Rob Coneybeer is a founder and managing director of Shasta Ventures. He has spent 22 years in the Silicon Valley venture capital industry and previously worked as an engineer for Martin Marietta, where he helped build the A2100 satellite. This model is still in production at Lockheed today. At Shasta, Rob focuses on space, robotics, AR/VR, and the connected home. He has led Shasta’s investments in Nest, which was acquired by Google, as well Accion Systems, Doctor on Demand, Fetch Robotics, and Turo.
I sat down with the self-described “thought partner, advocate, and counselor to entrepreneurs” to chat about how he has helped shape the company’s unique investment philosophy, what advice he’d share with other entrepreneurs, and his thoughts on up-and-coming sectors such as robotics and future transportation. Rob and I shared an investment in Fetch Robotics so we grabbed a small conference room before a meeting to think about things that could be helpful to founders looking at the venture capital space.
Q: Shasta has made a name for themselves in seed and Series A investing. What are you really looking for when you’re going and looking at a founding team that maybe has a little bit of product? What are the dynamics?
A: Well, as a firm, it’s very much a Series A and Series B focus. The way that we have thought about it historically has been strategic. Is it a category we’re interested in, and is it an area that we think would be big where we want to have a bet?
For instance, the reason that we did the seed investment in Fetch was we have no idea whether robotics is going to be a category, because the only thing when Fetch was getting going—it was before the wave really got going and we were thinking about autonomous vehicles. So, it was kind of a wacky thing at the time. But Melonee was recognized at the time as one of the absolute leaders in robotics.
So, it was a seed investment and it made sense to say, “Okay. Could be a big category. Don’t know.” Now if you look at that space today the category has had multiple exits and I feel that Fetch Robotics is one of the leaders in the space
Q: When you look at seed stage deals, what do founders need to think about? What are the one or two things you should have before you get to your Series A? What are Series A investors going to look for in that RAMP?
A: They’re going to look for a product. It’s always hard for me to think about Series A because really what you’re talking about is historically what was Series B? So, they’re looking for a product market there. It’s like pre-seed, seed. Pre-seed is seed as I remember it. And arguably when we invested it’s what would be called today pre-seed.
Q: What have you seen that has been successful in breakout companies specifically in terms of teams and culture? Is it a formula, a tool, or a feeling?
A: I would say to a certain extent, one of the highest correlations that I’ve seen is people that work really long hours.
Also, people that you can see are recruiting good people early on and making product progress. Like every time you talk to them, there’s progress. It’s interesting thinking back with Fetch. We’ve got some challenges like any company. I also look at hiring and say WOW I wish I would have hired that person a year sooner. So my suggestion is to higher sooner than you think.
Q: How do you bring that element of experience into operating the complexities of a venture-back business when there are so many first-time founders in this day and age?
A: One example of this is is, Turo. Bringing in Andre Haddad, who had deep experience in building two-sided marketplaces from scratch, as CEO early on was really important. And Shelby Clark, who founded the company, had the idea, but he didn’t have any experience in how you build and scale two-sided businesses or two-sided marketplaces. So that was a critical early hire there.
Q: And when did you make that hire? What stage?
A: They had raised an A, which would be called a seed today. And we declined to participate in it because we didn’t think Shelby was the right guy to scale the business. And when we found out that they had launched a CEO process then we came back in and did an A-1. We came in and we paid a 30 percent or 40 percent markup and just did a continuation of the A. But it was still before they had any idea if the business model was going to work.
Q: What other sectors are you interested in?
A: Robotics and future transportation. I am just personally very passionate about these spaces. I find that I can’t talk to enough founders, meet with enough leaders, or read enough about the space.
Q: What is it about those sectors that make them exciting for you?
A: Well, with robotics it’s all-around things that can work in and around people. So, automation, physical processes, and things. Obviously, what’s happening with Fetch or pretty much anything where you can automate a process that people do is physical automation.
Q: And is that because in robotics you’re starting to see cost and technology get to a place where robotics can work safely in confined spaces or in and around people?
A: Yeah. And it’s the perception piece. So, the idea of being able to have robots that go beyond the cage. And I’ve looked at a number of companies that are doing consumer robots, but other than the Roomba, there really haven’t been any that have worked. And I think the reason why is because you have to have something that can easily climb stairs and open doors.
And I think that type of stuff is 10 to 20 years off. It’s like the Boston Dynamics stuff, which is really cool.
Q: And then future transportation?
A: Yeah, it’s just completely open-ended. So, it’s things like Turo. Well, it’s software to make things more efficient. There are companies that are building tools for cities to be able to lay out bus lines and see the impact of restriping streets and stuff like that. So, it allows them to do what-if analysis. And they delivered software as a service and I think they’re used by something like 273 cities right now. But when you’re a transportation planner and you’re thinking about adding scooter lanes and you want to figure out what the impact is, it’s a way to do that.
Q: In your mind, what does general transportation look like in the three to five years?
A: It’s going to be Level 3 autonomy. More and more of the applying brakes automatically or loud sirens going off if you try to turn in front of another car. That’s in practice and people are going to see more and more of that. So, I think Level 4 autonomy, in the way that most people think of it, is decades out. It’s not even just a decade out, it’s decades.
Pretty much anything that moves from one place to another as opposed to physical fixed infrastructure is what I think of as the future of transportation, and robotics clearly is a key part of that. So that’s where my deep interest is on a personal basis and the sort of things we’re continuing to look at under the Shasta banner.