August 25, 2023
As a General Partner at IOVC, Shuo Chen invests in pre-Series A startups specializing in enterprise software, with a specific interest in the future of work. She also sits on the UC Berkeley College of Engineering and Singularity University faculty, focusing on entrepreneurship and the future of work. A former founder and Forbes 30 under 30 recipient, Chen's journey illustrates a powerful fusion of talent strategy and business alignment, underscored by her ability to leverage technology and foster growth.
Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley.
I recently sat down to chat with Shuo about future of work trends as part of my research to produce Season 1 of The Lever with Drew Fortin. This show highlights how the rise of artificial intelligence (AI), robotics, and Web3 will shift the paradigm of humans at work for the better. I wrote this article based on my notes and transcripts from the interview. You can also watch a video of my interview with Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley.
The Intersection of Entrepreneurship, Education, and Investment: Shuo Chen's Journey
Chen has had an impressive and distinctive career path. Her journey began as an entrepreneur when she ran a startup that provided curriculum and software solutions to some of the largest financial institutions and universities in the United States. This venture offered Chen invaluable insights into the intricacies of enterprise sales and corporate politics. It also allowed her to understand how to navigate these organizations' complex relationship networks.
The opportunity to share these lessons presented itself when one of her clients, UC Berkeley, invited her to teach on campus. They recognized the value of having Chen reveal what happens behind the scenes in the world of entrepreneurship. For the past decade, Chen has been teaching at UC Berkeley, primarily focusing on entrepreneurship and the future of work.
In a twist of fate, Chen transitioned from her startup to what she jokingly refers to as "the dark side" - Goldman Sachs. In this role, she was involved in traditional technology investment banking and worked on significant deals, including Google's acquisition of Motorola, a landmark $12.5 billion deal indicative of a shift between tech giant eras.
However, Chen's passion for startups led to her return to the space, this time as an investor. Armed with her first-hand experience as a former founder, she now guides budding entrepreneurs as they navigate the intricate world of enterprise data solutions and software.
Revolutionizing the Future of Work: A Visionary Approach to Digital Transformation, Automation, Hybridization, and Diversity
As we navigate the landscape of the future workspace, we all interpret the most thrilling areas in our unique ways. Chen, however, conceptualizes it through four significant pillars.
The future of work landscape breaks into these four pillars:
- Digital Transformation
The first pillar she emphasizes is Digital Transformation. This element focuses on integrating the latest technology into organizations to minimize mundane tasks and maximize engaging, innovative work. It's about optimizing efficiency and fostering an environment where creativity thrives. - Automation of Work
The second pillar is the Automation of Work. With automation comes a dual-faceted challenge. On one hand, it's about determining which tasks can be automated for optimization and streamlining. On the other hand, it's about figuring out how to best utilize the additional human hours that automation frees up. - Hybridization of Workplace
The third pillar is the Hybridization of Workplace. This moves beyond our traditional understanding of hybrid work as a blend of home and remote work. Over nearly a decade of investing in this space, Chen's focus has been on enabling geographically diverse teams to innovate together. This can be achieved through superior digital or in-person tools. For instance, Chen was one of the early investors in Boom Supersonic, a startup developing the current generation of supersonic jets to facilitate efficient travel and in-person meetings. Another example is her investment in Transcriptic, a startup that allows researchers to upload their experiments to underutilized labs, promoting a more efficient use of resources. - Diversity of Workforce
The fourth and final pillar is the Diversity of Workforce. This goes beyond the conventional understanding of diversity in terms of gender, race, neurodivergence, etc. Chen envisions a future where technology enables underrepresented groups, who may not have had access to education or training, to perform certain jobs well. These individuals can thrive in their roles with personalized training powered by technology.
"It's not just about diversity in the traditional sense of gender, race, disability, etc., but really thinking about what technology, what kind of new workforces traditionally underrepresented in the workforce do we have the ability to enable?" - Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley
These four pillars – Digital Transformation, Automation of Work, Hybridization of Workplace, and Diversity of Workforce – are not just about incremental optimizations. Chen is more interested in the foundational shifts that will allow us to work ten times faster or enable historically marginalized individuals to succeed in their jobs. This vision for the future of work is not just transformative; it's revolutionary.
Leveraging Technology and Human Skills for Success to Empower the Workforce of the Future
A couple of years ago, Chen started collaborating with the World Economic Forum in the San Francisco Bay area to inaugurate the Center for the Fourth Industrial Revolution (C4IR), focusing on cutting-edge technologies.
One consistent insight gleaned from her enlightening experience with C4IR is that regardless of the technology in question - be it generative AI or blockchain technologies, it is the cyclical nature of history. Every job displaced by technology often results in more jobs being created. The real challenge lies not in the displacement itself but in bridging the gap between job loss and the creation of new roles.
It's not so much about job loss as it is about acquiring new skills to adapt to a changing future. When Chen reflects on the types of jobs being replaced, they are often the more monotonous, repetitive tasks. Machines excel at these repetitive tasks, automating them efficiently, freeing up individuals to engage in more creative, relationship-building work.
Fast forward ten years into the future, Chen envisions a world where tedious jobs have been overtaken by technologies like AI, leaving people with more time to engage in creative pursuits and nurture personal relationships.
This lead to the question: What skills will the workforce of the future need to cultivate? Chen firmly believes in the value of inherently human skills. Relationship building, creativity, ethical judgment - these are aspects that machines cannot replicate. These are the skills of the future.
In the workplace, practical skills often overshadow the importance of human and social capital. "Who you know is just as important as what you know," Chen reflected. In an age where technology can provide answers to the unknown, the ability to establish connections remains a uniquely human trait.
"What technologies currently can't do for us is make new connections to who we know. So I think increasingly, particularly in my faculty role, I do a lot of this for my students at Berkeley, is thinking about how do you build network? How do you build connections? How do you build human relationships, genuine, authentic relationships with other people that will help you out in moments when you really need it?" - Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley
In her role as a faculty member at UC Berkeley, Chen emphasizes the importance of network building and fostering genuine, authentic relationships. She also advocates for developing decision-making criteria and a comprehensive framework for making decisions. Openness to iteration and adaptation is key.
Chen believes cultivating human connections and honing human judgment will empower individuals to navigate the ever-changing landscape of the future workforce with confidence and agility.
Preparing Students for the Future of Work with Lifelong Learning and Portfolio Careers
The student demographic at UC Berkeley is composed of approximately 40% graduate students and 60% undergraduates. The latter group is particularly youthful, born later than 2004. These Generation Z students have grown up immersed in the digital world, significantly shaping their interaction with their environment. Unlike earlier generations, these students do not rely solely on classroom instruction to form their worldview. Instead, they draw from a myriad of information sources, making education a multifaceted process.
Chen focuses on a few key areas when considering what to teach these students. The first concerns the future of work. A decade ago, students would graduate, transition into professional roles, and be expected to work with minimal continued learning. However, this expectation has drastically changed. Data from platforms like LinkedIn reveal that most workers now expect to continue learning post-graduation. This lifelong learning opportunity has become a crucial factor when choosing an employer.
Consequently, Chen emphasized that teaching should be less about imparting knowledge and more about fostering the ability to learn. She often places her students in real-world, chaotic environments to encourage them to make sense of complex situations. Interactive exercises, project and portfolio building are integral parts of this process, allowing students to demonstrate their accomplishments and growth.
Chen highlights the importance of understanding that everything is an iterative process. Unlike the traditional career path where individuals specialize in one area and build a career around it, today's workforce is increasingly embracing portfolio careers. Individuals are exploring multiple avenues simultaneously, often making them more committed, ambitious, and interesting collaborators. They are not confined to a single job but may engage in personal hobbies, side projects, or even serve on non-profit boards or other companies' boards.
"You really have to do effective exploration before you can do efficient exploitation. So you want to explore the world and understand what's out there. You want to be good at what the world needs before you can really exploit those skill sets that you're really good at and really go deep within a field." - Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley
These experiences allow them to connect the dots across various domains—an invaluable skill that Chen strives to instill in her students. Her classes at US Berkeley focus on leveraging side hustles or projects as tools for exploration.
Chen believes in the importance of effective exploration before efficient exploitation. Individuals need to understand what's out there, what they're good at, and what the world needs before they can exploit their skills within a specific field. She encourages her students to stay curious, adaptable, and agile in a rapidly evolving world, even when they've already developed an area of expertise. These, she suggests, are the core elements of successful learning and career development.
Balancing Knowledge and Human Skills in an Evolving Economy is Tricky
Chen brought forth an intriguing perspective on the ongoing debate about whether we are evolving from a knowledge-based economy into an idea-driven one. Her viewpoint hinges on how we perceive the structure of the organizations in which we operate. She asserts that while knowledge is undoubtedly important, its relevance varies across industries and geographies.
For instance, certain regions in the United States, such as Silicon Valley on the West Coast and Boston on the East Coast, heavily rely on knowledge workers, thus showcasing the prevalence of a knowledge economy. However, Chen pointed out that this isn't the norm. In many areas, often referred to as 'flyover states', the knowledge economy doesn't drive those local economies.
"We will decreasingly need access to advanced knowledge and technology if we have all we need at our fingertips. But increasingly what we will need more are these uniquely human skills that unfortunately not everyone is equally taught to be good at." - Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley
Chen posits that the future of work encompasses both technological and human challenges. The former necessitates solutions from knowledge workers skilled in technology, while the latter requires distinctly human solutions. These issues extend beyond the realm of knowledge workers and delve into the domain of human relationship building, presentation skills, and equitable access provisions for diverse economic participants.
While acknowledging the growth of the knowledge economy, Chen also questioned its overarching dominance. With the advent of generative AI, advanced knowledge and technology are becoming increasingly accessible and at our fingertips. However, Chen emphasizes that the rising need for uniquely human skills, which unfortunately aren't equally taught, cannot be overlooked. Thus, she presents a balanced view, agreeing and disagreeing with the concept of an expanding knowledge economy, highlighting the importance of both knowledge and human skills in our evolving society.
Chen challenges the notion that ideas will form the core of our future. She noted that Silicon Valley's tech-enabled start-ups can generate ideas at a pace far outstripping human capabilities. Take Jasper, an AI writing assistant who supported the writing of this article, for example. In the past, one needed to iterate their ideas for optimizing search engine results or marketing campaigns. Now, an AI platform like Jasper can simultaneously generate many ideas. What's more, it allows for the execution and testing of all these ideas to determine which yields the best engagement, stats, and returns.
This shift, Chen explained, has dramatically changed things. Previously, the best ideas had to triumph. Now, we can test innumerable ideas, run campaigns, and let data speak for itself. A truly good idea will reflect in superior campaign numbers. Consequently, Chen believes that the value of ideas has somewhat diminished.
Chen acknowledged the transformative effects of AI, like the devaluation of ideas, for instance, shifting jobs we consider to be 'white-collar' jobs into 'blue-collar' ones because they revolve around the 'doing' process. However, she points out that the difference often lies in uniquely human skills. For instance, an effective sales representative doesn't simply read off a script. They engage on a personal level, asking about the client's family, remembering important dates, and genuinely caring for their prospect.
"The way that we think about how technology plays a role in our lives, it is really to augment us as human beings. So to help us do things faster, better, and cheaper." - Shuo Chen, General Partner at IOVC and Faculty at UC Berkley
Chen emphasized that we, as humans, are often motivated to go the extra mile for those we genuinely like, even bending the rules for them. This, she insists, is what makes us unique as humans. She remains optimistic about a future where human connection retains its crucial role.
Looking years ahead, Chen envisions technology as a tool to augment our capabilities, making us faster, better, and more economical, freeing up time for activities we enjoy. She stresses that technology should never be designed to make our lives miserable but to help us achieve our objectives, considering time as our most precious resource.
Revolutionizing the Employee-Employer Relationship through Individual Strengths and Technological Advancements
Chen's perspective on the evolving employer-employee relationship is informed by her focus on investing in startups. She recognizes that technological advancements have made it easier than ever to be a solo entrepreneur. In contrast to earlier times, individuals no longer need to hire a team or invest in extensive hardware to launch their business. Today, anyone can create a website, initiate a paid marketing campaign, and start attracting clients as a full-time venture or a side gig. This ease of starting a business has significantly impacted the traditional employer-employee dynamic, as people realize they aren't bound to an employee's role.
However, Chen notes that this shift in power dynamics doesn't undermine the benefits of working in diverse teams. Despite the simplicity of operating as a 'company of one,' she acknowledges the value of collaboration. Working with others can compensate for individual blind spots and foster a richer pool of creative ideas.
Chen often engages with students and founders who express a clear understanding of their unique skills and interests. They seek to design their professional roles based on these attributes, seeking out relationships that accommodate their preferred working style. She notes that this dynamism in structuring work relationships has become more prevalent.
She illustrates this point with two contrasting examples. Some individuals prefer a traditional employer-employee relationship, thriving under direction and appreciating the ability to disconnect from work at the end of the day. Others, particularly those with a creative streak, resist micromanagement and prefer a role where they operate independently with support to overcome challenges. Chen observes that these scenarios are increasingly common in today's workforce across large corporations and startups. In her view, the spectrum of what's possible has broadened considerably in the modern workplace.
Freelance and Fractional Workers can Help Optimize Business Growth
Chen's perspective on the feasibility of building a company entirely on freelance workers is nuanced. She argues that the answer depends on numerous factors, such as the nature of the company, the product or service it offers, and the technologies it employs. For instance, if a company operates on a service-oriented, per-use basis where long-term relationships are not crucial, Chen believes it might indeed be possible to build such a company with only freelance workers.
However, she points out that in a business where deep personal interactions are important and high margins are at play, freelancing could pose challenges due to the need for time and relationship depth with employees.
Chen emphasizes this point to founders she works with, despite her investments being primarily in software. Founders have the flexibility to choose their target segment, either focusing on large quantities with lower margins or opting for a smaller quantity but with higher quality and margins. This decision often impacts the type of employees needed. Quick, one-time tasks may suit freelancers, but roles requiring in-depth knowledge and long-term commitment might necessitate full-time employees.
"One consistent thread we're seeing is founders who start their project or their startup as a part-time project or as a second-time project tend to be some of the best founders because they're super committed that they're willing to spend all this time outside of their full-time job to start building and exploring." - Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley
Chen also highlights the role of technology in reshaping work dynamics. With advancements like blockchain, it's easier than ever to become a fractional worker contributing to multiple decentralized autonomous organizations (DAOs) simultaneously. However, she cautions that governance structures need to evolve to accommodate these changes.
Moreover, technology has made it possible to work more hours than before, leading to scenarios where individuals hold a traditional full-time job while simultaneously developing a side project. Chen shares an interesting statistic from her research: founders who initially treat their startups as part-time projects tend to be among the best. They are extremely committed and tend to de-risk themselves by gaining more traction before fully committing to their startups. This pattern extends beyond startups to Fortune 500 companies, further underscoring this approach's value.
Aligning Talent with Strategy for Sustainable Growth and Success
Chen emphasizes that employment, like startups, tends to be cyclical. Initially, small companies and startups often rely heavily on freelancers. As these businesses grow and seek larger market shares, they tend to consolidate, leading to periods of mergers and acquisitions where large players dominate the market. Over time, these established companies find innovation challenging, paving the way for a new generation of startups and the cycle repeats.
Chen sees a similar pattern with fractional and at-will workers. Initially, many are drawn to the freedom and flexibility of such roles. However, as the number of these workers increases, many begin to crave the structure and benefits offered by larger companies, leading to a period of consolidation. Over time, these employees may feel stifled by too much process and bureaucracy, sparking a desire for more freedom and flexibility, thus restarting the cycle.
Chen also acknowledges that measuring performance is a complex task due to the unique nature of each business and individual. While common behavior patterns can indicate good performance across workforces, every individual has unique personal circumstances that can impact their performance. Therefore, it's crucial to have a flexible framework that attracts, retains, and develops talent while allowing individuals to grow at their own pace.
"There's this tough tension between 'a business has got to do what it's got to do,that' and its top priority isn't to help improve the performance reviews of its employees and individuals. But then you have this other tension where for individuals, their top priority is to maximize for their own learning and growth." - Shuo Chen, General Partner at IOVC and Faculty at UC Berkeley
There's a tension between business objectives and employee growth. While businesses prioritize their objectives, employees aim to maximize their learning and growth. If they cannot do so within one structure, they often move to another company that offers a more personalized structure for their success. Thus, when discussing performance reviews, Chen emphasized how essential it is to define what 'success' means - whether it's success at an organizational level or an individual level.
How to Evaluate the Value of a Human Worker
Chen underscores the complexity of evaluating individual performance in a company. Rather than assessing individuals on their unique traits, companies often focus solely on their outputs. She used the example of a highly skilled individual whose personal circumstances might temporarily limit their productivity. In such cases, companies may struggle to see the individual's potential, focusing instead on their current output.
According to Chen, individual success, particularly in performance reviews, hinges largely on communication and relationship building. Communication skills, which she believes are often undervalued in education, are critical for conveying the importance and progress of one's work to teammates, managers, and colleagues. On the other hand, relationship building involves viewing performance reviews not as isolated evaluations but as part of an ongoing collaboration to create a mutually beneficial work model.
From a broader workforce perspective and as we wrapped up our time together, Chen pointed out the need for startups to go beyond traditional data sources to understand where they can achieve maximum productivity. This approach requires innovative thinking and a different perspective on problem-solving. Thus, while individual and workforce evaluations both hold validity, they require distinctly different approaches.
Want to hear more from Shuo Chen, General Partner at IOVC and UC Berkeley Faculty?
- Catch Shuo in episodes 3, 4, and 5 of Season 1 of The Lever with Drew Fortin.
- Watch my full-length interview of Shuo Chen, General Partner at IOVC and UC Berkeley Faculty on YouTube.
- Follow Shuo Chen on LinkedIn