I recently got to know the newest member of the Pillar team, Russ Wilcox. One of the founding members of E Ink and a civil servant in spirit, Wilcox has a deep appreciation and understanding of the Boston entrepreneurship and innovation ecosystem. He joined Pillar just a few months ago alongside Jamie Goldstein and Sarah Hodges, where he plans to support the growing cohort of startups to produce the next pillar company of Boston.
NS: Tell me about your background - where did you grow up?
RW: I grew up in a suburban, quiet town north of Boston. My dad was from MIT so the big thing in our family was Star Trek. I grew up wanting to be Captain Kirk someday. I was a STEM kid and was interested in computer software programming. By the time of high school, the three big things for me were the science fair, wrestling, and Model UN.
NS: How and why did you end up attending Harvard? Why did you decide to stay at Harvard for your MBA?
RW: My dad, aunt, uncle, brother, and cousin all went to MIT. I almost went to MIT but ended up at Harvard. My dad as an MIT grad had started his own company and he concluded that sales, marketing, and communications are just as vital as engineering. So he encouraged me to think about liberal arts, and Harvard was better for that.
NS: Why did you decide to do get both your undergrad and MBA at Harvard?
RW: Remember how I wanted to be like Captain Kirk? Harvard Business School is the ideal school if you want to become a CEO. The whole first year is a rotation through each function in business, so you see a bit of everything, then you go deep into electives the second year. Classes are taught by case method, so it is like a simulation rather than a dry textbook. And in the end, there are few grades. You have to decide for yourself and based on the reactions of the people listening to you, whether you are doing a good job. That’s also true for CEOs.
NS: You seemed to have been interested in politics while in your undergrad. Why didn’t you go that route?
RW: When I was younger, I really wanted to drive some kind of results. Politics is much more amorphous; you get bogged down. I didn’t think it would offer a chance to achieve much quickly.
CEOs really should conceive of themselves as civil servants, oddly enough. As a CEO, you rely on your employees, customers, investors, and the community. If you want to be a great leader, you put yourself last and serve all those others by building an organization that unleashes everything they have to offer. That develops your people to their highest potential. Even in that rare case when you step in to make a top-down decision, people know you always do it in service of the company vision. That is why the CEO's job, done well, is a service job.
So while I did not become a politician, I keep trying to help the world and my community as a startup entrepreneur and now VC, who can build economic strength here in Boston by creating new businesses. That is the best way I can “think globally and act locally”.
NS: You traveled to 32 countries with your family over the span of a year while homeschooling your kids. Why did you decide to do that?
RW: I traveled a lot during my 12 years with E Ink and wasn’t home too much. My wife Gina loves to travel, but she couldn’t do much of it because she was home. So we agreed that when E Ink came to any conclusion, we would go traveling on an adventure together.
All the international business trips made me feel that Americans are too focused inward. We tend to forget that we are only 5% of the world’s population. Our family wanted to see the rest.
On the trip, our family grew closer and the kids gained a more global perspective. I hope they learned that if you go on an adventure, even if there are some inconveniences, it is a good life.
NS: You were the co-founder of E Ink, a developer and provider of electronic paper displays (aka what the Kindle uses). Can you share more background on the company and what you were trying to solve?
RW: The inventors of E Ink were thinking of how paper is easy to read but once you print on it, the words are permanent. Meanwhile, computer displays change instantly, but they are not fun to read (particularly true in the 1990’s). The idea of electronic paper was the best of both worlds.
The technology is based on an electronic ink, in which you have tiny bits of white titanium dioxide pigment and tiny bits of carbon black pigment. Suspend that in a liquid and move the particles through the liquid using electrical charges. Once set to a certain pattern, you can read letters.
It was raw technology at the MIT Media Lab at the start, but you could see the pigments swimming through the ink using a microscope, and it was beautiful to behold.
During the first 2 years, we raised a lot of capital and spent that time making it look better. The next 2 years were spent trying to make it robust enough so that after people bought it, it wouldn’t fail in the field. That required a complete redesign of the chemistries. Now we had a technology worth selling. Next Sony partnered with us to make an eReader consumer electronics device, which meant we had to figure out mass produce, at low cost, while meeting their quality standards. That took another 2 years. So after 6 years and $100 million, we finally had a product that looked good, was robust, and could earn real revenue. And 200 patents to protect it all.
All we had left was the simple matter of creating a new electronics category for electronic books. That took 6 more years. When we launched, Steve Jobs openly predicted eReader devices would fail because Americans had stopped reading.That was a bit of a heartstopper. And as with any exponential growth curve, the early years double from a low base, so our order volume looked small for a long long time. We needed a lot of patience and faith early on.
Lucky for us Amazon got behind the concept. Then Oprah got behind it. Authors like Steven King and Dan Brown.
So then our main problem became how to scale into millions per month while improving quality and cost. We built a factory in Massachusetts and exported to Asia. We did a good enough job to stay as Amazon’s sole ePaper display source. E Ink has sold 100 million displays since inception.
NS: You’re also currently the co-founder of two other companies, Transatomic Power and Piper Therapeutics. Can you tell me more about that and how you make it work with your day job?
RW: The E Ink sale closed on Christmas Eve 2009 for $480 million. In 2010 and 2011 as Gina and I had agreed, we took time off to travel (see above).
When we came home I had to decide what to do next. It should be significant for society, not just to earn a profit. I decided to apply my E Ink experience by supporting other scientists on their world changing innovations.
That led to Transatomic Power, a new method for nuclear power that is inherently safer and more efficient, which means the power plant can be far simpler. It can supply mankind with limitless clean energy at a price cheaper than coal. We raised capital from several families including Peter Thiel’s Founder’s Fund. I remain involved as a board director.
In 2015 I turned to life sciences. I met a brilliant doctor from Boston Children’s Hospital who wanted to start a company to pursue her discovery of a cancer drug that activates the body’s immune system. We started Piper Therapeutics and raised capital for animal testing. Last year we identified areas for further research and brought it back to Children’s for more science. We will bring on a new CEO to take it forward when that is ready.
NS: You’ve only been at Pillar for 3 months but you’ve known Jamie Goldstein, the founder, for quite some time. Why did you decide to join the team?
RW: Jamie is someone for whom I have enormous respect. He is an extremely talented VC with 17 years of pattern recognition from his time at Northbridge. He was a past Chairman of the NEVCA. He understands the venture business deeply. Jamie has an inspiring drive and fearlessness that makes him an ideal business partner. As a friend, he is loyal and funny.
So when Piper Therapeutics quieted down, I reconnected with Jamie. We started to look at deals together, and we were reminded of how much we enjoy working together.
He and Sarah have done a great job launching Pillar onto the Boston scene and the fund has already attracted terrific entrepreneurs. Sarah is a formidable businessperson and a huge win for Pillar. And then there were the venture partners and the many amazing Pillar CEOs who partnered on the fund.
It was altogether a great alignment of people I liked and a mission that resonated. It made wonderful sense to invest and to join as a general partner in the fund.
NS: Now let’s talk about Pillar. What stage of investments do you primarily target?
RW: We mostly invest in seed, getting involved from company formation or even prior to incorporation. We offer friendly terms and rarely follow beyond the early stage, keeping us in a close alignment with the founder as the company scales.
We typically invest $500k to $2 million in a first check and focus on investments where that capital will make a substantial difference for the business. We often syndicate with others and we can either lead or follow as appropriate.
NS: What is the current fund that you are investing from?
RW: We’re investing out of our first fund, Pillar I. It’s roughly a $50 million fund.
NS: What sectors of technology, industries, or trends are of interest to you?
RW: A key theme for Pillar has been machine intelligence, which means artificial intelligence, machine learning, devices, robots, and novel human interfaces like AR and VR.
A thesis we like is that machine learning allows for a new generation of enterprise software. Old enterprise software was about tracking information. Machine learning allows you to analyze that, find patterns, then proactively suggest changes. Call it adaptive enterprise software.
We are interested in the issues of privacy, blockchain, cybersecurity, centralization, and decentralization of the web and of large service companies into point services.
We are also interested in the application of technology to health. Boston has VCs in tech and VCs in biotech, but there’s a bit of a seed gap for companies that cross both camps. We are seeing tons of interesting digital health startups this year and want to see more. The growth is partly due to Boston’s strengths in healthcare and life science, partly due to state and city government’s push to make Massachusetts a leader in digital health, and partly due to Amazon AWS offering easy HIPAA compliance to bring down the costs of entry.
We don’t look at therapeutics, but we do look at diagnostics where there is an AI/ML aspect, and we are also interested in novel approaches to synthetic biology.
NS: What excites you about the current market in Boston?
RW: The Boston ecosystem has a bright outlook and growing brighter, due to foundations that have been laid painstakingly over the past decade.
It started with local universities and hospitals, who ramped up their support for entrepreneurship. That exposed a ton of innovation and made Boston a leading source of commercial innovation. Then aggressive companies started moving to Boston to get an edge - we’ve seen 20 major corporations either expand or shift their headquarters to Boston in the last 5 years. GE is the most notable and there are at least 10 life sciences companies as well.
We have strong government support for innovation in Massachusetts. A key way that played out was in real estate. The most important was the opening of the Innovation District and expansion of the Seaport, which has given people more space to grow. Allston is next. Another way was that Logan Airport added direct flights all around the world making us a more globally connected city.
The consequence of these dynamics has been a flowering of startups, venture funds, service providers, coworking spaces, mentor networks, and ecosystem. And that, in turn, is going to feed back and inspire more of the above in coming years. So we are poised for greatness here.
The factor that’s going to become our bottleneck is finding managers who are experienced at scaling. Boston is going to need to import and retain more experienced scaling talent in order to keep the flywheel accelerating.
NS: Outside the Pillar portfolio, what companies or founders in Boston do you find interesting?
RW: I’m impressed by Bullhorn, Fuze, Rethink Robotics, and HubSpot. Add Susan Hunt Stevens at WeSpire, Natan Linder at Tulip. I would also add Numerated, LevelUp, Lola, and Tamr.
My favorite non-Pillar company is Disruptor Beam. I invested as an angel in 2011. They’re building social games based on Star Trek, The Walking Dead, Game of Thrones, where fans can spend their leisure time in the worlds they love. Providing low-cost, high-quality entertainment is a valuable mission and Disruptor Beam does that for a passionate fanbase. The CEO Jon Radoff is an authentic, kind and highly competent leader. A strong culture and pillar company is emerging.
NS: What are the top traits you look for in terms of investing into a company or founder?
RW: Early stage comes down mostly to whether or not you’re impressed by the person. Yes, you will evaluate the idea but even the idea can change. What you don’t want to ever change is the founder because the founder is the soul of the company.
Each meeting, I try to envision the founder a few years down the road and see if they could be like the other tech CEOs in town I know who have been highly successful. I’m looking for drive, intelligence, and charisma. I also look for whether or not the person has a streak of humility and a self-awareness of their own limitations, because I don’t think any founder can survive to keep running the pillar company that we want them to build, unless they can change themselves in tandem. The key to being able to scale with your company is being humble enough to learn as you go. We’re looking for this rare person who is supremely self-confident and yet not self-centered.
Beyond that, I’m completely open about market, tech, and product, provided that the founders can show the path to a substantial VC-backed business. It has to reach us at an early stage where something like $1M is important to the company’s progress. And in most cases, it is in Boston where we can bring our support and network to bear.
NS: Who do you admire or who has been the greatest mentor for you?
RW: My first job was management consulting at Corporate Decisions Inc. (now Oliver Wyman). The founders David Morrison, Kevin Mundt and Adrian Slywotzky developed a superb training program. They taught us to assess markets, analyze businesses, and communicate clearly.
At Harvard Business School, I was hugely influenced by Bill Sahlman, who taught both Jamie and me about venture finance, and by Howard Stevenson who originated the HBS entrepreneurial department, and by many other Professors and fellow students. Jeff Rayport was the Professor at HBS who pointed me to E Ink, for which I will always be grateful.
I cofounded E Ink with Jerry Rubin, the founder of Lexis-Nexis. He taught me how to be a business person who takes initiative and steps forward to shape the world. How to be an entrepreneur and follow your gut and have faith and yet also be realistic and practical each day. That’s a hard balance and Jerry showed me how to do it, largely by example. His confidence and faith in me elevated my business career and E Ink.
Once we got E Ink to market and started to scale rapidly, we brought Steve Ward onto our Board of Directors. Steve was the CIO of IBM under Lou Gerstner and then he became CEO of Lenovo and he had recently retired. It is always good to have someone on your board who’s run a $10 billion company before! Steve well understood the process of grooming and developing C-suite executives. When we hit hyper growth, he drove down from Connecticut once a week for six straight months to mentor me and to boost my CEO game fast enough to keep up with the business. E Ink successfully scaled from $16M to $160M in 2 years. Those are lessons I would like to share with portfolio CEOs as they hit their fast growth periods.
Another group who was a big influence on me were the CEOs in a special forum run by Katherine Catlin. It was a small group of CEOs who met every quarter to swap advice and compare notes. Across the years I became friends with and grew from knowing enormously talented founders like Colin Angle from iRobot, Brian Halligan from Hubspot, Janet Kraus from Circles, Art Papas from Bullhorn, Scott Eckert from Rethink Robotics, Dave Balter from BzzAgent, Ellen Rubin from ClearSky, Steve Kokinos from Fuze and a dozen more.
At E Ink I also highly admired Ken Bronfin, the head of Hearst Ventures. He an upbeat supporter for the company, yet also at times our fiercest critic. He demanded we do things professionally always. Ken himself is the consummate gentleman. Even when our business was gyrating wildly and he probably felt nauseous inside, he remained calm and classy and in good spirits on the outside. What a relief to have someone like that in the Board Room. He is my model for how I would like to be as an investor and Board Member.
NS: Outside of your day to day work, what are your personal interests or activities?
RW: My main thing outside of work in recent years has been coaching the kids and their schoolmates on educational enrichment. I coached teams for Destination Imagination, First Lego League and Model UN. These competitions are an ideal place for kids to practice their creativity, problem-solving and leadership skills. Model UN is where they can also gain a more global viewpoint. As a coach, I found that middle school students could grasp international politics faster than many adults. They just think about a playground where the teacher is missing.
Now our kids are nearly out of the nest, so I’m going to have to find a new hobby soon.
NS: Which country was your favorite of the year-long adventure?
RW: We lived 4 months of the trip in Paris, so if we had to pick one spot where my family feels most comfortable and happy it would be there. When people ask us for travel recommendations, we try to think of places that offer exotic food and culture and also where the dollar is strong. We recommend Thailand, Peru, and Turkey.
NS: Are you involved in any charitable organizations?
RW: I joined the board of overseers at Boston Children’s Hospital, an organization of exceptional people. Not many people know that it invests heavily in basic medical research to find cures for children, in addition to running a superb hospital. Gina is on the board of directors of the UN Association of Greater Boston, which runs thousands of kids through Model UN here in the Boston area and teaches them global perspective and leadership skills, so that is another favorite non-profit for us.
Nina Stepanov is a Contributor at VentureFizz. Follow her on Twitter: @ninarstepanov.
Images courtesy of Russ Wilcox.