The ethics of venture capital

I’m attending the Techstars Summit this week in Torino, Italy. It’s the annual meetup of this international network of startup accelerators (I’m a mentor in the Montreal AI program). I was recently named “All-Star Mentor” in the global Techstars network and the organizers invited me to network and speak on a mentorship panel.

There were many interesting discussions over the three days of the Summit, but one presentation stood out for me. Dr. Johannes Lenhard, an anthropologist of ethics, gave a presentation on “the ethics of venture capital”. Having spent a lot of time thinking about the ethics of technology over the last two years, I was curious to learn more about how this can apply to venture capitalists (VCs) as well. I’ll share below my personal notes from Lenhard’s presentation, but you can also read his three blog posts.

The ethics of venture capital:

Johannes Lenhard has been interviewing VCs to better understand what they do and how they see the world. He explained to us the importance of researching the VC industry:

  • Venture capital is much more than money (they’re not bankers).
  • VCs are the first filters of the future economy
  • 7 of the 10 most-valued companies were VC-backed
  • Because VCs are kingmakers, we need to understand their motivations, incentives and value systems
  • And historically, there’s been tension between “doing good” and “doing well”. VCs are in the business of breaking things.

So, that leads to the following questions:

  • Is there room for ethics in this?
  • What kind of ethics would make this model better?
  • Where do incentives come from?

Recently, the zeitgeist has been about reinventing capitalism. The Financial Times called for a reset of capitalism, saying “Business must make a profit but should serve a purpose to. Harvard Business Review recently suggested the era of “move fast and break things” is over and proposed the idea of a “minimum virtuous product”.

Lenhard said that changes in tech industry could be driven by various stakeholders:

  • Consumers (and the growth of ethical consumption). They put pressure on companies via impact on revenue.
  • Governments. They put pressure via fines and regulations.
  • Employees (ex: the recent Google walkouts). They put pressure via retention.
  • VCs and Limited Partners (LPs). They put pressure via reputation.

He also wondered if a new model of financial incentives was in the making and gave the following examples:

  • Beyond Meat is doing good and well
  • Uber has turned from startup poster child to loss-maker, partly based on ethical issues
  • Zenefits. Started out as a perfect company and had to be fully restructured after 2016 because of cheating.

Lenhard suggested that, in the startup world, you can be a temporary pirate, but you need to eventually become “navy”. You should never be a psychopath (doing illegal or unethical things), committing fraud, lying, creating bad company culture as these types of behavior now lead to economic consequences. You have to be better now to do well financially. Diversity matters too.

So, what roles can venture capitalists play to help with this?

  1. Ethical due diligence
  2. Strategic advisor (culture building, sounding board, etc.)
  3. Board member (oversight, checks/balances, etc.)
  4. Patient capital (avoid pressure, be in it for the long term)

He did call out VCs’ blind spot in all diversity dimensions: gender, race educational background and suggested that to fix those blind spots, VC funds should be i) start early, ii) be intentional and iii) don’t rely on personal networks too much.

Lehman’s key takeaways were:

  • Ethics matters, behaving badly can have immediate economic consequences, like lost valuation, no exits, reputational damage, disruption in leadership structure.
  • So far, investors and many startups have been not proactive. They’ve been fined, sued, moving forward until stopped.
  • But things are changing. More stakeholders, consumers, employees, LPs, are starting to care; the financial incentive model might turn even further.

And now for something completely different*

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(Défilez vers le bas pour lire le texte en français)

Those of you who are more observant might have seen that I’ve updated my LinkedIn profile and my current location. After 2.5 years at Element AI spent in hypergrowth mode and 12 years operating startups, the family and I have decided the time was right to fulfill a long-time dream and take a professional sabbatical. We will be spending the next few months in Provence (France) living in a country house. 

Trend trackers amongst you have probably read that sabbaticals are on the rise, especially for startup entrepreneurs. I’ve seen it mentioned by serial entrepreneur Danielle Morrill and a few friends are considering taking one. There have been multiple articles written about their benefits, including these two. My program over the coming months: biking every day, going outdoors, spending quality time with my family, enjoying great food, reading philosophy and writing blog posts. 

As I will not be returning to Element AI after this pause, I will be exploring new challenges in 2020. If you’re curious to know what I will be looking for, you’ll find details in my LinkedIn profile’s “About” section. But no rush, as I won’t be available until Spring 2020 for a remote role or Summer 2020 for an in-person role.

During the next few months, you can follow my musings on Twitter (https://twitter.com/sebprovencher) or in French on my philosophy blog (https://DesEquilibres.net). Feel free to message me as well!

Talk soon!

Seb.

* with a tip of the hat to Monty Python

Et maintenant pour quelque chose de complètement différent *

Ceux qui sont plus observateurs ont peut-être remarqué que j’ai mis mon profil et ma localisation à jour sur LinkedIn. Après deux années et demie passées en mode hypercroissance chez Element AI et douze années à opérer des startups, la famille et moi-même avons décidé que le moment était venu d’accomplir un rêve de longue date et de prendre un congé sabbatique professionnel. Nous passerons donc les prochains mois en Provence (France) dans une maison de campagne.

Les observateurs de tendances parmi vous ont probablement lu que les congés sabbatiques sont à la hausse, en particulier pour les entrepreneurs de startups. La créatrice d’entreprises en série Danielle Morrill en a parlé récemment et quelques ami(e)s envisagent d’en prendre une. Plusieurs articles ont été écrits sur leurs avantages, y compris ceuxci. Mon programme pour les mois à venir: faire du vélo chaque jour, profiter du grand air, passer du temps de qualité avec ma famille, bien manger, lire de la philosophie et écrire des billets de blogue.

Puisque je ne reviendrai pas chez Element AI après cette pause, je serai disponible pour explorer de nouveaux défis professionnels en 2020. Si vous êtes curieux de connaitre mes divers intérêts, vous trouverez plus de détails dans la section « À propos » de mon profil LinkedIn. Mais rien ne presse, car je ne serai disponible qu’au printemps 2020 pour un rôle à distance ou à l’été 2020 pour un rôle sur place.

Au cours des prochains mois, vous pourrez suivre mes réflexions sur Twitter (https://twitter.com/sebprovencher) ou sur mon blogue de philosophie (https://DesEquilibres.net). Aussi, n’hésitez pas à m’envoyer un message!

À bientôt!

Seb.

* avec un clin d’oeil à Monty Python

Image source : Tommy Ku’s blog

“If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.”

20141009_141114In May 2012, Facebook COO Sheryl Sandberg delivered a very inspiring speech to the graduating class of Harvard Business School. Among all precious nuggets of advice, one has stuck with me. It was a conversation she had with Eric Schmidt in 2001, then CEO of Google, as she was contemplating a role there. She wasn’t sure she should take the job. That’s when Schmidt told her the following:

“Get on a rocket ship. When companies are growing quickly and they are having a lot of impact, careers take care of themselves. (…) If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.”

Ever since I left  my startup Needium, in 2012, I’ve been trying to find that rocket ship and it’s my great pleasure to let you know I’ve finally found it. I’m very excited to announce I will be joining Montreal-based Element AI as a Program Director.

What is Element AI?

Element AI is the platform that will help organizations embrace an AI-first world. Composed of a research lab uniquely connected to the world’s best academic ecosystems (Montreal alone has 150 world-class researchers in various AI topics), Element AI will launch and incubate advanced AI-First solutions in partnership with large corporations.

What’s my role at Element AI?

Program directors are the backbone of Element AI’s innovation projects. I will help the company identify opportunities and package AI-as-a-Service solutions that have maximal impact for our clients. When these solutions take the shape of spin-offs (i.e. when we’ve found a scalable, repeatable business opportunity), program directors will become entrepreneurs-in-residence and, eventually, CEOs of these new ventures.

Buzz!

The company has been generating a lot of buzz since the launch on October 25.

Why I’m excited to join Element AI:

You probably already understand why I’m excited about the opportunity, but here are a few additional bullet points:

  • Working with amazing, world-class founders
  • Having a front-row seat to this new AI-first world
  • Having a key leadership role in a high-potential startup
  • Working in a space that represents a huge, game-changing opportunity
  • Building a robust AI ecosystem in Montreal

The Ask:

  1. We’re looking to add new members to our team (come work with me!):

Find out more about all the various roles here.

2. Work in a large organization and want to partner with Element AI (and me!) on a AI-first project? You can email us at projects@elementai.com. You can also contact me directly at sprovencher AT elementai.com, on LinkedIn or ping me on Twitter.

Saying Goodbye to Acquisio

5002318500_e8a4a2919c_zPhoto by Kellan / CC BY-NC-ND 2.0

In 2015, I was approached by Acquisio to take on the role of VP Product to help the company make the transition to the local and SMB space. Another important element of my mandate was to better structure the product management team, a team that had recently started working in an agile context. I was also looking to gain experience managing a large team in a more mature technology environment. It was a perfect match between my skill set/experience/career interest and the company’s needs.

As a seasoned senior startup executive, I get approached all the time by headhunters or startup founders, but as you probably know, not all opportunities are born equal. You turn down a lot and refer these people to your talented friends/contacts. A few weeks ago, I was approached for a new role. Turns out it was the opportunity “you can’t say no to”. I won’t go into more details right now, but I can tell you Friday November 4 will be my last day at Acquisio.

I had a great time at Acquisio. I learned a lot and I extensively contributed to the organization. Thank you to the founders for your trust, my c-level colleagues and my amazing product team. You guys rock!


I’m very excited about what comes next. Stay tuned for my new role announcement in the next few days.

Sebastien Provencher, Local Marketing Expert, Joins Acquisio as VP of Product Management

Extremely happy to announce I’ve joined @acquisio as their new Vice President, Product Management.

The official release:

MONTREAL, Sept. 24, 2015 /PRNewswire/ — Acquisio, a world leader in digital and programmatic marketing solutions, has welcomed a new VP of Product Management to their executive team, Sebastien Provencher.

The Montreal-native local marketing expert has accepted the role of VP of Product Management with Acquisio and will help the search marketing company make the important shift towards more of a mobile and local customer base, which includes the development of new products exclusively for local small to medium businesses (SMBs).

Acquisio’s New VP of Product

Sebastien Provencher will use his experience as an entrepreneur in the local advertising market to drive the company forward.

“I aim to use my expertise and knowledge of digital tools coupled with my understanding of how small business owners operate to bring products to the market that make sense and help SMBs thrive in the difficult economic environment,” explains Sebastien Provencher, the new VP of Product.

With more than fifteen years of hands-on product management and business development experience, Provencher has helped generate hundreds of millions of dollars in revenue throughout his career. Acting as an advisor to startups, founding multiple companies and working for various industry leaders, Provencher is a digital marketer who has a lot to bring to the table at Acquisio.

“At this point in my career this Acquisio is the right place for me to be,” saidSebastien Provencher. “I know the company needed someone like me and I’m very happy with where the company is and what the challenges are.”

“Having an industry leader like Sebastien Provencher direct product is a huge win for our company. He brings a wealth of knowledge to the table regarding both local markets and product development, and we are confident that by welcoming Provencher to the leadership team we can better execute on our goals and grow immensely under his leadership,” says Marc Poirier, CEO.

About Acquisio

Acquisio is a high-powered performance media solution that enables digital marketers to optimize their search campaigns and report on all PPC initiatives including social, mobile, and display, all in one easy-to-use dashboard.

With more than 500 agencies and 25,000+ advertisers in its portfolio, Acquisio is recognized as being one of the fastest growing companies in North America, winning the Deloitte Tech Fast 500 and Fast 50 awards for three consecutive years. The Acquisio software is used by companies like GroupM, Sensis, Hanapin Marketing, iRep, YPG, YP and Microsoft.

With its headquarters in Montreal, Acquisio also has offices in New York, Seattle,London, and Tokyo. For more information, contact Acquisio.

The end for Folders (and now looking for my next role)

12 months ago, almost to the day, I started working with my co-founder Christian Lavoie on a new startup idea. After brainstorming for a few weeks, we settled on the idea that would become Folders.

Our idea was very ambitious. In customer interviews with local retail businesses, we realized that most were still storing their product and customer data in spreadsheets or even on paper. Others had data locked in their old point-of-sale (POS) or in their accounting system. And, even worse, they were not doing anything with it. Very few small businesses were using modern CRMs or POS.

So, we set out to build a better solution for the 80% of small businesses who were collecting data, but not doing anything with it. The resulting prototype allowed customer/product data upload (from a spreadsheet), manual entry or sync (from Quickbooks & Shopify). It did not stop there. We also gave them access to best-of-breed marketing/management apps to make that data actionable. Customer data would unlock email marketing, loyalty, invoicing and scheduling functions (and more in the future). Product data would unlock e-commerce functionality and shopping site syndication. We were, in effect, creating a basic dashboard to manage & market a small business. We talked to retailers and many loved the idea. We talked to potential resellers to help us scale sales and many loved the idea as well. We talked to a few fundings sources and many liked the idea.

Fast-forward to the last few weeks, we tried raising a pre-seed funding round on the early interest from all stakeholders. That would have enabled us to move full-time on the project and pay us a small salary, but we did not succeed. Everyone loved the team, but there were recurring doubts about the small business beachhead and how Folders would succeed against larger marketing or CRM platforms. Most wanted to see more traction. And, to get to that, it surely meant 6-12 more months of bootstrapping (getting customers onboard, signing reseller agreements, etc.). In a startup, when that happens, it’s a good time to assess where your project is and what the future looks like. It’s going to take time, so you want to make sure you’re ready to embark on that new round. For personal reasons, I wasn’t.

We’ve therefore decided to wind down the project and I’m now officially looking for a new full-time role. What I’m looking for: senior digital exec role (VP, C-level or General Manager), ideally in product management, strategy, partnership development and/or operations. My core expertise is in local search/local commerce, marketplaces, digital advertising, social media and digital tools for small businesses but I’m definitely open to other sectors. Size of company doesn’t matter, as long as it has a solid entrepreneurial culture.

If you hear of anything interesting in your network (I’m open to relocation to the US or to Europe), do let me know. You will find my LinkedIn profile here and you can reach me by email at sprovencher AT gmail.com.

Update from the startup trenches + some availability for freelance consulting

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Happy new year! As many of you know, I decided late last year to jump back into the tech startup fray and create a new company with a very talented technical cofounder (and ex-Googler) Christian Lavoie. The first few months of a new startup are really about validating hypotheses and blocking & tackling, including things like market opportunity, sanity checks on the idea, early business case, product requirements, first mockups, technical prototypes, incorporation, customer discovery, etc. Things are progressing very nicely on that front and you should expect our teaser site very soon! Stay tuned.

As I did in 2006 when I cofounded Praized Media, I’m doing 10-15 hours per week of freelance consulting. That model allows me to work the rest of the week (40+ hours) on my new company. I just finished a very interesting mandate with the City of Montreal’s Smart City office and I’m now available to take on a new one.

I usually work with tech startups and larger organizations on the following mandates:

  1. Product Strategy & Management
  2. Product Reviews & Improvements
  3. Strategic Partnerships
  4. General Management & Operations
  5. Assistance with VC fundraising
  6. General Strategy

If you’re interested in hiring me as a freelancer, you can ping me at sprovencher AT gmail DOT com or leave me a message below.

Mise à jour au sujet de mon projet de startup + quelques disponibilités pour mandat de consultation

Excellente année 2015! Comme plusieurs d’entre vous le savent, j’ai décidé en fin d’année dernière de me replonger dans le monde merveilleux des startups et de créer une nouvelle compagnie avec un cofondateur technique très talentueux (et ex-Googler), Christian Lavoie. Les premiers mois d’une nouvelle startup consistent surtout à confirmer les hypothèses et à poser des bases solides pour le projet. Nous avons donc travaillé sur des éléments tels que l’analyse d’opportunité de marché, la validation de l’idée, le plan d’affaires de base, les définitions de produits, les premières maquettes, le premier prototype technique, l’incorporation, les entrevues clients, etc. Les choses avancent très bien sur ce front et vous devriez voir apparaître notre site « teaser » très bientôt!

Comme je l’ai fait en 2006, lorsque j’ai cofondé Praized Media, je garde de 10 à 15 heures par semaine pour la consultation avec des clients. Ce modèle me permet de travailler le reste de la semaine (40+ heures) sur ma nouvelle startup. Je viens d’ailleurs de terminer un mandat très intéressant avec le Bureau de la Ville Intelligente de Montréal et je suis désormais disponible pour prendre un nouveau contrat.

Je travaille habituellement avec les startups et grandes organisations sur les mandats suivants en technologie :

  1. Stratégie et gestion de produits
  2. Améliorations sur produits existants
  3. Partenariats stratégiques
  4. Direction générale et opérations
  5. Assistance à la souscription de capital-risque
  6. Stratégie

Si vous êtes intéressés à m’engager en tant que pigiste, vous pouvez m’envoyer un courriel à sprovencher arobase gmail point com ou me laisser un message ci-dessous.

Photo Flickr: Esparta Palma – “La Quebrada Cliff Diver statue