Madrona Venture Group's Tom Alberg On What's Driving Growth In Seattle

Before co-founding and serving as managing director of Madrona Venture Group, Tom Alberg was a student at Ballard High School, Class of 1958. As a young man, his concept of Seattle did not extend much farther beyond the Zesto’s Burger and Fish House across the street. After attending Harvard, earning a law degree from Columbia Law School, and working back East, he returned to Seattle with fresh eyes.

“We’ve got a more robust economy, more diversity, and so many improvements to the city,” Alberg said. “There’s no question that we have a lot of traffic and other issues, but overall I think we’re all better off and have a much more interesting and vibrant city.”

Alberg has served on the boards of numerous public and private companies and has been a director on Amazon.com's board since before it went public in 1997. Madrona Venture Group was one of the earliest investors in Impinj, a company whose radio-frequency identification technology allows users to tag and track data on products across industries such as healthcare, retail and manufacturing.

Madrona recently invested in Echodyne, a company that is developing inexpensive miniaturized radar systems for drones and self-driving cars. Echodyne’s radar unit can be used on automobiles to improve their obstacle detection capabilities, which will become increasingly important for the rise of autonomous vehicles. 

“I think hundreds of thousands of autonomous vehicles will be bought in the 2020 [to] 2030 time frame,” Alberg said. “It’s hard to get your head around it, but it will greatly reduce automobile accidents and have a big land use impact. So much of our streets are devoted to parking lots and with these vehicles, you won’t need that.”

Alberg cannot predict how the new mode of transportation will ultimately affect traffic, but with the population growth in the Seattle area, he knows traffic and housing will continue to bring down the vibe of the city if they go unaddressed.

“Seattle is a net importer of people from the Bay Area and other places. People are attracted by the jobs and the excitement and openness of Seattle,” he said. “I think the pressure on single-family housing will increase as many of these young people who are living in apartments will want to live in single-family housing.”

Alberg said he cannot know exactly how Seattle will evolve or which investments will pan out. He must rely on judgment to decide which companies to invest in and which to skip.

“We have to make a prediction and that prediction is partly based on fact, but also based on judgment — a judgment that is part gut and part rational,” he said. “If it was a totally rational answer, we’d all be a lot more successful.”

Alberg is one of the panelists to take the stage at our upcoming State of the Seattle event Sept. 26 at the Westin Seattle.