A passion for tech: Isaac de la Peña speaks about dynamic innovation

Isaac de la Peña, General Partner of Conexo Ventures, describes the company as a bridge to Silicon Valley for Spanish and Portuguese innovative talent. A former Sloan Fellow at MIT, he opens doors to American markets for promising Iberian tech start-ups. We spoke to him about the tech ecosystems in different markets, and what it takes to succeed in such a dynamic and rapidly changing environment.

Your background is extremely varied – everything from Philosophy to Economics, Strategy to Leadership. Do you see an overlap in these disciplines, and have they shaped your approach to your career?

Good question! Philosophy has its foundation in science, mathematics, logic. From this I developed logical thinking, learned programming as a hobby, and spent ten years as a programmer.

 

I think creative people are found at the intersection of disciplines – lots of people who start companies have tried different things; for innovation and ventures, it helps. It gives you different approaches to try.

You led an innovation team at MIT, which developed a tool to improve HIV care standards in developing countries. Tell us about that project.

That team became legendary at MIT for bringing people together from academia and business. Scientists presented their innovations and the businesspeople joined them in looking at how best to commercialise them. This is something that The Collider is doing now, at a larger scale – a methodology came out of it that’s analogous to what Collider does.

 

The device counted certain blood elements that are predictive of HIV. It had no moving parts and was very cheap to produce. It’s highly motivating to know that you can do well and do good, and innovation is the ideal project field for that. It’s evolving into a whole field of impact investing, developing self-sustaining businesses that help people.

In 2007 and 2008 you led the MIT Global Start-up Workshop, which connects students, entrepreneurs and investors to accelerate the entrepreneurial ecosystem of their region.

At the time I was a visiting professor at MIT working on tech that later became ApplePay, GooglePay etc. This forum brought innovators together, and it interested me firstly because it was ‘grass roots’, organised mainly by the students, and secondly because it demonstrated how important networking is for advancement.

 

Get out of the lab or office, meet people. All calls and meetings are planned, and lack the serendipitous problem-solving potential of networking. There’s great value in bumping into somebody at an event or conference.

How does first-hand knowledge of technology help empower start-ups? Does it deepen your understanding of the sector’s entrepreneurial ecosystem?

Definitely. If you can’t speak the same language as the CEOs and entrepreneurs in the sector, how do you value a company or assess its potential? When I launched venture capital fund Inveready in 2010, much of the ecosystem was formed by bankers, not technologists. Good prospects were met not with passion and excitement, but blank stares.

 

With the right understanding you can see through the illusion of novelty and know when the tech knowledge is not there.

As somebody who’s been on both sides of the negotiating table, what advice would you give for effective collaboration?

The whole thing hinges on trust. Without trust on both sides, it can’t work. Try to leave the lawyers out of it as much as possible! Iron things out without focusing on what could go wrong.

 

In ventures, timing is everything. I was lucky enough to launch an educational platform for kids just as the first touch-screen interfaces were taking off. I could see that kids were clueless with computers but completely engaged with an iPad, consuming content that had been completely inaccessible to them.

You have first-hand experience of how FinTech, LegalTech and InsureTech are disrupting traditional industries. What are the most important developments today?

New ways of sourcing, structuring, mining and interpreting data. Big Data, Data Science and Machine Learning are fundamental now, allowing extraction and processing of data at scale. This has enabled the shifting of risk in a transaction. In advertising, for example, the platforms now know so much about the consumers that they’re prepared to share the risk, to guarantee certain outcomes.

 

And in the US, credit scoring was geared towards white people so people from other communities were being denied credit. Now start-ups are using ML to develop scoring systems for those communities. You hurt nobody and you’re enabling people; using technology to help people and still create a viable business.

At Conexo you work with entrepreneurial talent in Spain and Portugal. How is the start-up ecosystem in that region?

This is something I’m passionate about. I’m trying to give talented Spanish innovators the same opportunities that I had in the US, so they have access to the most developed markets without relocating. The Spanish market is small and, in sectors like finance, under-developed. We’re a bridge, connecting the best ideas and talent with opportunities elsewhere.

 

In Portugal, they started thinking globally and entrepreneurially from the start. There are more unicorns – companies valued at over €1bn – than in Spain. Thinking globally is the way to win. Look at the Lisbon web summit, for example. It’s a very powerful dynamiser or catalyser.

How is the development of AI changing tech-driven sectors?

It’s fundamental. It’s nothing more than the automatisation of human tasks, but tasks that need advanced cognition. The evolution of a process that started with robots, which build things like cars, bringing down costs and making them more accessible, now sees algorithms assessing the images of a car accident, processing the insurance claim and depositing the money in your account. Productivity gains for companies translate to ROI for investors. Everybody wins.

 

Of course we need to address the relocation of the jobs that are replaced, but tech is liberating humans from boring tasks and freeing their potential to be creative. AI is leaving us to do the things that machines can’t do, and probably never will.

What are investor funds looking for in aspiring tech entrepreneurs?

Passion. Innovation, entrepreneurship is romanticised. We downplay how hard it is: you could dedicate ten years of your life and be broke. Unless you have a passion, you’re going to crack. Not a passion for money but for creating something, ’making a dent in the universe’ as Steve Jobs said. You need to be passionate about innovation, want to change things for the better. Then the money will come.

 

Leadership skills. You can’t go it alone. You need to build a team, hopefully smarter than you. At the beginning it’s just issues and no resources. You must convey the vision; convince people to jump on board. It’s not as easy as it seems.

 

Knowledge. Experience of the sector, and understanding of its dynamics. You need to justify why, after 200 years of industrial revolution, nobody has thought of it before. You need a deep understanding of the industry.