“Create a role for yourself” – Private Equity pro David Barclay discusses his move to the startup world

I had the great pleasure of speaking with David Barclay about how he transitioned from an investment role at a private equity firm into running a new business home energy management business within a startup.  Read on to learn about how he made the move and how he created a great opportunity to move into the startup world at OpenPeak.

Talk to me about moving from investment banking and private equity into an operating role at OpenPeak.  Any advice for folks who are currently working in banking or PE and are looking to get into a BD role at a startup?

I had been thinking about moving away from finance for a while. Even when I left banking to move into private equity I was looking to do something more “operational” (a word finance guys use to describe anything other than finance — seems funny in hindsight). That was the primary reason I chose to go to Vulcan Capital instead of more traditional PE shops.

Vulcan Capital is Paul Allen’s private investment fund and the team I joined already had investments in a range of media & communications assets, so a large part of the role was to get involved with those companies and help restructure, drive performance, plan for exit, etc. (in addition to more typical PE role of new investments we did too). After about two years of that I knew that I wanted to get even more involved in actually building a business. To me the drive was based on a desire to be more directly creating something of value rather than just investing in it.

At the time, I was very interested in clean tech and it seemed a great vertical with an opportunity to both make some money and do something good. So I quit my job, moved to the Bay Area without anything specific in mind, and started looking around.

I didn’t have any connections in the industry or any industry-specific experience to think of, so I did it all the old fashioned way. I looked for job postings. I made lists of companies that I thought were the most interesting and tried to contact them directly. I made coffee dates with anyone that would talk to me. I went to as many networking events as I could get into without paying too much. I joined the Clean Tech Open as a volunteer to get exposed to more people. Basically I tried all the traditional ways to look for a new career, but even after a few months I didn’t have much to show for it.

Then, rather serendipitously, I was introduced to OpenPeak by my former boss who knew the OpenPeak CEO. He didn’t refer me for any specific role but just as someone talented that OpenPeak should look at. OpenPeak was not involved in clean tech in any way, but they did have some interesting touchscreen multimedia devices and a back-end system for managing them. So I flew to Florida and made a pitch to the CEO that OpenPeak should customize their products and go do home energy management. We would take their device and network it with smart thermostats, smart meters, etc. to give consumers information about how they were using energy and how to reduce their utility bills. It was a totally new business opportunity for OpenPeak but based on their existing products.

Lucky for me the CEO was willing to take a gamble on this finance kid with lots of passion but no real startup or industry experience! I started a few days later as the founder of OpenPeak’s home energy business unit. I was more or less able to run my own business within the company, had a blast doing it and gained an incredible work experience.

Fast forward a few years, and as OpenPeak’s strategic direction has evolved (now focused on enterprise mobile security), I’ve gotten to know the team and had a chance to prove out my abilities while gradually taking on more responsibility. I now run all strategy and business development for OpenPeak.

Lots of people with your career path end up back at business school.   Did you consider going back to school, and if so, why did you decide against it?

Yes I suppose I thought about it a little bit, but never very seriously. My somewhat cynical take on business school is that a lot of schools try to take people from all walks of life and with vary diverse backgrounds and then funnel them all into finance/consulting jobs. It is certainly biased by my personal peer group (lots of Wharton undergrads), but nearly everyone I see out of business school goes into some finance career. I very rarely see people come out of b-school and start a company or go work for a startup. I think this is due to both peer pressure (when you see all your friends going for the big finance jobs) and also the pressure the added debt puts on peoples finances.

I viewed the initial role I took at OpenPeak as my business school proxy. I took a pay cut from my previous jobs (although was still getting paid some which was big advantage over b-school) and took a risk by joining a start up I didn’t know that well. I was given the ability to start a business unit but with the guidance and support of a larger organization. It was honestly the role I would have been looking to get after business school if I had taken that path.

If you want to work in finance, consulting, VC or something, then I say definitely go to business school. If you’re looking for something more entrepreneurial then I personally don’t think it matters as much. It can certainly be a good experience, great way to meet others and some b-schools are more entrepreneurial than others. But I feel that most of the startup experience has to be experienced rather than taught. I also feel like after school because of the expense most people need to find a job that pays a certain amount that can limit your flexibility. With two years and a few hundred thousand dollars saved you could take a risk to take a lower paying job at a fun startup or start something yourself.

Any other career advice for people looking to work on the business side of startups?

Even though all the on the ground work I did to first look for a job wasn’t ultimately successful I still think it was the right thing to do. I also think you need to set your expectations that it could take up to 3-6 months to make a move like this. I felt like I had to quit my existing job and really dive in to be committed to making the move and have the time required, but that is of course a personal decision. Either way I think you really need to have focus. Just saying “I want to work in a startup” is very broad and hard to organize a search around. I think you should have your own thesis about what kinds of companies you are interested in and go after them aggressively, while of course always being open to anything else that might come up from your network or other avenues.

Ultimately, I think you will more than likely need to create a role for yourself. Start by finding a company you are really excited about and then sell them on how you can help. In my experience startups don’t typically go out recruiting for roles like this but if you get in touch with the right people they will recognize the value of it.

I also think that it helps to start my defining a relative narrow niche within that company for where you can contribute and add value. No one is going to hire you to run operations or directly into a senior executive role. But I do really believe that if you take a small role and do well it is very easy to prove yourself and rise quickly within startup/growth companies. It also makes for a great experience to have under your belt before possibly launching your own thing (which is what I think I will likely do next).

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