If you look at Larry Bohn investments at General Catalyst through the years, it's a who's who.
Do companies like HubSpot and Demandware ring a bell? Yes, both companies went public and Demandware was recently acquired by Salesforce for $2.8B.
Have you heard of Locu and Paydiant? Both are Boston companies that were acquired over the past few years. GoDaddy acquired Locu in 2013 and PayPal acquired Paydiant in 2015.
How about the next wave of companies like Drift, NewStore, and Semantic Machines?
These are all companies that Larry has invested in and it isn't even the full list. Needless to say, his track record speaks for itself.
Keith Cline: Tell us about your background.
Larry Bohn: I grew up in a suburb of Boston (Milton), went to public schools. My dad died when I was 17; he was a decorated airman in WWII. He was shot down over Romania and spent 18 months in a POW camp. When he returned, he ran a lunchonette in my uncle’s drug store. My mom was a bookkeeper and after my dad died, she worked full time to support three kids. She later became a travel agent. The main thing I learned from this was that life is full of unpredictable challenges; you need to work hard and become independent, and your determination and resiliency is how you develop character.
KC: Per your bio on the General Catalyst website, it looks like you’ve had some interesting jobs before college (delivered groceries, drove a taxi, worked on a farm, was a short-order cook, and managed a pool hall). Did you learn anything from these jobs that set down a foundation for later success?
LB: I learned early that working with people of all types, learning to listen, being able to manage conflict, and providing excellent service goes a long way to being successful. I really enjoyed all the jobs I had (except for picking corn, which sucked). It gave me confidence in my ability to make money, to be independent, and to learn important lessons from many types of people.
KC: What prompted you to study English at UMass Amherst for your undergraduate degree and then, complete your Masters in English Linguistics at Clark University?
LB: I entered college at a time of great volatility; Vietnam War, social division, etc. I was fortunate to be able to go to college on the GI bill as a "war orphan" as it was determined that my dad's death related to his war injuries. I didn't really have a career goal other than a vague sense of wanting to be a teacher or professor. Everyone who studied business at the time was a dunce. I liked English for the intellectual challenge and I was a good writer. I was lucky enough to get a teaching fellowship at Clark University where I taught expository writing. It was great experience but I learned that if I wanted to be a college professor, I would need a PhD and I didn't have the stomach for it. So I got a job teaching writing and English at a junior college in Boston. After a year, I realized I was really capped in my career and wanted something different. I had two real skills; I was a talented writer and I had a knack for technical things. I had taken one Fortran programming course. So at the time, I was actually qualified to get a job in the nascent computer business.
KC: Was your first job your of college at Data General?
LB: I landed a job as a software technical writer at Data General where I wrote manuals on how to operate and program 8 and 16 bit computers. My first masterpiece was called "How to Load and Generate your RDOS System"; it was a bit hit! Later, I became fascinated with computer programming and taught myself assembly language programming and a whole range of database technologies. This gave me a strong technical background to move on to technical and management roles at Digital and later Apollo computer, where I developed a software system for document retrieval and became sort of an expert in docoument production systems.
KC: Tell us about the rest of your career before getting into venture capital.
LB: While at Apollo I learned about a Cambridge software startup called Interleaf which was an MIT based company doing WYSIWYG document production software. I sort of fell in love with the product and later was recruited to be the VP Products and Marketing at the company. It was a terrific fit because I was very much the "voice of the customer" and was able to lead the product team to become the leader in the space. It was an amazing ride, from a small team to a sizeable public company and it forever gave me the startup itch.
This was at the very beginning of things that created the web, like XML, the rise of PCs, networks, etc. I ran almost all the different functions at different times at Interleaf and it gave me the confidence and desire to want to run my own company. I got recruited to become President of a startup in the document management space, PC Docs, which was headquartered in Tallahassee Florida and was owned by a Canadian company. My job was to move the company to Boston where there was better talent and to grow the company. Most of the employees in Tallahassee where students at FSU, and I was able to convince them to move to Boston in February!
The company hit a great vein of opportunity, riding the growth of PC networks, Microsoft SQL, etc. We catapulted to the #1 position in the market and after the second year we did a US public offering. It was an amazing and exhausting experience, and two years later another Canadian company, Hummingbird, acquired the company.
I was fortunate at the time to be able to take 10 months off and look for my next opportunity. During that time I met with a number of startups and I was very focused on finding an emerging internet application company. By chance, I was introduced to a very small MIT startup called NetGenesis which had a web analytics product. There were about a dozen people in the company but I really liked the two founders, Matt Cutler and Eric Richards. They had the beginnings of an interesting product but really lacked the go-to-market skills. Over a couple years, we worked hard to become the leader in the enterprise space, took the company public in 2001, and had a billion dollar market cap for about a month before the market crashed. The next 18 months of running the company were really tough; we retrenched, had layoffs, but were fortunate to sell the company to SPSS software in 2002 in what was a horrific M&A market. Again, I took some time off, was pretty burned out, but got a call from an old friend, David Orfao who was just starting a new venture firm in Boston and was looking for some help.
KC: How you did you get into venture capital and join General Catalyst?
LB: As a CEO, I had worked with venture folks and had flirted with the idea of changing roles. After selling NetGenesis I was looking for a change and joined General Catalst (GC) as a Venture Partner which is a good transition role. GC was just getting started; I really loved the startup nature of the firm and the motto of "entrepreneurs investing in entrepreneurs." Very soon, I made a couple of investments and my first one, Venetica, got sold to IBM after 14 months and I said "wow, this is easy"; what a false positive!
KC: How has venture capital changed or evolved over the almost seventeen years you’ve spent as an investor?
LB: I think the biggest change is that because of a number of technologic innovations (cloud computing, SaaS, mobile, etc) companies can get started and grow initially on much less capital, so venture tends to see companies that are already formed and starting to scale. When I first was in the business it took several million dollars just to get started. So the advent of seed funds, incubators, etc., has been a good thing overall and we get to see companies at the next stage of scaling. I also think the business has become increasingly specialized as the most successful venture investors have deep knowledge of certain areas and can be more helpful to startups as they understand their challenges and opportunities. For example, I focus on enterprise and B2B software and while I have lots of opinions on the consumer side, I know that my focus on commerce, SaaS, and analytics, gives me an advantage to source deals and benefit companies I invest in.
KC: How about Boston, how has the ecosystem evolved since then?
LB: I think Boston is a terrific environment for startups and technology but we have to realize that we are not the center of gravity. Silicon Valley and SF are clearly the leaders here. Boston has great strengths in software (SaaS, analytics, mobile, commerce, etc) and certainly the biotech sector is premier. But some areas like internet infrastructure are more challenged and we are weaker in consumer technologies. This has resulted from not having enough big internet companies where the most advanced technologies are being developed and brought to market and where teams spin out to create the next great thing. I don't obsess or fret about this. Boston has great universities, superb talent, and a long term startup and innovation culture. So while today we may feel a bit underappreciated, I see companies like HubSpot, KAYAK, Demandware, etc. spinning out startups that will become terrific companies in the future.
KC: What stage of investments do you primarily target?
LB: I have been almost exclusively a Series A investor, which means I back founders and teams very early. It's only now that I contemplate doing things slightly later stage, like Series B or C.
KC: What are the top traits you look for in terms of investing into a company or founder?
LB: I have a pretty simple rubric for a founder:
- Has great domain expertise and has "over the horizon radar" in the space they are persuing.
- Is personally magnetic and can recruit and build a terrific team.
- Is relentless in their pursuit of building something significant.
- Is resilient and can recover from hardship and failure.
- Is team oriented, and wants to build something lasting and bigger than themselves.
KC: What sectors of technology, industries, or trends are of interest to you?
LB: I am very focused on SaaS, including commerce, marketing and sales technologies, and the range of analytic applications. I tend to be "up the stack" in terms of where I focus. I'm also very interested in various AI applications both fully automated and human assisted. And I try to ground my investment focus on areas where I believe we can make money.
KC: What is the current fund that you are investing from?
LB: We are currently investing out of GC 8, which is an $850M fund that is both early stage and transformational growth.
KC: You are a very active investor in Boston companies such as Drift, NewStore, Semantic Machines, and several others. What excites you about the current market in Boston?
LB: As I mentioned, Boston has great entrepreneurs and innovation areas. I think we are especially blessed with deeper software technologies like AI, and application areas that are ripe for disruption. The amazing ecosystem in healthcare also gives us fertile soil for healthcare IT/data/etc. And there's every kind of oddball inventing the next great mobile game, cloud app, or mobile widgit.
KC: A lot of your previous investments have been successful leading to an exit, recent examples include HubSpot, Demandware, Locu, Paydiant, etc. Looking back, are there any common traits about these companies that led them to a successful acquisition?
LB: These companies were led by great founders and entrepreneurs who had the characteristics I mentioned earlier. And they have been blessed by both timing and luck.
KC: What companies in Boston, outside of your portfolio, do you find interesting?
LB: I am a big fan of Wayfair (I buy stuff from them), DataXu (amazing ad tech platform) and Rocket Software (the $500M revenue company no one has ever heard of).
KC: Greatest misses - what companies have you passed on that you wish you hadn’t?
LB:
KC: Who do you admire or who has been the greatest mentor for you?
LB: Really so many people. My grad school advisor, Dr. James Macris, was someone who had a rare mix of intellectual curiosity and hard knuckle practicality. And he believed in me.
KC: Outside of being a VC, what are you personal interests or activities?
LB: I am an avid cyclist, being an 18 year rider in the Pan-Mass Challenge. I am an occasional woodworker and I like to read a lot.
KC: What type of music do you like? What was the last concert that you went to? OR… what was the last book that you read or movie that you saw?
LB: I tend to be trapped in music of the 70s/80s. Last two concerts were the ABBA reunion and Bruce Springsteen. The last book I read was “Truck Full of Money” which was just released and profiles by good buddy, Paul English.
KC: Are you involved in any charitable organizations?
LB: Through the PMC, I am a big supporter of Dana Farber. My wife works with and we are supporters of Facing History. We are founding members of the Arlington Education Fund. Also, I consider some of what I do as a VC to be a form of charitable giving:)
Keith Cline is the founder of VentureFizz. Follow him on Twitter: @kcline6.