The core of an amazing company is a breakthrough product. At Shasta, we aim to help great entrepreneurs build iconic companies around epic products. But, ultimately, it takes an exceptional team – one with the instinct, drive, grit and the obsession – to build a life-changing product and bring it to market. We refer to them as Passionate Teams.
It’s not enough to look at the product alone. In fact, when I invested in Marketo, they didn’t even have a product. It was the references to the team that confirmed they were extraordinary product builders. It gave me the confidence to know that they would build a marketing-leading product. And they did.
We believe that Passionate Teams are behind Epic Products. It’s the team and their unique perspective on how to solve a problem that makes the difference. It’s about the way the team thinks about that problem and their ideas around the product to solve that problem. It’s the energy, enthusiasm and dogged perseverance they bring to solving that problem. It’s passion.
What Does it Take?
It’s one thing to talk about passion but how do you identify it? How do you look at a team and know that they possess what it takes to make it for the long haul? For us, Passionate Teams have the following three things in common:
1. They’re obsessed with solving a problem. Passionate Teams have usually experienced first-hand a problem or market inefficiency. It’s what brings them together. They might know the market and the players so well that they can see a way to build something no one else has created. Marketo was an example of that. Usually, Passionate Teams have lived the problem so many times that they’re willing to quit their jobs, give up any sense of normalcy and start a company just to solve that very problem.
Mitch Grasso’s Beautiful.ai, which is going to revolutionize how business creates presentations, is a current example. For Mitch, business people should not waste a moment spending hours sizing boxes, circles, and squares to create their presentation decks. Mitch is an engineer, a product visionary, a designer and a domain expert. He sold his last company – Slide Rocket, the first online collaborative presentation software – to VMware in 2011. But, after he sold Slide Rocket, he couldn’t stop thinking about all the business users who continue to struggle to easily create beautiful slide decks. So four years later he started Beautiful.ai. The problem keeps him up at night. We like that.
2. They run through walls. Passionate Teams are fueled by their obsessions – driven to smash through hurdles or tirelessly iterate until they find the workaround to defy those obstacles. Every start-up undergoes challenging times. Passionate Teams are resilient – they conquer setbacks, and unexpected complications because they know they are creative and resourceful enough to figure out solutions to the tough problems.
Anaplan is an example of that. It was an unusual situation. We backed a team that was spread out around the world which presents a host of problems, but we saw real genius in their product architecture. Despite the initial complications, as well as the unforeseen ones, Anaplan persevered. The team built an elegantly designed product to handle massive amounts of data in online spreadsheets. Anaplan is Excel taken to a different dimension – it literally allows Anaplanners to model complex business problems requiring multiple dimensions (e.g. product, time, geography, etc.). It’s something that Excel or Google Sheets or any comparable product in the market can’t do. And the team we backed were the only ones capable of creating it.
3. They can execute. Lots of people have “the idea.” But can they build it? Can they figure out the supply chain? Can they get the product to market efficiently and sell it? And, can they build long-term loyalty with their customers? There are countless companies with great products who have lost because they got out-marketed or out-maneuvered by rivals. Or they didn’t manage their customer relationships well. Or they failed to deliver on what they promised. One of my favorite quotes summarizes it well:
“It’s hard enough to invent and manufacture a product but then the logistics, the mechanics, the hydraulics of getting it to the people who want it – this is how companies die, how ulcers are born.” Phil Knight, Nike (Shoe Dog)
Many of our companies execute extremely well and Nest is a great example. The company was founded by a team out of Apple that had already proven themselves. Tony Fadell helped create the iPod and the iPhone and had shown the ability to create breakthrough products that delight users. He had this unique vision to create products similar to the iPod for home automation. He and his team executed brilliantly.
Who’s Got It?
But with founding teams, you don’t necessarily know if they possess all three of these abilities at the start of the journey. So how do you determine who’s got the passion to build an epic product and an amazing company around it? For us, it shows up when we meet with founding teams. We can tell who’s really thinking deeply about the product and the alternatives. We want to know how the team considers the design and balancing the features and functions of a solution with ease of use to the customer. Do they understand the target audience and their pain points? We look for deep, nuanced thinking informed by real-world experience. That’s number one.
Now, is there a product? That’s number two. If there is a product, the passion shows up in customer conversations. We talk with customers to find out if they’ve evaluated alternatives and why they chose this particular solution. Is the product differentiated from everything else out there?
We invest early in companies so we can help founding teams make their products as marketable as possible. We invest in teams that have the drive, relentless focus and undying desire to build product leaders. We look for Passionate Teams and have been lucky enough to work with many of them.