Riechers, long-time venture partner, board member, and advisor, discusses why so many startups get their second product/market wrong.
PEOPLE
- Guest: Gene Riechers, Venture Partner at Sands Capital Management
- Host: Anil Hemrajani, Founder of Startup Sidekick
TAKEAWAYS
- As CEO, recognize it’ll be harder than you think and you probably know less than you think.
- Invest in learning. Take your time to learn the industry and buyers (e.g. demographics, buying patterns).
- Don’t take shortcuts (product, marketing). Realize how much know about your first product and how long it took to develop that knowledge.
- Have separate/parallel groups for product/engineering, marketing, and sales; you can share other groups (e.g. HR, finance, legal). New groups can have a combination of inside people (company culture, knowledge) and outside hires (e.g. industry knowledge).
TIMELINE
- 01:30 – Overview of Sands Capital Ventures ($50bn asset manager), early stage tech
- 03:20 – What is a 2nd product/market and when/why startups get this wrong (e.g. they don’t know enough, they take shortcuts, overconfidence)
- 07:30 – The importance of business domain knowledge
- 08:05 – What’s riskier – industry vs product? Passion. Not understanding enough % of market (relationships, buyer behavior)
- 09:32 – Organizational issues using existing departments; create a parallel organization for engineering, marketing and sales
- 14:10 – How to empower a new business to operate autonomously with protections in place (e.g. legal)
- 18:50 – Takeaways (see above)
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