How To Get Your 2nd Product/Market Right, Interview With Gene Riechers, Partner at Sands Capital

Riechers, long-time venture partner, board member, and advisor, discusses why so many startups get their second product/market wrong.

PEOPLE

TAKEAWAYS

  1. As CEO, recognize it’ll be harder than you think and you probably know less than you think. 
  2. Invest in learning. Take your time to learn the industry and buyers (e.g. demographics, buying patterns).
  3. Don’t take shortcuts (product, marketing). Realize how much know about your first product and how long it took to develop that knowledge.
  4. 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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