John Backus knew right out of undergraduate that he wanted to become an entrepreneur. Backus is the founder and managing partner of the venture capitalist firm New Atlantic Ventures. Through his company, Backus now helps entrepreneurs with a “burning desire to win” in pursing their vision. WashingtonExec asked Backus if he agreed with rumors that the Washington, D.C. area is the future Silicon Valley as well as what markets he believes will continue to expand during this economic stagnant. Topics such as the importance of community outreach and the use of social media for small business were also discussed.
WashingtonExec: Please tell us a little bit about your background, did you always plan on becoming an entrepreneur?
John Backus: When I left Stanford as an undergraduate, I knew that I loved business, but had a ton to learn. Stanford was very forward thinking, and I was allowed to take entrepreneurship classes in the early 1980s. So while I knew that I wanted to be an entrepreneur, I also wanted to spend some time, first, learning about how businesses worked. So I went to work for Bain & Co and learned a wealth of information, hands on, about strategy and operations in a three year period. So I felt I was ready to be an entrepreneur when that first opportunity came knocking in 1985, to be the CFO of Bain Capital’s first investment.
WashingtonExec: I was reading the NAV News article about the D.C./NOVA area being the next Silicon Valley, what are some future predictions you have for your area?
John Backus: The DC area was the fastest rising star in the first wave of the Internet in the late 1990s, providing the plumbing for much of the internet with Network Solutions, UUnet, Corvis, MCI, PSInet, AOL and many many more. But with the telecom collapse of the early 2000’s, our star crashed, as all of the big internet companies in our region either went out of business, or were bought by an out-of-state company. We floundered in the “New Economy” over the last ten years, losing ground to Silicon Valley, New York, Boston and other places, as many of the best and the brightest returned to the Government sector after 9-11. But I do see a resurgence. I think LivingSocial is leading the way. It is a name brand company with a national reputation, and it was born right here.
I believe that the companies that will define the next wave of growth in our Internet Economy 2.0 will be in industries which touch the Federal Government through policy. Think education, health care, and security.
WashingtonExec: You are involved in a lot of outside organizations, including NVTC, NVTC TechPAC, Wolftrap, etc. Why do you think it is important for Executives to become involved in outside organizations?
John Backus: Two reasons. First is the need to look outside the windows of your office. We live in a Global community, where opportunities and threats present themselves in ways that are often hard to see in the day-to-day of running a business. Working with outside groups like NVTC gives me perspective on the world around me. Second, i think that once people achieve a degree of success, they should find ways to give back to their community. Being the Chairman of NVTC, Wolftrap, and the NVTC TechPAC helped me give back in ways I felt were unique to my skill set.
WashingtonExec: Your website, personal brand involves a lot of media (including blogs, interesting news articles), How important do you think social media and online marketing is for start-ups or small businesses in general?
John Backus: Small companies succeed by looking and acting bigger than they are. Social media and online marketing lets a young business project an image that is a step or two ahead of their business, in a way that conventional advertising would never permit. Social media lets you reach your end user inexpensively. It lets you hear unfiltered feedback directly from your users. It is a critical part of brand-building and company-building today.
WashingtonExec: You invest in future billion dollar companies, what is the next big market? Cybersecurity? Social Media? Healthcare IT?
John Backus: Social Media is a growing area, but has some strong players already. Tougher to break through there.
Education is ripe for disruption. The idea that each Fall, 4 million college students will trot off to thousands of classrooms to hear thousands of professors teach the same material from the same books in a fashion that dates back to Plato is outdated and ready to change.
Cybersecurity is an industry that is here to stay. Desktop antivrus software is outdated and just plain doesn’t work against new threats. The cybercrime industry today is bigger than the illegal drug industry. Which means the bad guys are beating our defenses. Opportunity abounds here.
And the new health care legislation is fundamentally disrupting a $2.6 Trillion dollar sector of our economy. I predict that inside a decade, company provided health insurance will disappear, just as pensions have disappeared in the corporate sector. In its place will be a health care equivalent of a 401K. Your employer will give you a health care account, and options to choose from. But you will design your own health care plan . Might sound scary, but it will turn all of us from health care “users” to health care consumers, where you are likely to ask your doctor, “How much does this cost?” And where she can give you an answer, by pointing to a price list on the wall of the office or online.
WashingtonExec: You meet with a lot of prospective clients, what qualities do you look when deciding to invest in a future entrepreneur?
John Backus: We look for someone with personal integrity, who has a burning desire to win, who works hard and listens well, who leads by example, and who is able to attract the best and the brightest to work for him or her.