The Age of Product: Outperforming in the FAANG Era
A new month means a new host of the Kauffman Fellows Podcast — and we’re thrilled to welcome SC Moatti, Managing Partner at Mighty Capital. Prior to her journey in venture capital, SC built products that billions of people use at Facebook, Nokia, and Electronic Arts. SC melds her product and investor knowledge in a brand new mini-series — The Age of Product: Outperforming in the FAANG Era.
FAANGs (Facebook, Apple, Amazon, Netflix, and Google) are stifling innovation with monopolistic practices that make it hard for today’s entrepreneurs to break through. But gifted founders have set out to compete using a “product-led” approach to gain market leadership. Throughout the podcast series, you’ll hear the perspectives of visionaries in this new era who are leading digital transformations, causing disruption, and utilizing the power of networks.
Click the links below to tune into each episode and catch a summary of SC’s mini-series below by flipping through an eBook summarizing some of the key findings from her conversations.
- Satya Patel (HomeBrew): Disruption and Investing
- Spenser Skates (Amplitude): Competing Against FAANG
- Renee Niemi (Products That Count): Evolution of Product and Investing
- Sami Inkinen (Virta Health): Investor Relationships That Build Winning Products
- Joe Robinson (Hummingbird): Power of Networks
- Melody Koh (NextView): Product Meets Investing
To kick off her series, SC welcomes Satya Patel, Co-founding Partner at Homebrew, and Spenser Skates, Founding CEO of Amplitude to share how they compete with and win against FAANGs, the challenges of transitioning between product and investing, and how they built companies and products that have outlasted their competition.
Catch each episode below or on iTunes, Spotify, and Anchor.fm.
This season of the Kauffman Fellows Podcast is produced in partnership with Mighty Capital. Together, we unravel what truly makes a great VC investor.
Homebrew Partner, Satya Patel, on Disruption and Investing
February’s first guest is Satya Patel, Co-founding Partner at Homebrew, a seed-stage venture capital firm. Throughout the episode, SC and Satya dive deep into the transferable skills between product and investing and the challenges that they ran into transitioning from one to the other.
Tune in and catch some of our favorite soundbites below!
https://open.spotify.com/episode/3Jhq7NIy25kSfL96eUIB40
On the best products winning
In the Age of Product, the best products win and Satya explains how.
“The best products win when they address a particular use case 10x better than everything else or when they become a habit. Changing behavior is hard. For example, the iPhone. That’s an example of the best product, that was also paired with the fact that it was enabling entirely new behaviors and habits.”
On the transferable skills between product and being an investor
As Patel ping-ponged between product management and the venture capital world, he has a unique perspective. There are product management skills he can use in his role now as a VC.
“We often say that no startup ever failed from a lack of ambition, only a lack of focus. One of the toughest jobs a startup founder has is prioritizing. Similarly, one of the toughest jobs I had as a product management leader was prioritizing the roadmap and keeping the team focused on the most important things. Determining priorities is super useful as an investor because that’s an important conversation that we need to have with founders on a regular basis.
Another one is coaching and development. As a PM, our job was to help our team members be their best selves and remove roadblocks to their success. We try to do the same as investors, working with founders. We want them to be their best selves and be as successful as they can be. Whether that’s customer introductions, coaching them, helping them hire talent, or whatever it might be at the end of the day.”
On the challenges transitioning from product to investing
While there are some transferable skills moving from product to investing, there are also challenges that go along with that switch.
“The biggest challenge is going from a world in which you can build things, release them, collect data, and iterate to one where the feedback cycles are so long. You don’t see the immediate impact of your work, where to improve, or how to iterate. You need to have a clear conviction around the strategy to overcome that.
The second is going from a world where you have cross-functional collaboration, where you’re working with a team of experts, to a business where it can feel like you’re working on your own. You can overcome that by building partnerships that are based first and foremost on trust. At Homebrew, we tackle everything that we do as a team to replicate that experience of working collaboratively.”
On building a good relationship with investors
There are a few key factors Patel says are critical to building a good relationship with investors.
“There should never be surprises. Good news is acceptable, bad news acceptable. However, no one likes being surprised. Investors like being surprised the least. It’s essential to have trust and transparency in the relationship.
Have the courage of your convictions. Investors are smart people and deep thinkers, but they don’t know your business as well as you do. It’s okay to disagree with them. You’re going to be held accountable for your decisions, but sometimes you just have to have the courage of your convictions and not necessarily follow the lead of the investment.
Ask for more from investors. Good investors are there to help. I think most founders don’t leverage their investors as much as they can. Especially in the context of key areas like hiring, sales, and fundraising.”
Listen to the full episode above on Spotify or over on iTunes.
Amplitude Founding CEO, Spenser Skates, on Competing Against FAANGs
In the second episode of her miniseries, SC welcomes Spenser Skates, the Founding CEO of Amplitude, a digital acceleration platform that recently filed to go public. SC chats with the MIT graduate about the importance of a CPO in this digital age, how he competed with and beat Google, and how he builds products and companies that outlast their competition.
Tune in and catch some of our favorite soundbites below!
https://open.spotify.com/episode/6TytXNFTzJrtDQY9v6PQzp
On the modern Chief Product Officer
According to Skates, the CPO has become important in a way it never has before.
“Chief Product officer is the new leader of businesses, full stop. Companies are shrinking and the one bright spot is the digital product. The Chief Product officer becomes the area where the business is growing and the place where you need to invest if you’re the CEO. The one place that is growing like a hockey stick is a digital product.”
On competing and winning against Google Analytics
At Amplitude, they looked at what their competitors were doing and saw a gap in the market that would allow them to solve a problem for customers in a better way.
“We noticed things that Google Analytics and others in the MarTech ecosystem we're behind on. The entire data model was not right for understanding products. They focused on pageviews and a world where your digital experience was all about marketing. We saw that people cared about measuring the digital experience as if it was a product. It’s about your users and how they are using your product.
The ability to deep dive into the understanding of the user journey was also limited. They had reports that would work out of the box, but as soon as you tried to get to any sort of depth on it you really hit up against a wall. We came up with a metric that we found is most correlated with success. We call it the weekly learning user. That’s a user who has shared an insight with another person on the platform or who has shared a chart or dashboard with someone else. That’s the strongest correlation to long-term success.”
On building products and companies
Success necessitates a level of sticktoitiveness that founders must possess to outlast the competition and thrive for years to come.
“Stick at it for a long time. If you’re willing to stick something out for a very long period of time, the compounding that happens is crazy.
When we first started Amplitude, we saw a lot of other companies that had done Y Combinator with us that would quit early. After six months of no success, or a year of no success, they quit. My realization was that if you stick it out long enough, you can outlast the competition and compound those gains. Here I am, 10 years later, still having the same mindset.”
On what makes a great investor
While it’s nice to honor those that have made a difference in our businesses, it’s also helpful to learn by example about where great investors make their impacts felt.
“Eric Vishria at Benchmark has by far had the biggest impact. He invested in us during our Series A and has been on the board working with me for the last seven years. He’s the person who’s taught me the most about what it means to be a great CEO. Whether it’s building a team and a great company or thinking about the strategic moves to make in the market, he’s been the person that I’ll call first for any issues that I have. There’s no question that Amplitude would not be even close to what it is today without the work that he’s put into the business.”
Listen to the full episode above on Spotify or over on iTunes.
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