Agile Businesses: Neal Hansch Of Silicon Foundry On How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies
An Interview With Fotis Georgiadis
I think the most important role of a leader during a disruptive period is clarity on vision, clarity on the Northstar, and communicating that to the team, while providing a sense of direction. Certainly, the disruption happening will continue, but when you communicate clarity on vision, at least everyone feels like they know where they’re headed and what it will take to get there. It’s been a challenging few years, and we’re a relatively small business in the grand scheme of things, but this clarity is applicable whether you’re a team of 20 or 200,000 people strong, which is the operating size of some of our members.
As part of my series about the “How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies”, I had the pleasure of interviewing Neal Hansch, CEO & Managing Partner at Silicon Foundry.
Neal Hansch is the CEO and Managing Partner of Silicon Foundry, an innovation advisory firm that builds bridges between leading global corporations and the emerging tech economy. Hansch leverages over 25 years of venture capital, product management, technology operations, corporate development, and trusted advisory experience to lead the firm, which helps its member organizations navigate new technologies and market shifts, discover and engage with key emerging leaders, and unlock high-impact opportunities.
Thank you so much for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I started my career in the late 90s, otherwise known as Internet 1.0 during the dotcom boom, on the dark side as an investment banker. I was in this space during that first wave of technology companies that went public–companies like Netscape and eBay. Then, I moved to the venture capital side. I was involved in the funding of many of those companies, as they were our clients, and for taking them public as bankers. After, I spent nearly two decades as a venture capitalist, investing in early- and late-stage companies. I also did a stint in corporate development, at Macromedia, which was acquired by Adobe, as well as working within a handful of startups doing corporate development and strategic investments and acquisitions. And,,at Silicon Foundry, we put all that together. We operate at the intersection of startups, Fortune 2000s, and the venture capitalists backing those startups. My backstory led me, most naturally, to the role I’m in today.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I think the funniest mistake or maybe the most expensive mistakes would have been some of those Internet 1.0 startups we invested in because many may have been a bit ahead of their time. Or where, at the time, it was all about growth and growth as measured in eyeballs and activity rather than revenue. I think everyone may recall Pets.com. Well, Petopia was the equivalent. The logic made so much sense given how much people love their pets and spend on them. But the economics just don’t work when you ship 100 pounds of pet food and there’s only a $2 margin. We had a few companies who had similar stories. There was one where I think all that was left of our investment at the end of the day was a rubber football from when we sponsored a New Year’s Day college bowl. Thankfully, these mistakes happened early in my career when I was learning the startup game and venture business.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
With my career, it’s not any one person. I think I’ve been blessed at each place I’ve worked or participated as a banker or venture investor. I was always at least two or more years with these companies and projects, which seems to fly in the face of conventional practice these days. At each stop, whether it was investment banking, venture capital, or on the operating side, I always had an informal if not formal mentor–someone who invested their time in me and in turn helped me grow. Also when leaving a place, I always left in good standing. There are probably a half-dozen names that I could directly reference here.
Much of what we do here at Silicon Foundry and the roles I’ve been in, they’re very much apprenticeship roles, where it’s less about a hard, tangible technical skill set and more about learning the trade and learning the nuances.What’s great is that I am still in touch with those half-dozen people. We often find ourselves crossing paths. One of the things I really enjoy about Silicon Valley and the ecosystem here is the connectivity, and those relationships which are not measured in months or quarters, but years and, in many cases, decades. After time passes, we find ourselves working together again. A perfect example is several of our Silicon Foundry team members whom I worked with 10 and 20 years ago, and now I’m working with them day in and day out here.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
Silicon Foundry is, at its core, purpose driven. For us, it marries personal passion with a drive of helping small companies and large companies find each other and have success in working together, which is a win-win for both sides. We talk a lot about helping Fortune 2000 companies navigate the startup ecosystem. First and foremost, it’s about having the insights, intel, and an understanding of the landscape. But to do that, so that you can connect the dots in the right way, you have to separate the signal from the noise. You have to figure out which of these emerging companies are not only the best of breed and pulling away from the pack, but also which of these startups Fortune 2000s should be engaging. The goal is they either become customers of these companies and use their new technologies, platforms, services, and even business models as inspiration in their own businesses, or they develop partnerships with these companies or make strategic investments that happen alongside those customer or partnership relationships or acquisitions. I feel fulfilled, whether it’s when I’m coming home at night or as we look back and reflect at the end of the year, knowing we’ve helped generate, ideate, and facilitate these engagements for outcomes that helped startups grow and be more successful as well as fuel business for the incumbents.
Which technological innovation has encroached or disrupted your industry? Can you explain why this has been disruptive? What did you do to pivot as a result of this disruption?
For our business, it’s understanding the landscape, identifying the startups operating within that space, and filtering them on many different variables and vectors. Arguably, for us, the most disruptive innovation would be if there was a holy grail database that captured all the startups in the world along with all the data points, quantitative and qualitative; where someone could be sitting at their desk and find just the right potential startup and partner for their needs. The good news for our businesses is that this kind of database doesn’t exist and, in many respects, it’ll never exist because the most important data points about a company and the founders of that company are qualitative. They’re real-time and largely about personal judgment. Yet, there are companies like CrunchBase and PitchBook. We view these tools as a starting point.
Ultimately, the human eye, human judgment, and relationships aren’t resident in a database, but garnered over time through history, trust, and authentic interactions. These databases are a tool we use because of the sheer volume of startups globally. But could they disintermediate us? We don’t think so because once again this is more of a starting point, or the mid game, but we take it from there and do what we do. We operate beyond a database at the highest levels, building sound relationships and using keen judgment. With founders and corporate executives, these attributes will never be measured in bits and bytes. We view these technologies like CrunchBase and PitchBook as an asset rather than a competitive threat.
Was there a specific “Aha moment” that gave you the idea to start this new path? If yes, we’d love to hear the story.
I’m actually the second CEO here at Silicon Foundry. I think the “aha moment” was when I talked to the original founders, as they were looking to bring in a new CEO for the next phase of the business. They described the fundamental value proposition and, given my background, it immediately struck a chord because I had been on both the startup side and corporate side. I had also operated as a VC. So, I knew the pain points, not just conceptually, but I lived and breathed these concepts. I also spent time in corporate development at a big tech company trying to find potential acquisition targets. I knew on the startup side that trying to connect with the right decision makers at corporates was a very challenging undertaking, but I learned how to navigate these behemoth organizations. I’d known as a VC that you always want global connectivity to decision makers at corporates for the benefit of your portfolio companies. If you could open those doors, they could be potential customers, investors, or acquirers. When I heard the founders describe the fundamental value proposition of Silicon Foundry, I immediately knew there was sizable business potential. And the pain points weren’t conceptual. They were very, very tangible to me, since I had experienced all of them in the prior 20 plus years in different ways.
So, how are things going with this new direction? Can you share the most interesting story that happened to you since you started this pivot?
Ours is very much a global business, where half, if not more, of our members or customers or clients are based overseas. It’s very much relationship driven. A big part of what we facilitate is the ability for these corporates to engage the startups and spend time with them. Covid, when the skies closed and borders were shut, was definitely a headwind to our business and yet we continue to grow and we continue to grow every year. I think the tailwinds through Covid, or perhaps silver linings as it relates to our business, is that digital transformation has accelerated. Digital became a must have rather than a nice to have. That was underway pre-Covid, but the pandemic really put a fine point on it. For us, this worked out to be a positive, because that’s at the very heart of what we do.
If we look at the macro environment right now, corporates leveraging external innovation will charge ahead, regardless of what the stock market is doing. We’ve only seen an increase over the last number of years. These are trends that have not just continued, but I’d say continued to grow and accelerate. We’re seeing the technology ecosystem and tech companies migrate further from Silicon Valley, which is still home of the greatest number of startups and venture capital funds flowing in the region. The Bay Area, Southern California, New York, and Boston, have generally been four of the top five ecosystems outside of the Valley. But Miami is gaining a lot of traction these days, along with Austin, Seattle, Chicago, and Detroit. There has also been a rise in international tech ecosystems in places like London, Stockholm, Hong Kong, Singapore, and Shanghai. Not too long ago, many of these were emerging markets. Today, the rise of these other ecosystems and the number of startups that are up and coming, only further plays into the hand, if you will, of our business.
We have a finger on the pulse of the best companies coming out of these ecosystems and the best companies in each category, regardless of where they’re based. These trends are positive for our business and increase the need to be able to monitor these ecosystems. We are champions of those startups and those entrepreneurs, and connect them to our corporate members and corporates in our network, regardless of where they are. The more distributed, the more challenging that is, of course. But for us, the more fun it is to connect a US startup with a Middle Eastern financial services conglomerate, or a startup based in Tel Aviv to one of our members based here in the states.
What would you say is the most critical role of a leader during a disruptive period? Based on your experience and success, what are the most important things a business leader should do to pivot and stay relevant in the face of disruptive technologies?
I think the most important role of a leader during a disruptive period is clarity on vision, clarity on the Northstar, and communicating that to the team, while providing a sense of direction. Certainly, the disruption happening will continue, but when you communicate clarity on vision, at least everyone feels like they know where they’re headed and what it will take to get there. It’s been a challenging few years, and we’re a relatively small business in the grand scheme of things, but this clarity is applicable whether you’re a team of 20 or 200,000 people strong, which is the operating size of some of our members.
To pivot and stay relevant in the face of disruptive technologies, it may be practical or relevant to just adopt those disruptive technologies and have them be an asset rather than a threat to your business. A number of years ago, pre-pandemic, we had 15 to 20 very senior folks from train companies based here in the US come out to Silicon Valley. We had several conversations about disruption from technology. These were train companies with billions of dollars of assets, hard assets, tracks laid on the ground, criss crossing the nation. When they came out to Silicon Valley, the lens was on disruption. Ironically, what came from these meetings was inspiring. It was less about disruptive tech eating into their business and more about the solutions they were seeing and how they could make their business more successful by cutting costs, streamlining operations, and increasing safety of their employees on the track. It was less a defensive posture, and more an offensive and a partner in the collaborative mindset. Here’s this traditional industry, right? Now, there is disruption from autonomous trucking to other modes of transportation and moving goods across the US. You could certainly take the lens and say these disruptive new technologies will impact their business. But the best leaders of the bunch were really looking at it as how can we embrace these disruptive new forces? How can we integrate them into our own businesses for more success, increased revenues, greater safety and happiness to the employees, and more productivity? This example is leadership at its finest.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
I’d go back to clarity and vision and direction and purpose. Again, when employees understand where a company is headed, there’s greater job satisfaction and a sense of fulfillment. Today, one of the biggest challenges is how to drive culture in what’s now so often a hybrid and distributed workforce. Leaders today and going forward need to think about the fundamentals, which is the purpose and mission of their companies. They need to be thinking about what drives employees too. What do employees embrace and attach themselves to? In parallel, how do we drive a positive, engaged, reinforced, committed culture?
There’s no shortage of articles, thoughts, and commentary on these critical topics. But I believe we’re all in it together and learning what that looks like going forward. And you’re talking to someone who just came back from their team offsite, and realized there are some team members who had not met each other after a year of work, which is the last time we had one of these events for our business. Pre-Covid, 95 percent of our employees worked together side by side. Everyone lived in the same general zip codes. Now, about half our employees are outside of our headquarters in Silicon Valley. We have team members in Los Angeles, San Diego, Austin, New York, New Jersey, Boston, and Florida. So, we’re learning along with everyone else.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make when faced with a disruptive technology? What should one keep in mind to avoid that?
The most common mistake ties in with those experts and executives back in the 90s who referred to the Internet as a fad–people like Clifford Stoll. Some thought this technology could never be sustained. A huge mistake is not recognizing or appreciating some of these new technologies and their potential impact. These things move on a relative basis at lightning speed. Some of this tech fundamentally shifts either the competitive landscape or just the way business is done. There is a continuous library of quotes from CEOs weighing in on some of these new technologies or trends and putting them off to the side very quickly. It’s important to keep in mind the potential of how these will change the nature of business. And, it’s about applying it to the business, as much as anything else.
The element of these new technologies is that they open doors to new ways of providing services or entirely new business models, which incumbents often have a difficult time embracing. When they are successful, those new models gain not just traction, but they end up being the model of choice in many industries. One example is SaaS in the software business. When I started my career, enterprise software was largely a perpetual license business model with a big ticket, single purchase, and then yearly maintenance contracts. Today, SaaS is arguably the de facto business model for software companies and many software companies had to go through that phase where they shifted their entire business models. It changed the economics upfront and, over the long term, became a business model that Wall Street appreciated and valued, which was reflected in the market cap of those companies who were able to make that transition effectively.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Change almost never fails because it’s too early. It almost always fails because it’s too late.” This maxim is one that in so many ways is a driver to our own business and a philosophy we share with our corporate Members, all of whom are going through their own digital transformations to varying degrees and speed of movements. At the same time, this also applies to our own firm and as we need to live by this philosophy, in the same way we espouse and support it with those companies we serve. During the pandemic change was certainly forced on us all in our personal as well as professional lives. Those who embraced, adjusted and in fact found ways to “lean into” that change as early and quickly as possible, I think we can all agree weathered the storm best over this period and perhaps even found the most silver linings during it. For example here at Silicon Foundry,, while our core value proposition remained the same, we embraces the need to shift so many elements of how we do what we do, how we deliver our services, how we collaborate as colleagues, and how we recruit and retain our current and future team mates, etc.
How can our readers further follow your work?
I can be reached by email at [email protected] or on LinkedIn and Twitter.
Thank you so much for sharing these important insights. We wish you continued success and good health!
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