Conversations with David J Roux
Written by Jigar Patel
In a world of conference excesses, this week’s Kings Entrepreneurship Lab fireside chat provided a refreshingly intimate conversation between two leadings minds in front of a small audience.
The career highlight reels from the tech entrepreneur turned investing figure, who served as a leader at Oracle and founded a renowned investment firm at Silver Lake Partners, provided lessons from being at the forefront of multiple technology evolutions.
The early successes as an entrepreneur and the pioneering of a private equity (PE) technology strategy, initially shunned by Wall St, provided a reminder of the edge and risk-taking an entrepreneurial route requires. Billion-dollar leverage buyouts (LBOs) in technology firms was a novel concept in the 1990s, and it transpired that amongst the first believers were technology founders Bill Gates, Larry Ellison and Michael Dell. The hypothesis presented: computer hardware and software companies were not just venture level investments but also promising private equity candidates because of the scale of growth and impact they would have on the world. This revealed a personal preference for highly technical founders whose innovations could be widely adopted.
Insights were provided on complex contemporary topics in a relatable and digestible manner for the broad audience, ranging from engineers to lawyers, in the room. For example, why would a PE house invest in Sports Teams? Teams such as Ipswich Town have been purchased by American private equity firms, and whilst some have seen on-field football successes the profit motivations have not always seemed obvious. A quick explanation tying electrons to eyeballs (and commercial rights within effectively regulated monopolies) provided an incredibly articulate explanation.
On another note, technology was presented as a critical solution to the healthcare and climate change crises. These industries impact huge swathes of the population, where there is urgent and unmet demand. The current services on offer either do not exist, are uneconomical or unscalable. The relevance? The scientific and engineering research developed right here in Cambridge is at the forefront of new innovations in this industry. The list of Cambridge alumnis receiving Nobel prizes this year serves a timely reminder. The mix of entrepreneurial talent, investment incentives, and active early-stage venture support is visible. Roux pointedly highlighted a preference for founders that run into the riskiest and most difficult areas – a perspective which may energise the engineers and scientists that were present.
As is often the case in UK entrepreneurship discussion, a contemplative account of why there is an underwhelming number of unicorns and mature technology companies was presented. Overzealous regulation was painted as one external constraint on British and European companies reaching the scale of their American counterparts. However, an interesting difference in mindset may also be a contributing factor. Do the very same pioneers that painstakingly create valuable ideas and IP sell too early? Imagine if Facebook, now Meta, had not rejected early offers for a billion dollars or Snap had not rebuffed Metas advances of a reported $3 billion. A UK founder on the other hand may exhibit excessive risk-aversion by following conventional wisdom and selling their high-quality company in exchange for a more diversified portfolio of safer assets. ‘Diworsification’ is the neologism used by Roux and one which continued the theme of entrepreneurship being a game of persistence and intelligent risk-taking.
The arc was positively in favour of the power of deep technology and its application to the serious problems we face. Whether student, founder or investor – there was something in the discussion for all to spark neurones at this E-lab event.
As a mature student with the experience of many “drab” conference events, the sharp interview skills of the Provost, and the generous anecdotes from Roux himself create the belief that a few connected minds can have just as significant an impact as a warehouse full of conference attendees.
About the speaker
David J. Roux is the co-founder and co-managing partner of BayPine Capital. He previously co-founded Silver Lake Partners and held various leadership positions there, including chairman, co-managing partner and co-CEO. David has also been chairman of Jackson Laboratories, an independent biomedical research institute. He began his career as a software entrepreneur and executive. David recently founded The Roux Institute at Northeastern University, a graduate school focused on digital engineering, computational biology and the practical application of artificial intelligence.
Jigar Patel
Jigar is an EMBA candidate at Judge Business School. He holds a BA in Jurisprudence from University of Oxford (Pembroke College) and an LLM in International Commercial Law with a Specialisation in Competition Law from City Law School. Jigar has twelve years of strategy and growth experience at technology, media and e-commerce companies based in the UK and USA.