 Boom, what's up everyone? Welcome to simulation. I'm your host on sake and very excited to still be doing interviews at cofe as the Congress on the future of Engineering software for our second annual partnership with them. We are now sitting down with Eric Anderson. Hello. Hey, thanks for coming out of the show Totally really appreciate it. I'm very excited to talk with a lot to discuss Eric's background is crazy He has been doing he's now the principal of scale venture partners for the last one and a half years They have a 400 million dollar fund that's been making investments into everything from cybersecurity to developer tools to open source Technologies to now engineering software. So we're going to be talking about that and we're talking about a journey how he got here Let's start with that. Who are you? How did you become who you are today? What were these major influences on your life? I so I I like to build things. Maybe we'll start there. Yeah, or and as a kid. I love science and Maybe the best way to visualize that I There was a comment when I was younger. I Think it was hail bop. Yeah, I don't remember hail bop. Okay, but I think it emerged for the first time when I was like I'm gonna say a 12 or something. I had probably a dozen pictures of hail bop and all it's on on my wall I got a telescope. I was pretty into like science. Yeah. Yeah that sort of thing. I Was supposed to astronaut was like the plan and that didn't pan out. I think I was afraid of heights and Anyway, so Eventually I turned to engineering and that was kind of what I wanted to build things make things So it's interesting that the influence came with both science and building but that with you know looking up at Comets or that or that as a young kid the parents were very involved with helping your creative ability flourish Yeah, I mean I I certainly I like my parents a lot So I should say yes to that question, but there was I was also one of six kids. Oh, you were one of six Yeah, that's a big deal. I was right in the middle. So I don't know that they were paying any particular With six they did get the telescope when I asked for it. That's great But I don't know that they ever looked at it with me totally with six of them It's really hard to give attention plus working to support all this. I mean I should tell my parents were amazing and before they see this and think that I didn't give them enough credit My dad was an amazing listener. Yeah, and like I Feel like I could just like explain everything to him and that and he was a super smart guy That's great. Got me interested in a lot of things. That's great. That's great Yeah, the When you're when you have six of them It makes it definitely a lot more difficult to be able to work and give each one of them really important Yeah attention and ability to creatively flourish then, you know, how did that lead you to to Utah and Stanford and Harvard? How did you like go from engineering and building? Yeah to to to the collegiate route? Where was the what were you building? going yeah, so I I went to the University of Utah was my home school and Ended up in mechanical engineering just because I couldn't decide between physics and computer science and a couple other things and I mean the first kind of thing I happened into was I was working with my brother-in-law on this Bike that he wanted to build and I knew how to design it from my school work, but he didn't So I helped him design this bike And it became like a business for him. I was like super jazzed about this idea that we could like Make something me and sell it I then So I was kind of thought I would I want to do engineering in the way I had a normally I don't want to be a designer so much as I want to be like I want to build companies and So that kind of I I then got excited about Software a bit and taught myself Programming that was back when apps were cool and I had an Android phones I wanted to learn how to make Android apps when people were only making iPhone apps it seemed I Actually want a little business pond contest small one For this particular app and it didn't work there were some constraints behind it, but It got me excited and I it was exciting enough that when I interviewed for this job at Amazon They thought that what I was building was cool And it landed me a job at Amazon. Oh Wow, which it was like Kind of set me on a course. I think tours like So I was a product manager in their cloud business Which I didn't know anything about But I got this email every day that told me how much money they were making in the cloud businesses And this is before they reported revenue. I was like forget my silly app. These guys are printing money Like there's something special here and I My manager left went to Google Cloud Wow, and I eventually found my way also to Google Cloud thinking that was kind of The ground floor or something big and I always thought it would be awesome to work at Google So I was just excited at the opportunity And that's where I really learned software. So I was there four and a half years. Yeah working with a team of mostly PhDs That were doing like distributed processing and I would I would have conversations with them about What we should build next and I would go home and just research what everything they had just like words I didn't understand things I didn't get right To try and like keep ahead of what was going on. Yeah And maybe just to round out the story. So In the process of that I felt like you know, I wanted to be a builder and here I'm working at like Amazon and Google these big companies So I Thought maybe it was time for me to look at starting my own company Was talking to VCs about things I was noticing and things that their startups to try to find a startup But that actually led to conversations about joining a venture firm Yeah, so in the process of trying to find a startup. I ended up at scale venture partners Yeah, yeah, and it actually makes a lot of sense because that when you you you've said multiple times that you care a lot about building companies and that Versus sometimes a lot of people care about, you know, just making a design that works really well for a specific aspect of of a product or a service and so when you're at that end of the abstract spectrum of a a Role and venture capital makes most sense you with your background with your when you're talking about the bike with your brother-in-law and then the Figuring this out slowly about yourself as as they're printing money at Amazon and Google Microsoft for their cloud computing services, right some crazy stuff's happening with what with what that means and how to make sense of data and the application of Quantum computing intelligence to that and and and other decentralization technologies of the algorithm so that people can actually Use the right things at the right times when they're not in silos all these types of aspects are so critical to To what's happening in the future and how many years was it total at Amazon and Google then? Yeah, I was really brief. I was there for like a summer in summer. Google was four and a half years Four and a half so almost five years in like right. Yeah total And total in in cloud work and then and then I love also how you're describing your story that When I do I do similarly when someone comes on to our show That's at the you know cutting edge of biotech or neuroscience or blockchain or wherever they're at You know what I do is I do similar work as you when they just go off and they're like but All this nuance and depth and then I'm like alright. I need to go do more homework I need to go and learn about these things so I can be more well-rounded be more well-spoken Understand future technologies better. So that's I love hearing that and I hope other people that watch also take that that that mentality of Humility and wanting to learn and be open-minded and go and and the internet is such a great tool now for you to be able to go and do whatever you want. Yeah. Yeah, okay Now as you find yourself You're like I want to build I want to build companies you get into scale venture partners now What is that like when you're first introduced from you know from from engineering and from the Cloud work that you did all the way into venture capital when you first introduced a baptism. What was that like? Yeah, I mean I think There were The the folks I joined had been at scale for some time And I think they were excited in some ways have like someone who's coming from industry some fresh ideas so immediately everyone turns to me and is like Eric, what should we what should we invest in and It's kind of deer in the headlights for like I mean I I've thought about this to some degree, but I haven't ever put my you know Skin in the game skin up until this point It's so at first. I'm just like I have no idea. I mean I'm Unqualified this answer but on the other hand. I'm like, well, no, I just spent a bunch of time Looking at these companies that I was about to personally invest my time in and maybe that's a good You know, I was thinking critically about what's gonna work there I floated a few ideas and one I was fairly jazzed about that we looked at pretty closely and Within like a couple months of being there the firm had made an investment in the company I was I thought we should like the timing all worked out like they happen to be raising we had I had an intro to them and And I felt like I've suddenly hit the ground running So that was exciting. I've since learned it doesn't always work out there We had a lot of great ideas and the timing hasn't worked out, but it's been a busy year and a half Okay, so so what what does what does it look like being the young guy that people are like What should we invest in and you're like thinking about what where? Civilizations moving towards where you guys can really apply these You're mostly focused on series a b c funding. Yeah, okay, so these are like bigger rounds. Yeah Yeah, the companies have like, you know Double-digit employees and they've got some revenue like they build the product and a little bit of revenue They probably don't have like a sales team yet, but they know the CEO is doing the selling Yeah, yeah, yeah kind of stage, right? Yes. Okay. And then so as as this is happening and you're having all these, you know The other partners asking you like what are you seeing right? Are we going? What are what are your what are your responses to yeah? So I think at first I start just Regurgitating all the trends that I'm seeing and which ones were those. I mean so open source was one. Yeah, like yeah, I think There was there was probably a class of investors who Don't think it makes sense to give away your product for free and and there weren't a lot of ton A lot of open-source exits at the time Actually in the year and a half. We've probably seen more open-source exits of open-source companies than before and before I mean Why are there was just a handful? Damn, that's great. And so yeah, so that was like one thing That I felt like what's happening, but I I think I hadn't Yeah, so I'm kind of regurgitating these trends like open-source is a thing and You know serverless A cloud infrastructure approach approach to cloud infrastructure that Makes it you don't have to think about the servers as kind of a thing And as I'm regurgitating these I think I'm realizing that I haven't thought about them the way Kind of VCs do in some ways like I hadn't I haven't really figured out Are these defensible markets are these big markets? I was just kind of rattling off the trends. I saw my friends were excited about And so I think quickly I started to try and look at them through a new Angle which was like okay, so which ones can you actually make money in and I Found that generally the things my friends were excited about were actually Good You know good investment areas, but maybe not always the case and then well when when you're when you're looking at Like the new aspects of these of these ideas you're looking at you said like defense ability You're looking at a scalability market size all these new ways of also perceiving the cutting-edge technologies it That that adds another lens to your to your kind of tool belt of right in the world And that that that makes it in a way it makes you more well-rounded it makes you able to see things in it in it And when you when you're listing you're listing these different fields, you know you open-source the amount of exits that are We're more in the last year and a half Which to me that sounds very interesting because I'm trying to figure out you know How can we move towards that like open-note book science? Yeah, right? Yeah, very good. Yeah Yeah, and then and then there's that and then there's also the the you know What was the other the second one that you mentioned a serverless serverless what was so so When a company wants to you know to to not have to build their own data centers, they just use Amazon right Google so But how does Google or Amazon become serverless or yeah, yeah, it's a silly phrase But when you use Google or Amazon you're still making a lot of decisions when you interact with Google or Amazon You're saying I want a server about this size a virtual machine and I wanted to have you know this much RAM this much memory and When I say I'm ready, it's gonna take about 90 seconds to become available It's crazy and it's gonna you know, which is crazy fast right and then it's gonna charge me while it's on for the next year until I turn it off and Once you start building services on top of these things you're like well If I don't you know, why doesn't it why doesn't the server automatically turn off when I'm not using it? And can't we spin it up a little bit faster and eventually if you think that way you arrive at the point of like Why don't you just charge me every time I need the moment I need the server for just that moment correct for the computation the computation so if I have a little website that You know Looks up license plate numbers. I don't know what it would do at the moment I send a license plate number and it returns the answer. I just pay for that moment of Computation, I don't have to tell you how big a machine I want You know the more requests I make it should just like Become charging more money and it should scale to fit my knees and and that's kind of the notion behind serverless Okay, no config to specify things and there's no. Oh, okay time spent spinning up or spinning down Okay, got it got it. So basically there's still servers out there. Yeah, you're not thinking in terms of sir That's what serverless. Okay. That's okay. It's interesting. So no config is potentially a better way to do it Kind of like at at as you need computation You're just you're just passing along the computation to the cloud and having that that cost come back for you But if no one uses your product, you don't pay Amazon any money. Correct. Yeah, right Yeah, yeah, so and then that that saves lots of time because otherwise time setting up config Yeah, and the time that it's on when you're not using it all this all this other right Interesting so that was the second one and then you've also been focused a lot on cyber security Yeah, that was a bit incidental. I mean, I don't I don't think Actually security and privacy is more top of mind for everyday folks, but we just had a Nebula genomics CEO on our show Okay, and and the the amount of of genomic Data that the number one reason that people are holding themselves back from from adding their their their genomic data into Into for the masses on medical research and all this type of stuff is because of the privacy issue that that are What is the government involvement? What is the what is insurance involvement? What is the? Who's who's monetizing on this data? Do I actually own it who owns it right all these questions? That so the pride yeah privacy in so many ways has bubbled up to become this This extremely massive issue, but what are you actually hiding should it go the way of China? Should it go a global surveillance? Should it go, you know, there's all yeah anyway. I can go off But yeah, yeah, so similarly I mean when I first started we were doing a deep dive on kind of GDPR at the time and which is the kind of European privacy policy that It's probably the biggest of it's of our time And we were looking for investments that could help people satisfy GDPR requirements Meanwhile, there was a ton of cyber security investments that I that was just kind of coming into the door That and the more time I spent with them the more I thought you know, I know actually fair amount of what goes on with computer networks and How these so so even though I didn't have security background suddenly I felt like this was an interesting area that I could weigh in on that I was kind of forced to get smart on and Since then in the first year of being at scale. We did I have I helped with for security investments Where I'm now a board observer, so I'm you know at the company every quarter helping build the business It's been like now. I this is one of the areas. I'm most excited about in that You're going to do the most homework that you've assigned yourself tons of homework to go through this process So that you can be at the edge when the when the founders of these companies are talking to you about what they're building You can relate with them right and can and help be that that you're hitting the tennis ball back in interesting ways for them to Build their business. I mean ultimately they're looking for me to be a contributor. Yeah, correct into the business and you know and so I do my homework, but but also there's After you you help three or four of the companies and security you start to see that and you know Here's here's a great VP of sales and here's a great sales process and and you know So it ends up The experience I've had in the past year has been super helpful and that founder seem to be yeah excited about now Don't teach us about what these new cybersecurity investments have to do with data and privacy Yeah, and it may be more properly labeled like security privacy compliance, but okay What what we found is that when The companies often have like a privacy officer somebody who's kind of on point for privacy, but they don't often have the budget or the Organizational kind of influence that the security team has the security team has been at companies for now a decade That's a lot of budget a lot of influence and and their goals are fairly aligned like Securing data is very related to to ensuring privacy compliance on that data and so What we're finding is that as we you know we see selling privacy software almost all often ends up Coming drawing from security budget and this and the security leader becomes the stakeholder in the conversation Hmm, and I I see privacy companies kind of expanding in the security and security companies kind of expanding in the privacy So it may it may be something that consolidates to some degree Yeah, and you had that at the very beginning you said, you know, it's a security privacy The year that that right that is coming together now when when it comes to securing data Companies that are aiming to secure data. They're complying with privacy regulations. That's usually happening through cryptography Is the process? Yeah, okay, and then the greater degree of cryptography the greater degree of privacy But then there's also this process of wanting to make sure that if the owner of the data wants for the data to flow Yeah, it's easy to open these valves and let the data flow. So that's is that part of the yeah I mean the the types of regulations the compliance that we're looking at initially is mostly around things like if you have a breach and Customer data is compromised. You need to notify the customer. This is you know, Europe says this is how it should work And it seems like the right way probably you even have the the these Co-centric circles that prevent you get notifications prior to yeah You should yeah, you should prevent breach and in the case of breach It should be kind of limited in scope. Yes, and then and people should be notified immediately Another kind of compliance regulation is if somebody requests to be forgotten or yeah from a database They should have the right to be done. So and for a lot of organizations like No one no one's Thought to do that before or has the capability to do that before and if Responding in an automated fashion in an efficient fashion to somebody's request Requires a change in how they tool their systems. So a lot of the Initial investments we were looking at it like how do how do we satisfy those requirements for companies that are now Immediately required to do this Long-term it's how do we keep the data out from the bad guys, but in the near term It's how do you comply with the regulation? Yeah, yeah, and just a quick bit on your on your perspective on the on the future regarding this Does it look like a global surveillance is where we're heading? Does it look like a complete? Transparency on all things is where we're heading I mean I like to think a lot if we spiritually advanced ourselves as a society We could more quickly eradicate malevolence and not even have to worry about some of these Issues that we have with with trust. Yeah, so where do you where do you see that the the the state of privacy? Yeah It's it's ultimately up to I think the People's How I like if we don't get excited and demand Privacy policy from either our governments or our company or our you know companies that provide you know private services, we're not going to get it. I think there's there's power in data and For big tech companies they they they wield more amount market power and have more revenue potential with more data Is there something to really be private about? This is an important thing Yeah, you have to be kind of personally like should we be worried about privacy like because As a just a thought experiment. Yeah, if they're if we could spiritually advance. There's no malevolence Yeah, what do we really need to hide right? Yeah, yeah, so then what would be the point of all the cryptography and all of that. Yeah restricted data flows and Potentially open up even our ability to move around the world with more ease when there's no malevolence It's just these are very important things to unlock. Yeah, assuming a world with good intentions good actors Yeah, yeah, maybe they're you know, it's an interesting thought experiment to consider why we need privacy I mean, I don't know that it's for me to say I got don't know that It's an interesting counter question to say just do people have a right to privacy whether or not they can articulate why they want it And should we feel obligated to satisfy their their kind of yeah request for privacy on the other hand? we certainly We haven't really asked ourselves these questions yet like Home ownership in the United States is largely public It's all on the titles and the deeds and you can look it up But most people don't and I don't think people realize that like their names and addresses and sometimes phone numbers are attached on a public record to like You know and and who owns vehicles is largely public today In some ways, I think I would love if a world where we treated social security numbers is public because the fact that we Pretend that they're private, but they're often leaked makes it makes a tricky place to Operate the personal genome project people just post their genomes completely on all six billion Bases just right on the yeah space. So so this is these are this these transparent You know your deeds to your houses your yeah, yeah, these are these are very interesting times to explore thought experience like this and how to how to get rid of some of the The bad behavior some of the bad intent that that exists to make it easier to live in that in that trust-filled environment I want to ask about Engineering software sure. Yeah, so what about skill? interest in I think I mean we don't have a bunch of historic investments there It's a smaller kind of venture market than what we have historically worked in but Part of your job is not to just keep investing in the same areas because there's always new opportunities And I think there's a kind of emerging opportunity in engineering software Between additive manufacturing and and it's couple technology of generative design As well as kind of what I spoke at Kofas today was about how there's a pattern of automation In building software, and I think we're seeing automation in building hardware Anyway, all that comes together think like there could be some really big companies here and in places that we haven't normally expected to see them Yeah, that's right. Yeah, the the one's ability to do Yeah engineering simulations the permutational capability of our official intelligence Just is vastly superior to our human Computational ability to see the fit how functional can we make a right? in that space and That doing that over and over again for pieces to fit into it a whole that generative design and additive manufacturing that this is very an interesting way to think about how a General intelligence could potentially be able to make more of itself and and in ways that humans are become a little bit Just Not even potentially can just become more. Yeah, I don't know. We don't like using the word irrelevant But yeah, it's human capital becomes it's a complicated. It's a very very complicated Yeah, thing it's kind of like a little bit of passing the torch to a to a general intelligence It's a it's a very complicated thing, but I'm glad that you're watching this this Well, one thing we found with we've seen automation come in business software and in Kind of our research it not not to touch on push-button issues, but like What's nice is that a lot of people a lot of these jobs aren't that appreciated? I mean like very repetitious jobs that can be automated by kind of rudimentary artificial intelligence Are not the most enjoyable jobs lack of meaning and purpose. Yeah. Yeah, and but I think what Not to delve too much into policy But we should also in at the same time we're automating rudimentary things we should look to Retrain for all the beautiful new things. Yeah, I'm a huge advocate of the hundred plus million jobs that are being created But the to get people into those slots Yeah Is a whole complicated shebang that we need, you know augmented reality and really these personal AI learning Systems that are like literally know Allen's capability in biology and they're really working with me on understanding Where I'm at and helping me get yeah to the point where I become very relevant in the synthetic biology world that type of stuff That is that that that's where you feel as well as that we're we're we're moving Potentially away from some of the with the crosshairs of software and the repetition work and moving towards the the new creative Gigs but that we have this gap that we need to get through of the tree of the training for those these do you feel similar? Yeah, I I mean, I don't want to like I don't have a strong opinion in one way or another on what that future looks like Yeah, yeah, but I I do think that everyone has To some degree an innate desire to create. I mean, I certainly did younger. I do now. Yeah, everyone I feel like I would talk to has had similar feelings It feels a bit human to want to create and and not just do repetitious actions And I love both children and creative designs. Yeah So I'd love to see a way in which more you know society in which more people get the opportunity to really Create that that's that would be awesome. Yeah It's like the the unlocking of the creative potential of a human mind as well because it's kind of stuck sometimes in repetitive maybe more Meaningless or or or less purposeful work and how about we talk a bit on you know, this is this is crazy that this is a You know of a 400 million dollar fund is is massive, but it takes a long time to build up enough trust to be able to to To take in that much funding to be able to go and and make and make really good investments then With this, where do you where are you seeing? your time and and and the the time of skill venture partners being invested into the future of technology Where's our focus going to be yeah, yeah, yeah, where's the main focuses that you're feeling out? Yeah, so we We've historically spent most of our time in what we call business software enterprise software and I In the in the last year or so we've dabbled in what you know, what you might call frontier markets. We've done some robotics But I don't think we want to move too much from our core of Business software. I think It's easy to kind of think about about the future and I'm not realized that most people today have fairly You know mundane nine to five lives and there's a plenty plenty of opportunity to make people more productive to To make businesses more efficient. Yes With with with even just kind of nuts and bolts software, but also Yeah, artificial intelligence. I think is certainly if I had a couple kind of like within business software where we're gonna look It's is vertical software like Instead of just horizontal tools like everyone needs a CRM to manage customer data, you know, what about for like the construction industry? Places it's probably under Invested in software today. Yeah, you know, what what do software solutions look like there real estate help care? So I think I think you know the Vertical specific business software is really interesting interest and then Machine learning artificial intelligence Can't be overstated, but probably is overstated. It's it's we talk a lot about it We're we're interested in areas I think uniquely served by neural networks. Yeah, I think it's easy to get excited about machine learning general machine learning has actually been around for a bit and I think the most recent advancement is language interpretation computer vision So I think areas that touch on Natural language and computer vision are interesting in vertical markets and horizontal markets. Yeah, yeah Yeah, it's good that you're you're Going into looking at health care and and real estate and construction. These are also just massive fields that are probably like you said They don't have as much of the of the artificial intelligence attention being placed on there There's there's a lot of like you said work that can be enhanced by artificial intelligence in those in those spaces So it's good that you're doing that Been a lot of fun. I want to ask you what would you say is an important skill set for for for kids and for adults in the moving into the 21st century to learn so My sales I might joke really kind of say but like and the sales the broader, you know thing of sales is just Communicating I Think communication is something we're getting worse at the same time. We're getting better at so many other things You know, we don't talk to people. We don't form relationships in the same way most software is still adopted through At least enterprise, you know a commercial software is through sales All of my work is is more or less sales. You know, I'm either being sold to where I'm selling and And yet I think we've we've kind of structured the way people You have to think about training themselves is mostly around skills and and those are kind of often very kind of Tactical skills by number crunching that sort of thing Yeah Steve Jobs is maybe like the most famous innovator Of our time and it's not because he was like great at machine learning or anything He was just incredible at communicating His vision of people. Yeah. Yeah This is such a Profound end to this conversation that the better we can get at taking this Crazy human experience that we're living Synthesizing it into a really powerful story that we can teach other people and sell them on the idea of our Mental map that we're trying to replace the old map of code of civilization with some new code That people can really get behind that that that skill is so critical Because it's funny because when we just had, you know, great Brockman on the show Co-founder of open AI that when when his what his skill that he recommended everyone needs to know how to program Yeah, and you're like everyone needs to know how to sell their vision Yeah So these two things kind of go hand-in-hand really is one's ability to understand the the fundamentals of code along the fundamentals of Human connection and rapport and love and compassion that go hand-in-hand. Yeah. Yeah It's so interesting the way that these these conversations end up going out Eric. This has been so fascinating Thank you so much for coming on in the show and teaching us Good time. I'm glad you had a good time. It's very important to us. Thanks everyone for tuning in We greatly appreciate it We'd love to hear your thoughts in the comments below on that episode go and have more Conversations with people around you about what it's like to invest into cutting-edge technologies and have more conversations around these topics also Go and build the future everyone manifest your dreams into the world support the artists and entrepreneurs that you believe in go and check out The links below to Eric's work the links to co-faz and our links as simulation as well Thanks for tuning in and we will see you soon everyone