Perhaps you’ve heard the famous African Proverb “If you want to go fast, go alone, but if you want to go far, go with others”. Our guest on this episode has gone far, but he’s also gone pretty fast. Yousuf Khan has been CIO for a number of high-profile startups, a couple of them quite notable in the automation space. His talent and vision led him to those roles, but his networking and outreach allowed him to excel. Now as Partner with an early stage venture capital fund, he advises both CIOs and startups on how they can work together to bring next generation innovations to market.
We learn quite a few insights from Yousuf in this discussion, including when it’s better to use artificial intelligence versus automation, how IT executives can prepare themselves to become CIOs, and why the CIO Group Therapy Dinners he started have not only led to better CIO decision-making, but better features in technology products.
Guy Nadivi:Welcome everyone. My name is Guy Nadivi and I’m the host of Intelligent Automation Radio. Our guest on today’s episode is Yousuf Khan, Partner at Ridge Ventures an early stage venture capital fund. Yousuf is also a former five-time CIO, most recently at Automation Anywhere and Moveworks, two well-known and high-profile automation providers. Yousuf’s unique perspective as both investor and practitioner in the automation space, makes him a highly coveted thought leader. And given the stepped-up adoption of automation due to the COVID-19 pandemic, we wanted to tap into his considerable insights and gain a better understanding of what senior IT executives should be aware of as digital transformations are accelerated for business resiliency, as well as competitive advantage. Yousuf welcome to Intelligent Automation Radio.
Yousuf Khan: I thank you so much for having me here. I’m really excited to talk to you. I know you had 17 other people that you wanted to have on this slot, but when you call me up at 2am in the morning and say you’re exceptionally desperate and you need that extra guest, I’m your man. So I appreciate being over here and thank you for having me.
Guy Nadivi: You were the first one to say yes, and we’re happy to have you.
Yousuf Khan: I don’t want to brag, but that’s how I roll. But thank you.
Guy Nadivi: So Yousuf tell us about your background and how you became a CIO in the field of automation?
Yousuf Khan: So first of all, you’ve made a very generous introduction. I think the long short summary is I’ve been a CIO and the first CIO of five companies. And that gave me the exposure to have a very broad mandate, especially if you’re the first technology leader for a company. When you’re looking at internal functions, you can look at it very broadly. And that allowed me to look at everything for business applications and cyber security, of course build out an automation strategy, look at data management and then also advise on go to market. And so my CIO experiences have really looked at those sort of functions and a little bit more. And after two decades of plans and operating, I decided that it was time for me to be able to aid the next generation of startups in enterprise software in my little way that I can having advised companies in the past. And so I decided to join a great firm in Ridge Ventures and looking to invest between three and 7 million into late seed and series A enterprise companies. And hopefully that will aid the next generation of companies, and hopefully I can be helpful in their journey.
Guy Nadivi: Something very interesting is that you founded a group called the CIO Group Therapy Dinner. I know that therapy sessions are always supposed to remain confidential, but can you share some details about any breakthroughs made by participating CIOs at these dinners?
Yousuf Khan: Very interesting question. And yeah, it was kind of a little bit of a joke, but it, as I like to say, I was the CIO of several companies and the chief dinner organizer for a number of CIOs in what I termed as group therapy. And that’s been going on for several years. It started on the back of me joining a company where I was having a real tough time with a specific initiative, which was pretty highly visible and highly critical. And candidly speaking, I felt a little bit out of my depth and wanted to connect with other peers. And I felt that going to large events was probably not the most useful way, at least for me at the time. And when I set up a dinner between two CIOs, myself and one other, 12 people showed up and discovered that a lot of us were having the same issues and we wanted to have those discussions. So over the years I organized those dinners now ranging in the several hundred, which were either sponsored by a VC or a startup. And the objective of those dinners was really to give candid feedback and have a candid discussion. And a lot of really interesting insights. I think first and foremost, I got to understand personally how to make better decisions as a CIO when it comes to specific initiatives, because I was able to learn the lessons from my peers. Second, I think a lot of the startups which wanted feedback. It wasn’t a pitching session. There was no PowerPoint. There was no presentations or even demos. It was a candid conversation between the founding team and the group of CIOs. Product feedback and I think some of the output and some of the features you’ve seen in some of the products that go out there was directly driven from some of those dinners. And I think probably the most important piece was there was a sense of pretty great camaraderie. I’ve been a big advocate for the CIO role, advising CEOs on their first CIO hire as well as being able to, and so part of that is also about sharing the lessons and being able to create a community. And I think those were some of the benefits that sort of came out of that. It largely was just a lot of fun. I continue to organize dinners even virtually now. And I think one of the things that I’ve learned is that you learn a lot from your community around you, and I think it’s something that we can all benefit from.
Guy Nadivi: Since you’re now on the investment side, let’s talk a bit about startups. The vast majority of innovation in automation, AI, and other digitally transformative technologies comes from startups, which can be challenging for enterprises accustomed to working with larger players. Yousuf, how should CIOs work with startups?
Yousuf Khan: One of the things that I’ve found in talking with CIOs has been that they are risk averse in some cases about talking to startups. They’ll happily take a meeting. In some cases, some will not take a meeting, but very few really want to engage at the early stage. I think I’ve definitely been on the opposite side of that having been a design partner of a number of startups. I’ve been early advisor, I’ve been an informal advisor to a number of companies. And so what the way I think CIOs should think about this is as follows. I think if you want to innovate at scale fundamentally and you’re trying to solve a problem in a very creative way, the high chance is that there’s a startup that is focusing on the exact same problem to a certain degree. And so therefore tapping into that with a very focused effort and collaborating and partnering on that is really beneficial for you, number one. Number two is by engaging with startups, it’s a very good development opportunity and professional opportunity for each of your teams and your direct reports. IT teams don’t get enough credit, and that’s why I’ve been such an advocate for the CIO role and mentor IT directors and IT managers. Being able to help even in the infancy of building out a product at an early stage and being able to say that, it’s a great exercise for professional growth. It’s a great opportunity for that. And it allows people to figure out and discover different skills. I think the third piece is that, I would go on to say make a resolution that you want to engage with one startup or two startups a year that you can choose. And that basically means that you need to basically spend a little bit of time connecting with VCs. And sure, I can say that from a vested interest standpoint and hopefully I can be helpful to my CIO peers, but I think being able to say, “Here are the one or two problems that I care about most, and I want to be able to talk to companies in this space,” and you’d be very surprised that you’d actually be able to see some very creative approaches. You haven’t got much to lose by being able to engage. And I think it’s a very, very good use of time. So that’s my recommendation typically.
Guy Nadivi: Interesting. Given your extensive experience Yousuf, where can automation be most useful to an organization and how can a CIO best lead that automation journey?
Yousuf Khan: So the most key thing that you’ve pointed out in your question is that it’s a journey. Automation is a journey in a company and people need to start that journey for a very good reason. Number one is the compute power is now available for us to be able to really be able to drive automation into our businesses. Number two, the data sets are now there. And number three, the innovation and the thinking is there, both internally and externally with companies like Moveworks and Automation Anywhere, which I’ve had the honor to work with in the past. And so understanding that is a journey is the first step. The second part is to be able to think about where you can get a very clear visible win, and that requires you to be able to spend time being able to think about your processes just a little bit more, and then being able to drive that further forward. Third, and probably most important piece is, when you think about RPA, you think about repetitive work and you’ve seen companies, and that’s why companies like Automation Anywhere have been successful, because they’ve been able to drive and deliver customer value consistently by being able to take repetitive processes and being able to completely reduce the human effort of them and automate them entirely. Moveworks has fundamentally been able to understand that you can apply powerful techniques, like natural language understanding and machine learning to be able to resolve IT support issues and IT operational issues in a very, very great user experience using messaging systems like Slack and Teams. And they’ve done that super well. And so, all of those started off in a journey by being able to understand a problem and framing that. Number two, being able to understand that you can do it differently. And number three, understanding that this is the start of the journey that it could basically lead on to. And that’s been pretty consistent with a lot of the CIOs I’ve spoken to as well as being able to look at the number of different solutions.
Guy Nadivi: Artificial intelligence and machine learning are becoming more common in enterprises, especially with all the digital transformation initiatives out there. Yousuf, where is it best to use artificial intelligence and machine learning and where is it best to use automation?
Yousuf Khan: Well, that’s an excellent question. I think it’s really important that we take a little bit of a step back, because the buzzwords have been out there for a little while and I think a lot of people get enamored by them. And so, my biggest advice is when you think about use cases, I would break it down into a couple of things. Number one is, are you solving the business problem first and foremost? And what that business problem is will help you try to figure out whether it’s a problem of manual repetitive work for which automation is a very good use case, versus one which requires more automation using more creative techniques, such as NLU and machine learning or otherwise. And so I think framing that problem is probably the most important first step. Second is thinking about use cases from an industry standpoint, which could be beneficial. So if you think about things like fraud prevention, fraud prevention that’s been very common for people to look at statistical processes and techniques and pattern matching to combat fraud prevention for large say telcos or retailers, because that’s a use case that has been sort of beneficial, versus something which is overly creative where the data sets are too varied, machine learning becomes a huge problem. If you think about companies like Moveworks, Moveworks was successful because it understood the business outcome which was being able to resolve IT support tickets. It understood the goal of being able to do that across some very specific areas and then grow it its impact. Automation Anywhere looked at repetitive processes and then built onto intelligent automation. And I think that was important to be able to think about from a use case standpoint. The use cases for each varied, right? If you think about automation, well there’s a lot of repetitive process. So use cases that are typical for automation can range from data entry where you are, I was experienced, for example, migrating one system to another. And the data structures for those were completely varied. And so rather than having to convert them through human effort, being able to do that through a bot designed by Automation Anywhere was great. If you think about a contract order process, which runs in the back end between connecting two systems, you could use automation for things like that. Whereas if you think about chat bots, and if you think about being able to have user experience, then solutions like Moveworks are a great outcome and they’re focused on an end goal, which applies across the entire company. Everyone needs IT support, and so that’s where ML and techniques like NLU become really beneficial. I think the important thing to think about is, one, think about the clear outcome that you’re trying to solve. Number two, the method that you’re basically using, and probably number three is, what is the incremental journey that you’re on being able to continue to add value by using either one of machine learning or automation techniques?
Guy Nadivi: Specifically with regards to automating processes like some of the ones you just listed, how do you think CIOs can best manage teams for automation?
Yousuf Khan: I think probably the most important thing is to actually have that as a focus area. And I do think that there’s a function within companies that should be focused on automation and automation teams should be created. Number one, I think it’s a huge opportunity for professional growth and development. Number two, I think it’s a huge business need, and number three I think it requires dedicated focus. And I think one thing people have not really appreciated, the benefit of automation is it empowers people. It’s much better for morale in a lot of cases where you’re able to take away manual repetitive tasks. And it’s a great sign of innovation for IT teams. And so definitively they should be thinking about building an entire function for that. And that’s one aspect. The second is you’ve got to re-think differently about your processes. I said that earlier, I think it’s important to not be able to migrate. That requires a fresh set of thinking. Companies expand, they grow. In some cases they contract, they take on more technology than they’ve ever done before. Companies are now becoming more technology-driven companies. Software is not just driving companies. It is being embedded in companies. And so therefore you can’t just simply take your old process and put them into this new way of thinking. And probably the third thing is they’ve got to be very focused on goals and put kind of measurements around success. And I think that’s important to do. I think you can be in a journey and it could be a very long journey unfortunately, and you’ve got to be able to iterate along the way. And I think that’s very, very important as well.
Guy Nadivi: Having worked for some automation vendors Yousuf, you’ve seen a lot of automation deployments. I’m curious, which industries did you see that had particularly successful results from deploying automation?
Yousuf Khan: It’s important to basically point out that the opportunity for automation exists across multiple verticals, I think number one. Number two is in terms of the functions, there are some that do really, really well. And some that require a little bit more effort and a little bit more thinking. Let me give you some examples. If I think about customer service, well the opportunity for automation there has really been when you have a high level of demand and you’re not able to, for example, scale-up your customer service center like an airline, for example, may have done over the last several months or a hotel chain. You can’t hire people fast enough, but their processes are very much specifically the same. Refunds, cancellations, otherwise. Could that process be automated? And so definitively the answer to that is yes. And that’s been proven, that’s been done. In some cases in financial services I’ve seen those verticals work well. We’ve experienced that myself. If you want to basically, you’ve gone away from being having to call and actually speak to someone about a lost or stolen credit card. You’re able to fundamentally run through that function through a combination of voice commands, but also candidly speaking through text and be able to basically get a new card ordered without any friction in the process whatsoever. And so I think those things, again, fundamentally if it’s repetitive that’s going to be easy to do, and it’s going to apply across a number of different verticals. I think it’s important to think about the fact that there’s a lot of opportunities which automation is not just about a customer experience. It’s really just about being able to get the work done. That’s a simple way of basically saying is, if you think about a data entry work across different systems, being able to just eradicate that because you understand the type of data going from one system to the other and being able to convert that could be easily done simply because you’re able to train a bot to do it. That’s a definitive value. And that applies across any company because systems are being changed and upgraded all the time. If you are looking at supply chain and inventory management, being able to track those and being able to not just automate the reordering of something, but also to be able to send out warnings and notifications is definitively of value. All of these fundamentally say that automation is a very, very big opportunity for enterprises and companies, and they should be thinking about very deeply about how to be able to benefit from that.
Guy Nadivi: Let’s talk about cybersecurity, which is always a topic of paramount importance to CIOs. And you’ve been CIO of some cybersecurity companies as well as automation vendors. Yousuf, what should CIOs be aware of and concerned about when it comes to the security of their automation initiatives?
Yousuf Khan: I think there’s a couple of things here. First of all, I think, cybersecurity is gone from being kind of something to be discussed, which is something that people will get round to talking about to now being very much in the mainstream and being discussed at boardrooms on a regular basis as an agenda item. Right, so it’s evolved over time. And so I don’t think it’s as specific as saying, “Well, should we think about security in the automation space?” Fundamentally you are buying software or you’re building software from leading vendors. I think that the vantage point that you would apply is really about what are the key areas that that automation is touching. Number one, it’s having access to your systems and being able to touch a number of different systems. So being able to make sure that the APIs are secure and robust. Second, if it’s touching sensitive data, then you’ve got to be very diligent about figuring out how that actually is happening and how you’re able to test that out. Number three, probably most importantly is to really think about the testing that goes into it. Automation use cases can vary from as simple as an email notification to data migration, to financial transactions happening. And it’s really, really important to be able to make sure that you understand that there’s going to be regulations around that, and you have to provide that vantage point as well. So I don’t think it’s massively different to what a CIO would look at when they look to buy a software solution. I think the difference is because this is something that you’re more deeply involved in from a creative standpoint, it’s important to take that extra step to be able to understand what parts of your infrastructure the automation is actually touching and how is that basically protected. And of course, how you’re avoiding making misfires by basically being able to send data out accidentally because you’re in control of that.
Guy Nadivi: Yousuf, for the IT executives and others listening in, what advice would you give them if they’re looking to move into a CIO role?
Yousuf Khan: I’m very grateful to have learned from a number of CIOs. I’ve also taken the objective to learn from different members of the C-suite, of what they expect from CIOs. And so with that in mind, I think I would probably give some key piece of advice. Advice number one is fundamentally the CIO role is a leadership role. And so you have to ask yourself a very honest question, which is, what type of leader do you actually want to be? And I think that’s important because people in IT teams are looking for more leadership, for guidance, both in their careers, but also in terms of direction. I think the second is, how do you navigate complex decision-making and prioritization of work? There’s no shortage of work for the IT organizations, the very hardworking IT organizations that I’ve worked with and I’ve met. And I think it’s really important that CIOs understand how they’re able to, if you want to be a CIO, how you are able to prioritize and how you’re able to basically make decisions. I think the third thing is probably, figure out how you’re able to communicate more effectively across, not just your team, but also across the C-suite and other executive leaders and across the company. I think the CIOs who are most effective in their roles are ones who are able to communicate with customers and partners as well as internal to their teams, as well as the company. Because change management enablement is very, very hard. And I think technological change is something which is really happening more and more in companies. And that’s being driven by CIOs and being able to explain that change, being able to drive that change, being able to see the success of it is a CIO’s responsibility. And so being able to do that, communication is one of the key things that they need to be able to focus on. So that would be my other piece of advice.
Guy Nadivi: Great words of advice from a former five time CIO.
Yousuf Khan: Well, yeah, I would say former is good and a want-to-be VC. I’m the accidental CIO and definitely the unconventional VC as I’ve said a couple of times, but I hope it’s been a benefit to many of my CIO peers.
Guy Nadivi: All right.
Yousuf Khan: Yeah.
Guy Nadivi: Well, it looks like that’s all the time we have for on this episode of Intelligent Automation Radio. Yousuf, It’s always great hearing from an investor in the automation space, but especially someone like yourself, who’s got hands on background that affords him a bit of an advantaged viewpoint. I’m sure our listeners found great value in hearing your perspective today. Thank you very much for coming on the show.
Yousuf Khan: Thank you. Thank you very much Guy. And one thing I do want to say is I do want to thank you for all that you’re doing for the community. I think these conversations are important, not just because I’m having them, but I think you’ve done a great portfolio of work, and I think we could all benefit from that. So thank you for all your work in this community.
Guy Nadivi:I appreciate that. Thank you very much. Yousuf Khan, partner at Ridge Ventures, an early stage venture capital fund. Thank you for listening everyone. And remember, don’t hesitate, automate.