Kirsten Suddath: Lessons from the Rearview Mirror

[00:00:00] Hello and welcome to My Biggest Lesson, the show that brings you the key learnings from the most influential founders, executives and investors in the Colorado Tech community. My name is Adam Burroughs. And I'm Chris Erickson.

[00:00:14] Together we are the co-founders of Range Ventures, an early stage venture firm based in Denver. You can find out more about what we're up to at range.vc. Our guest this week is Kirsten Suddath.

[00:00:28] Kirsten is a partner at Next Frontier Capital where she joined in 2021 after spending time with Blackhorn Ventures and Techstars. Prior to that, she helped launch a company called Flight Desk in 2016 which went through Techstars themselves.

[00:00:41] And what's notable about Kirsten, and this is saying a lot for a Colorado based podcast, she's probably the best skier we've ever had on the show, having competed in the free skiing world tour qualifier and the Colorado Freeride Championships. Kirsten, thank you for joining us today.

[00:01:06] Yeah, thanks so much for having me. Excited to be here. Excited to have you on our biggest lesson. I would love for our listeners to learn a little bit about your career and what you've done before and what you're doing now. Awesome, yeah.

[00:01:17] So I'm currently a general partner with a venture fund called Next Frontier Capital. We're based in Bozeman but I'm in Boulder, Colorado. We also have an office in Salt Lake City, Utah. So we invest as a firm into SEED and Series A early stage rounds, mostly B2B

[00:01:35] technology companies. We prefer to lead so we're generally, you know, our check size is about half the round that's getting raised and we love working with companies that are based in the kind of Rocky Mountain region is the core focus for our strategy.

[00:01:49] I arrived here kind of on a bit of a winding journey. I was previously with the firm called Blackhorn Ventures which is based in Denver and does a lot of investing in industrial technologies and of precede through Series A and a little bit later stage as well.

[00:02:05] And before that an EIR at Techstars where I worked with alongside Nadi Zola on the 2020 Techstars class as an entrepreneur residence helped him source and select that class and which one I went to Blackhorn. But before that most of my career was working in startups.

[00:02:24] I kind of got lucky early on in my career and found a place at a startup that was in the first kind of clean tech wave called Recycle Oil. We were recycling used cooking oils if you'd stock for a biodiesel. Bootstrapped company, not venture backed.

[00:02:39] I came in and initially just was running kind of the logistics of where to send trucks and when and got really lucky and had a CEO that was willing to take a chance on somebody kind of young and hungry and got a lot more

[00:02:52] opportunity to kind of grow and be in a leadership role there. And that really launched my career into startups and worked on a couple others kind of along the way before making the investing side which happy to dive into

[00:03:05] a little bit later but I figured I'd leave it there for the brief kind of intro. Yeah, I think one thing that's really interesting too about your career you know people talk about you know what side of the table someone is on right

[00:03:16] and you've been on both sides of the table would be curious to hear your take on like what are the biggest differences or biggest things you've taken from being on the startup side of the table to now being on the investor side

[00:03:28] and what's maybe surprised you the most and what lessons do you use that you learned doing you know the entrepreneurship thing now as an investor. Yeah well and I talked to a lot of people who are interested in venture

[00:03:43] and you know and wonder like a startup experience of prerequisite right for kind of being in this role and you know my answer is always no I think like diverse experience is really useful but what I often say is

[00:03:56] if you invest at seed stage which you guys do as well you do an investment especially as a lead investor where you're taking a board seat that board is often you and the two co-founders. That's it, it's a small board sometimes it's balanced and independent

[00:04:11] but it's this really small room and you know you're not only like the steward for your investors in that investment in the company but she also can have a really fun relationship with those founders and

[00:04:24] you can have a real impact in where that business goes and so I think everyone who wants to kind of become an investor should have an idea of what is the kind of board member you're going to be what is it kind of value

[00:04:35] that you can add to that situation and I think for me the answer has been that startup experience you know and it's not tactical it's not like I can tell you what's the right HR platform to scale from 20 you know

[00:04:48] 20 to 50 employees my knowledge is too old on that but it's more you know I've been in their shoes I have such a deep level of empathy for the challenge that it is to do that work and so I often get a level deeper I think with

[00:05:04] those founders then would be possible without that sort of deep empathy and so that's probably the biggest thing that I pull forward from my experience. Yeah that resonates very strongly with me because I think that that's

[00:05:16] one of the things I tell you know our first time founders or folks we're partnering with them is like we've been there right and we understand how hard it is what you're doing and I think the empathy comes from a real place I think

[00:05:29] that resonates with founders. Let's shift a bit to Colorado. So I'd love to hear your perspective on how you've seen the startup ecosystem change in Colorado and what you're excited about here now. Yeah well it's changed a

[00:05:46] lot. I grew up in Boulder and so I've been here a really long time went to Boulder High went to see you twice absolutely like love the Colorado startup community. When I first started working in startups the first two that

[00:06:05] we did you know one was you know this biodiesel company you know I was started junior ever kind of grow into a leadership role the second one was with the same group of people we started a local food distribution company

[00:06:17] called Source Local Foods and so I felt so much community at that stage because we were in the kind of climate clean tech is why we call it back then and local natural food. I think that sense of community and

[00:06:34] especially in Boulder it's been quite successful in that the food and beverage especially the good for you kind of category for a long time and it wasn't for me really until tech stars really started to get humming in Boulder

[00:06:49] that I started to at least see more tech coming in you know like you saw a lot of food and Bev and then I think with with tech stars doing the work that they were doing and foundry starting to have some traction and success as

[00:07:02] well that put Boulder I think on the map in a way that it wasn't before and you had a lot of technology companies getting started here and then you had some acquisitions you have some success stories like San Grid and

[00:07:14] Gnett getting acquired by Twitter and then all of a sudden you started it felt like very slowly but when you look back on it was really within the matter of like a few years all of a sudden you've got this tiny little town that

[00:07:26] turns you know from focused on like good for you category to you've got offices of AWS and Twitter and Google is building its headquarters and so a really quick shift into tech which was then of course accelerated by

[00:07:41] you know by covid and the influx of talent that came to this region in early early on it really did feel like Boulder and Denver like we're separate kind of communities and what I've really enjoyed seeing over the past maybe five to eight years

[00:07:57] is they've just connected in a way that I think they weren't before and it's really opened up to kind of a broader ecosystem within Colorado even just off the front range and I love the work that you know coca-pele and Greater Colorado Venture Fund are doing and bringing

[00:08:13] more of the the rural ecosystems into it as well. But I've just noticed that it started with a kind of a small group and has really expanded since the time that I remember getting into it. And so if we think about today and where we're at today

[00:08:29] are there any companies here locally that you're really excited about? Well of course it's a good opportunity for me to plug a few NFC companies so absolutely we've got we are OK with selling your own book on the podcast.

[00:08:41] Now I'm like we get to see so many amazing companies. I'm incredibly excited broadly about like where Colorado is going and you know I tend to focus a lot of my investing on still on climate tech, clean tech, energy, industrial companies.

[00:08:55] And so I'm incredibly excited about where that is going for the state. Like we have incredible national labs here that are producing and universities that are producing really innovative new novel technologies. And we're starting to understand tech transfer

[00:09:14] and how we commercialize those companies in a way that is really exciting. So I'm incredibly excited for that's going to companies in our portfolio that fit into that kind of that kind of bucket. One is called Optara Climate, which is a scope three familiar with emissions scopes.

[00:09:31] It's a focused on scope three carbon accounting solution for big enterprise companies. So they work with some of the biggest logos across retail, automotive and electronics manufacturing. And actually they were just recognized for the second year in a row by Outside

[00:09:46] Magazine is one of the best places to work. So Boulder based company that we're quite excited about. And then the other one is based in Durango, Colorado. It's called King Energy. And it's an energy company focused on putting solar on multi tenant buildings.

[00:10:03] So think like your neighborhood strip wall. Historically, there's not been a great incentive to put solar on those buildings because the property owner owns the building but passes those utilities onto the tenants and the tenants maybe are signing two to three to five

[00:10:17] year leases so they don't get the payback and they don't have enough poll. And so what King does is they come in, you know, they rent the roof from the property owner. So it's additional revenue for that building.

[00:10:27] And then they sell the energy at a discounted rate to the tenants plus it's green energy. So it's kind of a win-win-win. So that's another kind of Durango, Colorado based company that we're quite excited by. Awesome. Both those sound really exciting. Yeah. We'll see where they go.

[00:10:42] Yep. Well, let's switch to why we're here. We'd love to hear what the biggest lesson is that you've learned in your career. How did you learn it and how do you put it into practice today?

[00:10:52] Yeah. You know, I think the thing that I always go back to is this idea that the story, whether that's the story of your startup or your career, always makes more sense in reverse. And what I mean by that is whether you're sort of early in your career

[00:11:10] trying to figure out what you want to do, how you're going to get there or you're early in the journey of a startup company. It's never clear from those vantage points where the future is going to go. And we're often very good.

[00:11:25] Our brains are very good at drawing connections. And sometimes those connections are really meaningful and you can look at them in a kind of a cause and effect way. But oftentimes, you know, they might not be.

[00:11:38] And so this kind of idea of the story always makes more sense in reverse. I think it's both comforting for the person that's trying to figure out what the next step or two is going to look like in their career,

[00:11:51] but also a bit of kind of a cautionary tale for especially like the multi time founders, you know, thinking about building their second or third business and trying to figure out, you know, the right next steps. How do you think it manifests itself to the negative?

[00:12:07] Is it that, you know, people will look at someone's career and be like, oh, I want to get here and look at things they did. If I go do these, I'll end up there or sort of how do you see people

[00:12:17] sort of falling into a trap like this? Yeah, it's a good story and it kind of reminds me a little bit of so the first two companies that I worked in very mission driven, local food, establishing those supply chains, you know, clean tech.

[00:12:33] And then the next one I worked in also very mission driven. It was an ad tech company called Flight Desk. Company is still going, I think doing quite well. And it was, you know, working on aggregating advertising opportunities across college campuses, putting it into a platform

[00:12:49] so that national brands could buy those opportunities at scale. So kind of tackling two problems, you know, one helping brands reach a college audience and then secondly, driving more national ad dollar revenue to college journalism organizations.

[00:13:03] So had a bit of a mission driven impact story as well, but quite different from maybe the first two businesses that I worked in. And so for me coming into kind of my third go around,

[00:13:16] I had a good sense of who I was as a leader and what kind of values and culture I thought would work really well based on my first two companies. And what I learned coming into a different impact story,

[00:13:32] a different set of, you know, employees and how we needed to grow that business was that the things that worked really well in getting employees excited about joining our business, keeping them excited about growing a

[00:13:44] business didn't resonate the same way that they did in moving into kind of an ad tech space and that we needed to just think differently about what were the right set of cultures and values for the business. So that was a surprise to me.

[00:13:59] And I think I learned that the hard way. We probably tried some things that really didn't resonate, lost some people that were great people and had to think much more blank slate about what made sense for that business.

[00:14:14] So as you apply this to sort of your life in your career today, knowing that things do look more clearly looking backwards, like how does that influence how you make decisions going forward? Do you wave historical experiences less or differently?

[00:14:33] But and how does it help you today knowing this? Yeah, it's something that I think I've needed to be aware of, and especially as an investor, right? Because I imagine you guys get pitches as well for companies that

[00:14:48] maybe you're in a similar market or tackling a similar problem in some of the businesses that you all have worked on. And when you've worked on a startup, you know how hard it is to operate in that space and all the challenges that come along with it.

[00:15:03] And so sometimes I think that can bias you negatively. A lot of founders think it would actually be positive. Oh, you know, like for Adam, right? Home advisor. He'll totally know that market. He'll love my startup because he knows that.

[00:15:17] And Adam's probably thinking, man, that was a hard journey. Like we got out, but like with a lot of luck, you know, and certainly moments where things could have gone the other way. And so I definitely feel that in myself when I see companies

[00:15:29] that are in similar spaces that I've worked in before. And so what I try to do now is just check those experiences at the door. And I try to really focus on depending on the stage of the company, what is the founder seeing?

[00:15:43] That's my first, the first place I go. Like because you end up working on companies because I think you get a really clear vision of the future and and then a market that has that need. So I try to check my bias at the door

[00:15:57] and understand the vision of that founder, what it is that they see and what does that full future picture look like? That they see. And then, of course, you know, where we invest, there's usually a little bit more data as well.

[00:16:12] So also let kind of the data speak for itself. And then the third piece is letting customers, you know, shine as well at the point where we invest. There's typically customers. Yeah, I definitely recognize that. And it reminds me of an early story from my company.

[00:16:29] You know, we were making a pivot to change how we build our customers. And one of our early angel investors had tried that, right? And he knew the space and he's like, basically this is the dumbest thing ever. It will never work if you guys do this.

[00:16:47] I want my money back, right? Type of thing. And we did it and it worked, right? And it was the whole reason the company ended up being successful. And there were a bunch of things about the world that had changed from when he tried it 10 years ago,

[00:17:02] right, to now that he didn't know and didn't appreciate. And so I think that that is a really good lesson to sort of check your historical biases, especially when engaging new companies, because they have a different view, right, than you do.

[00:17:16] And they probably know something that you don't as well. Right. So do you have any tactical advice for our listeners in terms of how they can do this and their everyday in their job and invoice some of these pitfalls? Yeah, it's really simple, especially on the negative side.

[00:17:36] And then have you talk a little bit about more that comfort of positive side of this as well. But it's just voicing, right? I think when we are receiving any kind of information, whether it's as an investor, receiving a pitch or whether it's as a founder,

[00:17:57] receiving some customer feedback or employee feedback, we always have that little voice that's going on in the back of our head. And I think even voicing that out loud is a really great thing to do because it allows your brain to settle.

[00:18:17] You know, and so I try as much as I can now on the investor side when I hear a pitch on ad tech, I'll say, hey, I've been part of an ad tech business and I know just how challenging that can be building a marketplace in that space,

[00:18:33] but also really rewarding. Love to hear what you're working on. And so just by saying it out loud, for me at least it allows my brain to let go of that and then be in a fresh place. And so you could do that as a founder

[00:18:46] if you're getting some feedback from customers, but okay, this really worked in my last company and the data is showing me it's not working right now. So clean slate, you know, let's go brainstorm and think about what's the right next step. Yeah, I think that's really helpful.

[00:19:04] So where can our listeners follow what you're up to? Yeah, so sometimes I tweet, you can find me at Kirsten Settath on Twitter. I'm also relatively responsive on LinkedIn, Kirsten Settath on LinkedIn. So those are the two best places to kind of keep up with me.

[00:19:20] And then as a firm, we also have a blog that we post, a newsletter that goes out. It's a great place to keep up with what we're doing as a firm and our investments. And then our partner Les also has a podcast.

[00:19:33] And so check that out, it's called Found in the Rockies. There's no company wide or firm wide TikTok or anything yet that people need to subscribe to. No TikTok yet. Yeah. Okay, well we'll check back in a year

[00:19:44] and we'll see maybe all of this will be on TikTok. Well Kirsten thank you so much for joining us today and for sharing your lesson with our listeners.