This continues a series of interviews with tech executives who have seen the industry evolve over a minimum of two decades. They have helped analyze, envision, develop and take to market some of the most influential technology the world has seen. And they have done it well mile after mile as elite athletes do. I am honored they spend the time with me reminiscing and star-gazing.
This time it is Brad Keywell who is a lifelong entrepreneur and co-founder of seven technology companies, a cultural curator of innovation platforms, and a philanthropist. He is the founder and CEO of Uptake Technologies, an Industrial AI software platform harnessing predictive analytics to deliver outcomes of increased productivity, reliability, safety, and cybersecurity to global industry. Additionally, he is a founding investor in Tempus and co-founder of Groupon, Echo Global Logistics, MediaOcean, Drivin, and the venture capital firm Lightbank as well as on the Board of Trustees of Equity Residential, founder and Chairman of Chicago Ideas, Chairman of Future Founders Foundation, and an Adjunct Professor of Entrepreneurship at the University of Chicago Booth School of Business.
In Part 1 below he describes his highly unusual path into technology, his repeated successes and a focus on verticals when most tech companies tend to play safe and go after larger, horizontal markets. In part 2 tomorrow, we will hear him talk about his recent company Uptake and about how he sees enterprise tech evolve.
The formative entrepreneurial roots
You talk about the concept of starting to program computers in the fifth grade – so I’ll start by sharing this: I didn't start programming in fifth grade! On the other hand, I did start my first business when I was six years old – which is somewhere in kindergarten range.
The consistent part of the businesses that I started up until age 17 was they were fairly creative, they started in my imagination and then I took action (despite my friends confusion about why I was working and not playing video games). I started a greeting card company when I was six. I started a ‘home watch’ service – to help watch homes of people who were on vacation – when I was 13. I started a Sunday brunch delivery service as soon as I got my driver’s license. I started what you might call a local magazine, selling ads to generate revenue. But, as you can see, coding a computer was not part of these early ventures.
In college I started three different companies, and by my senior year had something like 20 employees. In the midst of that, I met someone who became a mentor – I met Sam Zell, the legendary real estate entrepreneur and industrialist. He’s been a mentor to me for thirty years, and remains so to this day. In my opinion, he's one of the greatest entrepreneurs of all time.
In 1988, I was an 18-year old freshman, and Sam was in his mid 40s and hitting his entrepreneurial stride. He cared a lot about the teaching of entrepreneurship at the University of Michigan. As a freshman, I advocated my way into an MBA graduate-level class on entrepreneurship, and it turned out that Sam conceived and funded that class, and I introduced myself to him when he was on campus giving a speech. That's how we met. I share that story because my formative influences were a combination of doing stuff on my own (and figuring out how to build businesses), combined with the great fortune of having an extraordinary mentor. My love for technology emerged during this period, as I learned that effective software can supercharge effective business building and impact creation.
While it may seem counterintuitive, I decided to go to law school. My instinct was that learning the underpinnings of the way things work is the most valuable asset as you can have if your goal is to impact the world. Law school was especially effective for me because I was certain I was not going to practice law -- ever. So I was there for the best possible reason – to learn, to understand, to find patterns. And over time, it has proven to be an extraordinarily valuable foundation for understanding how things are, how they should be, and how to make ‘better’ happen.
While it may seem nonlinear, it’s interesting to me how it all fits when I look in the rear view mirror. The first business that my business partner and I built after law school was in the apparel industry. We had success with apparel-related businesses in college, and we thought we knew something we could leverage.
While we grew that business, the true value was to put us in the arena and give us first-hand experience learning what we were good at (technology creation, partnership facilitation, customer success, growing sales forces, etc) and what we would rather avoid (inventory-intensive businesses, commoditized products, cash flow negative product cycles, to name a few). I appreciated those businesses in which you can control the outcome through hard work, resourcefulness, execution, and innovation – and those businesses where the outcome was entirely dependent on circumstances outside of your control (for example, commodities-based businesses)
I look at these early years as a playground of learning – an invaluable cycle of success, failure, learning, improvement, and constantly getting better. The most consistent part of my journey has been intensive learning - learning, learning, learning. My orientation is simple – what else can I learn? Some take the position of ‘knowing’ – I choose to focus on learning and being open to reconsidering what I think I know if better facts exist.
Those early years also taught me how much technology matters. It matters more than most businesses realize, and I see many leaders as masters of their industry but naïve to the enabling power (or crippling obstacles) that arise from technology in relation to their industry. In other words, I am a technologist whose education came in the arena, not in the classroom. I learned on the front lines of industry, not in the front row of the classroom. By 1997, you could say I received my diploma from the school of hard knocks – the best school of all. From that point on, my entire focus has been on technology -- building businesses whose core value creation comes from the building, deployment, and enhancing of purpose-built technology.
For over twenty years, my story is one of building technology companies. We build. From scratch. This is not about investing, it’s about building. It’s not about theory, it’s about the actual identification of inefficiency and arbitrage and opportunity, and then creating technology and entire businesses to unlock spectacular value for our customers.
Why vertical focus?
I look at industries and I see opportunity, often hidden by ‘the way things are’ and ‘it’s always been this way’. My assumption is that operators within vertical industries see more than I see and know their industries better than I do. Yet I happen to be a very good learner -- one of my edges is my willingness to study and look and listen and learn with intensity. I come to problems with humility, not with ego. So it’s with humility that I explore vertical-centric opportunities, and sometimes what I find is spectacularly compelling.
Being willing to ask questions and reach out where others might find it uncomfortable to learn is core to being able to crack some of the industry problems.
I’ve been a voracious learner about logistics. I’ve learned about media buying. I’ve learned about manufacturing, about oil and gas, about energy generation, and more. I learn about the technology that exists and doesn't exist. And with the pattern recognition that comes from experience, I assess where there's opportunity that we're best oriented to solve.
Starting companies is what I do. It’s also who I am – it's where I find maximum excitement and optimism and possibility. When you start a company, you are not beholden to the way things are – you can enable things to be the way they should be! That’s at the core of the value of emerging enterprises -- the ability to learn and take advantage of new technologies that might not have existed two, three, four years ago. This helps explain why new enterprises can become so valuable so fast – they serve the extraordinarily service of liberating the industry from ‘the way things have always been’ and creating the conditions for ‘the way things should be’.
I'll give you a quick bit of the “how”. The ‘how’ of our methodology of conceiving an idea for a new enterprise and creating a company. We have lots of ideas. My orientation is to ask why the idea is bad (rather than try to get you to tell me that it’s good). I challenge experts in an industry to tell me what's flawed about my idea? By expediting the understanding of why it’s a bad idea, it allows for us to move on to another idea. And it eliminates the drama that comes when someone is convinced that that they’re right and upset if you don’t agree with them.
I prefer to build, prove, succeed, fail, refine, build some more, prove some more. What now is described as agile, is basically the way we've been operating for years, decades.
Another element of our “how” is that we’re pretty good at knowing what we're not good at. We're entering spaces where we have deep confidence in our ability, our network, our competency, our resourcefulness, and our skill set.
I’ll give you a few examples.
Echo is a technology business that addresses inefficiency by leveraging analytics to create optimization and leverage in the logistics and freight and transportation space. That business started with me – one person -- at a desk in 2005. It's now 3,500-plus people. It's publicly traded on the Nasdaq stock exchange. It's a $2 billion revenue business. The edge in creating and growing Echo is that we were willing to ignore the "it's always been this way” mentality, and instead focus on the way things should be. We were able to focus on the best way of doing things, the best technology to make it happen, and to then get it done.
MediaBank is an enterprise technology company that we started in 2007. We created the technology, data leverage, analytics, and optimization platform that now serves as the foundation of the media buying industry – we changed the name to MediaOcean, and it’s now used by WPP, Omnicom, IPG, Publicis, and other leaders to run their businesses. We sold it recently to Vista Equity Partners.
I’m very proud of the businesses that we created and the impact they continue to make on important industries.
When we start these businesses, either my partner (Eric Lefkofsky) or I serve as the CEO. In the case of Echo, Doug Waggoner (the person that I hired to replace me as CEO) is still there ten years later. In the case of MediaBank, Bill Wise (the person I hired to replace me as CEO) is still there eight years later. One of the things we're good at is building and leading, and then at the appropriate time knowing when to hand the reins to even better leaders. Leaders like Doug and Bill have shown what it looks like when operational leaders partner in leadership with entrepreneurs – by leveraging diverse talent sets, we’ve been able to create leadership evolutions where one plus one equals three (or more!).
Groupon is really the only pure consumer-facing business that we started. We started Groupon in 2009. What’s relevant in relation to enterprise software is that Groupon addresses an inefficiency of local retail, so it also provided a fertile learning ground. Groupon is a very operationally intensive business. It's in-the-trenches sales, customer service, integration, and deployment of tools and technology used by merchants, with customers acting on discount offers.
The cumulative effect of these experiences is relevant to our evolution. Echo grew from one person to 1,000 people in two and a half years, giving us very important lessons and understandings about ourselves and our capabilities. We then directly applied that calibration of our capabilities to Groupon, which grew from 125 people to 5,000 people in calendar year 2010.
The growth experience of Echo created mental models that were valuable in growing MediaOcean. And the growth experience of both Echo and MediaOcean created mental models that were critical in growing Groupon.
Those are just some of the stories of the businesses we’ve grown. And it gives some of the sense of learning, growth, and evolution that led to mental models and a refined understanding of industry dynamics.
