Exploring the Future of Work with Shuo Chen: IOVC Partner & UC Berkeley Faculty | Podcast Episode

It is easier than ever before to be a company of one. Now I see increasingly more portfolio careers, not just in the sense that people would try many things throughout their career in the end, but that many people would try out many things in their career at the same time. If I could share this interesting stat, we did some research around this. Founders who start their project or their startup as a part-time project or as like a second-time project tend to be some of the best founders.

All right, I'd like to welcome Shuo Chen to the show. Shuo, welcome.

Thank you so much, Drew.

Hey, could you maybe kick off for the audience, take a minute, introduce yourself, and tell us how you ended up as a partner at a venture capital firm and as a faculty member at UC Berkeley?

Absolutely. Well, really excited to be here today. Thanks again for hosting, Drew. I'm Shuo. As Drew mentioned, I want to decipher a little bit how I put the different pieces of the mosaic together that form what I currently do. So I actually kicked off my career as an entrepreneur and ran a startup where we sold curriculum as well as software to some of the largest financial institutions and universities in the US. And from there, learned a lot about how enterprise sales worked, understood how corporate politics worked, understood how to navigate all the intricate relationships in between, and really wanted to pass some of those lessons onwards. It was in the process of working with a lot of these larger institutions, including universities, that I got invited to teach at Berkeley because they were one of our paying clients. They said, hey, if you're already working with us, maybe it'll be great for you to come on campus and tell us how the magic is done from behind the curtain. So have been teaching at Berkeley for a little over 10 years now, always focused around entrepreneurship, but also have done a lot of courses themed around future of work, which I'm excited to talk more about today. But post the startup, we were acquihired, and I always joke with people that I joined the dark side a little bit. I ended up joining Goldman Sachs out of role, did a lot of our traditional technology investment banking coverage, worked on some fascinating deals, including helped Google acquire Motorola, a $12.5 billion deal at the time, very much a transition between different tech giant eras. And from there, really missed working with startups. So came back to the startup world in the form of being an investor, hopefully sharing some of the lessons that I've learned firsthand as a former founder with folks who are just getting started and helping them navigate the whole world of enterprise that I've worked with. So for the past almost 10 years, I've been investing in pre-Series A startups in enterprise and software, with really a focus theme around future of work.

That's fantastic. And we're so delighted to have you. And I also saw last year you were named to Forbes 30 Under 30 for venture capital.

Thank you very much.

Yeah. So, and I think it listed in there, you know, over 60 early-stage investments in the future of work. So I'd just love to hear from you, like, what are the most exciting and popular problem spaces that you see being tackled right now?

Yeah. So in the future of workspace, everyone defines the most exciting areas a little bit differently. The way that I personally like to think about it is I really think there are 4 major pillars under future of work. The first one I think about is really digital transformation. How do we catch up all organizations with the latest technology? So we could minimize the amount of boring time spent at work and maximize the actual fun, engaging times that we do interesting work. And the second pillar that I really pay attention to is automation of work, as in what we do at work every day. So with more automation, there's kind of 2 pieces to this. There is what work gets automated and optimized and more streamlined. But then there's also the what do we do with the additional human hours that are left with more work being automated? And the third pillar that we pay attention to is thinking about hybridization of workplace. So the where we work, not in the traditional sense of just hybrid work, we work at home or we do remote work. We've been investing in this space for the past almost 10 years. So there was no way we could have foreseen that the pandemic was coming.

Right.

But since the earliest days when we were investing in this space, it's all about how do we enable geographically diverse teams to innovate together, whether it is with better digital tools or better in-person tools. For example, we were one of the earliest investors into a startup at the time called Boom Supersonic that was building the current generation of supersonic jets that would allow people to travel and meet each other in person more efficiently. So that's another way of thinking about hybridization workplace. Another good example I wanna mention here is a startup that we invested in that since got acquired called Transcriptic. What they allowed individuals to do well before the pandemic—

Yeah.

Was essentially the founders realized that whenever people needed to run tests in labs in physical They would very quickly run out of lab space, and you would have labs that are overcapacity on the 2 coasts here in California and over where you are, Drew, in Massachusetts. But you have a lot of labs that are well undercapacity throughout, say, Midwest US. So Transcriptic allowed researchers to upload their research experiments to labs that were undercapacity, allowed people to do research in physical labs together in a hybrid manner so that they could better utilize lab space and resources. Yeah. So that's another example beyond the traditional hybrid remote work of—

Yeah.

How do you work in different spaces? And then last but not least, the 4th pillar that we look at under future of work is really diversity of workforce, not just diversity in the traditional sense of, say, gender, race, disability, etc., but really thinking about with technology, what kind of new workforces traditionally underrepresented in the workforce do we have the ability to enable? Perhaps these are people who typically didn't have access to education or training in order to perform certain jobs well, but with now the power of technology and better assistance, they could get personalized training to do better on the job. So across all these 4 pillars under future of work that we think about— so digital transformation, automation of work, hybridization of workplace, and diversity of workforce— we're really excited not about the incremental optimizations of you get to do work, say, 10 times faster— sorry, 10% faster. We're more interested in the fundamental shifts of you get to do it 10 times faster, or that you get to enable people who historically haven't been able to succeed in certain jobs now the ability to succeed in those jobs.

Yeah, it's just fascinating. And this comes at a time, right, where we're not only looking at the hybridization of work, but also— and when you mentioned automation, I wondered if we could go there for a second. But now with all the fervor around generative AI and the impact that that's going to have, a couple months ago, the World Economic Forum released a report that, you know, they estimated like 80 million jobs would be displaced, right, by this AI and essentially automation. And that same report was like, well, but it will probably also create 90 million plus jobs. I would argue it's probably going to be over 100 million jobs, but Could you maybe help our audience, you know, and maybe give us your point of view on how do you see this all unfolding as part of that view into, you know, automation of work?

Absolutely. So coincidentally, we've actually been working very closely with the World Economic Forum out here in San Francisco Bay Area. A couple years ago, they opened up a 4th Industrial Revolution Center that really focuses on the latest technologies. And we've been working with folks there ever since. And it's really interesting because One of the key consistent threads that we always come across, regardless of what technology we're looking at, whether it's generative AI or even looking at Web3 and blockchain technologies, oftentimes what we find is that history tends to repeat itself, where for every single job that's displaced by technology, oftentimes you get that and more jobs that are created as a result. So the toughest challenge that people actually really need to tackle is how do we bridge the gap between when a job gets destroyed and that individual's livelihood is affected, how do we reskill, upskill, retrain, and all of that educational process to get this individual to be prepared for the new jobs that are created? So it's not so much that people are losing jobs, they can't do the work anymore, but it's rather how do we continue to learn to be prepared for this new future with new skills? And oftentimes when I think back to what are the new skills that are necessary, and what kinds of jobs are getting replaced, oftentimes these tend to be the more tedious, repetitive, and boring jobs that people have to do in the first place.

Hmm.

So machines are really good at replicating actions. They're really good at automating things, which is all about repeating the same things over and over again and identifying those patterns. Those also tend to be skills and jobs that people don't particularly enjoy being good at. Hmm. And so where we remain very optimistic is we really imagine a world where, say, 5, 10 years into the future, we will increasingly see jobs that are tedious, repetitive getting replaced by technologies like AI, but people have more time freed up to do other things that are more creative, that are more personal relationship building. And that actually brings me to the second part of this answer, which is really what are the skills that people of the future are really going to need to be good at? And I think a lot of it has to do with truly human skills, things like relationship building, Things like being creative, things like how do we think about building ecosystems in a way that is fair and just and environmentally friendly and responsible. So those are unique ethical judgments that machines really can't make on our behalf. So anything that requires human judgment and relationships are going to be skills that are important for us. So with the first part of this, what I mean by relationship building is oftentimes we talk about skill sets in the workplace, We're really talking about these practical skill sets of what we do day to day. But we oftentimes forget the piece around human and social capital. So oftentimes, who you know is just as important as what you know.

Hmm.

And I think the what you know is going to become increasingly less important because now we have all these technologies that can tell us what we don't know. But what technologies currently can't do for us is make new connections to who we know. So I think increasingly, particularly in my faculty role, I do a lot of this for my students at Berkeley, is thinking about how do you build network? How do you build connections? How do you build human relationships, genuine, authentic relationships with other people that will help you out in moments when you really need it? So the building the who-you-know piece. The second part of what I think is going to be really important is not so much developing the final judgment or criteria for how you make decisions as much as it is thinking about how you build a framework or systems for how you make decisions. So it's not so much as, well, I think this is right and that is wrong, as much as it is, here are the reasons why I think this may be right and that may be wrong, and being open to iterating on that over time. So I do think those 2 skill sets of building human connections and building human judgment are going to be 2 very important skills for the future.

Yeah, so I love that thought. So thinking about skills and the work that you're doing as a faculty member for college students, how is that changing what should be taught and things we need to be focusing on versus, you know, is, is there anything that you think needs to kind of be worked out a little bit or deemphasized?

Yeah, so in terms of the students that I work with, I get about 40% grad students and I get about 60% undergrads. You have to keep in mind the grad students are a little bit more normally aged, but all my undergrads are born 2005 and beyond, right? So they're incredibly young. They were born into the world of internet, and they have very different ways of interacting with the world, because it's not like before when I first started teaching. Oftentimes what professors and faculty members said in class tended to be taken as, this is the way the world works. But now when I work with students, what you get taught in the classroom is only one part of forms. how you think about the world because there's so many other ways to get exposure to information. So when I think about what are really important things to be taught are probably 2 to 3 things that I would personally focus on. So the first thing is, if you think about future of work, what used to be the case, say 10 years ago, is you kind of graduated from school, you had a phase when you were a student, and then you graduated and you became an employee or you became a founder, you transitioned into a professional role. When you were a student, you were expected to learn, and when you transitioned to the workplace, you were expected to work. And the two didn't really blur together very much. But fast forward a decade later, that expectation has completely changed. When you look at some of the latest data that LinkedIn and all of these different forums have released, you'll find that the majority of people in the workplace not only expect to continue to learn after they graduate from school, but they actually like to continue to learn. And that becomes an important part of deciding which employer to work at and/or So the fact that they know they get to continue to improve and grow and learn on the job becomes a really important predictor of whether or not they would even choose that job and stay in that job. So the top thing that that informs us of how we think about teaching undergrad students is it's not so much about the what you learn as much as learning how to learn. So we do a lot of, well, how do we make order out of chaos? By throwing students into more of a chaotic environment, which is the real world, and getting people to figure out these different pieces. Yeah. A lot of it is interactive exercises. A lot of it is project building. A lot of it is portfolio building so people can showcase, well, these are the things that I've built. These are the designs that I've put together. These are the traction and growth numbers I've managed to achieve with my last startup project. That's the first part of things. I think the second part of things is understanding that everything is an iterative process. So oftentimes, I think in the past, it was very traditional that we enter the workforce and we had one career path. We did one thing that we were great at, we continue to build on it, and we kind of ended our career in that. Whereas now I see increasingly more portfolio careers, not just in the sense that people would try many things throughout their career in the end, but that many people would try out many things in their career at the same time. And oftentimes those tended to be the most committed, the most ambitious, the most interesting people to work with because they're able to connect the dots across so many categories. So instead of having one person who works one job, they might have one core job, they might have some personal hobbies, they might have some personal side projects. And these side projects don't have to be side businesses. They could be nonprofits that they work for where they learn about skill sets in a different way, and they could sit on the boards of other companies where they're really connecting the dots. And I think that's a really unique skill set to instill in students early on. So the theme that our class at Berkeley has really focused on is How do you think about leveraging side hustles or side projects to help you explore the world?

Yeah.

So the framework that I like to think about it is you really have to do effective exploration before you can do efficient exploitation. So you want to explore the world and understand what's out there, what you're good at, what the world needs before you can really exploit those skill sets that you're really good at and really go deep within that one field. So how do you continue to stay curious, learn about new technologies, continue to stay agile and adaptable in a very fast-changing world despite having already some learned area of expertise. So those are probably the 2 important things.

That's fantastic. And as, as you were talking about workers want to learn, there's also the imperative there. We were chatting with, with another economist on this show who was talking about how STEM graduates will graduate and think like, oh, I'm at the top of my game amongst my whole friend group, but the degradation and the value creation of STEM roles drops precipitously over their career if they don't stay on top of like the latest code language or programming trends, which, you know, it's just, there's a requirement. You just have to keep learning, right? Going off path a little bit, because as you were talking, it just got me thinking about this. I was on with a guest of this show. We were talking about the future economy. We're talking about what, what was happening and just would love to get your thoughts. So Labor economists and economists in general, typically they say it's like the late '80s, early '90s, or maybe it was about the '80s where we shifted into a knowledge economy. And we've been in a knowledge economy ever since. Do you agree with that?

It's a really interesting point. So it really depends on how we think about the structure or the organizations that we live in. And the reason why I say that is It's true that knowledge is critical and important, but it doesn't apply equally to all industries across all geographies. So it's true that we've seen more knowledge economies emerge in certain geographic regions of the US. For example, it's certainly true that it's more reliant on knowledge workers, say, here on the West Coast in Silicon Valley specifically, and perhaps out in Boston where you're based as well. But for most of the US, there's plenty of geographic regions, say, in what we typically call, you know, flyover states where knowledge economy is not really the main driver of the world. So I do think there is a little bit piece of thinking about, you know, Drew, we were talking earlier how within future of work, there are technological problems which require tech solutions. These are probably the areas where you need more knowledge workers. But then you also have human problems that require human solutions too. Yes. That are not so much about knowledge workers as much as it is about human relationship building, thinking about how to present oneself, thinking about how to provide equitable access for different folks in the economy. So I guess I both agree and disagree with the idea that we're increasingly in a knowledge economy. With honestly the advent of generative AI, we will increasingly not need access to advanced knowledge and technology if We're able to access that at the tip of our fingers. But increasingly, what we will need more are these uniquely human skills that unfortunately not everyone is taught equally how to be good at.

Yeah, absolutely. Yeah, I still have to bring back my visual or debate with this other economist about that. Because I look at it as over the past decade, with workforce software like Salesforce, for instance, has turned sales into a doing role, essentially blue-collar work, we call it white-collar work. But you're following a process, you're mapping fields of information, you go to the next step, you go to the next step. There is no difference in my opinion, just because you're sitting at a desk than that and building something else. So I actually think that we've been saying we're in a knowledge economy this whole time when there's oscillation, to your point, and we have been doing so much doing, and now AI is coming and is going to take care of that doing. So this leads me to my next question. If you were to think about the future, you know, even in this knowledge economy, I remember being in marketing and sales and teaching you know, old fogies had to do online marketing 20 years ago. And, you know, talking about how, you know, search engines, ideas are a dime a dozen. So it doesn't matter what you know anymore. It's all about execution. But now if AI is coming in, it's going to execute and you can feed it an idea and hone that idea. Do you think we're on the precipice of an era of ideas really are something that we should be focused on?

Yeah, it's a really good question, Drew. I don't necessarily think that ideas are going to be the core of the future because now there's plenty of tech-enabled startups, even based out of Silicon Valley, that can do massive amounts of idea generation 10 times, 100 times faster than what humans can do.

Mm-hmm.

Jasper is a great example of this where previously you needed to actually run iterations of your own ideas for how to optimize for, say, search engine optimization or for keywords or have marketing campaign ideas. But now actually any AI-enabled platform could generate 100 ideas for you at the same time. And in fact, if anything, that is better because you don't even have to determine which one is the best. You can actually execute all 100 of those ideas and see which one gets you the best engagement and best stats and best returns. So in many ways, before, the best ideas, quote unquote, best ideas had to win out. Whereas now we could just test in massive numbers, run marketing campaigns with all of these ideas and let the data and numbers speak for themselves. So if it truly is a good idea, well, that's gonna get you the best numbers on social media campaigns, for example. So I do think that the value of ideas have in some ways lowered. And I absolutely agree with you, Drew. Earlier you commented that what we now consider as white-collar jobs are blue-collar in some way because it is all about the doing process. But I do think what oftentimes separates from those who just do to those who are thoughtful and strategic do tend to come back to these uniquely human skills that we were talking about, right? So if you are a really effective sales representative, it's not just about reading off a script. It's about asking the other person about their family, how their kids are doing, remembering when there are important days, and just caring about the other person as a genuine human being, right? Yes. So oftentimes we're incentivized as humans to go above and beyond for people that we genuinely like and get along with. And we break rules for people like that, right? Absolutely. And I think that's what makes us so unique as humans. And I do hope that we— and I am optimistic that we are going towards a world where that human connection is still incredibly important. And maybe one piece I will add here is even though I focus on investing in software companies where they're leveraging technology to really change the way how they do work, I do still really believe that human skill is so important because if you were to really extrapolate things out say, years forward, the way that we think about how technology plays a role in our lives, it is really to augment us as human beings, right? So it's to help us do things faster, better, and cheaper so that that frees up our time to do other things that we enjoy more. It's really not intended, at least in the way that it should be designed, to make our lives more miserable. So I do think it's important for us to think about, well, how do we actually want to spend our time if time is our most precious resource? Absolutely. And how can we leverage technology to accomplish our own objectives?

Sure. And I'm so glad you brought up intelligence augmentation. That's my beef with the general AI movement. Like, oh, we had to anchor on AI, we couldn't have anchored on IA, right? Like, because it is, it's a critical part. And when we speak to people closest to the matter, it's always about augmentation and not straight up artificial intelligence to replace. So really good point. So let's shift our conversation a bit to talk about the employee-employer relationship. There's a lot of tension right now. I've even gone as far to say, you know, and I think, I personally think it's been for a while, I think the employee-employer relationship is broken. But how do you respond to that statement? And what do you attribute to your beliefs?

There's a couple pieces to this. Given that I focus on investing in startups, I'll tackle this from a startup perspective first, which is oftentimes when you think about the employer-employee relationship, well, enabled by technology, it is easier than ever before to be a company of one nowadays. So it's not like before where you really needed to hire your own team, you needed to buy your own hardware to form your own data centers and go through all these motions to just have a website up and running, right? We're not at those days anymore where anyone can drag and drop a couple buttons, they can have their own website up and running, start their own paid marketing campaigns, start getting paid clients, and have their own business. Whether they're doing that full-time or part-time, both are equally easy nowadays. So that has certainly been a key driver in shifts in the employer-employee relationship because people are realizing for the first time that enabled and augmented by technology, you don't have to be an employee anymore. So the power dynamic has certainly shifted. At the same time, Are there benefits and efficiencies and even better outcomes as a result of working in diverse teams? Absolutely. So even though it's easier to be a company of one, would I rather collaborate with others who can make up for my blind spots and who can add more creative ideas and we can jam? Absolutely. So I think in that way, there has been some dynamic shift in the power dynamics, so to speak. where there's an equal need of— oftentimes I speak to students, founders that I work with, who say, look, these are the things that I'm uniquely good at, these are the things I'm uniquely interested in. And as a result, I want to play this kind of role. And I want to design a relationship that looks like that. And they're able to go out there and look for that kind of relationship. So I think there's more dynamism in terms of how you structure a working relationship where you could say, look, I want a person to be my employer and boss me around because I respond really well with directions and I don't want to do too much thinking. I want to shut my laptop at 5 PM and forget work behind me. And as a result, I want that kind of employer-employee relationship. Or I could go completely the other way and say, hey, I'm a creative person. I don't like being micromanaged. I want a different kind of employer-employee relationship where I'm closer to an independent contributor. And this person just helps me cross barriers and obstacles that I come across. And both are equally present and popular in the workplace now, whether it is at large corporates or startups. So I do think you just get a broader spectrum of what's possible now.

Sure. You just made a comment about a company of one. So I don't want to assume your answer to this question, but I'm going to guess and then I'll see. Right. So over the past few years, and it's not because of the pandemic, I think we have naturally been seeing a shift to more freelance fractional work, right, as a part of the total workforce. Do you think it's possible to build a company of 100% freelancer fractional workers?

Yeah. So Drew, I'm really glad you asked about freelance workers because I think when I start to think about whether or not it's possible to build an entire company off of only freelance workers, my answer is really, it depends. So it depends on what kind of company you're building, what product service you're providing, and what technologies you're leveraging.

Mm-hmm.

So if you are building a service-oriented company and it is on a per-use basis, long-term relationships don't matter, and it is all about achieving that one-time objective and you're done. In that case, I think it is possible to build a company of all freelance workers. However, if you're building a company where deep personal interactions are important, where you need to know the other person on an extended basis, and you're in the high margins business, that is a classic example of where freelancing might be more challenging and difficult because you need to get depth of time and relationship with someone. So one thing that I always tell founders that I work with, despite the fact that I invest in software, oftentimes founders have the option of choosing where in the segment they target. And so you could either go large quantity and lower margins, or you could go lower quantity but extreme high quality and higher margins. And every founder makes a decision for themselves as to which market they want to go into. And oftentimes, depending on your choices across the spectrum here, you're really making a decision on what kind of employees you need as well. So if it's, again, one time, relatively easy to do fast training to get people on board, get freelancers to deliver on the product and service and be done. Mm-hmm. But again, if you required that depth, It's really hard to not just attract, hire, but also to train and retain that talent to do that depth of work with you that freelance may be difficult because by the time you've spent so much cost in training someone, well, that person is then gone and won't do the work with you again. So it really depends on this.

Sure. No, definitely love that answer and agree. Absolutely. I think if you were to ask me, I would I would more lean on company by its definition is more than one person, right? So you probably have a business and an amazing product you've been able to build on freelance or fractional work, but the moment you need to take that quarter person's time and turn it to 100, congratulations. Now you've probably, you know, you probably have a, have a company. I'd

like to add on that thread one more thing. With technology, I do think it's easier than ever before to be a fractional worker.

Yes.

If you were to think about technologies like blockchain, I'm leading a couple of research projects at Berkeley, and we've invested in startups in the space where with blockchain technology, it is easier to build a DAO, a decentralized autonomous organization, than ever before. Of course, our governance structures needs to evolve in order to meet— Yes. Technologies, but it is easier than ever before to be an employee that's not even an employee, where I'm contributing to, say, 5, 6 different DAO projects And I just get compensated based on what I contribute. And what I contribute is the same because that's the area that I'm really good at. Say coding is one part of it, or UX is one part of it, but I just do the same work for 6 companies or 6 DAOs at the same time. So that has become increasingly possible. And another thing is that with technology, we can be working more hours than before, which may or may not be a bad thing depending on who you are. But if you're able to work more hours than before, it means that instead of the traditional 40-hour work week, you could have another 40-hour full-time job.

Right.

So depending on what founders we're talking to, they could perceive their work as a fractional worker, or actually more often what I see in the startup world is they see themselves not as a part-time founder, but almost as a double-time founder where they have their full-time job where they provide stability to their families and they have a W-2. But in addition to that, they leverage their skill sets to build a side project that allows them to really enjoy and grow and further develop their skills in a way that they control. And that's their second full-time job in some way. Yeah. And if I could share this interesting stat, we did some research around this through the fund. And we found that surprisingly, one consistent thread we're seeing is that actually founders who start their project or their startup as a part-time project or as like a second-time project tend to be some of the best founders because they're super committed that they're willing to spend all this time outside of their full-time job to start building and exploring. They oftentimes de-risk themselves because they've managed to build more traction before they jump into it full-time. They also tend to be more ambitious and just learn faster because they have more things that they wanna do and they have this boundless energy. And when we replicated this research to not just startups but to Fortune 500 companies, It turns out that 100— so 20% of all Fortune 500 companies were actually started part-time. So the CEOs and founders didn't go into it full-time right away. They actually tested it on the side, made sure that it worked, had traction, and then jumped into it full-time. So I think that's a really powerful way of thinking about how we spend time.

Absolutely. I call it the third shift. I work all day and then I'm with my kids for dinner and then put them to sleep, and then I do my third shift, which is till like 11 or midnight every night. So definitely feel feel that one. That's that's some fantastic research there on this vein of the freelance and fractional work. As as you were saying, it's never been easier right to do this, and there there are companies that are helping like Upwork, for instance, right? Is really and I think in a lot of ways they're revolutionizing contracting. And actually the contract between the employee and employer. And they came out, I think it was in February, and announced that they are going to allow now for full-time contracts, right? If we look at that in context, we're also seeing a lot of union activity and chatter in news feeds today. What do you think this all says about the future of at-will employment?

This is where I want to highlight that many, I mean, employment processes, just like startups, do tend to be a cyclical process. What I mean by that is, for example, in the startup world, there's a generation of startups that are started, of course, and all these companies are relatively smaller. Many of them may employ only freelancers. But as they grow in size and want to gain more market share, oftentimes they end up having to start consolidating where you see a lot of mergers and acquisitions. Mm-hmm. And you have a period of consolidation where you have these large players that are dominating most of market share. And then of course, once they get too big, it's harder for them to innovate again. So then you get another generation of startups that pop out. And I feel like it's the same cycle that applies to when I think about fractional workers and at-will employment, because at first you have a lot of people who are really excited to do this. But then as we have too many at-will workers, people realize actually we love having the structure of having someone make sure that our basic needs, things like health benefits, things like retirement plans are taken care of. So people start to consolidate around these bigger companies that are taking up all these market share, right? And they start being less excited to work for startups. But as they increasingly become incumbent with so much processes in place, they realize actually we like having a little bit more flexibility and freedom. And then of course, this process starts all over again where they go work for startups, they seek more freedom, and the process continues.

Fascinating. I love that concept of the cycle. Definitely cyclical. So what is the impact that this is all having on performance, right? The way I want to set this up is, you know, I think performance measurement as a space is woefully unsophisticated. Each business is different, right? So there's limited portability. If I work at one place and I'm a, let's say, product manager, there may be one kind of performance requirements or standards thrust upon me, and then look at the same product manager, same industry at different company, and their performance measures are different, right? So what do you think the future of performance looks like?

So I've spent a lot of time thinking about this because we've invested in startups in this space. And the toughest challenge is always trying to standardize anything when you're evaluating humans because we're also unique. So it's true that there are typically behavior patterns and things that make for better performance across workforces, right, across larger populations. But at the end of the day, every single individual has unique personal circumstances. Some people might be parents and have additional responsibilities at home. Others might be doing elderly care and in the exact same way have more constraints on their time. So it really ultimately does come down to How do we have an overall framework that helps us not just attract, but also retain and develop talent? But also, how do we allow for enough flexibility that we could give people the space to develop and grow at their own respective paces?

Mm-hmm.

So this is what I always tell my students in class where, you know, when you're in college, it almost is the last time in your life, or when you're in school in a graduate program, it's almost the last time in your life when the ecosystem is designed around you to help you succeed. Because once you get into the workplace, of course, there's all these different departments, but businesses need to think about business objectives as the number one priority. So their number one priority isn't to help employees learn and become better individuals over time. So coming back to your question around performance reviews, it's this tough tension between, well, business has got to do what it's got to do, and its top priority isn't to help improve the performance reviews of its employees and individuals. But then you have this other tension where for individuals, their top priority is to maximize for their own learning and growth. And so oftentimes, if they aren't able to do it within one structure, they move to a different startup, they go to a different company, and they try to seek for a structure that is more personalized for their own individual personal success. So when we talk about performance reviews, it really depends on how we define success. Are we defining success as success on a workforce population level? By within a certain organization, or are we talking about performance reviews on an individual level?

So then we use this performance and we use that performance to evaluate people to determine compensation, right? What do you think? How would you go about answering the question, how do you understand the value of a human in the work context?

It's really difficult. I'm gonna start with an individual perspective because from a company perspective, is really hard to value an individual on an individual basis. Oftentimes, you don't evaluate it based off of that person, you only evaluate it based off of their outputs. So for example, there could be an incredible individual, well, I can't evaluate their particular skill sets, I can only look at what they produce during this period in their life,

right?

So I'll start from an individual perspective, because it could be that, you know, you have an individual who's talented, working at a company during a period of time when there's just a lot happening in their lives, and their output is limited. And so the company can't see beyond that. It's absolutely a possibility. But from an individual perspective, a lot of it really is centered around 2 things. One, communication. 2, relationship building. Communications is critical because it's oftentimes not one of the first skill sets that gets taught in school, right? How do you communicate to your team, to your manager, to your colleagues what you're working on, the significance of that, so people are aware of what you're doing and why it's so important? And of course, people want to see progress over time, right? Right? So these are things I'm working on this quarter. People want to see that by next quarter, I've completed not only everything I talked about, but here are new plans for what I will continue to work on. So I think communication is a really important piece in even thinking about from an individual perspective of how to do really well in performance reviews. And then the second piece to that is relationship building. How do you not just think about performance reviews as a one-time thing, but as a, hey, let's work together over time to find a model that works for both of us? So that's really how I would think about it from an individual perspective. Now, if we were thinking about this on a workforce level and only looking at the output, this is really where a lot of the startups that we invest in kind of steps in and says, all right, how do we look at untraditional sources of data and how do we extrapolate beyond these untraditional sources of data to help us figure out where we can get the most productivity from? You can see how both are equally valid, but really approach problems from a very different perspective.

Yep, that makes a lot of sense. Earlier I mentioned this concept of portability, and you just brought up Web3. So just curious, do you have any thoughts on Web3 technologies, a la blockchain or something else that could actually help this portability conversation or even the employee-employer contract conversation?

Yeah, so we've seen a lot of startups that try to work on this space. I've seen a lot of different projects from public sector projects to private sector projects to startup tech-enabled projects been trying to archive skill sets, trying to develop unified standards. And I think anytime it relates to any human being, it is really difficult to standardize anything at all, really, which is why no company still has a uniform interview process. Right. Because there's so many unique things to adapt for. But I do think what it tells us is the continued importance of education throughout this process. So I think companies intentionally make portability difficult in many Because what is proprietary to my specific company and my company culture is not only something that I might want to keep to myself, but also something that is not going to apply when you go to a different company that don't believe in the same things. Google is a great example of this. I've worked with Google closely from a corporate perspective, as well as working with Google as a client of startups that we invest in. And Google is very unique in that they are relatively cash-rich. rich. So they're always encouraging employees to go out there, explore innovative projects. And if they really do get a lot of success at it, they should go do it as a startup, and then eventually Google will probably buy them, right? However, if you take the exact same idea and you replicate it to a different company that might not think about part-time projects or third shifts, as you described, Drew, in the same way, you would imagine that those same skill sets that came with a stamp of pride at Google, if became portable to another company, might actually become a huge minus on my profile because it seems like all these things that I work on are not perceived highly upon. So I would imagine that it does become easier for things like background checks, like work verification processes, like these basic certifications, like proving that I have the graduate degrees that I do have. Yeah. Those become more portable. But the more uniquely human skill sets, like projects that I've worked on, things like that, might not be so easily done with technology. Because, you know, as we were talking about earlier, portability enabled by blockchain technology is a tech problem. But portability of skill sets and whether or not that's recognized, that's a human problem and not so easily scalable.

That's spot on. Definitely agree with that. Uh, Shuo, this has been It's been just a delight to speak with you for the hour. I want to be very conscious of our time. Is there anything else you'd like the audience to be aware of or know?

Yeah, absolutely. I think it was great that we talked a lot kind of at a high level around how we think about future work. I would love to anchor our conversation with a very specific story of a startup that we worked with, just to contextualize some of the stuff that we've been talking about at a high level and bring it down to kind of a practical execution level. Um, so this particular startup, um, we had been working with for a very long time. We were one of the first investors, and this particular founder I had worked with since he was still a full-time employee. And I wanted to share an example of how a part-time project that he was working on at the time for that company became portable for many other companies across different geographies. And I think it's a fascinating case study to what we've been talking about. So when we had first met this founder, Joris, he was still working as a hardware engineer at Boeing at the time, specifically working on the wing design of the Boeing 787. And what he realized was that specific to that wing design, there were a lot of inefficiencies to how people were thinking about designing of planes and their wings specifically, where you would sketch up all of these designs with software, send it off for personalized manufacturing, get the hardware pieces back, test in a physical environment. You would repeat this process over and over again. He had obviously a lot of skill sets that he picked up in this process that he said, hey, let me see if I can poke around some pieces of software and try to build build something that would allow us to build more efficiently. He ended up building the software ecosystem that would allow people to test for virtual simulations of that wing design before it gets sent off for manufacturing in the physical space. That particular project ended up saving his department, specifically working on the wing design, about $180 million and 3 months in research and development time. Classic great case study of unique skill set there, right?

Wow.

So he was really, really excited to replicate this to more parts of Boeing. And so of course, he escalated these conversations up and beyond. And this relates to our conversation around performance reviews as well, where he started to say, hey, like, I've built this thing that saved us so much money and time, let's see if we can replicate this to broader parts of the company. Imagine if everyone working on the 787 could use this, not just the wing department, but the tail department, the body, the head, etc. And so fast forward months later, he had been having this conversation for a very long time. It finally got escalated up to C-suite. And when he was sitting down ready for that conversation to get the green light, C-suite sat him down and said, hey, thanks so much for this, but we're not going to move ahead. So of course he was kind of mind-blown. It's like, wait, I thought this was amazing. Why is it that we're not going to go ahead and do this? And C-suite had a relatively straight answer for him and told him, hey, it's because we're not a software company. company, really great at the designing, manufacturing, building, and selling of planes, but we're not in the software space. So of course, at the time, he didn't understand, and he ended up leaving the company. But fast forward 10 years later, he's actually really thankful that that particular conversation had taken place. You know, in the traditional style of an American underdog story, he had left the company, started his own startup, actually hired his old employer as his employee, speaking to our employer-employee conversation, His old manager actually still works for him as a CTO now. And fast forward 10 years later, his company is now the number one startup in the high-performance computing space, 10x larger than the second runner-up, by far the largest in market share. And surprise, surprise, Boeing is a paying client. And what's interesting about this story is actually relating back to a lot of pieces that we talked about throughout our conversation, which such as what are the shifting dynamics between employers and employees? What about portability of skill sets? How is it recognized in some environments versus others? In fact, fast forward 10 years later, the fact that now he is really thankful that C-suite had told him no is really because at the time, the biggest he could think was, well, hey, let's implement this technology across all the different teams working on the 787. Heck, the biggest he could have thought was, let's use this across all the different plane models. But when he actually had left and started his own startup, he realized, well, if I could do this for Boeing, I could probably do this for other aviation players. And so of course Airbus became a client. And had he had built this within Boeing, he could have never sold to a direct competitor. But then because he tackled this for aviation, he realized maybe I could do this for aerospace as well. So NASA, SpaceX, Department of Defense all became paying clients. So they would run virtual simulations of rocket launches on his platform before they actually do this physically. Wow. And because he could do this for aviation and aerospace, he realized, I can probably replicate this to advanced manufacturing. So Siemens became a client. Then he started to do this for automobile as well. Toyota, Nissan, Hyundai all became clients. And then he realized, actually, this is not just limited to manufacturing or hardware design. I could do this for really any type of research. So Harvard and MIT became large paying clients where they would run a lot of their research optimization processes through the platform. And actually, a couple of years before the pandemic, he realized, well, if Harvard and MIT are running research experiments through our simulated platform, we could probably do this for biotech as well. And he started getting a lot of publicly listed biotech companies as clients where they would use his platform to virtually simulate all the drug development processes and only select the most promising drug iterations to test in a physical lab. So highly effective for—

Yes.

Testing. And then of course, the ultimate verification piece needs to be done in the lab. But you can imagine that when COVID and the pandemic had hit, it became integral to expediting our drug development process to get COVID vaccines out in the world. And so I think this is a classic example of where the founder started with a really unique skill set, applying it to a very specific problem, built on the side and demonstrated traction and And then was able to really learn, grow, iterate over time, and start to replicate this to other industries. So I think it speaks to a lot of the different threads that we talked about in this conversation.

100%. Yeah,

dynamics and portability of skill sets, but valued differently in different settings.

What a fantastic story. And absolutely, you see it playing out right, right there. Shuo, thank you so much for your time. We greatly appreciate your contribution.