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Who is the Product person? When we talk about early stage venture capital at Lightspeed, this is the single most important question we can ask when making an investment.

Why?

Because the product person is the artist with the vision who sees a masterpiece where the rest of us see clay. After 10+ years of venture capital experience and two startup experiences of my own I’ve learned to appreciate how rare it is to find a truly stellar product person, and also that startups without a product person as a founder are much more likely to fail.

My belief is that great entrepreneurs are able to marry innovative technologies with macro changes in order to build disruptive products we love to use at the right time.  They see the opportunity and leap when the rest of us only see obstacles.  The world is calling them crazy, but its because they have the vision to see what the rest of us don’t that they have the conviction to try.

When I make a seed or Series A investment, it’s because I am excited about the market opportunity and the chance to be a concierge for a world class team (yes, that is the true job of a VC); and that team must have the product person.

The Product Person does four fundamental things:

  1. At a high level, they understand the macro forces (I call it the tail winds) that are driving the industry to change and allow for a new product to disrupt incumbents.
  2. They have the ability to understand technology at a level that enables them to see the flaws in existing products (in light of the macro changes occurring), and also appreciate the power of innovative technology for new products.
  3. Incredibly passionate about the customer experience.  Maniacal about features and detail.
  4. Ability to tell the story.  Great product people can succinctly explain the reason the company and product should exist.  And stories are what sell potential hires, investors and customers.

When teams come into pitch and they talk about hiring a Chief Product Officer or a VP of Product during the Series A timeline, that’s a signal to me that they may not have the complete DNA.  At the heart of the company is the product vision.  Trying to hire a person to be the product visionary, to obsess about the customer experience, to drive the right feature prioritization and strategy — well, I think that has to come from a Founder.  Because only founders have the gravity in a company to make those choices and tradeoffs that a startup must in order to succeed.

If you are thinking of starting a company, or are currently working at a startup, ask yourself – Who is THE Product Person?  If the answer isnt obvious, perhaps you should think a little more about your decision.

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Our freshly minted investment in Comprehend (www.comprehend.com) was announced today. We are thrilled to back co-founders Rick Morrison and Jud Gardner and their team as they continue their mission to use next generation data analytics to help life science companies transform the way they bring products to market.

Like many of our most successful companies, what Comprehend does is simple yet powerful and has a profound impact on their customers. Basically all the life science companies out there have a really difficult time seeing and analyzing the data they need to navigate the clinical trial process. This is the lifeblood of their business — getting products to market — yet they are flying blind! There are so many data sources and the data changes so rapidly, and traditional data warehousing and integration technologies simply cannot adapt to that change. Comprehend has developed a next generation data analytics platform that readily adapts to all this change. Their customers such as Boston Scientific have implemented Comprehend’s SaaS service in less than a month and thereafter the system keeps up as the data and needs for analysis change. Comprehend allows life science companies to successfully get new products out faster with less risk.

Comprehend hits on one of the major themes that Lightspeed has been seeking out investments in. We first invested in Big Data infrastructure companies such as Hadoop (MapR) and Cassandra (DataStax). This infrastructure, together with other advances in processor power, in-memory data storage (Fusion-io, Nutanix, Nimble), and software delivery in turn enable a next generation set of Big Data and data analytics application companies. We have been actively making investments in this overall area in companies such as Numerify (cloud-based analytical apps for IT operations), BloomReach (Big Data marketing applications), EverString (Big Data-driven B2B demand generation) and ThoughtSpot (data search).

When Rick and his team shared their story with us, we knew instantly that we wanted to work with them. We were delighted to be chosen by Comprehend to be their partners, and look forward to helping them on their journey to transform the way life companies bring much needed next generation treatments and devices to patients around the world.

 

 

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We are excited to announce our new Series A investment in EverString (www.everstring.com)!  CEO and co-founder Vincent Yang, a mathematician by training, had built a system while he was at Summit Partners, a private equity firm, to comb the Web looking for investment opportunities.  At EverString, he took his thinking to an entirely new level.  He has assembled a crack team of experts in natural language processing, text mining, machine learning, computational optimization, and unstructured data analytics to do something essential for any B2B enterprise:  generate demand.

EverString does this by first building a proprietary database that continuously crawls to collect and analyze over 10,000 variables on millions of individual businesses from company websites, announcements, industry data, and other public and proprietary data sources.  This is BIG DATA!  The team developed unique natural language processing and text mining capabilities which are keys to building this database.  The system then ingests historical sales lead and conversion data and other data resident in a customer’s CRM system; analyzes this data against the proprietary database using machine learning capabilities; and generates a predictive model.  This model then is used to:

  • Maximize the value of leads by micro-segmenting them and identifying the most likely to convert. Typical conversion rate boost > 50%.
  • Generate new leads with a high probability of conversion.
  • Identify the best upsell/cross sell prospects.
  • Provide analytic insights on what characteristics represent the best customer prospects, enabling the fine tuning of marketing activities.

We love businesses like EverString that take complex technologies that are out of reach for most companies and create incredibly impactful, easy to consume products and services.  Enterprises that use EverString gain a fundamental edge over their competition in building revenue and market share.

EverString hits on one of the major themes that Lightspeed has been seeking out investments in.  We first invested in Big Data infrastructure companies such as Hadoop (MapR) and Cassandra (DataStax).  This infrastructure, together with other advances in processor power, in-memory data storage (Fusion-io, Nutanix, Nimble), and data analytics methodologies in turn enable a next generation set of Big Data application companies.  We have been actively making investments in this overall theme in companies such as Numerify (cloud-based analytical apps for IT operations), BloomReach (Big Data marketing applications), and ThoughtSpot (data search).

We are looking forward to helping EverString in their quest to disrupt the world of B2B demand generation.

 

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Business Intelligence (BI) is the gift that keeps on giving. For years, startups have popped up, promising better insights and faster decision making capabilities, consistently resulting in new waves of highly valued companies. Take a look at the past decade, …

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Congratulations to Tony Fadell, Matt Rogers and the world class team at Nest!  Today Nest announced that it has agreed to be acquired by Google.   As investors in the company since the early days, we here at Lightspeed have been …

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Today is an exciting day for Nimble Storage. We are fortunate to be early investors and partners to the company, having made our initial investment during the depths of the global financial collapse in late 2008. Nimble successfully completed its …

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New content sites like Buzzfeed, Upworthy, ViralNova and PolicyMic*are growing fast through social sharing. Yesterday Facebook made some changes to their newsfeed algorithm that will deprecate low quality memes and highlight high quality stories that get clicked and read a …

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Bitcoin has been on a nice run over the last few months, currently trading above $500 USD/BTC.

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A large driver of the run up has been growing demand for Bitcoin in China. BTC China has always been …

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In yesterday’s Facebook earnings call, a lot of concern has been raised about how teen usage on Facebook has dropped slightly. Said Facebook’s CFO:

“Our best analysis of youth engagement in the U.S. reveals that usage of Facebook among

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Social media sites by definition involve user generated content. In some cases, like Youtube comments or Chatroulette, that makes for some unpleasant behavior. In other cases, like Pinterest and Quora, the better angels of our nature win out. The difference …

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