Michael Schutzler, CEO of the Washington Technology Industry Association (WTIA), joined Cascadia Report for an inspiring conversation about the tech industry in Washington and the Pacific Northwest, and the value of mindfulness and personal growth.
Michael describes himself as an ‘entrepreneur, engineer, science geek, and first-generation immigrant.’ Before joining the WTIA, Michael led the merger of Livemocha with the popular education software company Rosetta Stone. He also built Classmates.com into the first profitable social media application, transformed online marketing at Monster.com, and grew the online gaming business at RealNetworks to become a global leader.
He teaches part-time at the University of Washington Foster School of Business, serves on several boards, and is an investor in Blue Canoe, Flowplay, YouSolar, Moment, 9 Mile Labs, Alliance of Angels, Keiretsu Forum, and Flying Fish Ventures. As a successful Internet entrepreneur, lead angel investor, and veteran executive coach, Michael has personally invested in thirty companies, served as coach and advisor to more than 100 executives, and has raised over $100M in private and public financing.
Schutzler was named CEO of the WTIA in 2013. It’s been a busy 7 years for the organization, which has seen rapid growth in membership and funding. I started by asking what he enjoys about the day-to-day of the job.
“No day is the same as yesterday. So much variety, so much complexity. It's fabulous. It's a very wide church. There are more than 10,000 tech companies in the state of Washington, and roughly 8,500 of them have less than twenty employees. There are giants like Microsoft and Amazon and Expedia, lots of big companies that people know. But there are also thousands of small companies that are hoping to be the next Expedia, Amazon, Microsoft, Uber, etc.”
It’s immediately apparent when talking with Schutzler that he is incredibly passionate about his work and the community that the WTIA is so close to. With an impressive resume of experience as an entrepreneur, memberships of numerous boards, and leadership roles in the technology industry, I asked him how he felt his journey had led him to the WTIA.
“I think there's an element of inevitability to it, and to some degree, it's just pure accident,” says Schutzler. “The accidental part of it is I had no actual interest in running a Trade Association. I was never a member of one. I wasn't sure there was any value in one of these things.
After the sale of the last company that I ran [Livemocha acquired by Rosetta Stone], I had some free time to think about what I was going to do next. I got on a motorcycle and rode around the Pacific Northwest and Southwestern Canada and wanted to go explore parts of the region that I had read about but hadn't experienced firsthand. I was doing that for about three months. The board of the WTIA reached out to me asking me to make an introduction to someone in my network that they wanted to try to recruit.
So, I called her, and she said, “I want nothing to do with that.”
She was running a huge non-profit in DC and this was small potatoes for her. So, I told them she didn't want to talk to them, but I was curious about why they were pursuing her, and what they were trying to accomplish. They told me that the trade association had been around for - at that time - roughly thirty years. It had petered out and just kind of flat-lined and there's nothing new happening. They were wondering whether there was a need for a trade association. They wanted a reboot of the whole thing. They wanted someone to either turn it around and make it great or figure out how to shut it down gracefully in a couple of years.”
It was at this point that, as Schutzler puts it “the accident and inevitability intersect” and the opportunity presented itself to him at the right time. While the obvious candidate for a role such as this might come from a non-profit background, he saw the potential value from his own experience within the technology industry.
“Why wouldn't you just recruit somebody from the industry? This is an industry trade association, so why wouldn’t you recruit from the industry? They told me that they wanted somebody that understands non-profits and public policy, but I've run companies, I've got a big network in tech. I could pick up the phone, call them all, and say, ‘I'm building a trade association. You want one?’”
It was completely by accident. They started to interview me and the next thing you know, I was seriously being considered for the job. There was a vote of a forty-member board at the time and I won by one vote. The board was split because the other candidate was a traditional non-profit executive that had run a trade association before, but they picked me because I had an industry background.
There's an inevitability to that because I've been doing start-ups and turnarounds my entire career, and this was just another. Also, it was in the tech industry, which is what I was serving, even though I’m technically running a non-profit. I'm serving an industry that I grew up in.
I literally contacted one hundred companies and sat down with them and said, ‘we're making a brand-new trade association. What do you want to do?’ I've been here for seven years now trying to continuously answer that question.”
In the process of answering that question, Schutzler has overseen a period of prosperity and growth at the WTIA, with the organisation going from 13 to almost 60 employees today. In that time the organization’s budget has exploded from around 2 million to over 20 million in the same timeframe. I asked Schutzler what he attributed the success to, and what the vision is for the future.
“We asked a hundred companies what they wanted from a trade association; they all said the same thing. It's interesting - it was the exact same answer from Microsoft as it was from a two-person start-up. ‘Help us get talent, find us people.’ So that was universal. I was really worried at first, when I was having this conversation with companies, that there is a segmentation in the tech industry. Do the gaming companies want something different from enterprise software, do they want something different from online retail? What do these different companies want? Well, it turns out they all have the same problem. They don't have enough talent. That became our ‘North Star’ and it pushed us to do a series of experiments, to understand how to address that challenge.
For small companies, the biggest issue they're grappling with is because they're only hiring a few people, they don't have a real volume issue. They have an issue attracting and retaining the talent away from other companies, big ones. The biggest thing they need to do is a world-class set of benefits beyond cash and stock. And so, we put together health care programs and a 401k program - lots of programs that have evolved over the years - specifically designed to meet the needs of small tech companies with less than fifty employees. We started with dozens and now we have almost 500 companies that we do that for. We provide healthcare and retirement benefits for pushing 15,000 people.
So, that's one way the budget grew, because we created a set of services that met the needs of the small companies. Rather than just being a service company, the reason it works is that we essentially set up a co-op. We have purchasing power because we have 500 companies, and then we'll negotiate a healthcare contract on their behalf. I've got 15,000 bodies that I'm serving as opposed to five. So, we're in a much better negotiating position than start-up business.”
That keen understanding of how business works and the realisation that the power of an organization like the WTIA is in its members has been key to the rapid expansion of the services they can provide to companies in Washington. Schutzler also leverages his considerable experience working within the industry - he knows the problems tech businesses in the region face and has gone about addressing them.
“The other area we did lots of experiments in was in recruiting and curriculum development for schools and trying to help fix the existing pipeline. We realized this is not a twenty-year problem, it's longer. Maybe a 200-year problem. Solving this problem is really hard. But there's a concurrent issue in the shortage of talent that's even bigger of a dilemma for the tech industry. Roughly eight out of every ten people showing up for a job interview is a white guy, they have difficulty recruiting and even more difficulty retaining women and people of color.
We experimented with a program to find the talent that isn't in the traditional pipeline. We created a tech apprenticeship and that mushroomed from a couple of companies doing an experiment in Washington to seventy companies across twelve States. That's not going to stop anytime soon. It's just going to be epically huge because there's a value again, in a co-op.
It turns out that a software developer for a bank is very similar to a software developer for Microsoft, or a software developer for Amazon, or a software developer for Google. And Costco, Nordstrom, Alaska Airlines, JP Morgan Chase. It turns out Harvard and MIT are customers, too. Because those schools producing some of the brightest best students in the universe have IT departments, and they have difficulty recruiting talent as tech companies do. So, we're serving them, too. It has become an epically giant opportunity that we're trying to solve. A $25 million budget isn't scratching the surface. This thing is a multi-hundred-million-dollar problem that needs to be solved.”
As one of the leading voices in the tech community in the Cascadia Innovation Corridor, and someone with real-world experience of being on the ground, I was keen to get Schutzler’s insight onto what the landscape looks like now that working from home is the ‘new normal’ as a result of the COVID-19 pandemic.
“Human beings are pack animals; we like to be in groups. There is a need and a want to collaborate in person, so that's not going to go away. I'm not predicting a future of online-only work, but online primary for sure. companies in our region have already moved quickly to adapt to the notion that having a requirement that you collaborate in person is counterproductive. There is a higher level of productivity and efficiency in not forcing people to commute to collaborate. Even in the tech industry, tools like Zoom, and Slack, and Teams, etc. had not seen a lot of adoption, but as a result of COVID, everybody's getting used to these tools and everybody's discovering that they’re awesome. Many companies are already shrinking their footprint to serve employees.
There’s also an amazing side benefit that's now becoming obvious. If you don't force people to relocate and you allow them to live where they live and now, they're collaborating, I can recruit from anywhere. My most recent hires are not in Seattle, they are elsewhere. We don't care where they live. And if a non-profit can do that, imagine what a large company can do. And so, we're seeing that shift take place dramatically - recruiters are now able to recruit from anywhere without the constraint of relocation.
This is also true of the schools that teach computer science. We're finding community colleges who had so much difficulty finding an instructor to show up at certain class times at their community college, to teach the handful of students that were in their area. They are recruiting instructors from all over the country to teach classes, which are online-only, with students that are not just in their area, but anywhere. So, training has changed, recruiting has changed. The footprint of how we operate in this industry has changed.”
It is a shift in the industry that had long been predicted but has only been accelerated now. While big corporations are often slow to change, some of the biggest have been forced to adapt quickly.
“Some of the tech companies we worked with over the last five years were unwilling to change any activities at all [when it comes to working remotely] but now these behaviors are completely normal,” says Schutzler. He also predicts a return to physical workplaces will happen but as a ‘secondary’ way of working.
Outside of his professional career, Schutzler is an endurance athlete and has taken part in many competitive events. Most recently, he completed the Seventy48 - an open-ocean race over 70 miles in 48 hours that must be completed by human power only. Schutzler completed the race in 2019 in just 18 hours. I wanted to find out what that experience was like, and how important it is to have an outlet like that outside of work.
“My professional choices have required tenacity. One of the reasons I still train and compete in endurance races is because it teaches me something about my boundaries and how to break through pain barriers that are seemingly insurmountable. Seventy48 is 70 nautical miles. So, it's roughly 77 regular miles from Tacoma to Port Townsend, and it was ridiculously difficult to do. I learned a lot about myself out there. It forces a discipline in training and forces a discipline in approach to problem-solving. It requires you to be focused on the moment — how do you deal with this, right here right now.
I find that translates naturally into an entrepreneurial experience. Even though technically I'm not an entrepreneur here, I was given a blank sheet of paper and I was asked to rebuild a trade association. So, it's very entrepreneurial, there's a strong connection to that experience.”
Aside from competitive sport, Schutzler also unwinds by practising Zen meditation, describing himself as a ‘Zen student’ he is also a Dharma teacher.
“This is a super stressful job. It's every bit as stressful as any of the start-ups that I've launched and, in some ways, more stressful because there's the complexity of more stakeholders. We've got 1000 member companies. I have roughly fifty-two people on boards that help us run this thing and a staff of roughly sixty people. That's a lot of stakeholders to try to get through. A lot of stress is involved in this job. For some people it's yoga, other people it’s reading, everybody has their version of that. For me, it's been Zen meditation. It’s been an essential part of me getting centered and knowing how to deal with the stress of the moment, and processing it.”
While the day-to-day of the WTIA keeps Schutzler busy, he also commits time to sitting on the Transformative Technology Committee for the Cascadia Innovation Corridor. The committee has identified blockchain and quantum technologies as areas that the Pacific Northwest can become global leaders in. We asked Schutzler why the Steering Committee identified those technologies in particular, and what role he sees the technology industry playing in the economy of the region in the future.
“Quantum computing is really poorly understood - if at all - by the general public. Essentially the easy way to think of it is if you think computers are fast at making math calculations, quantum computers make computers look dumb and slow. Quantum computers can just do way more calculations super-fast. That leads itself to very interesting applications, especially in life sciences. Sequencing the human genome took a long time because we had slow computers. You could do it in seconds with quantum computing. Codebreaking, code creating, facial recognition, artificial intelligence, all those kinds of applications. They're much more powerful and much more useful if you have a very fast computing system.
It turns out that the Pacific Northwest has an overabundance of riches in this field of study. There are a couple of universities that are top-notch in this. Several companies in our area are some of the best in the world on this. Pacific Northwest Labs has made quantum computing a centerpiece. We have also a couple of large companies, well-known companies that are in this space as well. Microsoft is just one of many. There's a natural affinity among the universities, laboratories, and companies already. That was easy to connect, and it’s taking hold, and a great deal of shared progress, shared understanding, and shared learning has taken place. I think it's going to have a huge impact, but it's going to take ten to twenty years to fully realize that that's a longer-term. We're going to be the center of the world for it because it's happening here. It's not happening in other places.
Blockchain is similar. Most people think of blockchain and they connect it to Bitcoin. They might think of drug running, or of day trading and tulips if they think about the money to be made in it. But cryptocurrency is just one implementation of blockchain. Blockchain has a lot of other much more useful, arguably infinitely, more useful ways of implementing it. And two of those happen to be a really big deal for British Columbia and the states of Washington and Oregon. One of those is in agriculture. For example, blockchain can be used as a tracking mechanism to ensure quality control back to the root source of food. Whether you're talking about apples or blueberries or potatoes or cows or chickens, you can use blockchain as a mechanism to ensure that if there's a problem with the food in retail, then you will know exactly where the batch came from and you can take care of the root problem.
There are also companies in Vancouver and Seattle and a much smaller number in Portland that are already leaders for blockchain supply chain management; this region is number one in the world.
In terms of the impact economically, there's a giant job creation engine. What the internet did to industry over the last really twenty years or so substantively, you're going to see blockchain doing something similar. As blockchain really starts to ramp up and grow, so too will quantum computing. I think we're looking at a huge job creation engine, which therefore attracts private equity and government investment, creating more economic prowess from the region. There's a really powerful economic engine underway here.”
Speaking to Schutzler he is clearly at ease while also being impassioned about the subjects that are close to his heart. He speaks with an assurance that is somehow inspiring and calming in equal measure. As someone with a track record in founding companies, and leading teams to great success, I wanted to understand his leadership style and what advice he would have for other aspiring leaders in the region.
“Roughly thirteen years or so, I took a break from running organizations, and I decided to become a professional executive coach. I went and got training and I got licensed and I started coaching CEOs and senior executives at companies. The core of that training is you spend eight to nine-tenths of your time with your client listening and only 10 to 20% of your time do you say anything. The rest of the time, it's about probing and making them talk, which was really hard at first.
It's become an incredibly powerful shift in mindset for me in the latter part of my career, I apply it. Even if I'm not coaching somebody, if I'm working with somebody, I apply it now. I have found it to be immensely useful if you really probe and ask a lot of questions as if you don't know the answer. If you're leading an organization, you may very well have an answer. It might not be the right one, but you may have the answer that you think is good. If you approach it pretending you don't know, and you’re just going to ask what they think, what shows up often are much better ideas than you would have had in the first place. Because I have the position of power, I give them the opportunity to go do the thing that they think is a good idea, which is motivating and inspiring and empowering to people.
I almost feel like my job in leading a team is to release the creativity and release the effort that's bottled up behind their constraints, or their assumptions that they can't. I'll try to get them to do stuff that they're not sure if they can do. It goes back to the whole endurance athlete thing. I kind of spread that love a little bit, I’m like; ‘I know this is really hard, but I think you can do this.’ I think that's probably the best description of my leadership style and this really adjusted a lot. I was much more domineering and dictatorial when I was younger. I'm much more probative now.”
While it’s often a tricky question to answer, Schutzler is able to speak to a certain truth about leadership from the perspective of someone who has been on both sides of the coin. While we were on the topic of sage advice, I asked him what his three key takeaways from his journey were so far, and if he had any words of wisdom to impart to the Cascadia community.
1. Every single person you meet adds value, even a stranger poorly dressed on a bus. You just have to be paying attention.
2. All of us are much more capable than we think we are.
3. This was an epiphany I had recently because of the Anti-racism in Tech Pact we just launched. It's amazing to me. If a group of people can agree on what a future could look like and they're willing to work on it, it happens. When you get a group of people to believe in a future and they work hard on it together. It actually works.
“Don't be afraid to build a better world.”
You can learn more about Michael Schutzler and the WTIA here: https://www.washingtontechnology.org/