Tag: EC TechCrunch Disrupt 2021

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How to take advantage of distributed work

Distributed work is becoming the norm for many tech companies as the pandemic waxes and wanes. But there are plenty of ways to mess it up, especially if you’re attempting a hybrid solution — or if you’re secretly pining for the office.

I recently sat down with two experts on the topic to learn more: Wendy Nice Barnes, chief people officer at Gitlab, and Phil Libin, founder and CEO of startup studio All Turtles and mmhmm.

Our philosophy is we’re not remote, we’re distributed intentionally in the same way that the internet is a distributed system. Phil Libin

Barnes joined the long-time distributed WebOps company during the pandemic, after a career working in physical tech offices as a human resources leader.

Libin, after a long Silicon Valley career built around office meetings, has gone through the process of learning to love distributed over the last couple of years. As part of the process, he founded mmhmm, a video conference company (that’s fully distributed).

I’ve highlighted a few points from the conversation, below, including getting the mentality right, how to handle vacations and a couple tips on fundraising.

Think “distributed”

“Of course, some of it is harder. There are obvious disadvantages,” Libin said, regarding going distributed. “How about we focus on the amazing superpower advantages, like the fact that 0% of the people in our companies waste any time commuting? Not like the fact that they can live anywhere they want, like the fact that they can be fully productive. There are like massive advantages. Focus on those, and everything becomes much better.”

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Crafting a pitch deck that can’t be ignored

Thousands of pitch decks, and only a handful of winners. Such is the math of the VC industry right now, what with an explosion of startups and dreams of glory launching every year. VCs are overwhelmed with pitches, which means that crafting the perfect deck and connecting with a reader in the few seconds you have their attention is critical.

So what do you do to build a deck that can’t be ignored? To answer that question, we assembled a group of three exceptional venture capitalists on the Extra Crunch stage at TechCrunch Disrupt 2021 who have probably read more decks collectively than any group of humans should ever be expected to. Mar Hershenson is founding managing partner at Pear VC, Mercedes Bent is a partner at Lightspeed, and Saba Karim is the head of global startup pipeline at TechStars.

In our discussion, we covered what’s changing with pitches as the world moves toward a hybrid in-person and virtual pitch model, discussed how deep tech startups should think about pitches, and then we wrapped by exploring how each panelist reads decks — and what that portends for founders who don’t want to be ignored.

The changing nature of reading pitches in 2021 and standardizing formats

We got right into the crux of the matter at the top of the panel: What does reading pitch decks feel like in 2021? For Hershenson, there’s just always more under the sun:

I would say the volume of pitches that we receive has increased and continues to increase at some form of exponential rate. For us, we have to become far more efficient at sorting and reading through these decks. The actual reading of the individual deck hasn’t changed, but the rate and volume have increased dramatically. (Timestamp: 1:01)

Bent noted that the bar has gone up for the quality of decks that she reads.

The decks are getting better and better in terms of design. I think more and more people have realized that the visual representation of your deck is just as important as the material and the content that’s in there. There’s these instinctive milliseconds that an investor looks at your deck and almost makes a snap judgment about whether it’s even in the realm of something they want to look at it. Unfortunately, it shouldn’t be like that, but we’re human. So I’m seeing decks that are super polished, and I don’t know where everyone is getting these great graphics from, but they’re amazing. (Timestamp: 1:48)

Most pitch decks are based off templates, and therein lies a key trade-off: How much should you rely on a template versus being “original,” but different and perhaps harder to read? Karim noted that sometimes originality can pay off:

The best pitch deck that I got in a different format would be from a company that recently got into TechStars — it was actually a podcast version of their pitch deck that had my face on it. I went into Apple Podcasts and it said, “Hey, Saba, here’s my pitch.” That was amazing! But the second or third time that happens, it might not be as impressive because I’ve seen it before. (Timestamp: 3:41)

Hershenson pushed founders to consider keeping to the standard templates because it can help VCs focus on what makes each business unique.

For us, having the pitch in a format that we are able to consume in an efficient way is super important. There are a lot of templates online, we all know the key points that need to be hit on in a deck. So your job as a founder is to hit those in a deck of 10 to 15 slides and kind of do the hard work of synthesizing your business in a short format. I think you can be original, but sometimes being original is to your detriment.

I can tell you my own story. When we were first fundraising for Pear, we decided we were going to be really original: We’re going to use Prezi to send decks to LPs. And that was just totally the wrong call, because it’s almost like, “What did they just send me?” (Timestamp: 4:29)

One of the interesting dynamics that has shown up in the last year has been the rise of Notion as a form for fundraising. Responses from our panel were muted. Hershenson said Notion isn’t an excuse for not being succinct.

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How do you select the right tech stack?

Having a great idea isn’t enough when you’re starting a startup. You have to execute well on that idea by making the right decisions at the right time. In particular, you have to pick the right tech stack for your product. Without a good technical foundation, you can end up accumulating a lot of technical debt.

So to help founders understand what a good tech stack should look like, we invited two experts on this topic, Preeti Somal, the EVP of Engineering at HashiCorp, and Jill Wetzler, the VP of Engineering at Pilot, to TechCrunch Disrupt 2021 to discuss everything from evaluating vendors to making sure you can rely on an open-source product.

Making sure your team can ship quickly

Some development environments are more familiar than others. For instance, if you choose to work with a popular framework, it’ll be easier to find engineers to join your team, and the learning curve will be easier for your existing developers.

Your tech stack isn’t limited to the language your team is using. Choosing a good CI/CD (Continuous integration and continuous delivery) framework can help you release updates more frequently. Using test suites is also a key element of a good development pipeline.

“I looked at how we were thinking about developer productivity and our environment. What are the things that can help our team move really fast and ship really fast? Because I think that is the name of the game when you’re talking about a startup. It just comes down to how you can get your code out the door as quickly as possible,” Wetzler said.

Wetzler knows what she’s talking about on this front as she experienced the opposite of that in a previous job when she was working for Twitter. “Twitter was making some decisions that I think were based on some people’s personal preferences at the time. We started to fork our own versions of git and our build system as well. It just became a mess that had to be untangled over a number of years. And so you really do pay for those decisions down the line,” she said.

The ability to reuse your code across different platforms can also help you manage multiple projects more easily. That can be important if you’re in charge of the roadmap and you want to have some visibility when you’re planning the next quarter.

“We had done a really good job of making some investments in our back-end productivity. But when it came to front end, we were really missing a lot of the key infrastructure pieces that helped us build a front end really quickly,” Wetzler said. She worked on fixing that when she joined Pilot.

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Getting started with building an audience in the creator economy

How can you anticipate the content people want before they want it? How do you figure out where your audience lives online and what they like? What is a creator, after all?

At TechCrunch Disrupt 2021, we were joined by Julia Munslow, Special Projects Editor at Yahoo News, Alexis Gay, comedian and host of Non Technical Podcast, and Sushma Dwivedi, who leads communications and brand marketing at Daily Harvest. All three of our speakers come at the challenge of building a brand online from different angles, and they all had valuable perspectives to share for navigating a social media landscape that has very high expectations from anyone creating content in 2021.

Whether you’re an independent creator or a company, you need to think about how to connect with the audience that’s right for you before dipping your toes into brand building. With more platforms than ever, and more savvy content perpetually upping the social game, it’s worth remembering that building your audience doesn’t just mean accumulating a sky high follower count.

“It doesn’t really help anybody to try and be everything to everyone at any size of brand, no matter how big or small,” Dwivedi said. “… When you’re really looking to galvanize a base, and build some momentum amongst a dedicated base of customers, it serves you to really think about who they are. What do they need? Where are they and how on those platforms are they being communicated to?”

Before you can study an audience you want to reach, you have to figure out where they live online. And as new social platforms and products emerge, that process can require quite a bit of trial and error. For Daily Harvest, TikTok was a successful experiment that continues to pay off, but not all experiments will work out — and according to Dwivedi, that’s just fine. Daily Harvest dipped a toe into Clubhouse when the social audio app took off, but because of the visual nature of its brand and audience, it wasn’t a perfect fit.

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What you should know about prepping your startup for the public markets

It’s been an active four quarters for technology IPOs. If you rewind the clock to Q4 2020, we’ve seen megawatt public debuts from tech shops of all sorts. Airbnb recovered from COVID-19-induced lows to list, while Roblox delayed its IPO and went out with a direct listing. DoorDash went public. C3.ai had an explosive offering late last year as well.

Things have largely continued in 2021, with IPOs throughout the first and second quarters leading to debuts from Freshworks, Toast and, most recently, filings from GitLab, Rent the Runway, NerdWallet and others.

Many startup founders aspire to an IPO, even if the average time horizon for the liquidity event has now stretched as capital flows into the private tech market. But how to get a company ready for an IPO isn’t normal fare in startup conversations — it’s a bit like talking about your 21st birthday when you are in middle school. Sure, it’s a thing that will happen someday, but not much of a pressing concern.

You’d think so, at least. The prep process for going public is actually somewhat long if done well, and startups might need to get started with prepping their operations for the public markets earlier than they think. It’s a topic that we explored during TechCrunch Disrupt 2021, where I hosted a conversation with Lux Capital Partner Deena Shakir, Madrona Managing Director Hope Cochran, and CrowdStrike CFO Burt Podbere.

The entire discussion is embedded below, but I’ve pulled out a few key moments for those of you who are more reading-based learners than video-watchers. Topics follow by subheadline, with the video at the bottom. Enjoy!

You can prep too early

Heading into the conversation, I expected to encounter three folks all nodding their heads sagely, intoning in unison that startups can’t really start IPO prep too early. That was not what I wound up hearing. Cochran said this, following my question about how early a startup should start prep for its public debut:

You hear many people talk about, “Oh, you need to start thinking about going public really, really early” and building that rigor. I’m actually more on the camp of: “Let’s let the company run and be agile for a while and put in processes as they’re needed.” You will get there in the appropriate amount of time.

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Leveraging customer feedback and data to iterate on your product

How to iterate on product has always been one of the top concerns at startups. But while they previously had to rely solely on customer feedback and instincts, they now also have a trove of data to balance. This dynamic creates new opportunities but also requires a new kind of arbitrage.

We discussed this new context during TechCrunch Disrupt 2021 in a panel conversation with Jean-Denis Grèze of Plaid, Stephanie Mencarelli of InVision and Pete Thompson of eBay. We explored different perspectives on being data driven, segmenting your user base, iteration speed and more.

The role of data

Our conversation started with a provocative question: Can a startup or a tech company ever be too data driven?

According to Thompson, the answer is “absolutely not” — but Mencarelli wasn’t so affirmative.

Thompson:

It’s a matter of how you use the data and how you balance it with other forms of feedback that you get. But I would say that it’s just getting more and more important to uncover things within the organization with data that you can’t do with any other means. It identifies things that human curation or manual processing wouldn’t uncover.

Mencarelli:

I will maybe slightly disagree and say that there is a point where you can get too data driven, where you’re not seeing what I call the edges of the innovation bell curve. So it’s really important to see what smaller cohorts are doing, because they could be early adopters to a new behavior.

However, Thompson himself had added some nuance earlier, noting that “You need to be able to also think about other things that you’re not doing or features that you could build that the data won’t actually tell you.” He gave an example of this at eBay:

We’ve recently been launching something that we call searching through images, so not just text queries. And this is a great example where our data would never have told us that on our site, for instance, for fashion, the younger audiences just want to be able to browse and see other things that look like the same image, not based on a text-based search. And these are things that you have to glean through other forms of feedback loops.

The importance of segmenting well

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Getting the details right in your pitch deck

VCs read pitch decks extremely quickly, which means that every detail holds the potential to get them to double down on a startup or just pass altogether. While crafting the high-level narrative is critical, of course, founders can’t skimp on the details either.

That’s why every Disrupt, we host a session we call Pitch Deck Teardown. It’s a convivial workshop where founders in the audience send me their decks, and I walk through a curated set of them live in front of an exceptional VC panel, who critique the deck slide by slide. This year at TechCrunch Disrupt 2021, we were joined by Maren Bannon, co-founder and managing partner at January Ventures; Vanessa Larco, partner at NEA; and Ben Ling, founder and general partner of Bling Capital.

We went through two decks — one consumer and one enterprise — covering about 30 slides in total. It’s honestly hard to summarize all the discussions we had on the panel — there were just so many interesting viewpoints that I highly recommend reading the transcript or watching the video included below.

So for this summary, I decided to pick four slides, two from each deck, that provoked our panelists to show how VCs can have radically different views on the same material.

Product slide

Most consumer decks, like this one targeting dog owners, will have some form of product slide that shows exactly what a startup is building. It’s a critical slide, but one that can be easy to get wrong.

Larco liked the design, but suggested offering investors ways to dive deeper:

Screenshots are typically great, but if it piques your interest, it would be great if they had a link to a Loom video or something so that if I did want to go deeper and if I was really curious about what the product actually looks like, I could. That said, when it launches automatically into video, I find it typically hard to sift through it unless I am really interested already. So I think screenshots with an option to go deeper is great. But this looks great, the UI is great and clean. It explains the three core components of the app, which is basically what I asked for upfront. So this is pretty well executed. (Timestamp: 9:00)

The company had an additional slide just like this one with three more product screenshots. Larco felt that this maybe added a bit too much information about the UI.

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Finding product-market fit, from the earliest stages through growth

At this year’s TechCrunch Disrupt, we assembled an all-star panel of venture capitalists working across the entire range of startup growth and got their insights on assessing product-market fit — a perennial and evergreen challenge for entrepreneurs at all levels of experience.

Human Ventures’ Heather Hartnett, Greylock’s David Thacker, and Felicis’ Victoria Treyger all shared their perspectives on what makes for good product-market fit, how to spot it and how to use it to your best advantage for both your business’ growth and for raising capital.

What to look for before there are even any metrics

Product-market fit gets easier to assess the further along in the company development process you are; it’s a lot simpler to figure out if what you’re offering is what your users want once you actually have users. But what about before that?

Especially for first-time founders, assessing product-market fit at a stage where it’s mostly anticipation can be as much art as science, but our panelists provided some advice about how to set yourself up for success.

Hartnett:

Our view of product-market fit is at the earliest, earliest stages, really at that point, you’re looking for metrics that are not even there yet, right? You’re looking for the earliest indicators that customers even want what your messaging and value prop is, and then you have a strong hypothesis about what that value is, and you have a strong hypothesis about how you can grow that value over time. And then it’s just a lot of experiments to figure out if you can even see some of those early indicators. You know, my father used to say, “You don’t have to tell a thirsty man that he needs water.” So we always just think about “What is that thing that you’re not trying to double sell?” But it’s the single sell that people really do want.

Thacker added that while it may seem counterintuitive, it actually behooves entrepreneurs to raise as much money as possible on a concept in order to have the right resources from which to find and maximize product-market fit.

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3 founders share strategies for navigating bias and building confidence

Entrepreneurs from underrepresented groups are more likely to face an uphill climb than their white, male counterparts, but their challenges stretch well beyond systemic bias and a general lack of access to capital.

Women, transgender and Black startup founders must navigate myriad issues for which there is no playbook: People of color may question how much of their authentic selves they can bring to the workplace, CEO moms are more likely to shoulder the majority of their family’s childcare responsibilities, and many workers have never been led by someone who’s gone through gender transitioning.

In a TechCrunch Disrupt Extra Crunch Stage panel titled “The Path for Underrepresented Founders,” I spoke with Hana Mohan, a transgender woman who is the CEO and co-founder of MagicBell, a notification platform for product teams; Leslie Feinzaig, a Latina entrepreneur who started the Female Founders Alliance; and Stephen Bailey, a Black man who is the founder and CEO of Exec Online, an online leadership development platform.

We went slightly over our allotted time; the conversation was a blend of frank talk about their lived experiences and practical discussion about some of the strategies that help them keep moving forward.

Despite their varied backgrounds, each panelist agreed that it’s important for founders who aren’t from privilege or wealth to understand and accept that systemic bias is real. And because Silicon Valley touts itself as a meritocracy, the gap between expectation and reality can create cognitive dissonance.

When Feinzaig was fundraising in 2017, “I expected that it would be hard. But I also expected that it would be fair,” she said. “And in reality, it was just kind of a gaslit experience. I felt like I was in this really dark room. And nobody would tell me how to turn on the lights.”

Mohan, whose company graduated Y Combinator’s Winter 2021 cohort, said pattern-recognition bias doesn’t just influence who investors decide to work with; it also informs how founders present themselves and their companies.

“White cis men, they tend to have a bravado about how they talk, this kind of exuberant, ‘we are going to crush the competition,'” she said. “I definitely felt that when I would sprinkle my pitch with some of those words, it definitely resonated more, like you have to communicate that excitement is naturally amply balanced.”

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Index, Sequoia and Canvas investors weigh in on how to raise your first dollars

Founders seeking to raise their first round of capital may feel overwhelmed by the prospect. There is definitely plenty of capital out there, but there are also a lot of startups clamoring for it.

To help new entrepreneurs figure out this dilemma, we invited three investors to speak at a panel titled, “How to Raise Your First Dollars,” during TechCrunch Disrupt 2021 so they could share their best tips on what you should do as you attempt to raise that money, as well as strategies for who to pitch to, when to pitch and how to pitch.

Index Ventures partner Nina Achadijan started out by urging founders to first consider whether they actually really need to raise venture capital. “It’s a phenomenal time to be an early-stage entrepreneur. There’s more capital than ever before and there’s a willingness to accept technology from consumers and businesses,” she said. “And quite frankly, there’s a lot of platform shifts that are very exciting for early-stage entrepreneurs. But the first thing you need to do is ask yourself: Do you really need to raise venture capital? There are so many incredible businesses that can be built that actually don’t need VC funding.”

Achadijan said founders should first get clarity on what they would be using the money for. Secondly, she said, they should consider whether they want to eventually exit the company via an IPO or a sale. Once a founder decides to raise capital, the next step would be to make a list of companies that are either similar to theirs either in business model or by industry. Then using Crunchbase or PitchBook, she then recommends making a list of VCs that backed those companies, including angel investors.

“Then what you can start to do is go down that list and say, ‘It seems like this person focuses 100% on what I’m doing; I’m definitely going to talk to them,’ or ‘This person has backed similar business models and I’m really excited to hear their perspective on my space or my industry!’ And then once you have your target list … you can start to get introductions and basically start the process of fundraising,” she said.

Canvas Ventures’ co-founder and general partner Rebecca Lynn agreed with the exercise. In particular, she recommended listing what’s “non-negotiable” in terms of the investor and amount of money raised, and what would be a “nice to have.”