Bill Erbey, a highly successful entrepreneur and angel investor has founded six multi-billion dollar public companies traded on the NYSE and NASDAQ. In 2013, two of those companies were the 12th and 20th fastest growing companies according to Fortune Magazine.
In 2015, Erbey retired and focused on angel investing, specifically in tech. I had a chance to speak with Mr. Erbey about his vision, leadership and insights into the world of tech and beyond.
1. When looking into possible new ventures, what are some red flags that will make you walk away without a second glance?
A lack of solid patent protection and a complex and
long development cycle. There are many
exciting opportunities which will require hundreds of millions of dollars of
investment and decades to perfect. These
are well beyond my scope of interest. I
am attracted to solutions where the inventor has taken a unique perspective to
a well defined problem. For example,
Strataca with respect to Acute Kidney Failure.
2. You have said that the key to good management is finding the best employees who fit a company’s needs. What advice can you give to employers on assessing potential candidates?
There are many aspects to finding people who will be
successful employees in your company. It
is one of the most difficult tasks and most susceptible to failure that a
manager faces. Relevant experience and knowledge,
intelligence, personality and job stability are all important factors in
employee success. I think of each one of
these variables as a screen. Fail any
one of them and the odds of the employee being successful are severely
limited. Unfortunately, selecting
employees is all about probabilities.
There is no litmus test that will ensure 100% success.
3. You have said before that working in highly successful and established companies is the best education for entrepreneurs. Do you think that this an intense startup environment where many companies never actually see success is hurting young entrepreneurs?
Not at all.
Failure is a part of learning. My
comment was that beyond schooling, young adults have a lot to learn, and one of
the best places to learn how to become successful in business is at a highly
successful, established company. Think
of it as being an intern or resident in the medical profession or being an
associate at a law firm. Spend a few
years at a successful, established company and then become an
entrepreneur. Granted, one cannot stay
at an established company for too long as the probability of success decreases
as time passes.
4. Many leaders in tech are being criticized for irresponsible usage of their users’ data. As someone who places such importance on data analytics, is there an appropriate intersection between essential data analysis and privacy?
I am not one who would generally favor heavy
regulation outside of health and safety. Data, however, is power and
unfortunately that power is extremely concentrated globally in the hands of a
few tech companies. Individuals are at a
severe disadvantage in protecting and defending themselves and thus regulation
5. In addition to internet congestion, what other problems which are perceived as requiring physical solutions have you tackled?
We are tackling a major environmental issue by
addressing energy efficiency in a unique manner. System73®, a company I invested in, has a patent-pending control
system which will increase electric motor and generator efficiency. Under simulated driving conditions, our
technology increases motor efficiency by 8% and reduces heat generation by 50%. It is still too early to determine if our solution
will be successful and achieve widespread adoption, but we are optimistic that
it will have a meaningful impact on EV adoption by significantly extending
6. Do you see Artificial Intelligence as a threat to future job growth?
As in all revolutions, whether it be the Industrial Revolution or the Information Age, many jobs will become obsolete. Artificial intelligence is in its simplest form correlation analysis. There is a very interesting book Thinking, Fast and Slow by Daniel Kahneman, a recipient of the Nobel Prize in Economics. Dr. Kahneman points out that many tasks are instinctual. We learn how to do these tasks through environmental correlation. Many of these tasks are highly susceptible to being replaced by AI. And, these jobs are not simply low paying jobs such as working in a call center or driving a car. Jobs such as radiologists and actuaries could be replaced by AI. In the long-run, AI will lead to a higher standard of living, but in the long-run we are all dead. This will provide little solace to the displaced today. It is absolutely imperative that we take a far more thoughtful approach to education providing students with information to make better career choices. Far too many students take courses where there is less than a rosy future for their chosen careers with little prospect of paying off their student loans.