Jordan Ritter grew up as an only child, never really putting down roots as his family moved between California, Texas and Florida. That nomadic and sometimes lonely experience impacted Ritter in his later years as the software developer and entrepreneur started companies such as Napster, Cloudmark and Servio.
Startups — and more importantly the teams formed by them — in a way became Ritter’s family.
But the all-too common conclusion of that family dynamic was a break up, usually in year two or three after the all-star teams he’d assembled started to carve their own paths or lose interest in products that moved into new phases.
“It’s a bummer of an experience raising money and then losing teams,” says Ritter, who moved to Silicon Valley in 1999 with Napster, initially sharing an apartment with Shawn Fanning and Sean Parker at the San Mateo Marriott Residence Inn. “For me, it really is about losing family.”
Last year, Ritter pledged to solve the team “disintegration” issue once and for all.
He moved from San Francisco to Seattle, setting up shop in a 6,000-square-foot space in Seattle’s Pioneer Square neighborhood last October. He dubbed his new company Ivy Softworks, and set out on a mission to foster team cohesiveness through a unique apprenticeship model that could alter the way startups are formed.
Until now, little has been written about Ritter’s move or what he’s cooking up in his so-called “innovation studio.” But the 36-year-old entrepreneur shared details about Ivy Softworks in an interview with GeekWire, explaining why he picked Seattle for his new experiment in company creation and team building.
“There’s a spaciousness here. There is room for growth that I don’t think exists in Silicon Valley right now,” says Ritter. “(Silicon Valley) is a crammed city, a crammed area. It is attracting more and more people, and I sense the experience of pressure building up.”
When Ritter first arrived in Seattle, he said the city simply felt right in his soul. “There was just this Gestalt-like experience of a better approach,” he said. That contrasted with his experience in Silicon Valley, which he says no longer feels like a healthy place to be.
“We are not investing in ideas, we are ultimately investing in people, and their growth,” says Ritter. “And that has been a big thing for me personally — and it has been a big thing for those who’ve worked with me. And I don’t feel like Silicon Valley is a good place where that is important.”
For now, Ritter isn’t sharing much about the initial product that the team at Ivy Softworks is working on. A short statement on the company’s Web site says they are building technology products that “raise the bar on modern productivity and collaboration.”
“We have one big idea that we think breaks into distinct products, and independently commercializable things. And those different things have different domains and different skill sets… So we are hiring specifically for those things,” said Ritter, adding that a beta product likely will be released later this year.
Ritter also declined to disclose the Seattle angel investors who are backing the organization, noting that the combination of the product vision and the investment team could make a “a big impact and a big splash.”
Nonetheless, Ritter believes his approach to company building could ultimately fix the way startup companies are formed.
“I think there is a flaw in venture capital in existing models, losing innovators after three years,” he says.
That’s a pain point that Ritter finds hard to stomach. In his view, it’s simply inefficient spending time recruiting a whole new set of A-team players or finding new office space every time a new business idea emerges.
“I have to start from scratch and build that all over again,” he says.
Ritter’s goal? Keep those teams together innovating and creating for as long as possible, making something special in the process.
In other words, Ritter, who attended Lehigh University on a scholarship studying computer science and music, wants to try hard to keep the band together.
Here’s an extended Q&A from our interview with Ritter:
On the problem that Ivy Softworks is trying to solve: “”When the business starts to crystallize, you can still have those great ideas, but the flexibility of experimenting and exploring and really the early-stage startup experience has started to erode. The business becomes more focused on sales and marketing; on business development; on product development. It takes more of a stable view, and not as much of ‘let’s discover the new thing…’ So, inevitably those people either can’t work on the cool new thing that they have, and they leave. Or, they can, but now they have to go sit in this R&D corner and … they don’t have a direct impact like they have had in the past. So, inevitably they leave and teams disintegrate.
The common trait that I’ve had across all of the companies that I’ve built is that around year two or year three — when the business crystallizes and the product becomes the product — all of these great people who’ve put all of this time, energy and effort into … mashing personality wise as well as skill sets, it starts to disintegrate. That’s a bummer for me on a personal level. That’s a bummer I think for the business. And it is not because there is necessarily anything wrong, it’s largely because great people have great ideas all of the time.”
On why keeping teams together matters: “I was an only child and I grew up moving a lot, and I never really had a strong sense of family and never lived in any one particular place for a very long time. And while that was a difficult childhood, as I kind of grew into myself in adulthood and started building companies and building teams, that became my proxy for building family. I’ve always had this very strong bias toward culture and values, and the things that bind us together as people, not necessarily things that bind us together as a company. But as a people, as a social sub-unit…. That’s a little background of who I am and my narrative arc, and why teams are really important to me. It’s a bummer of an experience, raising money and then losing teams, for me it really is about losing family. So that has been a major motivator for me in coming up with what we are doing here.”
On why keeping teams together breed innovation: “You spent all of this time and energy and effort and money into cohering this amazing group of people … but you end up with this core group and kernel of innovators only to lose them in the third year. A good idea with a bad team fails 100 percent of the time. A great team with a terrible idea has a chance of a succeeding. It’s really all about the team. When you think about early-stage investment, it is all about wanting that kernel, that group of people, and really honing in on that.”
How can we leverage that team from an investment angle across multiple companies and multiple products. From an executive angle and entrepreneurial angle, we spent all of this time bringing these people together — how do I keep them together when they want to work on something else?
Our existing models for approaching that team — you have to go and start all over again. I have to go raise new money. I have to go find new office space. I have to start from scratch and build that all over again. Some people say, when we have past relationships with people that they’ve worked for you in the past so they will come work for you again, and that is true to a certain extent. They have their own narrative arcs…How can we facilitate the serendipity that comes from a great group of people across multiple iterations.”
On how the organization is more like an apprenticeship: “I wanted to build something where people could come and learn…. We liken it to the apprenticeship model. You bring your skill set and your energy and your personality, and we know we are staying together, and you learn our ways. And you earn a very clear economic pieces of what we are building.”
On taking the startup risk out of startups: “We want people to come and have that startup experience, but without the startup risk. Which is to say, if you come and you take the chance and you join the startup company and that product might succeed or fail, if it fails you lose everything. You lose the time.. You probably have taken a reduced salary, especially in today’s market where compensation is increasingly competitive.. You lose it all. Why not come here instead and have the startup experience with a lot of the startup upside, but without many of the startup risks. Our model is to keep the core team together, and if one particular idea fails, it still (means) we are able to execute on others.”
On connecting with Seattle: “I was up here on a beautiful summer day and I was really taken by the landscape, the mountains and the feeling of a deeper connection with the surrounding landscape. Compared to my past experience in Silicon Valley, where we have all of the same features — we have mountains and bays and beauty — but the culture itself is far more work oriented and there is less of that connection to nature and growth and the human experience.”
On why Silicon Valley is unhealthy to innovation right now: “I’ve been building up a feeling as I’ve watched the changes in Silicon Valley over the past 14 years that things aren’t actually going in that great of a direction for society, for people, for the middle class. I don’t feel like it is a healthy place to be. When I think about what has made my teams great, it has been about the growth of the individual. The big difference between us and say incubators or accelerators is that we are not investing in ideas, we are ultimately investing in people, and their growth. And that has been a big thing for me personally — and it has been a big thing for those who’ve worked with me. And I don’t feel like Silicon Valley is a good place where that is important.
As I started to have this … experience in Seattle, there was just this Gestalt-like experience of a better approach. There were lots of smart people up here, and I was meeting them left and right. A lot of them were hungry to have that startup experience. Comparatively, Silicon Valley is clearly Mecca for startups. An engineer up here (in Seattle) has a lot more larger companies — a very different type of experience for people.”
On comparing Seattle’s Pioneer Square to San Francisco’s South of Market area: “I was staying in Pioneer Square and watching all of this construction around me and I am feeling this talent coming up in a way that reminded me of the old days in the late 90s of South of Market (in San Francisco). Today, I think people would consider that the home of Silicon Valley, but back then it was a little bit dilapidated but had a lot of historical things, and was coming up and being upgraded. There was a sense of upward trajectory and energy going on. I felt all of this. The different experiences. The fact that there were people who wanted to run and hustle, that really didn’t get as many opportunities…. It felt right in my soul. I want to build a business that I think has enduring qualities that focus on investing in the person and the individual in their own journey. This is a much better place to do it. It really was serendipitous — that this was the right time and the right place to do it. There’s a spaciousness here, there is room for growth that I don’t think exists in Silicon Valley right now. It is a crammed city, a crammed area. It is attracting more and more people, and I sense the experience of pressure building up. And here, you can make a lot of the same choices about who you hire and how you run your business or how you operate, but there is room to do more, and there is more to think about more. And I like that.”
On how Ivy Softworks is different from a tech incubator: “There are a couple key differences. The first is, I think of incubators like college internships. You show up for six months, and you have sort of a dorm experience, you get to really bump elbows with people, and you have this intense experience. The nature of the incubator is really focused on market segments or particular ideas, it’s not really about the growth of the person and investing in their long-term journey. For us, we think of it as more of an apprenticeship or a journeyman. They are coming here to practice their art and expand and grow their skill set, and leave something greater than when you joined. That’s one way we measure success for what we are trying to do here, it is around the growth of the individual. Because in my experience, those people are the ones who generate new ideas. People who are not put into a box but are set free and given an opportunity to see new things and be exposed to new things. That is where ultimately new product ideas and new technology comes from. It’s a bit of a longer game.”
On helping people find that serendipitous moment: “You don’t need an idea to come here. You come here and you are going to bootstrap off of our existing big vision, and when you get that itch and that serendipitous moment and think of a cool idea, you are going to learn our process, the way we think about things, and how we filter and qualify … and you will slot right into that process. Really, our underlying model is that no one is forever. We are all on our own trajectory, on our own journey…. At the end of the day, we want you to stay and think much longer if we are exposed to those opportunities we are looking for. That said, if we have done our jobs right, and we can build something that everybody loves, and individual people will fall in love with it. The people who are building it will fall in love with it. I expect people to fall in love and follow these things out. That’s not a bad outcome. That’s actually a great outcome…. That is something we plan for because at the end of the day nobody is forever. So, we plan for that, and we build our culture around that. We are always trying to think about how we grow together or how we grow forward. That’s a key difference of what we are trying to do and more traditional accelerators and incubators.”
On what Ivy Softworks is working on right now: “We have one big idea that we think breaks into distinct products, and independently commercializable things. And those different things have different domains and different skill sets… So we are hiring specifically for those things. That’s a quick way to bootstrap this model for the investors to say: ‘Yeah, this is the goal we are working towards, and the experiment is: Is there a better return on investment on this expenditure of capital, allowing these people to stay together and grow and build newer things.’ Maybe. Maybe. That’s what our goal is…. I started this with a very big vision, and big visions are very hard to execute on upfront, but you can break them up into pieces and make people understand it, so consumers and end users want to buy. That’s what we have done. I think it is an extremely valuable and compelling vision, but I prefer to have the conversation around launching the product.”
On the future path of the organization: “In our case, there are multiple successful outcomes. It could be building an enduring organization or spinning off one product or spinning off many products. There are a lot of avenues and opportunities.”