393. The $40T Opportunity Investing in Physical Industries, The Framework for Investing in Hardware, and Lessons Learned from Industry Legend, Pierre Lamond (Lior Susan)

**Nick Moran** (0:02)
Welcome to the podcast about Venture Capital where investors and founders alike can learn how VCs make decisions and reach conviction. Your host is Nick Moran, and this is The Full Ratchet.

**Nate Pierotti** (0:17)
Our guest today is Lior Susan. Lior is the founder and managing partner at Eclipse Ventures, a multi-stage firm focused on backing startups building in physical spaces.
At Eclipse, Lior has led investments in Cerebris, Arc, and Vulcan, forms to name just a few. Lior is also a co-founder and investor in Bright Machines, a startup that's reimagining the way products are designed and manufactured, which was recently valued near a billion dollars. Lior, welcome to the show.

**Lior Susan** (0:46)
Great to be here, Nate. Thanks for having me.

**Nate Pierotti** (0:48)
Yeah, you bet. I've been looking forward to doing this one, and I want to start with prior to getting into Eclipse Ventures, can you share the one to two minute background of your upbringing and ultimately what brought you to Silicon Valley?

**Lior Susan** (1:01)
Yeah. So I tried to do it fast, but I grew up in Israel in a kibbutz community in the north part of the country, and the military went to their special forces and we've been there for a bunch of years. Finished in 2008 while my brother was starting a company called Intucell and joining him to help him build that company. The company was focusing on a software defined network. Company got acquired by Cisco in 2012 I moved to the Bay Area and met Mike McNamara, that was the CEO of Flextronics back then. And Mac convinced me to join him and build the digital transformation team.
And I agree because I had the huge man crash on the guy and thought he was going to change the world. And I joined him and was doing that for just a little bit over three years.
And, yeah, it was seeing how the whole market is changing and how all of my VC friends cares only about the software and fintech and my heart is in physical industry. So I decided to leave to start Eclipse.

**Nate Pierotti** (2:02)
Awesome. And for those that don't know, you founded the firm with legendary investor Pierre Lamond, who famously worked at Sequoia and legendary name in the space.
How did you come to meet Pierre? What was the journey together to founding the firm?

**Lior Susan** (2:18)
It was amazing. So to be naive from time to time can be very powerful. A, I didn't know who is Pierre. B, I never invested in anything before Eclipse. C, I for sure never didn't walk in a VC, had no idea what is this all in the industry about. But when I told the chairman of Flextonics that I'm going to have this idea, I wants to go and invest in physical industries and I think I will start a fund.
He said, hey, go meet this guy, his name is Pierre Lamond and I'm quoting him. He said, I don't know if he's still alive, but if he is, go find him because he knows a lot about what you're talking about. Actually, Sequoia was a Flexronics investor in the early stage before Flex went public, so it was a connection over there. So I went to see Pierre and in a very Pierre fashion, 10 minutes into the meeting, he interrupted me and he's like, hey, young man, are you looking for a partner?
And I said, yes, and kind of the rest is a history. To give you a sense, I was 31 years old when we met, he was 85 and he is now almost 93 And it's been just an amazing journey with him.

**Nate Pierotti** (3:27)
Yeah. Wow. What a special opportunity.
Thinking about your time working with Pierre, what is the greatest lesson that you've had from working with him? I'd be curious, both your most salient lesson when assessing new investments, but also one from either working with founders or building large businesses.

**Lior Susan** (3:47)
You know, there's so many things that we literally have here at Eclipse. We have a book of Pierre saying that some of them are extremely funny and some of them are very serious. But probably the two things I learned the most from him, we are all operators at Eclipse, not only Pierre, I was an operator as well.
And he told me that you cannot push founder, you need to nudge them.
And I didn't really understand this notion of nudging before. But his main point was, you are an operator. And when you see a problem, what we do as an operator, we dive in, in order to solve it. And now you are actually an investor. And you need to convince, you need to nudge the founder and the CEO to actually do what you think makes sense. You can't push them. And as an operator Israeli, I like to push. So it was definitely a great lesson. And the second one was his philosophy of it must be that big, otherwise, it will not make a great venture return that, you know, you may you meet all of this amazing, cool companies and he wants to be invest and he will say, No, yeah, I understand why you like it. But it cannot be that big.