Rajeev Madhavan is a Founder and General Partner at Clear Ventures. With $120 million of capital, Clear is a VC firm that is purpose-built to help startup teams win in business technology and services.
We recently asked Rajeev for his advice to recent graduates in the engineering field on best practices for their career and what the steps to success look like. Here’s what he had to say:
Tell me about your early years and how they contributed to who you are today?
When I was a kid, I absolutely loved reading comic books. I would go through comic books quickly, reading the latest edition and be ready for the next, but my dad was not a fan of comic books. So, I built a lending service on the school bus – I charged a small fee to read my comic books—which enabled me to support my hobby. It was a comic book business with a few friends. We started to run into trouble when it came to collection though, especially with the bigger kids. We solved the problem by getting one of the bigger kids to collect for us, with a deal that he would get to read the books first. However, the school principal caught us and we were suspended from the school bus. It took away all business interests in me for quite a while!
What business lessons did you learn?
This very early business-building experience taught me several business basics. I learned valuable practices like how much money to charge, the delicate art of money collection and, perhaps most importantly, the role of rules and regulations in business. Even the suspension in that story had a critical effect on how I operate in a business setting.
Who has been your biggest influence?
There were 3 people who contributed to my successes – one was my manager, Ed Vopni at my first job – he challenged me to execute better, work harder and set better goals for myself. Another was Lucio Lanza who I met when he was an Executive VP at Cadence and a General Partner at USVP. His questions on various ideas that were being proposed to him made me want to think of doing startups. The last person was Jim Solomon, founder of Cadence who told me when we were on a customer trip to Florida, that he should have done the analog business at Cadence (the business group I was in) as a new startup – this made me realize that I am better off doing a startup. Hit with that deep desire, I joined with two others to do my first startup, LogicVision. One year into it, we had a product and our first customer, Apple. During that time, I learned that creating technology is not enough. Extracting value is what is the most important. I then started Ambit Design Systems, and Ambit was sold to Cadence for $280M. Then I started Magma, which went public on NASDAQ and was eventually acquired in 2012 by Synopsys for $650M.
What motivates you to succeed?
I love to compete. So, the fact that 30 VC firms turned me down when I was looking for funding for Ambit Design was an invitation for me to prove them wrong. Being able to show them I could succeed in spite of this was incredibly rewarding for me.
I also love the opportunity to create a new, exciting product and bring it to life. The mantra has always been that failure is not an option. As an entrepreneur, I believed that I needed to find a way to make it, whether that means needing to pivot, redoing or changing direction.
What career and life advice do you give to new college grads?
Not everyone is built to do a startup. Some may want to work in a large company because it offers stability and less risk. There is nothing wrong in choosing either of these paths. But if you truly want to pursue a startup in the tech space, Silicon Valley is the place to be. Building great relationships is important. Doing a self assessment of your strengths and weaknesses and building a team that addresses your weaknesses is very important. It takes a village to succeed and the invaluable, supportive infrastructure here will help pave your way to success, if you tap into the right relationships. In the same vein, you should take any opportunity that presents itself to build your network.
How do you define success?
Success means different things for different people.
To me, success meant success for all the people in the village that helped build the company. Success means having happy customers who rely on you to do key pieces of their day to day tasks and ultimately success to me implies changing the status quo.
Ensuring that everyone succeeds with you is something which is important to any good entrepreneur. After all is said and done, ask yourself, “Have I done the right things to make sure that my employees have been rightfully rewarded? Am I helping them to succeed too? Have you built a culture that ensures people can provide their honest, open feedback to improve the company?”
Do you have a mentor and if so who is it?
I have been lucky that in the Silicon Valley Village, I have had great mentors during my startup days. Mark Perry, now a retired General Partner at New Enterprise Associates, has given me several pieces of advice about how to put the right systems in place for my company. He also helped me understand the complex financial and legal sides of business.
Andy Bechtolsheim was also an important mentor for me. I always got a lot of much appreciated advice, which was always great, to the point, and highly relevant.
What do you think of the opportunities out there today for engineers and their salary and career potential?
In the valley, engineers carry tremendous value. It’s important for every engineer to know his or her true worth and that over time, that worth increases. It’s easy for engineers to move from company to company to company. There is a lot of distraction out there. It’s great to have the opportunity, but it’s important to assess all angles of a career move before taking the leap. A bigger project name might be appealing, but the management might not be a culture fit. You should stay focused on what really matters to you in your career. Seeing an opportunity for engineers to understand their true worth, prompted us to invest in Paysa.
What is the one piece of advice you’d give to young, entrepreneurial-minded engineers who want to launch a company?
Know your strengths and weaknesses from the get-go, but also know what resources you have at your disposal. Improve and cultivate the appropriate skills you need to succeed. Leverage the experience and knowledge of your team and look for opportunities within your desired startup arena. Building a cohesive unit and having the right co-founders often creates the best outcome.
What are you passionate about outside of your career?
I’m passionate about gardening. I started with 3 or 4 rose bushes in my first house. Now I have 400 varieties of roses and 2,000 bushes in my home. Walking around in the garden always has calmed me and given me peace of mind. So for me, gardening is a past-time that helps balance the immense pressure of the start-up world. That being said, I still haven’t been able to shake my competitive nature to my wife’s dismay – even in my gardening. I see beautiful places like Filoli Gardens and feel determined to out-do their roses.
What were your best/worst subjects in school?
My best subject was math, and all language classes were a challenge for me.
Why did you choose your profession?
I did not have much of a choice – I had a tiger mom who wanted me to be an engineer or doctor – I could not stand blood, so engineer it became. Half way through I wanted to become a CPA (called CA in India). Luckily my dad made me realize that I was too close to finishing to quit. I coasted through to my first job at Bell Northern Research and had the right manager to light up the fire. I knew I had an entrepreneurial streak in me though, dating all the way back to my comic book business. I believe that entrepreneurial spirit is inherent to a degree. The first chance I had to pursue something entrepreneurial, I ran with it. I only worked two years with large companies, but the rest of my career has been in startups.
What do you think about most of the day?
With my current companies, think about new technologies I’ve seen that we could be pursuing. Silicon Valley is fantastic at coming up with new technologies that change status quo – I am lucky to be in the valley and to meet and work with world class entrepreneurs who have passion and wealth of knowledge in so many areas of technology.