Reaction named as a Top 100 Innovator
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DAN
MATTHIES
Global Changemaker
In 2020, 205 Stanford alumni execs, CEOs, and founders across 50 countries united to pursue a single mission: Improve the lives of one billion people within this decade by scaling innovations that change the world. Together, this diverse community of leaders co-founded Reaction, a global venture fund invested in tackling humanity’s toughest problems. Leading this effort is changemaker, Dan Matthies.
“The pace of innovation is growing rapidly, but so are the biggest global issues. Innovations offering potential to address these often fail to reach markets they can help. We founded Reaction to solve that problem. Reaction’s movement continues to grow – ignited by a shared vision to improve more lives faster with innovation. To achieve that, we elevate exceptional innovators who are positively changing tomorrow. Leaders have tremendous influence. If we can harness that and organize it, we can make a difference,” Dan shares.
Reaction Partners are leaders who have seen success and want to give back, to build a common legacy, to learn and form relationships with like-minded leaders, and to do something together they could not have done on their own. “Each leader is exceptional. What we can do together is exponential,” Dan states. Fast forward to today, Reaction has built a portfolio of global technology for health, sustainability, education, and AI that will meet or exceed its mission to improve a billion lives, within this decade.
We met with Dan to learn more about Reaction, their unique model, and why climate change is now squarely in their sights.
Q: Why do you see climate change as the toughest problem humanity has ever faced?
Climate change is more multifaceted than any other problem, affecting every industry in every region. If we don’t solve it, the domino effect on health, food, and equality will be more destructive than anything we’ve ever seen. It’s a hugely personal problem. Heatwaves, wildfires, hurricanes, and floods are becoming more frequent and severe. Many community members have been directly impacted. And it will get worse. Younger generations will experience up to 7 times as many extreme climate events.
"Reaction is first-of-its-kind. Our Partner community offers global perspective, access, and influence, which allows us to reimagine venture capital in a way that has never been done before."
It’s highly personal to me as well. My family loves being outdoors, but that joy has been compromised by unsafe air and record heatwaves. I feel my kids distress through their questions and prayers. Depriving them and their families of a safe planet is not the legacy we want to leave. The silver lining is that in every crisis lies an opportunity. Many investors believe decarbonizing the global economy has enabled the world’s largest economic opportunity. Trillion-dollar problems attract top minds and that will create the most valuable, and consequential, innovation wave of our generation.
Q: How is Reaction different from other venture funds?
Reaction is first-of-its-kind. Our Partner community offers a global perspective, which allows us to reimagine venture capital in a way that has never been done before. Specifically, there are three qualities that make us different, which correspond to the three outcomes we are driving, what I call our “three C’s.” The first is our global Community advantage, enabled by our network of 200+ partners in 50 countries. That allows us to be a venture catalyst that can scale innovations to amplify value and change. The second is Capital return. Our selection strategy is unique. We leverage a “smart beta” strategy, which is a systematic way to capture specific opportunities. This term originated in public markets. Stock picking began in the 17th century. Sporadic results led to mutual funds in the 1960s. Failure to consistently beat benchmarks led to index ETFs in
the 1990s. Then, smart beta funds progressed in the 2010s. Numerous studies proved their advantages. For example, Morningstar found smart-beta funds outperformed index funds by 1.5% per year. We are extending these advantages to capture Stanford’s next big innovation wave in global sustainability. Last, and of cardinal importance, is being a driver of Change. We are about creating exponential change on a global scale. Our community makes this possible and capital return makes this sustainable.
Q: How can investors do well by doing good?
We prefer the word “partners” to investors because the journey to success is never a straight line. While there are many uncertainties in innovation, the more hands-on we can be, the more we can help founders navigate them. Sharing in their success also means sharing in their journey, no matter what we encounter along the way.
Q: What do you enjoy most about your work that drives you?
The process of discovering innovations and helping them scale to the regions they can change is very fulfilling. What drives me most, my WHY, is to share pride with this incredible global community in what we are accomplishing together. We’re literally changing the world. At the end of this journey, that shared legacy will be our greatest reward.
