[Published on VCCircle]
I have worked with the Slideshare team, as a user, investor and board member at different times, from 2008 till late last year. After the Slideshare + LinkedIn announcement last week, I have been reflecting on how much has changed and how much (or little, depending on your perspective) I have learnt from this experience since starting out in the venture business several years ago, as well being a founder myself in the late 1990's.
Here's what I learnt from Rashmi, Jon and Amit about best practices of founders. I appreciated their willingness to work with me and be patient.
Passion & Focus
- Passion about your userbase is contagious. It impacts the employees and their retention, it impacts your core user base and their retention, it impacts customers and their retention.
- Focus, focus, focus on honing the product – UX, scalability, security, data, analytics and more – but keep trying new product angles quickly to iterate toward high engagement and clear value.
- Focus on crystallizing value to paying customers – make it easy for customers to understand value (packaging, positioning, messaging), connect value to price, and make it easy to pay as customers receive value. To do this, understand who your super-user segments are and why.
Growth and (or versus) Monetization
- It’s tough to balance growth versus monetization versus profitability. There is definitely a trade-off. Get lots of input on this from people who have made these trade-offs successfully.
- Understand path from user acquisition to engagement to retention to monetization early on and track associated actionable metrics (a la Dave McClure’s AARRR). Especially for user-generated content, there’s no automatic connection between usage and revenue.
The Outside World
- Acquisitions and successful partnerships take time to develop. They generally come from engaging over long periods of time. At the end of the day, it’s about people getting to know people.
- Keep tabs on competition, don’t obsess about them though – most companies die of self-inflicted wounds, not because of competition.
- Investors are people. Sometimes your investors and board members know what they are talking about, sometimes they don't, hopefully more of the former.
Becoming a Better Board Member
Through hits (and misses), I also learnt some lessons on how to become a better board member over time:
- Be respectful w.r.t. founders – they known their business better than you do.
- Be patient – there’s no such thing as an overnight success – don’t get too impatient but still hold management’s feet to the fire
- Be thoughtful and have a high bar when suggesting workstreams for the company – their time is precious, don’t waste it.
- Focus on strategic impact – as an investor, focusing on daily management decisions (i.e. micro-managing) will not have a positive impact on the company (and may have a negative impact). Focus on strategic changes, such as building the best management team, making the right bets on monetization, making the right introductions to partners/acquirers, holding people accountable for outcomes.
- Conduct board meetings for the right reasons. Board meetings should not primarily be about reporting only but also about trying to solve problems together and laying the groundwork for scale. The real action happens outside of board meetings though.
- Align with founders on outcomes. Understand your goals and risk-profile as an investor early on relative to goals and risk-profile of the founders & management team. Align.
- Angels and VCs are not at loggerheads. As long as companies continue to build value in a large enough market, angel investors and venture investors are aligned. All the media hype about the two communities being at loggerheads with each other is overdone.