20VC Maveron's Rebecca Kaden on The Patterns Of Entrepreneurship and Taking A Consumer Product From Niche To Mass Market



In this episode of 20 minutes VC, host Harry Stebings interviews Rebecca Caden, a partner at consumer-focused venture fund Maveron. Caden discusses her journey from a passionate journalism student at Harvard to venture capital through the guidance of tech mentor Bill Campbell, which led to her role at Maveron where she specializes in identifying and supporting early-stage consumer companies. She emphasizes the importance of pattern recognition in successful entrepreneurs, particularly their speed, detail orientation, and exceptional hiring skills, using examples like Katrina Lake of Stitch Fix. Caden also explores Maveron's interest in the consumerization of IoT and the potential of chat interfaces in enhancing convenience. She touches on the challenges of transitioning startups from early adopter to mass market and the significance of brand building in consumer-facing investments. Additionally, Caden praises Maveron's approach to hardware investments and the firm's focused investment thesis in the consumer sector.

Summary Notes

Introduction to Rebecca Caden and Maveron

  • Rebecca Caden is a partner at the consumer-only fund Maveron.
  • She focuses on identifying emerging consumer-focused entrepreneurs in Silicon Valley, Southern California, and New York.
  • Plays a leading role in Maveron's seed program, partnering with emerging consumer companies.
  • Board observer at August Common, Derby, Smart, Dollskill, Ego, Earnest, and General Assembly.
  • Recognized by Forbes in their annual 30 under 30 list.

"Rebecca is a partner at consumer only fund Mavron, where she identifies emerging consumer focused entrepreneurs in Silicon Valley, southern Cal, California and New York."

This quote introduces Rebecca Caden's role at Maveron and her geographical focus for identifying entrepreneurs.

"And Rebecca also plays a leading role in Mavron's seed program where they partner with emerging consumer companies at their earliest stages."

This quote highlights Rebecca's involvement in Maveron's seed program, emphasizing her role in the early stages of consumer companies.

"And we're not the only ones who think she's awesome, as her outstanding achievements have also been recognized by the likes of Forbes, who've included Rebecca in their annual 30 under 30 list."

Rebecca's achievements and recognition by Forbes are mentioned to establish her credibility and success in the venture capital industry.

Rebecca Caden's Background and Career Path

  • Grew up in New York City and attended Harvard for undergrad with a passion for journalism.
  • Worked at The Economist in London, developing a love for writing and editing.
  • Shifted interest to digital media and the functioning of online publications.
  • Attended Stanford for business school and sought advice from mentor Bill Campbell.
  • Joined Maveron during business school summer and stayed on post-graduation.
  • Appreciates Maveron's focus on consumer, team tackle approach, and founder-first attitude.

"I grew up in New York City and went to undergrad at Harvard, where I became very, very passionate about journalism and thought that that's probably what I would do forever."

Rebecca Caden describes her early passion for journalism and initial career aspirations.

"Which led me to business school at Stanford. And when I was there, I went to talk to a mentor of mine who's a kind of tech God named Bill Campbell, who I was lucky enough to get to know and very much admire."

Rebecca's pivot to business school and the influence of her mentor, Bill Campbell, are explained, showing the importance of mentorship in her career.

"So I joined Maveron during my summer of business school and then never left."

This quote marks the turning point in Rebecca's career where she joined Maveron and decided to stay in the venture capital industry.

Writing and Personal Branding in VC

  • Rebecca has not yet fully integrated writing into her investing career.
  • Focuses on direct engagement with entrepreneurs through conversations and developing pattern recognition.
  • Sees value in gaining experience and hard lessons before returning to writing.
  • Admires those with experience and plans to write more in the future.

"Not yet, and probably not enough. I spend almost all of my time talking to people, which almost feels like kind of an old art now."

Rebecca discusses her current approach to her role, emphasizing personal interaction over personal brand building through writing.

"I see writing as something I'd love to go back to and plan on doing in the future."

This quote indicates Rebecca's intention to return to writing at some point, acknowledging its potential value in her career.

Investment Decision Making and Pattern Recognition

  • Investing requires a forward-looking approach, predicting future business and technology successes.
  • Rebecca focuses on understanding characteristics of successful entrepreneurs from past experiences.
  • Maveron attempts to support assumptions with data, including mapping out traits of great entrepreneurs.
  • Examples of traits include speed and the ability to balance big-picture orientation with detail orientation.

"But you do that often by looking backwards and by trying to understand the characteristics that have worked in the past, particularly on the people side."

Rebecca explains the balance between forward-looking predictions and learning from past successes in investing.

"We've actually tried to map out what we think goes into a great entrepreneur and put it into ten bullet points."

This quote reveals Maveron's methodical approach to identifying traits of successful entrepreneurs through data and analysis.

Key Theme: Entrepreneurial Traits and Success Factors

  • Successful entrepreneurs possess the ability to tell a compelling big picture story while paying attention to the intricate details of company building.
  • Pattern recognition in hiring is critical; top entrepreneurs hire team members who are seemingly out of their league, convincing them to believe in the vision early on.
  • Entrepreneurs like Lewis Barrell and Katrina Lake are highlighted for their exceptional skills in storytelling and team building, respectively.

"That's really hard for one person to do, be able to tell a very big tale, but focus on the minute details that go into company building."

This quote emphasizes the difficulty and importance of balancing a grand vision with attention to detail in entrepreneurship.

"Pattern recognition between standard entrepreneurs is how they hire. They shoot above their league. They convince people to join their team and to believe in their vision way before it's obvious."

This quote outlines a key trait of successful entrepreneurs: their ability to attract and hire exceptional talent by inspiring belief in their company's vision.

Key Theme: Consumerization of IoT and Sector Growth

  • The consumer IoT space is driven by the pursuit of convenience through technology, blending hardware and software to improve physical world interactions.
  • Challenges in IoT include creating user-friendly experiences, the high cost of development, and the need to build brands that facilitate and drive adoption.
  • Consumer IoT opportunities lie in leveraging mobile devices and emerging technologies like voice and AR/VR to enhance convenience.

"And when I think of Iot, I really think about that. How do you make the offline world more convenient and better and faster and smarter, but use technology and software to do that and as the interface for customers..."

This quote captures the essence of the IoT's goal, which is to augment the physical world with technology to simplify and enhance everyday life.

"Is it hard to build these kind of magical experiences? Yes. Is it expensive to build them? Yes, it definitely can be. All of the trends there are going in our favor."

The speaker acknowledges the challenges in creating compelling IoT experiences, noting the trends are positive despite the difficulties and costs involved.

Key Theme: Integration of Chat and Messaging in IoT

  • Chat and messaging interfaces are becoming integral across various platforms for their convenience.
  • The trend towards chat integration is not unique to IoT but is particularly impactful due to the seamless and ubiquitous nature of messaging platforms.
  • Voice interfaces, like Amazon Echo, are being explored as potentially more convenient options for controlling IoT devices and services.

"Can you download another app to operate your hardware device or to just do anything? Sure. But is it easier to communicate on a single platform and in a single format and one that you're on all day anyway, which know a chat interface..."

This quote highlights the convenience of chat interfaces over downloading multiple apps, suggesting a shift towards unified platforms for device control and communication.

Key Theme: Amazon Echo and Voice-Controlled Experiences

  • Amazon Echo represents a potentially revolutionary way to interact with technology through voice control.
  • The device's simplicity and the novelty of controlling various features by voice contribute to its "magical" user experience.
  • While currently more delightful than utilitarian, Echo's integration with various services could make it a mainstream method for interaction.

"I think it's a great example of magical experiences where we're a little bit in a too soon to tell phase. I love it when you use it. It feels like magic."

This quote describes the enchanting experience provided by Amazon Echo, while also noting that it's early to determine its full utility and mainstream potential.

Key Theme: Brand Building for Consumer-Facing Startups

  • For consumer-facing startups, product quality is foundational, but building a lasting brand requires wrapping technology in an engaging story and emotional experience.
  • A lasting consumer brand integrates into customers' hearts and minds through storytelling and customer experience, not just product excellence.
  • Entrepreneurs must prioritize brand building and customer experience from the outset to create a successful consumer-facing brand.

"How do you take great product and great technology and great platforms and wrap it in the right experience and story and emotion to build a lasting consumer brand?"

This quote underscores the importance of combining a strong product with a compelling brand story and emotional resonance to build a lasting consumer brand.

Understanding Team Dynamics in Due Diligence

  • The due diligence process involves comprehensively understanding how a team thinks and operates.
  • Assessing the team's thinking is crucial in determining their potential for success.

of diligence process and getting to know a team is really understanding how they think about it.

This quote emphasizes the importance of understanding a team's thought process during the due diligence phase of investment. It suggests that the way a team thinks is a significant factor in their potential for success.

Mavron's Attraction to Hardware Investments

  • Mavron shows a preference for hardware investments despite common VC skepticism.
  • Skepticism from VCs towards hardware often stems from concerns about logistics, production, and shipping challenges.
  • Mavron seeks to partner with the best emerging technology-powered consumer brands, regardless of whether they are purely software or involve hardware.
  • Investing in hardware requires entrepreneurs who can handle the complexities of logistics and supply chain management.

And then moving back to your portfolio and say the likes of August and Derby smart, Mavron's shown their likability towards the hardware investments again. So why do you think Mavron have this tendency maybe towards hardware that other vcs are skeptical of? And do you think the VC's skepticism towards hardware due to logistics and production and shipping is a feasible one overall?

Harry Stebings questions Mavron's inclination towards hardware investments, acknowledging the general VC skepticism due to the operational complexities associated with hardware.

Yeah, So to back up, the way we look at it is that our goal is to partner with the best emerging technology powered consumer brands.

Rebecca Caden explains Mavron's investment strategy, which focuses on partnering with top emerging consumer brands that leverage technology, regardless of their business model.

Bridging the Gap from Early Adopters to Mass Market

  • Consumer companies often struggle to transition from early adopters to a broader mass market.
  • Mavron looks for brands with mainstream appeal rather than niche markets.
  • Successful transitions involve understanding diverse consumer bases and building strong brand connections through storytelling.
  • Mavron values brands that resonate with consumers beyond the tech-savvy early adopters.

How do you try and bridge that gap and view that tipping point?

Harry Stebings inquires about strategies to transition consumer companies from early adopter markets to mass market appeal.

I think one of the most common discussions at our Monday meetings is, is this something we love or is this something everyone loves?

Rebecca Caden discusses Mavron's internal evaluation process, which focuses on distinguishing personal preferences from broader market appeal.

Admiration for Other Investors

  • Rebecca Caden expresses admiration for investors who understand diverse markets and entrepreneurs.
  • She specifically mentions Dan Levitan, Fred Wilson, and Bill Gurley for their unique strengths and approaches to investing.
  • Emulating successful investors involves understanding motivations, building brands, and maintaining focus.

I'm really intrigued to hear who those might be for you personally.

Harry Stebings shows interest in learning about which investors Rebecca Caden admires and potentially emulates.

Oh man, there are so many. I mean at my own firm, Dan Levitan, who started Mavron is fantastic at that.

Rebecca Caden shares her admiration for her colleague Dan Levitan and other notable investors for their ability to connect with and understand different markets and entrepreneurs.

The Benefits of a Narrow Investment Thesis

  • Mavron's focused investment thesis on consumer brands brings clarity and direction to their strategy.
  • Specializing in consumer-only investments allows Mavron to build expertise and make more informed decisions.
  • A narrow thesis can lead to high conviction in the types of entrepreneurs and companies to support.

So what do you think the benefits are of having such a narrow investing thesis.

Harry Stebings asks about the advantages of Mavron's focused investment approach, particularly in the consumer sector.

I think if I've learned one thing in the last kind of five years of getting to know Mavron and being part of the team, it's the benefit of focus.

Rebecca Caden reflects on the importance of maintaining a focused investment strategy and the benefits it has brought to Mavron.

Importance of Pattern Recognition in Investing

  • Pattern recognition is crucial for investors to identify successful ventures that resemble past successes while considering future potential.
  • Narrowing focus can accelerate and enhance the development of pattern recognition skills.
  • Specializing in a specific sector, like consumer technology, can lead to better investment decisions despite the vastness of the field.

"But as investing requires this ability to pattern match with great things that have come before, while still keeping that eye on the future, if you can narrow that scope, you're going to develop that pattern recognition faster and probably better."

This quote highlights the significance of being able to identify patterns in successful investments and how a focused approach can improve this skill, which is critical in making sound investment decisions.

Personal Interests and Passions

  • Rebecca Caden is passionate about Russian literature, particularly the novel "Pale Fire" by Vladimir Nabokov.
  • The story's exploration of the importance of narratives resonates with her work in building consumer brands.
  • Outside of consumer tech, she is personally interested in fintech due to its potential to improve experiences and outcomes with technology and data.

"But my absolute favorite book is called Pale Fire by Vladimir Nabokov, which is a strange, strange novel, but it's basically a story about why stories are important and why they're necessary in our lives."

This quote explains Rebecca's favorite book and its thematic relevance to her professional life, emphasizing the power of storytelling in both literature and brand building.

Inquiry and Engagement in Investment Meetings

  • Entrepreneurs should inquire about a firm's process for reserving capital and making follow-on investments.
  • Understanding the support process from the outset is critical for entrepreneurs seeking investment.

"So I think more entrepreneurs should ask how firms can reserve capital. What is their process for reserving capital? What is their process for follow on investments?"

Rebecca advises that entrepreneurs should be proactive in understanding the investment firm's approach to funding and support, as it is vital for their long-term relationship and the success of their venture.

Favorite Reading Materials and Influencers

  • Rebecca consumes a variety of newsletters and blogs, including well-known ones like Term Sheet, Strictly VC, and TechCrunch.
  • She admires the thinking and writing of Sarah Tavill, Fred Wilson, and Brad Feld.
  • For a break from tech, she enjoys the humor and intelligence of the blog "Wait But Why."

"I love Sarah Tavill's blog... I love Fred Wilson's blog. I love Brad Feld's blog. And then when I want a little tech break, I read, wait, but why? Because it's so funny and smart."

The quote lists Rebecca's preferred sources of information and inspiration, highlighting the importance of diverse perspectives and the balance between professional development and leisure reading.

Favorite Apps and Investments

  • Rebecca's favorite app is Service, which simplifies customer service interactions.
  • Mavron's recent investment in Booster Fuel was driven by the entrepreneur's exceptional background and the company's innovative solution for fuel delivery.
  • The decision to invest was based on the entrepreneur's abilities, the product's convenience, and the potential for a superior customer experience.

"We led a series A in a company called Booster Fuel at the end of the year... But the reason we said yes and the reason that I like it so much is the entrepreneur super special, Frank Mycroft."

This quote explains the rationale behind a recent investment decision, emphasizing the importance of the entrepreneur's vision and capabilities, as well as the product's value proposition.

Acknowledgements and Resources

  • Harry Stebings expresses gratitude to Rebecca Caden for her participation in the podcast.
  • Promotion of the 20 Minute VC newsletter and the SaaStr podcast.
  • Endorsement of Sanebox for email management, offering a special trial for podcast listeners.

"And I'd like to say a huge thank you to Rebecca for giving up her time today to appear on the show."

Harry thanks Rebecca for her contribution to the podcast, which is a courteous acknowledgment of the guest's time and insights shared during the episode.

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