Introduction and Background
Ryan Davies: Welcome everyone to the Tech Business Roundtable podcast show. This is a podcast show dedicated to shining a spotlight on tech innovators, entrepreneurs, founders, and the compelling narratives behind the movements that they’ve established. I’m your host, Ryan Davies, and I’m hosting today’s discussion Deep Tech Founder, Advisor, Consultant, Investor: A Journey with Daniel Gonzalvez. Did I get it? Was it close again?
Daniel: Fine.
Ryan Davies: Fantastic. Daniel. I appreciate your kindness. I appreciate you being here, for our audience, a little bit of background. So Daniel works currently as a senior venture manager at GCO Ventures, a VCN venture building vehicle founded with over €300 million of committed funds. Incredibly impressive background with a Bachelor in business management, economics, as well as applied philosophy, you know, business, huge business school background as well has been previously an investment and portfolio manager where you managed, what was it over almost 60 deep tech companies and, and participated, not just in that, but the creation of start-ups and management of investments, you know, to kind of bring it all together incredible experience in early stage deep tech, general tech, financial services, health, real estate, utilities, energy travel, you’re the one-stop shop for us. This is fantastic and we’re so happy to have you here sharing your time and your wisdom with us today. Thanks, Daniel.
Daniel: Thank you, Ryan, for having me for inviting me to this great opportunity to contribute to this Global Knowledge library and to be able to collaborate with you and bring this information about deep tech to the DC ecosystem and also to do it from Spain, Barcelona specifically and to get to explain how are things here and how I actually got here. So I think it will be a great time.
Daniel’s Journey and Career Evolution
Ryan Davies: I think that’s great. I mean, we could even start with that, right? A little bit about your journey: I know you wear multiple hats as venture capital, deep tech investor, and strategy consultant. So maybe provide our audience with a bit of an overview of all of the hats that you wear and how you navigate between the creation of start-ups and managing investments and your place in the Spanish ecosystem, I guess.
Daniel: OK. Yeah, let’s do that. So basically, I started, you know, as a typical business student here in Spain, and you could say early on my college journey, I discovered what entrepreneurship was, and I thought, OK, this thing about creating, you know, something that wasn’t here before. So going from 0 to 1 and also to be able to get this 1 to 100 in a very short period. That was a very interesting thing also to use technology to do it. Actually, as the only way to do it because, other than technology, right now, we don’t have other ways to increase value in today’s businesses, or at least I haven’t known any other alternative. So, yeah, basically, while in college, I was able to experience the creation of a start-up. I created a democracy. This was a social network start-up on, you could say, politics and debate across cities, and it was good, but it was not, you could say a for-profit endeavor. So I moved on, and I finished my, we could say, studies in my bachelor’s in both Spain and the Netherlands and there. I decided to join. We could say a fund, a VC fund, to get to know the financial perspective of investors on that subject that I was just speaking about, and that was entrepreneurship and technology. So, I joined first a fund here in Barcelona. This fund was one of the first deep tech funds in Spain. Basically, deep tech for the audience who may not be familiar with it. The term is companies that come from universities with, we could say a scientific or a technological significant advance in that sense. They usually come from universities, but they may not in that sense. They should have a patent, and they should have an IP that advances. So that was deep tech and deep tech VC. Deep tech investing was to invest and to succeed at these companies across a portfolio. So after this first experience, I joined another VC Fund this was in London. EJ Capital was another VC fund, this time focused on renewable energy and green energy, and it was very interesting also to get to know another ecosystem of businesses and of entrepreneurship and yeah, basically in that sense. At that time, I also finished my, we could say, studying student career academic career by getting into a master’s degree. This master’s degree was not the typical choice. So, the typical choice would have been a financial management master’s, accounting master’s, or an international management master’s, but I decided to do a different thing, and that was applied philosophy and logic. That choice came from, first of all, my, we could say ambivalence but also likeness to philosophy in my personal time and, in my free time, in the sense of reading through books and getting to understand how philosophers thought back in the day but as a matter of fact, once I discovered that the same questions that these philosophers were thinking about at that time, we were the same that we are right now at this time. And currently thinking, I thought, OK, let’s, let’s see how this takes us not only in the personal level but also in the professional level. So I decided to go for that master’s and to, you know, complement my more economical and quantitative background with a more qualitative one. And yeah, basically, that was about studies, and then as I was in the VC Fund in London, I saw how, you know, I loved the job. I loved the industry. I love to get to know founders and help them once we have, we have invested in their company. But I saw, and I realized that my skills as a person who had been only in venture capital were not the best ones in the sense that VC venture capital is an industry where most of the people that are in are coming from other industries. So there is this cross-pollination of skills, and in that sense, people come from investment banking, people come from the start-up world as operators, people come from consulting or audit, and in that sense, I thought, OK, let’s try something different. Let’s try to acquire other skills that would allow me in the future to add more value to the founders and be more versed in the VC industry. So I decided to go to another industry in that sense to transition careers into strategy consulting. In that sense, I went into a mid-size firm called Kiters, a company operating from Spain but also from Portugal and operating across Europe and in Latin America Eastern America, and in that sense, I was there up until I think it was 3.5 years up until I met manager, A manager in consulting is kind of an inflection point in that moment of your career. You have to decide if you’re going to be a consultant, a strategy consultant all your life or you should move on and get into a client or transition careers in that sense. So, as I saw in the projects at Kiteris were very good. We were doing advisory and we were doing M and A, Intercontinental projects. We were doing, you know, strategy plans for European companies that wanted to use technology for their advancement and for their consolidation in their market share, but in that sense, even though the exposition to C street and so forth was great. I decided to go back to VC. So, yeah, it was great, but yeah, I had to find the gig, and in that sense, something helped me because, at that moment that, I wanted to get back to VC. Another idea came in the sense of a project to be chased, and that was the creation of a start-up. So, along with an engineer friend, we created Energyhash. Energyhash was a company that from which, you know, we built a small solar plant back in Tarragona. Tarragona is one of the provinces here in Spain and near Barcelona. And from the energy and the power that we generated from this solar plant, we pulled and we mined cryptocurrencies, crypto assets such as coin and, and Ethereum, and it was great. It was, we could say, profitable because also we were able to raise from a few family friends and fools, you could say individuals and also context that, that, you know, that we had from back in the day in the busy world and yeah, it was great but COVID came and in that sense, we were not able to meet the expectations that we had set for such as we were not able to get into the plant as frequently as we wanted due to lockdown and so forth. Also, the monitoring costs went up, and we could say the final move against us was that the legislation and the law changed, and we were not able to adapt as quickly as possible. So we said, OK, we reflected, and we said, OK, this has been a great journey. We have built something that worked, but right now, it isn’t working anymore. So let’s see how we finish and close this as clean as possible. We decided to sell the assets that we had acquired and to liquidate everything. So, we returned all the money across another sum of investors that had trusted in us. We retook some of the gains because it was, in that sense, for Bitcoin and Ethereum was very profitable at the moment. But for at least for miners, because it has been spiking and going to the floor in the last months, but now it’s kind of spiking again. It was a great journey, and it was, in that sense, an inflecting point,
Discussion on Tech Landscape and Ecosystem Building
Ryan Davies: I think you covered a lot on your journey here, which is phenomenal, and I think you, like you just said, there’s so many external factors that come in things, you just can’t predict no one’s seeing a pandemic like that coming. I mean, like maybe some people had something on their radar that eventually was going to happen, but certainly, you can’t necessarily prepare among all the other things you’re doing as a start-up investor and everything for things along those lines. Maybe, you know, over your journey here, tell us a little bit about the evolution of the tech landscape from your perspective, maybe how you’ve seen it change for our listeners, you know, what kind of trends are maybe currently shaping the industry from both the start-up and the investment side. So basically, what we are seeing right now is that even though the market has been freezing a bit, for investors, we are seeing, you know, fewer start-ups or fewer good start-ups coming in with a good proposal and so forth, and for start-ups, what I have seen is that they were used to ask a lot of money with, you could say three slides and many investors even funds in which I was you know, even if they had you know, not product market. But if they had an I title or so forth, back in the day, it was easier for us to fund them. But right now, capital has been freezing, and valuations have gone to the floor. Maybe with the exception of, you know, precede, it has been keeping itself kind of afloat; it has been on top of conversations, and many investors are looking at it. At least here in Spain and Europe, many investors are beginning even if they were, you know, early slash growth. Stage investors back in the day now are thinking of getting into precede. So yes, I would say in terms of capital and funding this is how we are seeing this evolve and in the sense of creation of start-ups. I’m seeing more and more how this is called start-up mafias. Here in Spain, we have the CAV five mafia and the 20 mafias. Now and then the wall of mafia was recently acquired by the Liberate Hero. In this sense of this, the first employees of these start-ups are right now creating other start-ups or creating new VC funds that fund other start-ups. So this is very good for the ecosystem, and I would say that in the next years, we’ll be seeing how the supply is getting more and more traction, and yes, I think this is where we are headed.
Ryan Davies: I think you touched on something really important there, and I think you have a really unique perspective on it. As a founder, advisor, and investor consultant, you’ve kind of been on all sides of it, but it comes down to in each of those roles, you know, strategic consulting and collaboration and being able to build that ecosystem. I know you mentioned, Spain’s got some unique things that are happening there. So, I’d love to hear about that ecosystem specifically. Maybe we could start there, but also, just in this rapidly evolving tech landscape, how do you navigate those challenges of being able to build that ecosystem and really foster innovation through it?
Daniel: I would say I mean because everyone needs to do their part, right? So there is no one and no entity being able to bring everybody to the table, at least from now the government is trying, they are doing, you know, or at least national governments are trying, they are doing plans they are doing incentives and so forth but I think that the way to navigate those challenges would be to you know, coordinate across agents in that sense and focusing, for example in the deep tech industry, You need to coordinate the research centers and universities with the start-ups, and also the talent plus the investors and I would say that how we navigate this is I would say the only work is together and to be coordinated. So yes, I think we’re doing a pretty good job in the sense that AI, for example, is being regulated here in Europe, and it has evolved through consensus because we have come companies that may know or incumbent companies that want AI regulated, but you also have startups that do not want AI to regulate it. So, in that sense, consensus and doing things together would be the key.
Evaluating Startup Success and Adaptability
Ryan Davies: I like that kind of thought process, right? Is making sure again. The one-stop shop to bring it all together. I think you’re probably as close as it comes in terms of being able to kind of see it from all sides of the table but, you know, just like any sports team, any football team, everybody has to do their part. It’s the keeper, not also the striker who’s also, you know, playing good field, doing everything, you know, you’ve got everybody does their part and that’s what kind of builds to that success. Maybe again, you’ve got a very unique perspective in your journey about being able to evaluate potential success in a start up, right? Because, again, you’ve been a founder, and you’ve invested in them. So you’ve been on both sides, and then you’ve advised and consulted on how to do this as well. So do you have any kind of points that you would say, hey, this is how you could evaluate the potential success of a start-up or for tech leaders to reflect on themselves and say, am I going to be successful? This is kind of what the questions I need to answer here.
Daniel: That’s a good question. So yeah, allow me to explain to you an anecdote that may relate to how I answer this question. Last month, I was speaking with another fellow investor, and we were saying, or asking ourselves, how should we value it, assess all the AI start-ups that come to us with the newest model, the newest application, the newest, you know, layer in the sense of new things that we may not be able to get to know already because we are in many industries, we are in many verticals and the question was how can we tell a founder? OK. I’m going to invest in you if we don’t actually know the technology, at least at its finest, because we know AI, but we may not know the latest advancement, and the question came to us easily, that was, or the answer came to us easily, and that was to assess things as if technology was also mean and moved away from technology, and we focused on the problem that they were solving on how happy they were making their client on how good they compared to their competitors. In that sense, what I would say to any founder on raising capital for the start-up on developing a good product for a new market or even people wanting to join a start-up and not knowing which one to go for. I would say to focus on how big is the market and the problem that they are tackling and understanding how this start-up, this specific talent, you know, populating a start-up, is able to create something incredible to solve that problem. In that sense, I would say that what we have seen from my experiences and now at GCO Ventures is that great talent makes great solutions, and when the difficult times come, this talent knows how to readapt, they know how to find product market feed again. Product market fit is an expression that is becoming more and more famous because it reflects what is needed for a start-up to succeed. Product market fit means if a start up is getting into a new market that wasn’t created before, how is their product finding the right niche in that market? So up until you find it, your efforts should be in creating a great product, in talking to clients, in getting to testing hypotheses and so forth. So you get your ideas and justifications ready.
Networking and Connectivity in the Tech Era
Ryan Davies: I think that is just an incredibly critical point for listeners to kind of hear and understand. You can’t embrace that one enough in terms of being able to do that. And I know, again, the tech industry, especially the deep tech side of things, rapid changes, as we talked about, right? So, GCO ventures and yourself, how are you able to stay adaptable and responsive to these industry shifts to identify this product market fit and really understand what clients are looking for? Do you have some advice you’d give to tech leaders who are constantly going through this change of how to stay resilient and, again, really make sure that they do have the understanding that they need?
Daniel: I would say getting moving in that sense, being at events, being at conferences, talking to people in those events, and talking to people by LinkedIn. You know, if you see some article that you wanted to, to meet the author and discuss, you know,, write to them, get engaged. There is also the other side, so that creates a narrative, we could say persona in the internet that also, I don’t know if you know a lot about financial management in hardware companies, you know, write about it be open to people getting to you and you may be able to learn a lot from that same people that are asking you something. So, in that sense, being connected to the DK system is the best way. We have been seeing how these old silo companies are not working anymore. We are working right now on the interconnected wall in the, you know, we are speaking, me from Barcelona, you from the States. This is the new world. The best way to be connected to this new thing coming in and this new tech and innovations in the world is to be global and be able to contribute to this machine.
Conclusion and Future Engagement
Ryan Davies: I think that’s incredible advice that we could kind of almost close off on here because we’ve been going, I just looked at the time like, wow, this has been, this has been incredible. There are so many questions I still have to ask. So, first of all, I think we’re just gonna say, Daniel, you need to have your own podcast probably so we can get more of this message out because there are so many topics. If not, you have to come back and give us some more of this great information. I think we could drill down like ten different layers here on so much we’ve talked about on collaboration, that approach, consulting strategy. I mean, there’s just so much here to cover, and I’m so happy we were able to even just scratch the surface to get some of this information and some of these great points. I know we’re gonna have listeners that are gonna want more. So, in addition to the apps to come back, I want to make sure that they can get in touch with you in contact with you for our audience’s sake. What’s the best way to do that?
Daniel: So I would say LinkedIn. I would say I always read my invitation. So I would suggest that you write a small line on who you are or maybe what you want from me or if you just want to connect to bring me some piece of who you are in these few lines. I know that is a difficult thing to do. I try to improve it by the day. But yes, by LinkedIn, I always read my invitations and also answering to you, Ryan. I would be more than happy to come back whenever you want.
Ryan Davies: I love it. That’s great. There it is. We’ve got it now recorded. So I’m gonna be taking you up on that, Daniel. Thank you so much. Let you know, on behalf of all of our listeners here at TBR, I want to thank you, Daniel Gonzalvez, for this amazing podcast, beyond Investments, crafting strategies for corporate success in the tech era. I think again, like I said, we’re going to have you back again. So, thank you very much for your time today and for all of the wisdom you shared. Thank you.
Daniel: Thank you, Ryan.
Ryan Davies: Excellent and I also want to thank our listeners. You know, we can’t do what we do without you. So, until we meet again with another amazing TBR episode, I’m your host, Ryan Davies. Thanks, everybody. Take care.