An interview series spotlighting global tech influencers, disruptors, visionaries, and of course, innovators.
Founded in 2016, Menlo Park-based Impact Venture Capital invests in early stage technology companies applying artificial intelligence and data analytics to conventional sectors. Co-founded by General Partner Eric Ball, ImpactVC invests in pre-seed, seed, and Series A startups and companies, helping some of the world’s greatest up-and-coming AI founders and entrepreneurs who dream big to execute seamlessly. The firm emphasizes collaboration and coinvestment with large corporates. Investments include Geeq, Pondera, Cornami, CapConnect+, and BondCliq.
In addition to his role at Impact VC, Ball also chaired the Audit Committee at Glu Mobile, a publicly-traded leader in 3D freemium mobile gaming, for eight years until the company was acquired in April 2021 for $2.4 billion. He also chairs the Archimedes Tech SPAC, which will announce its partnership with a tech unicorn to take that company public via SPAC. Until May 2016, he served as CFO of C3 AI, a leading enterprise AI software provider for accelerating digital transformation. From 2005 to 2015, Ball served as Senior VP & Treasurer at Oracle, one of the world’s premier technology companies. While there, he was named one of the 100 Most Influential People in finance by the editors of Treasury & Risk Magazine. Before joining Oracle, Ball served in various finance roles at Flextronics International, Cisco Systems, Avery Dennison and AT&T.
In this enlightening interview Ball discusses how his academic background influences and informs his career outside academia -- he earned a PhD in management from the Drucker-Ito School, as well as Masters degrees from the University of Rochester and a BA from University of Michigan -- all while continuing to teach at three universities as well as online. Ball also co-authored the book Unlocking the Ivory Tower (released in April 2016 in Japanese language version).
Ball’s view on “eulogy virtues” truly resonates: his exemplary career comprises just part of his experience and many successes. Other key components include connecting with family, community and colleagues. In our interview he also discusses career serendipity, creating opportunities, the benefit of multi-faceted research, risk-taking, book recommendations and his theme song. Readers, each time you read his responses, I guarantee that you’ll be inspired by Ball’s candor and wisdom. Our interview follows.
EKMH: How did you learn to navigate career risks, including moving from academia to Oracle, to serving as C3 AI’s CFO, to co-founding CapConnect+ and later Impact Venture Capital, while also serving on Boards and co-authoring Unlocking the Ivory Tower?
Eric Ball: We each like to think that we plan our careers, and it is important to think about what roles fit one’s own strengths. But I have concluded that most careers represent a combination of serendipity and reacting to opportunities.
I started my career when I left my first doctoral program. I learned to ask myself not “what do I want to be” but rather “what do I want to do” with my workday time, and concluded that I would not be a top-tier academic. I took the first reasonable job offer I received, at AT&T, and then transferred to the treasury team where my academic study of capital markets might have had relevance. I spent the majority of the next 27 years in treasury roles. I kept one foot in the academic world (by completing my doctorate part-time, coauthoring a book that summarized academic research in management for use by executives, and co-editing an academic journal).
I got one of the best treasury roles in the world when I became Treasurer at Oracle in 2005, where I issued $52 billion in bonds and managed $60 billion in assets, and worked for executives who I respected. But after 11 years realized that one can have a great job and still not be growing (in terms of responsibility or compensation), and I did not see a near term probability of a better role within the firm. I took a big risk to leave this good job to take on the CFO role at a startup with a potentially significant equity stake. And I did not succeed in taking that risk; there was not a good match between my skills and approach and what the CEO wanted in the role, and a year later I left that job.
I was fortunate that I still had a couple of board and advisory roles. And I discovered that I felt liberated from having a boss. I co-founded a venture capital firm, and my teammates and I defined exactly what our investment thesis would be. I co-founded a capital markets startup (CapConnect+) to fill a gap we perceived in how corporations issue bonds, and in doing so, became an entrepreneur. I had the freedom to choose which advisory and board roles I could pursue. One of those was a board chair role at the Archimedes Tech SPAC (special purpose acquisition corporation) that is now working to take a late-stage AI unicorn public. Another was to advise some of my oldest friends at Geeq who are building an alternative blockchain architecture enabling micropayments.
Even though I am getting late in my career, I am taking bigger risks than I ever did when I was young. Even when the risks don’t pan out, I enjoy the fact that they were my choice, and my performance can be measured directly in financial metrics rather than subjectively by a busy supervisor. I mitigate the risk not by taking the safe route but by taking several risks at a time, a bucket of risks, in the hopes that at least one will pay off. The downside is that I am busier than ever, but the upside is that each day I set my own priorities.
EKMH: Would you consider yourself a generalist or a specialist?
Eric Ball: I think a lot about this distinction. There are fewer Renaissance Men and Women; we live in the era of the specialist. High school students get more mileage from college admissions officers for being world-class at one single talent than for being simply competent at a good number of activities. Academics get rewarded for research that pushes knowledge in one narrow area, not for being well-read (no one gets tenure for writing a good literature review). Large corporates specialize job tasks; until you get to the C-suite, you tend to be rewarded for doing one thing particularly well; much of my pay in my career has come simply from having experience in raising debt capital. Until you get to the point where you can get C-suite roles, you are recruited for your specialized knowledge more than for general business acumen.
I tell MBAs that large corporates are looking for specialists. Young startup companies need generalists, because they have too few bodies for the work and everyone has to wear more than one hat. I tell them that if they ever want to work at a large corporate, better to do it early in their careers, because it is easier to move from specialist to generalist than the other direction. This is because if you do ten jobs at a startup, a big company won’t know in which of those ten specialist functions to put you, and would rather hire someone who has spent all their time in that function. For junior and middle management, moves from big to small companies tend to be one-way, unless you happen to join the rare startup that becomes a unicorn, and then you find yourself at a big company as one of the early employees, which is a great but uncommon position to be in.
So I see some tension between the intellectual reward of being a generalist, and the better compensation, and ability to concisely describe your value-add, that comes from being a specialist. For myself, I have taken on a small portfolio of specialized roles to try to get the best of both, but this has taken me 33 years to do.
EKMH: How can other business leaders benefit from bridging the gap between academic management research and operational business management?
Eric Ball: Faculty at business schools and other academic departments tend to study what can be measured. Much of it is interesting, but only a fraction can be applied by a manager making decisions in a company. Corporate managers tend to exaggerate the extent to which they are special and that no one could possibly understand the challenges they face.
The truth is that a reasonable percentage of management and other research (in psychology, economics, and elsewhere) actually contains lessons that can make people better managers, supervisors, and decision makers. And most people’s jobs are less unique than they want to think. So there is a tremendous amount that executives can learn from academics. But they often lack the incentives to interact, or the vocabulary to understand each other.
There are a lot of traditions in management that persist despite being contradicted by research. Just a couple of examples:
Hiring managers tend to rely on asking open-ended questions in an interview, despite the fact that this approach has zero predictive power of future assessed performance
Companies tend to think about motivation primarily in terms of pay, when research shows that most people are motivated more by challenging work, recognition by supervisors and peers, and compensation relative to the people closest to them, and less by their absolute level of compensation
Performance reviews tend to be de-motivating (often supervisors are thinking about performance, and employees are thinking about compensation, and they end up having two very different conversations)
Founders and CEOs at growing companies often establish their own norms of behavior to replace broader norms, and then are surprised when employees behave unethically. And Steve Kerr determined that organizations tend to reward very different behavior than they say they want
The Stanford Prison Experiment showed that people’s behavior is determined more by their situation and the role they are playing than by their personality or upbringing
EKMH: What formative experiences helped you become a more effective leader and prudent risk taker?
Eric Ball: Leadership is not innate, it is learned. The best way to become a more effective leader is to have the opportunity, and take the opportunity, to lead. Often people are hired for technical skills, and get deep into their career before they manage a team. The earlier this happens, the better for the person. When I was in college, I was a resident advisor, and in grad school became a teacher. When I became Treasurer at Oracle, I went from leading a handful of people to leading a team of 30. Each of these helped me develop a set of skills.
I think it helps people in senior management who want to be effective leaders to have been in middle management. This is one downside of the tech founders who succeed early in their careers. If the only job title you have had is CEO, there is a lot you haven’t learned from managing people above you in a hierarchy.
I think it is formative to take a risk and fail. You realize that the world does not end, and that people will still work with you. And the next time, knowing that you can weather having the risk not work out can help you maximize the odds when it does work out. I did not complete my first doctoral program, and I did not stay in the CFO job I left Oracle for. And I am in a good place career wise, even if it is different from what I would have expected even just five years ago. You can only plan your career up to a point, and many people end up somewhere they didn’t expect.
Incidentally, this is why I suggest to recent graduates not to be too perfectionistic about their first job out of college. Do not think that the job you select will lock you in for the next 50 years of your career; the odds are you will be doing something different in a couple of years, and you can view that job more like dating than marriage.
It also helps to really think about your strengths. Many management books tell you to shore up your weaknesses. Peter Drucker had a big impact on me when he wrote (and told me directly) that playing to your strengths is a higher-percentage play than shoring up your weaknesses. Better to go from good to great at some skill, than to fight your way from mediocre to average in another. And I have had the opportunity to observe some extraordinarily successful people up close and discover they have significant weaknesses, but succeed nevertheless because they have one or more overriding strengths that they lean into.
ImpactVC Co-Founder / General Partner Eric Ball at Kyriba.
EKMH: Which routines established during the last year continue to enhance your and your colleagues’ connectivity and productivity levels?
Eric Ball: Eliminating business travel and a daily commute has added a couple of hours a day to my productivity, and others have found the same. Most of us have simply added that time to our work schedule, and working in the same place we live has a tendency to encourage us to work all the time. I think it is important to put some guardrails around that, starting with something simple like insisting that the family eat dinner together without phones.
For work, my venture business partner likes to start zoom calls with “tell us one good thing that happened to you this week”, and my wife’s colleagues start each day with a few minutes where you can only talk about your personal life. I think these are good ways to help remind us to strike the right balance when you no longer have a commute to define work time and home time.
The comfort with having participants not be in-person opens a lot of doors and adds options. You can invest in young companies further away, or take board seats in companies in other countries, if you don’t have to fly to them for meetings.
EKMH: Theme song.
Eric Ball: It’s hard to pick just one. I always liked the message of The Seeker by The Who about constantly searching low and high. I recently learned that songwriter Jim Steinman passed away, he wrote a lot of larger-than-life music of the 1980s, and I have been listening to several of his songs recently. When I need to relax, anything with Jimmy Buffett and a steel drum gets the job done.
EKMH: How have successes/failures/missed opportunities evolved and streamlined your portfolio vetting and selection criteria? Please share some standout sector investments, (i.e. Geeq) and exciting venture opportunities in cutting-edge innovation and emerging “next” normal, post-pandemic business models.
Eric Ball: Serendipity is an under-appreciated force in which startups succeed. But over time and over large portfolios, luck favors the prepared. I’ve seen random shocks set businesses back, and help other businesses. Covid is a good example of that, some of our portfolio had sales stop when they couldn’t travel to make the pitch, others saw sales increase dramatically. At our venture firm, the relative ranking of performance of our various portfolio companies shifted suddenly and significantly. And Covid was an ultimate example of a shock that few could have predicted.
One of the lessons I take out of the experience is that we are all limited in accurately assessing the odds of success for a particular company. One way to guard against that hurting your portfolio returns is to ask, regardless of the odds of success, what is the best case scenario for this company. If everything goes right, how big can it get?
Some companies have captured a market that may be respectable but is constrained on some way. We look for companies that, if they succeed, the sky’s the limit. This is the essence of the power law described well by Peter Thiel in his book Zero to One, and I think it’s fundamental to venture investing. Our investment in Geeq is an example of this; they are swinging for the fences in using a stripped-down blockchain architecture to enable an entire new economy in micropayments. It may or not work, but if it does work, Geeq can be as big a company as any in the world.
EKMH: As an active community volunteer, how do you encourage others to give back to their communities?
Eric Ball: I respect the political commentator David Brooks. He recently wrote about the need to separate “resume virtues” from “eulogy virtues” in life. We tend to focus on emphasizing eulogy virtues when we raise our kids, and trying to teach them how to be good people. But our culture as a whole tends to take for granted, or dismiss, messages about being a good citizen, and instead focus and reinforce those who build successful careers. There is nothing wrong with respecting career success, but it is easy to lose the balance, and to forget that simply being a good person, and spouse and parent, and community member, all actually takes time and work.
One way to give back to a community is to achieve a level of career success that allows you to create jobs. That way is not open to all of us. We need to remember that money and resumes are tools, a means to an end, and to keep in mind what the end is. Giving back to our communities is a good way to remind us what the end goal is. Whether you join a nonprofit board or coach little league, or simply volunteer in your child’s classroom, you build community. I think political divides and Covid have both recently challenged our sense of community, and taking the small steps to reinforce that none of us are an island can help us regain that.
EKMH: And finally, which books, films and/ or podcasts top your recommended list?
Eric Ball: There are some great books out there. I already referenced Zero to One by Peter Thiel, which a concise and informative lesson on entrepreneurship and venture. No one should participate in, or invest in, a startup company without first reading this book.
I just finished Noise (by Dani Kahneman, Oliver Subony and Cass Sunstein), which demonstrates how inconsistent people are at applying decisions, across all sorts of contexts. A criminal’s sentence, for example, depends more on the assigned judge than on the crime committed, and even a single judge behaves differently on consecutive days. Humans are really bad at applying subjective criteria consistently, and it has a huge cost in productivity and fairness. The authors make a good case for using checklists over discretion.
I consider this a companion volume to Kahneman’s equally amazing 2012 book Thinking Fast and Slow. Research shows that we all have a host of cognitive biases in how we make decisions. We tend to rely too much on flawed intuition and not enough on data and discipline in making decisions. And we tend not to take the time to correct these biases even when the stakes are incredibly high. There are implications for decision-makers in almost all walks of life, but certainly when it comes to how we make business decisions. The first step to making better decisions is self-awareness, and both these books offer a huge service to all those folks who are overconfident in their intuition.
And to unplug, I am a fan of space opera, stories where the authors build whole societies around different norms and assumptions, and challenge our ideas of what is possible technologically and socially. Some of the best include Foundation (Asimov), Dune (Herbert) and The Expanse (Corey).
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