In June 2015, Descartes Labs CEO Mark Johnson looked down from his plane to views of northern New Mexico’s Jemez and Sangre de Cristo mountains, and realized he was home.
Six months earlier, he’d left everything behind in San Francisco—where he’d launched several successful startups—to move to Los Alamos to launch Descartes.
Johnson really doesn’t seem like a middle-of-nowhere kind of guy. A Stanford grad who started Zite, which CNN bought in 2011 and turned into Flipboard, he’s got the kind of nervous energy, enthusiasm and drive you see in serial entrepreneurs from Silicon Valley, Boston or New York.
In other words, it’s hard to imagine him being anywhere but in the middle of a place with all the action. Which makes New Mexico seem like an incongruous choice.
Then again, it kind of depends on how you define “action.”
Descartes Labs had spun out of Los Alamos National Laboratory (LANL) with a deep-learning satellite image analysis technology that had tremendous potential—but when Johnson arrived on the scene in July 2014, it was little more than the technology and the band of LANL scientists who developed it. Johnson’s task: figure out how to commercialize the technology, get the company launched, and then—or so he originally thought—move it back to the Bay Area.
But as those mountains came into view, it hit him – in the year since he’d first arrived, New Mexico had grown on him, and he wasn’t sure he wanted to be anywhere else. Plus, the financial benefits and long-term company growth that came with staying were an irresistible mix. At that moment, he decided to give Descartes its maximum chance of survival in the Land of Enchantment.
Descartes Labs, which now uses its satellite imagery to forecast agriculture production around the globe with up to 99% accuracy, was thriving in northern New Mexico – and so was Johnson. “And because I gave [staying in New Mexico] such a good go, investors started rallying around all the benefits,” he says.
What Descartes has achieved in Los Alamos is a blueprint for leveraging your natural strengths as a startup – in this case, activating a wealth of scientific talent, establishing a dramatically lower cost of doing business and seeding a company culture that thrives on collaboration and emphasizes quality of life, leveraging the natural environment.
The lesson? Success is not always dependent on place.
“The answer is really simple: Are you building a business with value?” he says. “If you want to stay in New Mexico, the best way to convince shareholders to stay in New Mexico is to build a viable business in New Mexico. I’m not sure there’s a more convincing argument.”
Here are his six insights for entrepreneurs who are wondering, “Should I stay or should I go?”:
Make peace with impermanence – it’s part of being a startup. You may ask yourself every day if you need to relocate to a city with more-established capital and talent networks. But the key is to recognize that the whole thing is an experiment.
“I honestly don’t know any other way,” says Johnson, because he lives with the idea that the 30-year plan simply isn’t an option, and he recruits that way, too. “I tell employees that if you want to be guaranteed to be a millionaire someday, go to Microsoft and work really hard for the next 20 years. But if you want to make a personal mark on the world, startups are a better place.”
Still, the best CEOs come in with no preordained notions. As Johnson amplified the positives of staying, he knew that at the end of the day, he had a fiduciary duty to the company. If the bottom line wasn’t working, “I would move without a second thought.”
Make it easy to come, and easy to stay. You can attract talent with a tight-knit community that functions more like a family than a corporation.
Early on, Johnson cultivated a “we’re all in this together” mindset. “We created a corporate culture where people are looking out for each other.”
That means stressing “superior lifestyle, productive people.” When Bay Area-based employees came out to Los Alamos for meetings, they got that message loud and clear. Goodbye cramped, expensive San Francisco apartment, hello great scenery and easy access to the outdoors. “Almost everybody has a dog,” Johnson says. “Almost everybody skis and hikes.”
Get an ambassador on board. At first, Los Alamos itself was a pretty effective chief recruiting officer – then Johnson hired Jon Wolles as head of recruiting. Wolles had spent 15 years in Silicon Valley recruiting for Zynga, Yahoo, Friendster and Palm, but he was persuaded not just to come on board, but to relocate to northern New Mexico himself.
Investors were sold on Wolles as an early hire because they were committed to the experiment, says Crosslink Capital Vice President Omar El-Ayat. Descartes now has the advantage of pulling talent from LANL and from the Bay Area. “This is a no brainer,” he says.
“(Wolles) was employee no. 12,” says Johnson. “If you believe people are your most important asset, you absolutely need a gatekeeper whose sole charge is to find the best and brightest for the company.”
Audit your assets. Scan your ecosystem for its natural strengths and leverage them. For Descartes, the talent pipeline of scientists from LANL was a big plus, but combine that with cheaper operational costs, the beauty of the region and a life-work balance that’s tough to achieve in the city, and you’ve got something.
The takeaway? “Find the great scientists who don’t want to live in cities.”
Win the trust of your investors. With his years in Silicon Valley, Johnson had a deep network of trust. That helped with investors and early hires, but he needed a payoff moment.
The technology had always been dazzling – early prototypes had tracked the environmental impact in the aftermath of 9/11 and Hurricane Katrina. But what was the market? The clock was ticking.
Once spun off from the lab, co-founder and longtime LANL research scientist Steven Brumby and his team of scientists were free to innovate at rapid speed. “We were a group of extremely well-motivated scientists,” Brumby says. “If we thought of something new to try, we could try it within an hour.”
Suddenly, supercomputing time was accessible and costing pennies on the dollar. “The combination was so fruitful that within the first six months of the company, we built our first commercial system,” Brumby said, and it was beating the U.S. Department of Agriculture’s predictions.
Where that led was crucial: product-market fit.
The team hit on the idea to leverage the deep learning model to predict food production. That meant agricultural forecasting and data for commodities investment. Johnson brought the idea to El-Ayat.
“We said, a-ha, that makes a lot of sense,” El-Ayat says.
Know your true “win.” At Descartes, the motivator is purpose-driven profit. That came naturally with the core band of scientists who founded the company and had spent much of their careers in hot pursuit of discoveries that serve the country. If you understand how to channel the fundamental desire that motivates your employees, it can pay off.
“Mission is really important,” says Johnson. “If you want someone to move out to the desert, it was important to have a company where we were doing something groundbreaking for humanity. I know that’s talking a big game. But you need to be talking about it early.”
That one irresistible motivator was already in the DNA of Descartes, but Johnson amplified it.
Since its first three funding rounds in 2015 totaling $8.28 million, Descartes has aimed to commercialize its granular and highly accurate data about global crop production. “We just don’t have enough data on this planet,” Johnson says. “No one knows how much corn is being grown in China. I want real-time updates about the forests of the planet.”
The big win is that Descartes can change the way we think about the planet by providing big data, real-time planetary scale numbers. “It’s important to remind us, you can only see so much. It’s the natural joy I always feel when I go up in an airplane, seeing things in a completely different perspective. The awe and wonder people have for the planet is our best tool for reminding people we should try to keep it around for thousands of years.”