, and reignited the production of our own clothing line in Lima, Peru. Lima really became a second home for me during those years. I miss so much about that city - my friends, the food, running on the Malecon, and learning about yarns in factories run by an amazing group of women. The experience was a truly wonderful opportunity to learn the ropes of of launching a new business, and I was grateful for mentorship from my partner, Mindy Brush.

KC:  What brought you to Carbonite, then to RunKeeper and Smarterer?

SH:  I looked up one day and realized that I wasn’t growing at the same pace. As part of a small team, the business had also become lonely. A recruiter came knocking from Carbonite, and I was intrigued. The company was a rocketship when I joined in 2009. The marketing team I joined was a growth machine, but it wasn’t all smooth sailing. When I first met my boss, Swami Kumaresan, he wasn’t convinced that the role was right for me. He was sure I’d get the itch to do something entrepreneurial, and placed me on ‘probation’ coming in. What a great way to enter a new company! We laugh about it now.

I sure was hungry for the experience of learning from a growing company, and proved him wrong in the end. We had a powerhouse team of operators, and I was fortunate to learn from people like Swami, and Ivana Flodr, and Rebecca Van Nederynen (who went on to help grow Help Scout). When a company is growing that quickly, you have no choice but to roll up your sleeves and learn on the go. Everyone on the team had a strong worth ethic, and it was exciting to see what we were able to accomplish together.

Sarah at the Rock & Roll Half Marathon with RunKeeper teammate, Jake Cacciapaglia

When I started at Carbonite, I loved the breadth of responsibility that came with working in an early-stage startup. As the company continued to grow and each of our roles became more specialized, I started to feel constrained. I was ready for a change, and met the CEO of RunKeeper, Jason Jacobs, through a good friend, Aaron White, who was doing contract work for the company. My intent wasn’t to leave Carbonite at that point, but as soon as I met Jason, I was immediately consumed by his passion for RunKeeper and his vision for the future of the company. I was running half-marathons at the time, so the opportunity to lead marketing at a running company seemed too good to be true. When I met the rest of the team, including my now good friend, Jake Cacciapaglia, it was a no-brainer. I was employee number nine at RunKeeper, and the time we spent together was pure magic.

KC:  What prompted you to start Intelligent.ly?

SH:  Dave Balter and I met in 2011, at the open house for a friend’s startup. Jennifer Lum and I had been kicking the idea around for a tech prom - a blowout party to make up for the lackluster proms of our high school years. Our friend, Cort Johnson, suggested that Dave sponsor the event. He jokingly retorted that he only sponsored things with his name on them. Game on.
Dave Balter Tech Prom Committee
Dave Balter Tech Prom Committee

Jennifer and I immediately went home and built a website, Twitter handle and Facebook page for the Dave Balter Tech Prom. By 8 am the next morning, a reporter was calling Dave to get the scoop; we hit him like a freight-train. He was bewildered, and could barely remember having met us!

Naturally, Jen, Dave and I roped Cort and Mike Troiano into forming a prom committee. In 30 days, we raised money and threw the 80s prom of a lifetime, complete with corsages, letterman’s jackets, and branded flasks. As luck would have it, Travis Kalacanik, Uber’s CEO, and Austin Geidt, who led expansion, were in town before the event, and stopped by the RunKeeper office, where I was working. Tech Prom became Uber’s launching pad in Boston. The night of the event, we looked around in awe; together in one room were over 500 members of the startup community - experienced entrepreneurs, startup newbies, and investors. The whole experience was a trip.

Sarah with Dave Balter and Mike Kowalchik, Smarterer co-founders after the closing dinner.
Sarah with Dave Balter and Mike Kowalchik, Smarterer co-founders after the closing dinner.

A few months later, Dave and I were still high from the experience of collaborating. He approached me about consulting for a company he’d founded, Smarterer. Mike Kowalchik, Dave’s co-founder, immediately won me over. Mike’s a brilliant technologist, and was erupting with passion for the business. Before long, a few month consulting gig turned several years on the management team in roles spanning marketing, operations and strategy. Dave, Mike and I went through the emotional highs and lows of building that company with a truly exceptional team, and came out on the other side of it as family.

Around the same time, Dave and I realized that we had a great rhythm working together, and wanted to re-create the energy of bringing together different pockets of the startup community. We saw companies starting to roll out peer-to-peer learning programs, and thought, what better place for the concept to succeed than in Boston? The idea for Intelligent.ly was born. In just under a week, we threw a launch party to build our mailing list, aligned with sponsors like Silicon Valley Bank, WilmerHale and CBRE, set up our classroom with furniture donated by Turnstone, and signed up experienced entrepreneurs and startup leaders who volunteered their time to teach 90-minute skill workshops. Aaron Lumnah, a student at Suffolk, joined on as an intern, and Scott Seiffer introduced himself and volunteered to facilitate our curriculum. The outpouring of support from the community was overwhelming, because that’s what Boston is - a community.
 
Intelligent.ly emerging leaders in Boston
A recent Intelligent.ly Exchange session with emerging leaders in Boston.

Four years later, the company has evolved into a leadership development company, with Gabriela McManus at the helm as Executive Director. Through programs like Exchange, for new managers, and EMERGE, for high-potential individual contributors, we’ve impacted over 1,000 leaders from over 50 Boston companies. It’s still a mind-blower for me.

KC:  You were an advisor to Flybridge Capital Partners, can you share more about your role there?

SH:  Dave introduced me to Jeff Bussgang in 2012, and we immediately hit it off. My role as an advisor at Flybridge was to support and broaden the firm’s investment activities in the Boston region. I attended select partner meetings, collaborated with the team on events, and brought opportunities to the firm as I met interesting new entrepreneurs. Intelligent.ly and Flybridge were both deeply invested in supporting our startup community, and it was a natural fit from the start. I continue to be impressed with the level of mutual trust and respect that Jeff, Chip, David, Kate and the rest of the Flybridge team have for each other. It’s clear that they all love what they do, and have a great time together.  

KC  Why did you join the venture capital industry and join Pillar?

SH:  After Pluralsight acquired Smarterer in November 2014, I joined the company’s management team. I got an apartment in Salt Lake City, where the company is based, and spent a year logging over 200,000 miles on Delta airlines back and forth to Boston. It was an incredible ride - the company doubled in size during the year I was there - but by the Spring of this year, I was fried.
Pluralsight Halloween - Sarah is the the owl up front

I resigned in March, with the plan to stay on through June, and take the summer off to recharge. Then I met Jamie Goldstein, Pillar’s founder.

I’d given a lot of thought to what I wanted to do next, and a few things were clear. I was hungry for the sense of community I’d experienced connecting with so many entrepreneurs when I launched Intelligent.ly. I was eager to share the experience I’d gained with other entrepreneurs in the thick of scaling their own companies. I wanted to build something meaningful. Pillar checked every box.

Everything Jamie shared with me about his vision for rethinking venture resonated. I was fortunate to experience the support of so many wonderful investors - Boston Seed Capital, True Ventures, Google Ventures, Rethink - but I’d also seen some of the negative behaviors that have tarnished our industry’s brand. Jamie was taking the long view; he had surrounded himself with a world-class team of co-founding investors, and wasn’t shy about making short-term financial personal sacrifices to ensure that our entrepreneurs are aligned with the resources they need in the long run. I knew I wanted to build Pillar with him.

KC:  What is your role focused on within the firm?  It seems like there’s a split between making investments and leading the firm’s Access group?  
 
Sarah hanging at Pillar HQ
SH:  While I’ll be doing some investing on behalf of Pillar, my primary focus is on developing our Access group - access to leadership development, operating skills and insight our entrepreneurs need to succeed.

KC:  Can you tell us more about what the Access group is at Pillar?

SH:  VC has long been perceived as ‘the dark side,’ an evil empire where investors are adversaries instead of partners. We think there’s a better way. We want to change that perception, and we’re doing it by aligning our interests with entrepreneurs right from the start. From our investment terms, to support from the group of 16 CEOs who are co-founders in our firm, to the breadth of resources our Access group provides, we’re all in.
 
We don’t expect anyone to have all the answers. We often invest in first-time entrepreneurs and researchers, people for whom scaling a company is uncharted territory. Even experienced entrepreneurs have so much to gain from aligning with peers who can enhance their own knowledge. Our Access group plays an active role in connecting our entrepreneurs with leadership insight, mentors and advisors who will help them grow and evolve.
 
KC:  What stage of investments do you primarily target?

SH:  We invest in early-stage companies, and prefer to be the first capital in. We believe we can be the most helpful and make the most meaningful impact if we align with an entrepreneur at the ground level.

KC:  What are the top traits you look for in terms of investing into a company or founder?

SH:  At this stage, it’s all about people and teams. We look for entrepreneurs who can blow through walls, people who have the ability to create a swell of momentum around an idea or a technology that can transform a market. We want to build lasting relationships with our entrepreneurs; we’re not interested in partnering with jerks.

KC:  What sectors of technology, industries, or trends are of interest to you?

SH:  We’re particularly interested in B2B applications of machine intelligence right now - robotics, AI, machine learning, IoT, autonomous vehicles, drones, data and supporting infrastructure. With MIT and Harvard nested in our backyard, we have an unparalleled opportunity to drive the next wave of frontier technologies. We are open to making investments outside these areas, but there’s a reason why companies like GE and Amazon are expanding their presence in Boston; our ecosystem is rich with new innovation in these categories.

KC:  What is the current fund that you are investing from?

SH:  We’re currently investing from Pillar I, our first fund.
 
KC:  What companies in Boston, outside of your portfolio, do you find interesting?
 
SH:  I have a bias toward the companies Pillar’s 16 co-founding CEOs are building. There are too many to name, but it’s been incredible to see the growth of Fuze under the leadership of Steve Kokinos. PillPack is on an unbelievable trajectory. I remember meeting TJ and Elliot when the business was still in Techstars; it was clear that they are exceptional entrepreneurs, and that they were going to build something huge. I’ve also been impressed with the team at Catalant (formerly HourlyNerd). I love that they’re leveling the playing field for companies by opening up affordable access to experts. There’s a big opportunity there.

KC:  Who do you admire or who has been the greatest mentor for you?

SH:  Dave Balter, Mike Troiano, and Greg Woodward have all been important mentors in my life. Dave is my partner, and is a constant source of support and encouragement. He was the first person to instill confidence in me that I had the capacity to venture out on my own as an entrepreneur. Dave is relentless in his pursuit to bring big ideas to life, and inspires me with his ability to paint a vision of the future, then go out and make it happen. Mike, CMO of Actifio, has been a good friend and mentor for years. He has the unique capacity to distill complexity into simplicity. He is the person I turn to when I’m struggling with a career decision, or need a fresh perspective on how to tackle a professional challenge. I met Greg Woodward, CFO of Pluralsight, when we sold Smarterer to the company. Greg helped me navigate the transition from an early-stage startup to the management team of a $1B company, and always shared thoughtful guidance. He also taught me about the power of vulnerability as a leader. He built true loyalty among his team by creating deep personal and emotional connections with people. Greg is a good human, and taught me how to be a more sensitive and compassionate person through his own example.

KC:  Outside of your day to day work, what are your personal interests or activities?

SH:  I love to travel. I’m on a plane several times a month, whether it’s to catch a quick weekend in San Francisco or Florida, or to indulge in a longer trip to Italy or Amsterdam. Will travel for food and adventure. Two years ago, Dave and I rented a house in a remote village in southern Spain. We invited friends and spent the morning exploring surrounding towns, and afternoons working by the pool. I love that we live in a world where you can pick up your laptop and work from anywhere.

KC:  What was the last concert that you went to?  

SH:  The last concert I went to was a three-day run of the Phish tour in Denver. In fact, I went to eight Phish shows this summer. Dave has seen hundreds, and introduced me to the band a few years ago. In our first year together, we saw 16 shows! There is an entire set of people I only see when we’re on the road with Phish. I can’t begin to describe the feeling that takes over when the band takes the stage, the music lights up, and everything falls into place.

KC:  Are you involved in any charitable organizations?

SH:  Growing up, my grandfather was an episcopal priest who devoted himself to others. He was a big supporter of Habitat for Humanity, and the non-profit has deep personal meaning for me. Several years ago, Jeff Glass introduced me to BUILD, and I had the pleasure of serving on the board for a year. BUILD uses entrepreneurship to help at-risk students remain engaged in highschool, propelling them on to college success. Before joining the board, I attended their annual event, and heard a powerful story from a brave young BUILD student entrepreneur. Her courage was astounding, and I was hooked. More recently, I’ve gotten involved with Science from Scientists, an organization Erika Angle created to bring STEM education back into our schools, by deploying real scientists into classrooms.


Keith Cline is the founder of VentureFizz. Follow him on Twitter: @kcline6.