Heads Up with Nicolas Sauvage, President, TDK Ventures

Nicolas Sauvage is President of TDK Ventures, the corporate venture capital arm of TDK Corporation. Since its launch in 2019, TDK Ventures manages $350 million in assets and has invested in 43 startups, including three that became unicorns—Ascend Elements, Groq, and Silicon Box. A recognized thought leader in corporate venturing, Nicolas has contributed to Harvard Business Review, London Business School, and INSEAD, and hosts the Corporate Venturing Insider podcast. He is also one of only two corporate venture capitalists selected for the prestigious Kauffman Fellows network.

Nicolas kindly shares his perspectives on transformational leadership below with our Global Technology and Software Partner, Robert Dunn.

What does good leadership mean to you?

I don’t think good leadership is simple to universally define, as the very characteristic of the word ‘leader’ is about team members wanting to follow a leader and that could be for very different reasons, but it is easy to know when you have it in an organization: all members’ energies are aligned in the same strategic direction, all inspired to deliver cohesively in that direction regardless of their roles, and with the least communication friction possible between them.

What is the best example you have seen of Transformational Leadership?

The way I think of Transformational Leadership follows the same framework: all members’ energies are aligned in a new strategic direction, all inspired to deliver cohesively in that new direction regardless of their roles, and with the least communication friction (and confusion) possible between them. From the outside, it looks like NVIDIA CEO, Jensen Huang, appears to be an excellent example of a transformational leader, inspiring his team to make pivots after pivots in a way that is seen as inspiring stepping stones into what could otherwise be seen as an uncertain and risky future.

What is the most important thing you have learnt in your career so far?

Many discuss “win-win” scenarios when they really mean “small win for them, big win for us” outcomes. I have learned time and time again that such engagements lose momentum, stop, or as a minimum, create friction where it could have been avoided if the engagement had been set-up from the start as an “equal-win” engagement. Leading TDK Ventures means working closely with early-stage startups and helping them connect with TDK and TDK companies, and it would be easy to construct these engagements as small win for the startup and big win for the bigger corporation, and it might work for one to two years until the startup would decide to move on and our Mothership would get nothing. So we put a lot of care in our engagements to be crafted as equal-win to ensure they are sustainable over time and truly create value to both parties, build a long-term partnership, and ultimately deliver value to society with better products and solutions.

How did you get to where you are today? Did you take a strategic, planned approach to your career or has it been more opportunistic?

I actually have not taken a strategic view of my career, instead focusing on working on what I find most important and valuable at the time, and this is probably why I was open-minded to the idea of creating a corporate VC for TDK when I was attending Stanford Executive Program, as this quickly became clear this was the next big thing I could really contribute to, and learn a lot along the way. Funnily, I always ask in interviews where a candidate sees themselves in 5 years, while this is not how I think myself.

Is there anything you wish you’d known when you started your career? And anything you would tell yourself at an earlier stage in your career?

I had to reflect quite a bit before answering this question. I think I would tell my younger self to work for VC-funded startups much earlier on, rather than bigger companies. I had this hypothesis that working for big tech companies would help me build foundational skills and best practices, but my view has changed because I have witnessed how learning cycles are so much faster and applied with startups. If I was to advise my younger self for a first job, I would say to choose a tech startup that just raised a Seed or Series A funding from a good VC, that’s it.

What type of people do you like to work with and what makes them good leaders?

I have simplified my view over time to simply: good brain and good heart, and I recruit accordingly. A good leader means you want to follow them, and if they are not smart or not kind, that’s a turn off. Good brain means intellect and humility, and good heart means compassion and patience.

What fascinates you about your job?

I get to meet entrepreneurs who are building a better future for all of us, support them in their journey and learn from them on a daily basis. Short of building a better future myself (directly versus indirectly as the Impact Scaler behind the Impact Scalers), I can’t imagine a more fulfilling endeavour!

As a leader what skills do you continuously work on to keep you at the top of your game?

Rather than specific skills, I focus on maintaining curiosity and humility, which means wanting to learn new ways, and knowing my ways are nearly always local maxima that need to be challenged by smarter (and many times younger) people.

What is the best way to switch off in your free time?

I don’t think I ever switch off. What matters most for me is to be in the flow when working and learning, and to be present with those I care about. My phone and computer have zero notifications allowed for example. Even when someone calls me, the phone is on silent and no vibration, so I call or text back when this happens.

AI and digital landscapes are ever-evolving. What skills or areas are you currently focusing on to ensure your organization remains at the forefront?

AI is very helpful to be more efficient, you can do more with less effort, and sometimes way faster. I expect everyone to get the same advantage over time. What I think an organization needs to do to remain at the forefront is improving its effectiveness, being laser focused on what to do and be clear on what not to do, the very definition of strategy, and I am not sure yet how AI is going to help an organization achieve that. I am definitively curious to learn that!

How do you foster a culture of continuous learning within your teams?

Recruit curious and ambitious people, then make sure to give those who want to stretch the full opportunity to stretch themselves, and appreciate that not everyone wants to stretch all the time (a key learning for me in recent years).

How do you integrate diversity and inclusion strategies into your leadership approach, and what impact do you believe this has on your organization’s culture and performance?

I always go with the strongest ideas regardless of their source within the team, always ensuring proper credit is given to the originator. I don’t think a company needs to run on consensus or majority, it needs to be run by the best ideas, and probably imperfectly, I am the one deciding what are the best ideas to execute on. At TDK Ventures, we have annual Reflection Week where everyone comes to our HQ in San Jose and we spend the full week reflecting on what our entrepreneurs, investing partners and TDK teams told us in our annual NPS surveys (for more on using NPS at venture firms, see my HBR article, “Why VCs Should Use Net Promoter Scores with Founders“) and other channels, and we think how we can improve as a team; it is designed to be bottom-up driven where anyone in the team who wants to drive a particular improvement for the firm can co-opt others and prepare their case in advance. The impact is simple, TDK Ventures is not me, it is the collective of the best ideas from the full team.

What strategies do you find most effective in creating a more inclusive environment?

Giving the context and safety net for everyone in the team to share their ideas. We run a very transparent communication style at TDK Ventures where, for example, everyone can share their learnings of the week in their weekly updates to everyone else. This not only gives a chance to share good ideas from anyone in the team, but also for everyone else to learn from, and possibly to build on top of them.