The first start-up Dayna Grayson was involved with, long before her venture capital days, was right on Grounds at the University of Virginia.
She was an undergraduate in the School of Engineering and Applied Science, and she’d taken a thermodynamics course from famed professor Thomas Hutchinson.
Like many UVA students over the years, Grayson volunteered for Hutchinson’s technology project, the Eye-gaze Response Interface Computer Aid, or ERICA. The computer-based system, invented by Hutchinson in the 1980s, tracked eye movements, originally with the goal of helping disabled people communicate. Stephen Hawking, the wheelchair-bound Cambridge University physicist, was among its users.
Over the years, hundreds of UVA students like Grayson worked on the project, and she said it helped her realize the potential of transformative technology.
“Thomas Hutchinson was a huge influence on me,” she recalled recently. “I was able to meet him in my first semester of my first year, in an engineering design course, and he ended up being my advisor and really integrated me into the ERICA project as well. That was a huge influence on my career – working on a startup early on in my academic life – and seeing that technology can be commercialized and could help people.”
Today, Grayson is the co-founder and general partner with Construct Capital, a venture capital firm based in Washington, D.C., that specializes in launching new technology-based startups.
She recently answered a few questions about her journey from engineering student to venture capital and about how the systems thinking skills she learned in school can apply to virtually any field.
Q: How did you end up in the UVA Engineering School?
I grew up just outside of Charleston, South Carolina. In school, I was always drawn to math and science, and I knew that I wanted to study something in college that was tangible, but not necessarily a deep science or math.
That’s kind of what drew me to engineering: it’s quantitative, but also something that produces real results in the world. But I love the arts also, and I minored in English literature at UVA to complement my studies.
What made you want to work on ERICA project as an undergraduate?
It was an incredible project, and it was my first time in a product management type of role. ERICA had existed for a long time at that point. But what had started as a communications tool for the disabled had also shown promise for uses in other areas, like lie detection for the government and eye-tracking for advertising studies. In my role, I had to understand this core technology and how it could be applied, and that meant understanding the data around it and its applications. It was a great foundation.
It also lined up with my interest in systems engineering. I always knew I wasn’t going to be a hardcore mechanical engineer designing systems, or an aerospace engineer designing rockets and planes. The physical design process wasn’t as attractive to me as the digital design process.
After those experiences, what were your next steps?
Well, right after school I went into consulting and did a project for a very large company focused on custom designing a leasing-and-loan program.
And then, true to form, I went into a product management role. There was some coding, but mostly I was responsible for understanding the product. It made me think about questions like: “If the core technology can do a lot of things, what’s the best match for the ecosystem around the product?” That’s my systems engineering training, which makes you think not just about the many ways a product might work, but also about its surrounding systems that it will be dependent on.
But I knew that technology was where I wanted to be, and I ended up at Blackbaud, one of the largest software developers for nonprofits at that time.
This was the early days of the Internet, in the early 2000s, and Blackbaud was growing rapidly. I had a first-row seat to the run-up of the company going public, and I got more exposure on the accounting and finance side. I had learned the product, and I was learning to evaluate a company from the top down, to understand what it takes to build a sustaining entity.
You went to school, then started in venture capital—was that planned?
If you’d asked me when I started my MBA at the Harvard School of Business, I would have said that I was going to go back into a product management role or a product role afterward, just maybe at a more senior level.
But when I was in business school, I was exposed to venture capital. I realized that having a technology degree combined with my experience would serve as what some venture capitalists call “operating experience.”
Startup investing is different than later-stage private equity investing. At the startup level, you really want to understand the product and the founders and the basic system of what the company is creating, but you really need to have that operating and technical background.
I thought, “I’ll just try this for a while,” and here I am 20 years later.
What advice would you give engineers on a similar career path?
Engineering is so important to a lot of technology careers, but in venture capital, it has been vital. It’s really hard to come into venture capital from just a finance perspective. You have to know what it’s like to build something and understand the day-to-day machinations of what can go wrong and what can go right.
It can be a “brownie or chocolate cake” problem. So, imagine there’s a problem you could solve, and then the company could easily make a chocolate cake. But maybe the founders are more motivated to build a brownie, even though the problems are harder. If you stick with the brownie, you might end up with a better product, long-term. That’s a product-first mentality instead of a finance-first mentality. That’s what systems engineers have.
I think entrepreneurs are born versus being made. If you have a passion about solving a problem through a product that you’ve developed or imagined, go do it. Go build that thing and solve some problems for people, and the rest will come.
That’s the advantage that the Engineering School has in the entrepreneurship world. They have people who know how to build things and to take on big, complex problems. That’s different than just saying if the financial model will work. It doesn’t matter if the margins and projections are great if people aren’t going to start using the product.
Especially as an undergrad, or as a post-doc or a researcher: take that time and do it well before you put the numbers in an excel spreadsheet.