VC Platform Summit 2019–4 Key Takeaways…
Last week 200 VC platform people from across the globe met up in New York for the 4th annual VC Platform Summit. Our goal was to come together to learn from, and gain context and perspective from each other. The agenda covered topics including scaling a platform team, productising platform as a service, measuring success and impact of platform, launching ‘blend’ initiatives in the wider ecosystem to promote and increase diversity, and much more. I wanted to share some of the standout nuggets of wisdom I left with.
On The Role Of Platform In VC…
Platform is no longer a nice-to-have. It’s now very much a core part of the entire VC process right from sourcing through to exit but plays the largest part once the deal is won. What’s expected from platform people in our role at VC firms will differ at each step of the overall VC process.
On Platform As A Product…
The goal of a fund is to maximise returns to its investors. Platform’s role in this is to focus on the growth and development of the fund’s portfolio companies. Nick Kim @ Crosscut Ventures summed it up perfectly, “platform must be built as a product if it’s going to scale and product management principles must be applied.” Prioritisation is key and at every stage of the process platform managers will need to ensure that they’re pitting the ideas against one another to be sure that the resources are being allocated to the highest impact activities. I’m a huge fan of the R.I.C.E model used by product managers to determine which initiatives to prioritise by scoring ideas according to four factors: Reach, Impact, Confidence & Effort. Scoring and ranking initiatives in this way cuts through the noise and ensures we focus on the activities that most align with the platform goal(s) and overall platform strategy.
On Practicing What We Preach…
Customer engagement is key to any successful platform offering. If you want to get founders and their wider teams engaged, it’s helpful if you’ve tested the product yourself where relevant. Building a successful company is dependant on how well a founder can manage, lead, and inspire their teams. More firms focus on helping founders develop their leadership skills by offering resources to help them do so. We’re in an era where VCs also need to improve themselves and think about their own development as professionals. As put by Daisy Onubogu @ Backed VC, “if we expect founders to adopt best practices, then we as a VCs need to do the same.” This attitude goes a long way towards winning the trust of founders and also helps to ensure that we’re developing at the same rate at which the industry is changing.
On Measuring The Success Of Platform Efforts…
Many platform strategies and activities are hard to quantify, especially in terms of direct ROI. This poses a challenge for platform people. VC is an industry driven by hard metrics and quantitative data. When it comes to measuring platform success, Dan Kozikowski @ FirstMark Capital has found that “qualitative feedback and measuring what you can control, are the best ways to buy social capital with the team and LPs, too.” The consensus shared was that measuring activities such as introductions made to talent and/or corporates, portfolio coverage / attendance at events, the number of successful introductions made to follow-on investors and deals closed off the back of a meeting with the platform team are good data points to work with.
The best ways to obtain qualitative feedback is to interview a handful of founders from the portfolio that represent your fund’s ideal customer profile (for us as a seed stage fund, these would be our pre Series A founders), and ask questions around what they’ve liked and disliked, what they’d like to see more and see less of, what has added the most value, and what has had the most impact.
Final Thoughts…
I left NYC with lots of food for thought and a real sense that platform is a crucial part of the VC process. What was once an optional role in funds, is now table stakes and the speed at which the community is growing reflects this. I’m excited to see what strides we’ll collectively make across our respective ecosystems over the next 12 months and in years to come!
