Thursday, December 26, 2019
Reflections on 2019: Brett Brewer, Crosscut Ventures
Every year, at the end of the year, we share some reflections on the past year from our readers, entrepreneurs, venture capitalists, sponsors, and others in the local technology community. Today, we share the thoughts of Brett Brewer, co-founder and Managing Director of Crosscut Ventures (www.crosscut.vc). We'll be featuring contributions all through the holiday season.
What was the biggest news for you/your company this year?
This was a big year for Crosscut because we’re finally delivering on our promise of implementing a full-scale investing platform after 11+ years in business. Growing our practice from 3 original partners who would meet at coffee shops into a full institutional investing platform is a constant evolution. To build it, we’ve hired some amazing people, including Nick Kim, who is now leading platform development at Crosscut. So far, under Nick’s leadership, we’ve built sourcing and pipeline management systems, a portfolio growth and development platform, and a job board to serve the entire city named Interchange. Our goal is to build a platform that helps our companies achieve best practices as quickly as possible on their way to becoming world-class companies.
What new technology area, startup, service, or app did you find most interesting or useful this year, and why?
First, within our portfolio I am really excited about Wheels (Crosscut led the seed round at the end of 2018). Personal mobility and transportation innovation are absolutely massive issues for cities—especially Los Angeles—and we watch the categories closely. We went out on a limb in a competitive category with Wheels, and we did it because we believed in the founders. We’re presently on a roll and the team recently closed a large Series A ($50M+) lead by DBL in the Bay Area in August.
Second, this was a great year for the broader Southern California tech ecosystem. LA took a leadership position in five critical areas: health tech, content 2.0, mobility and transportation, space tech, and esports. These are all gigantic categories with hundreds of new startups founded each year. We are seeing companies that get traction in these areas move here from abroad and around the US because LA has proven its strength in these categories.
What was the biggest lesson you learned this year?
On a personal level, I learned the lesson I learn every year: people matter. I’ve been building technology companies in Southern California for 22 years and at the end of the day, the quality of the management team has the highest correlation to the eventual outcome of the business. Dynamic entrepreneurs attract talent and outside capital, both vital resources to every startup. You can have the best idea in the world with the fanciest board members and advisors but you need a world class management team to execute, iterate and ultimately navigate troubled waters. That’s the only formula I’ve seen that leads to successful outcomes with regularity.
And then there is the lesson of WeWork. The WeWork debacle revealed many things, but clearly showed that a path to profitability matters. The reason it happened? Well, you can muck around with the math when you’re a private company to make yourself look better than you are, but when you step into the public sphere, four plus four has to equal eight. Because it was so public and such a dramatic fall -- $47B to weeks away from bankruptcy filing -- it impacts the whole industry. We are more thoughtful than ever about our companies hitting meaningful milestones to attract further rounds of capital. If the music can stop for WeWork, it can stop for anyone.
What are you most looking forward to in the technology/startup world in 2020?
When I started my first company in 1997 during the middle of the dot com Gold Rush, there were 8-10 meaningful companies in the LA ecosystem. Twenty-two years later, the tech presence here has not only grown, but the city is now home to dozens of accelerators and incubators for startups. The LA technology scene has officially arrived! The thing I am looking most forward to in 2020 (and for the new decade as well) is seeing what amazing ideas come out of this new crop of home-grown companies.
Brett Brewer is a Co-Founder and Managing Director at Crosscut Ventures. Prior to starting Crosscut, Brett was a serial entrepreneur who built, operated, and sold a number of internet media companies including Myspace.com. In 1998, Brett co-founded Intermix Media, launching several online businesses and eventually selling the company to Rupert Murdoch's News Corp. in 2005 for $680M. After leaving News Corp., Brett became President and Vice Chairman of Adknowledge and eventually founded Crosscut with Rick Smith and Brian Garrett. He has been a featured speaker at numerous industry events including Bear Stearns Internet Roundtable, Goldman Sachs Internet Conference and the Montgomery Technology Conference. Brett received a B.A. in Business and Economics from the UCLA.