00:00:00 – 00:00:08 Nitin Bajaj

Hey everyone, welcome to The Industry Show. I’m your host, Nitin Bajaj, and joining me today is Arun Penmetsa. Arun, welcome on the show.

00:00:08 – 00:00:10 Arun Penmetsa

Thanks for having me, Nitin. It’s great to be here.

00:00:11 – 00:00:14 Nitin Bajaj

Great to have you here. Let’s start with the big question: who is Arun?

00:00:15 – 00:00:33 Arun Penmetsa

Yeah, so I was born and raised in India. I’m based in the Bay Area now. I have two young kids, married to a great woman, and I’m a partner at a firm called Storm Ventures. I can talk more about it, but it’s a fund based out here in the Bay Area. So I would say that’s me in a nutshell.

00:00:35 – 00:00:48 Nitin Bajaj

Very humble, very sharp, very quick. Let’s talk about Storm. Give us a sense for what is it, the size and scale, the impact primarily, and also how you found your way into Storm.

00:00:48 – 00:01:02 Arun Penmetsa

Sure. So Storm Ventures, it’s an early-stage, B2B-focused fund. The firm itself has been around for quite some time, about 25 years. I joined in late 2014, so I’ve been there for a little over 11 years.

00:01:03 – 00:01:16 Arun Penmetsa

So the firm has focused, at a high level, on what we call building enterprise leaders, so businesses that sell to other businesses, and that’s what we focus on investing. We’ve invested through six funds. We’re in Fund 7 at the moment.

00:01:16 – 00:01:29 Arun Penmetsa

Fund 7 is a $230 million fund. And I would say the ballpark of fund sizes have been between 100 and 250, so somewhat on the smaller scale, especially given the funds that we see out there today.

00:01:31 – 00:02:00 Arun Penmetsa

We invest across the B2B software space, everything from infrastructure, cybersecurity, go-to-market tech, all the way to verticals like healthcare. And generally, our goal is to take young companies, typically very early-stage, seed and egg, and help them unlock what we call unlock growth, so really help them transition from when the founders are selling, really building out the early part of the product, to figuring out their go-to-market and then scaling it, and really making that process repeatable.

00:02:00 – 00:02:11 Arun Penmetsa

It’s a relatively small team. We have five partners. Most of the team is based in the US, and we have one in Korea. But the team has always stayed small. So that’s us in a nutshell.

00:02:12 – 00:02:30 Nitin Bajaj

That’s amazing. One, kudos on the continued success and growth. And I’d say relative is a short term. A $230 million fund is pretty sizable, and you’re able to drive a tremendous amount of impact. And you have some stellar companies in the portfolio, so congratulations on that.

00:02:30 – 00:02:30 Arun Penmetsa

Thank you.

00:02:32 – 00:02:53 Nitin Bajaj

Now, amongst the many things we are all facing with the dynamic markets and things that are changing, a lot that has come in primarily in the portfolios you look at with AI and how things are evolving, many challenges. What’s the one that’s the one you would want to call out?

00:02:54 – 00:03:06 Arun Penmetsa

Yeah, I think this is both an opportunity and a challenge, especially given everything that’s happening with AI and the infrastructure that we have available to companies today. Just the pace of innovation and change is so high.

00:03:06 – 00:03:25 Arun Penmetsa

And this is both from the perspective of newer companies that we look at to invest in, and just what they are capable of is changing so quickly, but also our existing portfolio, right? Like some of these are older companies. They’ve built substantial businesses. And in some cases, they have to re-architect themselves to leverage everything that’s out there.

00:03:26 – 00:03:44 Arun Penmetsa

So I think that’s sort of a balancing act. And that’s, I would say, a challenge, but also an opportunity, right? Because the companies that can get it right have enormous potential. And it’s something we spend a lot of time with our companies on, and we also think about as we invest in as we look to invest in newer businesses.

00:03:44 – 00:03:53 Arun Penmetsa

And I don’t think this is unique to Storm. I think every investor and company and founder is grappling with this at the moment.

00:03:54 – 00:04:10 Nitin Bajaj

It is challenging and exciting times, but I say, you know this is super amazing to be alive and being in the thick of all of these things as they are happening in front of us. And you have, I guess, the front row seat to all of this action.

00:04:10 – 00:04:36 Arun Penmetsa

Yeah, yeah. It’s definitely very exciting. I think even from a personal knowledge and learning perspective, right, these tools, obviously, they impact our companies and how we invest. But there’s so much you can learn as an individual, right, whether it’s optimizing or improving the way you invest, but also there’s topics that would require significant time and effort before to put into or to get up to speed on.

00:04:37 – 00:04:53 Arun Penmetsa

That’s, I think, one of the most powerful reasons why the AI wave has done so well is because, as consumers, we can see the value. And if you’re using these tools and platforms in our daily lives, we expect that we should be able to use them in the enterprise as well or in our workplaces.

00:04:53 – 00:05:19 Arun Penmetsa

Obviously, there’s more complexity when it comes to work. These are bigger companies. You worry about reliability, governance, security. Consumers, depending on the use case, can be more forgiving. Like if you have a badly formatted email or something goes wrong, you can control it. But when a business delivers a good or a service, you can’t really have mistakes. But I think that’s what makes it so exciting, right? Like it’s just fundamentally changing how we work.

00:05:19 – 00:05:45 Nitin Bajaj

So true. Now, as we gaze into the future, I’d love to take a moment and pause and reflect. And I’d love for you to share two moments from your personal or professional life, one where things did not work out as you had expected. There was disappointment, failure, lessons, and another one where things exceeded your expectations and became a success beyond your imagination.

00:05:45 – 00:06:14 Arun Penmetsa

Yeah. I mean, the success, I’ll give you a personal example. I mean, for me, it’s you know and this is maybe true for a lot of people, it’s just my children, right? It’s such a joy to see them grow. I have two young kids, you know still relatively young. They’re 10 and 7. And just seeing them evolve and grow from being little toddlers to now the older one will be a teenager soon, I think that’s probably like the most fun part of my day-to-day life. So I think that’s probably one I would pick.

00:06:14 – 00:06:54 Arun Penmetsa

I think disappointment is interesting. I’m thinking more about companies that we thought had a lot of potential but didn’t work out for one or the other reason. I mean, I probably won’t name names, but we’ve had a handful that had enormous potential with fantastic founders. And I think it’s especially disappointing when things happen sort of outside of your control, or maybe there’s something you could have foreseen but didn’t foresee markets change, regulation changes, and you felt like there was an opportunity to build something special here, and it just didn’t work out. So I think that’s probably the most disappointing from a professional perspective.

00:06:55 – 00:07:22 Arun Penmetsa

It also can be quite emotional because we tend to work with these companies when they are very young, in terms of the age of the company. And as much as it means for us, it means everything for the founders, right? I mean, we have a portfolio, fortunately, so there could be a balancing of emotions. One company is doing well, something else is not doing well, but it’s everything for the founders. And we try to be aware of that. But that’s probably where, I would say, is disappointment, maybe in some cases.

00:07:23 – 00:07:32 Nitin Bajaj

Yeah, that’s a tough act to balance that. How much do you go after and continue to hold and persist? And when do you say it’s time to move on?

00:07:32 – 00:07:33 Arun Penmetsa

That’s right. Exactly.

00:07:35 – 00:07:44 Nitin Bajaj

Now, something lighter, change of tracks. What do you do for fun? I mean, you obviously talked about your kids, and I’m thinking that’s one of it. What else?

00:07:44 – 00:08:13 Arun Penmetsa

Yeah, I think outside of work, my life mostly just revolves around the kids, their activities. You know we like to spend time hiking as a family, so we do some of that, playing board games occasionally. Especially with the older one, it’s interesting, given that he’s at the age where he can understand the kind of work I do and some of the things that are happening. And by the way, this is another area where AI can help a lot, right, is bringing him up to speed if he’s interested on topics that we can discuss.

00:08:13 – 00:08:27 Arun Penmetsa

So I think that engagement and relationship has changed a little bit. We obviously want to try to keep them kids for as long as we can. You only grow up once. But most of the time is spent on that, you know activities.

00:08:27 – 00:08:41 Arun Penmetsa

All of us as a family, we play tennis, my wife, I, and our two kids. The younger one is quite not there yet to have rallies, but the older one can. So that’s actually a fun activity we try to do when the weather is warmer. But yeah, those are some things that I do, I would say, for fun.

00:08:41 – 00:08:47 Arun Penmetsa

Yeah, so besides, honestly, work and family, there’s not much time for anything else.

00:08:48 – 00:08:49 Nitin Bajaj

That’s a great place to be in, though.

00:08:49 – 00:08:51 Arun Penmetsa

Yeah, yeah, I think so.

00:08:52 – 00:08:54 Nitin Bajaj

Is there a book or a podcast that’s your favorite?

00:08:55 – 00:09:27 Arun Penmetsa

A book I like, and this is not this is common. I think people will know about this, is I like the book called “The Score Takes Care of Itself” by Bill Walsh. And I think it’s a sports book, so it doesn’t apply to startups. I mean, it applies to startups, but not directly. But I think it’s a great lesson on how thinking about how you improve a little bit every day can have such a significant impact over time, you know just the power of compounding. And the book uses football as a mechanism to demonstrate that.

00:09:28 – 00:09:49 Arun Penmetsa

It’s actually not it’s a pretty easy read. And I think it encapsulates a lot of what makes companies successful. Obviously, there’s wild swings these days with AI companies and how quickly they can grow. But if you think about sort of more traditional businesses that have been built over time but are quite enduring, I think it’s a good book that represents that.

00:09:50 – 00:09:51 Nitin Bajaj

Great. Thanks for sharing that.

00:09:52 – 00:09:52 Arun Penmetsa

Yeah.

00:09:53 – 00:10:00 Nitin Bajaj

Now, onto my favorite part of the show. We call this the one-line life lessons. Arun, I would love for you to share your life lessons with us.

00:10:02 – 00:10:22 Arun Penmetsa

Yeah, I don’t know how unique these are. I think the first thing I would say is just be curious. One of the benefits of living in this time is we have access to pretty much the world’s data at our fingertips. And I don’t think there’s ever been a better time to learn and pick up something new or experiment.

00:10:23 – 00:10:38 Arun Penmetsa

In fact, you know it’s an interesting topic that you know sometimes we talk about at home is, you know how do we prepare kids for a future where things are changing so quickly? Like can’t even imagine what happens like 10 years from now when they are you know getting into college or something like that. But I think if you’re curious.

00:10:38 – 00:10:39 Nitin Bajaj

Getting into college, right?

00:10:39 – 00:10:50 Arun Penmetsa

Yeah, exactly. Oh, yeah, right? I mean, what does college look like at that point? But I think if you’re curious and you’re adaptable, I think that will go a long way to preparing you for whatever that future holds.

00:10:52 – 00:11:16 Arun Penmetsa

The second thing I would say is it’s probably a cliché, but this is a great time to build, right? I think AI and the vibe-coding tools have made it possible for people to just create things that maybe just wasn’t possible because of expertise or time or money or whatever the reason was before. And I think one of the best ways to learn about where the world is going is to just take part in it yourself in some small way.

00:11:18 – 00:11:36 Arun Penmetsa

You know we have family members and friends where like you know people in their 70s are like building things and playing around because then they have some time now to do this. So I think that would be my second thing is just experiment. The bar for experimentation has never been lower. And I think it’ll continue to get lower. So I think that’s maybe another one.

00:11:36 – 00:12:08 Arun Penmetsa

I think the third thing probably is maybe just to do with family, like you know spend more time with your loved ones and family. You know as the saying goes, you know the days are long, but the years are short. It’s just shocking. And I think all parents will relate to this is how quickly the kids grow up. And it’s easy to be hyper-focused on one thing, whether it’s work or something else. And there are reasons to be hyper-focused. You’re doing something meaningful. But yeah, the years go by so quickly. So that would be the third thing.

00:12:09 – 00:12:46 Arun Penmetsa

I’m trying to think about what else. Yeah, I mean, it’s a version of what I said before, you know have fun, enjoy the journey. I think for me, you know working with startups and founders, it can be all-consuming, right, which is true for a lot of professions. But you know you can spend as much time as you want on it. There’s always more companies to meet. There’s always new things to learn about. But I think it’s important to have fun and enjoy what you’re doing. Otherwise, it becomes a chore. So that’s probably four. I don’t know if I have a fifth one, but those are some, I would say, probably similar to what other people have said. But that’s at least ones I think about.

00:12:47 – 00:13:06 Nitin Bajaj

Arun, thank you so much for sharing your journey, your story, and your life lessons. Really appreciate it. And you know I really love your very unassuming, very approachable style and the clarity that you bring with you. So thank you again for doing what you do. Really appreciate it.

00:13:07 – 00:13:09 Arun Penmetsa

Thank you, Nitin. Thanks for having me on. And it was a great talk.