A Verkada Investor's Playbook: Rob Ward on 25 Years of Growth Investing

Meritech co-founder and Verkada board observer Rob Ward on the lessons of a 25-year career in growth investing — the investments that actually compound, and why, in the end, it always comes down to the people.

This year at Verkada, we started a quarterly series we call Boardroom Insights: a fireside chat where one of our board members or investors sits down with our team to talk candidly about where the company is headed, what's happening across the broader tech landscape, and the lessons they've learned building and backing great companies. 

It's a chance for employees to learn directly from the people who've had a hand in our story and to hear an outside perspective on the road ahead.

This quarter, we sat down with Rob Ward. Rob co-founded Meritech Capital in 1999, one of the first venture firms dedicated exclusively to growth-stage companies, and over the past 25 years he's backed names like Salesforce, Snowflake, Tableau, Duo, Looker, Roblox, and NetSuite — work that's landed him on the Forbes Midas List multiple times. 

He's also been part of Verkada's story from early on: Meritech co-led our Series B alongside Sequoia in April 2019, and Rob has been a close partner to our team as we've scaled rapidly in the years since.

Ask Rob what makes a company worth a quarter-billion-dollar check, and he won't start with the financial model. He'll talk about whether customers are passionate, whether the team is hungry, and whether the market is undergoing the kind of shift that lets a new player run away with it. What follows is an abridged version of his conversation with our Executive Chairman.

Hans Robertson: You founded Meritech in 1999, right at the peak of the dot-com era. Can you tell us about that point in time, and how the firm has evolved since?

Rob Ward: Let me start by grounding everyone in what growth capital actually is, because it's different from traditional seed and early-stage capital. Growth capital is all about coming in once a company already has a product in market and has established product-market fit. The customers are already starting to purchase more, it's really taking off, and it's just a question of adding more fuel to the fire.

As a growth investor, we’re what I'd call an "and" investor. You have to have it all — the right market and the right product and the right team and the right customer validation and the right financial model. Early-stage investors can get away with being "or" investors. They're able to say, "I hate the team but love the product," or "love the team, hate the market, but they'll figure it out." That doesn't work for us. We need it all.

Back in the early '90s, companies would raise early-stage venture capital and then go public — there really wasn't another step in between. Then the big buyers of IPOs got bigger and bigger and stopped wanting these small transactions. You had this pulling apart of the IPO market and early-stage venture capital, and there was a hole in the market. That's what Meritech was formed to take advantage of. We created a firm, but we were also involved in creating the market.

Hans Robertson: How do you sum up what you're looking for as a growth investor?

Rob Ward: Our tagline is "market leaders in markets that matter," and that's a nice way to sum it up. Technology markets aren't like Premier League tables, where first place is a little bit above second, a little above third. It's orders of magnitude difference between the winner and the runner-up. You want to be in with the number-one player, and if you don't get the number-one player, you don't invest in that market.

And then "markets that matter" — you're coming in later and paying a higher price, so you really want this company to have the ability to go public. To make a company like that, it's got to have a market that's not only big but very necessary, and undergoing some sort of transformation that allows a new player to scale up rapidly.

Hans Robertson: What's the biggest lesson you drew from that dot-com period?

Rob Ward: Honestly, the first lesson is to forget about almost everything that happened in that period — it was that insane. For example we invested in one company, and a week after we invested, they closed on a sale of the company. Things were moving so quickly.

The more important lesson, after 20-plus years, is to be contrarian. That's really the way to succeed as an investor. That’s how you find opportunity and differentiate yourself. Back when we invested in Netezza no one wanted to invest in data and analytics - everyone thought Teradata had already won that market. Admittedly it's very hard to be contrarian right now because everything is so focused on AI, but that’s what every great investor should be aiming to do.

Hans Robertson: So how did Verkada fit into that thesis?

Rob Ward: The market you operate in – physical security – had been almost shockingly under-invested in. Even back in 2019, you could have a much better experience with consumer security products like Ring and Dropcam than in the enterprise. We'd talk to customers in diligence and they'd say, "Yeah, I sent my guy down to pull VHS tapes from the basement." 

Speaking of customer diligence, what stood out about Verkada right away — and what I'd argue has the highest correlation with long-term success — was your customer referenceability and customer passion. Verkada is right up there with the best, arguably even better on a relative basis when it comes to NPS. That was true at the time that we invested, and still is true today. 

We could tell there was real sensibility in Verkada's product — a lot of thought and focus, a lot of great design — and that the roadmap was ambitious. You add it all up, and it was a clear and easy decision for us to invest. By the way, we were also an early customer, so we appreciated that we got to use the product and experience how easy it was to use, too. 

Hans Robertson: Looking back over the last seven years, what surprised you most about Verkada?

Rob Ward: I'm still amazed at how well you navigated supply chain disruptions during COVID. We had a lot of other hardware-software companies that suffered terribly and had to do all kinds of unnatural acts to make it through. I was honestly amazed at how well the team navigated those curveballs to ensure that you were able to continue bringing your hardware into the market with remarkable speed during that whole period.

Something that maybe surprised some of the other partners at Meritech, but less so me, was around the team. I tend to back founders with real hunger — extremely hard workers who have very high ceilings — over founders with a blowout resume. I think that played out very well here – Verkada’s team had amazing credentials, but most important was that the team had the drive, the vision, and the ambition to go out and build a generational company.

Hans Robertson: You've been with companies that scaled well beyond where Verkada is today. What makes the difference between a company that’s valued in the single-digit-billions and one that reaches truly massive scale?

Rob Ward: The obvious answer for how you make it a monster outcome is the people. It's always the people. It’s why I always caution founders and teams to not let the hiring bar degrade. It gets harder and harder the bigger you get, but it's amazing how often hiring well solves problems. 

The other piece is to continue to be a learning organization. When you start very small, one really important ingredient is trust and communication, and it's harder and harder to maintain that as you scale. You need to be self-aware and critical, especially as a manager. And most important, you have to lead by example. The best leader I ever saw in this regard was Bob Brennan, the CEO of Veracode. Every one-on-one he had — direct report or skip-level, it didn't matter — he'd start with the same two questions: "What can I do to help you do better in your role?" and "How can I be better in my role?" He’s such a great example of a CEO leading with humility, breaking down walls, and making sure open and honest feedback is heard.

Then there's how you act on the feedback as you scale. With scale, complexity follows – and complexity is not your friend when you're trying to deliver superior results. So you push decision-making down, you empower people, and you do everything you can to make the business move at a faster cadence. Frank Slootman is probably the best example. His rules for scaling quickly are: first, raise the cadence of the business — asking your team: “instead of next week, how about tomorrow?” Next, raise the quality bar — insanely great or nothing. And last, focus on the few things that matter.

I know these are all “soft” skills, but the longer I've been in this business, the more I believe in them and how much culture matters. I've seen too many companies that get to the IPO and treat it like it’s the destination or "game over." The IPO is always just a milestone. An important one, but a milestone. If you want to build a truly great company, you have to be playing the long game.

Hans Robertson: There's a lot of talk that we're in an AI bubble. How do you think about this market cycle?

Rob Ward: It's a fascinating time. There are certainly similarities to the internet bubble — history doesn't repeat, but it rhymes. But there are big differences too. Back then, a lot of the incumbents were catatonic. Today, you've got NVIDIA, Google, Amazon, Microsoft heavily invested in AI. The private-market behavior, though, is eerily similar as far as urgency with term sheets and fear of missing out driving investments. 

But stepping back, the bigger point is that great companies still survive even dramatic cycles. Look at what came out of the internet bubble — eBay, Priceline, Amazon. Amazon's stock went down almost 90% but the business kept going, and look where it is today. Don't over-rotate on the idea that the world is going to end for the good companies. There will be a shakeout, sure. The companies that get in trouble are the ones building for short-term optimization instead of focusing on the long run. But great companies persist.

Hans Robertson: You mentioned preferring slope and hunger over pedigree — but that's a subjective judgment. How do you actually measure it?

Rob Ward: It's hard, and it's even harder now, because deals move so quickly. Traditionally, you got to know people over a period of time. I remember meeting a founder when they were right out of college and a little green. But then I came back three months later, and the difference in how they thought and articulated things was incredible and tangible. They ended up building a remarkable business and nine years later exited for north of $3B. I have countless examples just like this. 

So the way I've done it is to get to know people over time, really understand how quickly they learn and adapt, and ideally see how they handle a stressful situation. I never want to just meet a founder on every good day, because the hard days are where real leaders are defined. 

Want more Boardroom Insights? Read Mark Anderson's Playbook for Scaling Enterprise Tech.