Drew Clark has one of the best jobs in tech. As director of strategy for IBM's Venture Capital Group, his job is to run around Silicon Valley, seeking out startups for IBM to partner with -- a great occupation for a guy with breathless enthusiasm for new technology ideas. When I first met Clark nearly a decade ago, he was all fired up over SaaS; these days, he's more likely to get overexercised about inventive vertical analytics apps.
A physicist by training, Clark joined IBM 30 years ago as a programmer, just as IBM began to develop its software business in earnest. He eventually moved to marketing and brand management, serving as IBM's "search czar," and at the height of the dot-com boom, co-founded IBM's Venture Capital Group -- which, interestingly, has no fund. Instead, IBM works with VCs to take promising startups to market and increase the odds of their success.
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I caught up with Clark in San Francisco at the IBM SmartCamp Global Finals for entrepreneurs, an event aimed at identifying early-stage startups that align with IBM's Smarter Planet vision of an interconnected world. Along with examining some of the most promising ventures, we talked about today's relationship between startups and conventional IT, and how IBM plans to play a pivotal role in a new ecosystem of cloud services. The following is an edited version of a wide-ranging discussion.
Eric Knorr: How did it come to be that IBM's Venture Capital Group invests no capital?
Drew Clark: In 2000 ... we felt like we were observing what everybody observed: We saw in excess of $100 billion invested into venture capital on a global basis. And we said -- holy cow! What if we could do a better job of leveraging that spend so that some of it came our way? We don't want to be the only ones footing the bill for R&D around software, hardware, and services. And what if we could kind of use this as a leverage point for IT investment?
We were going to form a group on the West Coast, and I was one of the founders of it, and we were either going to go raise our own fund like a VC or we were going to partner with the VCs in some strategic way and kind of marry our skill set, which is about markets and customers and kind of deep technology knowledge. Those are kind of DNA elements of IBM. The DNA of the VCs, of course, is about identifying great entrepreneurs, promising companies, and being able to look at five companies that do roughly the same thing and figure out which is the best one to invest in -- not really our strength.
We tossed around the idea of -- should we raise a fund? Should we not? We went up and down Sand Hill Road, literally, and we talked to VCs. Uniformly, they told us -- thanks very much, IBM, we don't think you should raise a fund. Where we could use you, IBM, is after we put the money in, help us take the company to market. Help us understand the market. Help introduce [our startups] to your customers, get them into your direct channels, get them into your partner channels.