In this episode of "20 minutes VC," host Harry Stebbings interviews Scott Belsky, a multifaceted entrepreneur, author, and investor. Belsky, who co-founded Behance and served as Adobe's VP of Products post-acquisition, is currently a venture partner at Benchmark. He discusses his journey from bootstrapping to venture capital, emphasizing the importance of the "first mile" in product development and the challenges of enduring the "journey in between" startup phases. Belsky, who has invested in companies like Uber and Pinterest, shares insights on the evolving landscape of social media, the potential public utility model for autonomous vehicles, and the significance of diverse perspectives in venture partnerships. His central theme revolves around the critical yet often overlooked middle stages of entrepreneurial ventures and the balance between hands-on building and strategic investing.
"Now. Scott really is a man of many skills, so I'm not really sure where to start. Scott Belsky is an entrepreneur, author, and investor."
This quote introduces Scott Belsky, highlighting his diverse skill set and achievements in entrepreneurship and investment.
"I also want to say a huge thank you to Mike Mignano at anchor for the intro to Scott today, without which the show would not have been possible."
Harry Stebbings expresses gratitude to Mike Mignano for his role in facilitating Scott Belsky's appearance on the podcast.
"Today, there are some products that you simply cannot remember what life was like before them."
Harry Stebbings shares his personal experience with products that have become essential in his life.
"Absolutely fantastic. And you can check it out now. At X AI, it really is a must."
Stebbings endorses X AI, emphasizing its effectiveness and recommending listeners to try it out.
"I had been at Adobe for a little over three years, helping change some parts of the company, like mobile products and some of the creative cloud stuff."
Scott Belsky describes his impactful work at Adobe, which included revamping mobile product strategies and contributing to Creative Cloud developments.
"I get to spend some of my time on things. With benchmark, I jumped into one of the businesses that we recently backed that I actually helped found and also get to do some of the earlier stage seed investing again as well, which is exciting."
Belsky outlines his multifaceted role at Benchmark, which allows him to be involved in both founding new ventures and early-stage seed investing.
"When you're bootstrapping a business, you get a tremendous feel for the granularity of your business."
Scott Belsky highlights the intimate understanding of a business's finances that comes with bootstrapping.
"I benefited from the discipline, but of course, I also benefited from being able to scale and grow more quickly once we had venture capital."
Belsky acknowledges the advantages of having venture capital, such as the ability to scale and grow a business more rapidly.
"You're a big fan of the kind of thesis that constraint enforces creativity."
Harry Stebbings makes a statement about Belsky's belief in the positive impact of constraints on creativity.
"I am, yeah."
Scott Belsky confirms his agreement with the concept that limitations can lead to innovative solutions.
"When you start to do more traditional venture capital, and certainly venture capital at the benchmark level, it's a lot more. Or it's also about momentum..."
Scott Belsky contrasts angel investing with traditional venture capital, emphasizing the significance of momentum in the latter.
"So it was hard for me in some ways, to start focusing more on the measuring of the momentum side than anything else."
Belsky shares the difficulty he faced when adapting to the venture capital approach, which places a strong emphasis on gauging a company's momentum.
"Venture capital and investing in general is a business of exceptions."
Scott Belsky points out the unique aspect of venture capital where standard criteria may be overlooked in favor of exceptional cases.
"And I think the learning that I had from the many conversations we had and continue to have as a team, looking at potential investments, you start to learn how to weigh the exceptions versus the rules..."
Belsky describes the learning process of evaluating when to make exceptions and when to follow established investment patterns, a key skill in venture capital.
"I think that's certainly one of the greatest benefits of a partnership, is having a group of people that you really respect and have a lot of affection for, but think extraordinarily differently." "The trouble with momentum also is that when something has too much momentum too quickly, in my experience at least, it tends to fade out."
These quotes highlight the value of diverse perspectives in investment partnerships and the need to be cautious of investments with rapid momentum, as they may not be sustainable.
"When there is an increasing level of benefit from using a product over time, I feel like that sustained momentum versus you get this big hit." "It's fun, it's cool... But it wasn't like the more you used it, the better it became."
Scott Belsky explains how sustained momentum, as seen in companies like Uber, is driven by increasing benefits over time, contrasting it with products that fail to offer long-term value despite initial popularity.
"The failure of the first mile for most products is that the teams fail to remember that every user in his or her 15 seconds is lazy, vain and selfish." "They should make sure that a customer can get in, can see something in it for themselves, they know why they're there and what to do next."
Scott Belsky emphasizes the importance of designing the first mile of a product to cater to users' tendencies to seek immediate benefits without effort, ensuring quick and clear value is provided.
"The first mile is forever more important, especially as you try to engage more and more people." "You have to continually revisit it and optimize it for new groups of new users with different psychographics, different expectations, different ages."
Scott Belsky argues that as a product's user base grows and diversifies, the first mile must be continually refined to meet the evolving needs and expectations of new user segments.
"You have to consistently go through it yourself, and you'd be surprised how many teams don't revisit it." "Let's just find a way to deliver a great service without that information and then garner it over time from regular use."
Scott Belsky stresses the need for creators to regularly revisit and improve the onboarding process, focusing on ease of use and gradual information gathering to enhance user experience.
"What really makes the difference in any sort of venture is your ability to endure everything in between, the anonymity, the struggle, the lack of financing, at times, the failed products and the iteration." "There's just not as much discussion and coverage over the most critical insights for the journey in between that endurance and optimization phase."
Scott Belsky highlights that the key to success in any venture lies in navigating the challenges and continuous improvement that occurs in the middle stages, which are often overlooked by media narratives.
"The entrepreneurs that I admire the most are just very practical heads down. They are obsessed with... I remember talking to Ben Silberman in the early days of Pinterest, asking him what his plans were for the next six months... And he looked at me and he said, I want to have a better process."
This quote emphasizes the value of focusing on foundational elements like process improvement over more superficial or short-term objectives. It suggests that practicality is a key trait of successful entrepreneurs.
"And so I'm struck by the juxtaposition between the perspective of the investor and the wide lens, and then the entrepreneur, super focused."
Scott Belsky highlights the contrasting viewpoints of investors and entrepreneurs, suggesting that a balance between broad and focused perspectives can be beneficial.
"And if so, why wouldn't those be operated off of some of the same software and planning infrastructure as city transportation today?"
Scott Belsky proposes that autonomous vehicles could be integrated into existing public infrastructure, potentially managed by government agencies.
"But I wouldn't be surprised if there's a lot of that data becomes a trade secret, if you will."
Scott Belsky suggests that while some transportation data could be shared for public benefit, companies may keep other data private for competitive advantage.
"I just find it hard to believe that it will all still be through their individual branded apps."
Scott Belsky speculates on the diminishing role of individual brand apps in the future of transportation, hinting at a shift towards service aggregation.
"And all three of them said, safety. Safety net for them. If they can't get a bus, if they can't do something else, they always have Uber, which I thought was a very interesting alignment with the brand..."
This quote reflects the public perception of Uber as a reliable and safe transportation option, which is a significant aspect of the company's brand identity.
Sebastian Junger right now on tribes, and it just talks about how when we get too comfortable and complacent as a society, we tend to not be at our best. But when there's calamity, when we're at war, when something happens to us, is when we really band together.
The quote highlights the main argument of Sebastian Junger's "Tribes," which is that societal challenges often bring out the best in human cooperation and collective action, as opposed to times of comfort that may lead to complacency.
Social media will become more passive in the sense that we'll always be sharing what we're doing, what we're reading, what we're looking at. And other people who follow us can, at various times, jump in and see what we're doing or search it in smart ways.
This quote explains the predicted shift towards a more passive form of social media, where continuous sharing and live updates become the norm, changing the nature of user engagement and privacy.
There's some people know Seth Godin that I've only met with a handful of times. But every time, he really makes me think and rethink a lot of the decisions and career points in my life.
This quote illustrates the profound impact a mentor can have, even with limited interaction, by prompting critical reflection on career decisions.
I enjoy, on the technology side, I enjoy a lot of Jessica's stuff on the information.
The quote indicates Scott Belsky's preference for substantial technology content, specifically mentioning Jessica's work on The Information as a valuable resource.
I just missed building and I realized that a lot of my strengths are around helping teams before product market fit, helping them find it, helping them before they have momentum.
The quote reflects Scott Belsky's self-awareness of his strengths and preferences in the venture capital space, particularly his passion for the early stages of company development.
I still have a lot of conversations with other technologists and designers that I respect about problems that should be solved, and there's always a part of me that thinks, well, I jump in someday and focus more of my time on a particular problem.
This quote captures Scott Belsky's ongoing dialogue with peers about potential problems to solve and his openness to dedicating himself to such challenges in the future.
And you must sign up to his newsletter. It's absolutely incredible and I've included the links in the description for today's episode.
Harry Stebbings endorses Scott Belsky's newsletter, emphasizing its value and providing a link for listeners, which demonstrates the importance of sharing resources within the community.