20VC Scott Belsky on Why We Must Challenge Our Faith In The Strength of Resources, Why We Must Rethink The Product Creation and Design Process & How To Determine Between The Good and The Truly Great When Assessing Individuals

In the first 2019 episode of "The Twenty Minute VC," host Harry Stebbings interviews Scott Belsky, Adobe's Chief Product Officer and Venture Partner at Benchmark. Belsky, an accomplished executive, entrepreneur, author, and investor, shares insights from his multifaceted career journey, from co-founding Behance to angel investing in startups like Pinterest and Uber. He emphasizes the importance of resourcefulness over resources, the "tragic product lifecycle," and the need to maintain simplicity in products. Belsky also discusses his book "The Messy Middle," advocating for truth in entrepreneurship and the value of enduring through the challenging phases of business growth. He advises on board membership, hiring for initiative, and the potential of micro-brands, reflecting on his investment in Assembled Brands. Throughout the conversation, Belsky highlights the correlation between happiness and feeling fully utilized, encouraging entrepreneurs to seek opportunities that maximize their skills and passions.

• Harry Stebbings is the host of the "20 minutes vc" podcast.
• Scott Belsky is the guest, known for his extensive accomplishments in the tech and venture capital ecosystem.
• Scott is Adobe's Chief Product Officer and Executive Vice President of the Creative Cloud.
• He co-founded Behance and served as CEO until its acquisition by Adobe in 2012.
• Scott is a venture partner at Benchmark and has an impressive angel investment portfolio.
• He is also an author, with his book "The Messy Middle" being highly recommended by Harry.

"You are listening to the 20 minutes vc with me, Harry Stebbings at H Stebbings 1996 with two b's on Instagram and my word, does it feel good to be back for the start of what will be a killer 2019?"

This quote introduces the podcast and the host, Harry Stebbings, highlighting the excitement for the new year and the upcoming content.

• Ladder offers term life insurance online with a straightforward application process.
• Pilot provides bookkeeping services for businesses, focusing on freedom and accurate financial reporting.
• First Republic is recommended for entrepreneurs seeking resources, network, and expertise to build a solid business foundation.

"With Scott today, are you thinking about life insurance in the new year? If so, you have to check out ladder."

This quote transitions the podcast from the introduction to advertisements, promoting Ladder's life insurance services.

• Scott Belsky's career includes being a startup entrepreneur, a venture-backed entrepreneur, and an executive in a large company.
• He has experience with the challenges of acquisition and integration into a larger company.
• Scott transitioned from being an angel investor to venture capital, joining Benchmark.
• He realized that he preferred building products and teams rather than being solely in venture capital, leading to his venture partner role at Benchmark.
• Scott emphasizes the importance of feeling "fully utilized" for personal happiness and career satisfaction.

"It's a confusing series of identity explorations."

This quote from Scott Belsky reflects on his diverse career path and his exploration of different roles within the startup and venture capital ecosystem.

• Scott Belsky believes happiness is correlated with feeling fully utilized in one's interests, curiosities, and skills.
• He feels most fulfilled by engaging in a range of activities, including being an operator, investor, and writer.
• Scott advises others to seek roles that make them feel fully utilized and to take risks to achieve this state.

"I actually feel like happiness is very correlated with utilization."

This quote emphasizes Scott Belsky's philosophy that personal and professional fulfillment comes from fully utilizing one's capabilities and interests.

• Scott Belsky values hiring people who can engage in increasingly interesting conversations over time.
• He seeks individuals who contribute to discussions with a "step function" increase in interest and insight.
• A shining example of this is his interaction with Kayvon Beykpour, which led to discussions on social media, empathy, and the idea of video versus photos.

"Is this someone whom every conversation is more interesting than the one before it, or is it a replay?"

This quote illustrates Scott Belsky's approach to evaluating potential team members based on the depth and progression of their conversations.

• Scott Belsky suggests that attracting top talent involves matching mutual curiosities between the leader and the potential team member.
• He emphasizes the importance of chemistry and the desire to work for someone you admire and who inspires you to explore shared interests.

"I think part of it is the matching of curiosities."

This quote highlights the significance of aligning interests and curiosities when building a team and attracting high-caliber talent.

• Leaders play a crucial role in shaping the narrative and providing a vision for the future.
• Great leaders are also storytellers who can motivate others to join and invest in their journey.
• The vision for the future must be complemented by a sense of daily progress to maintain engagement.
• Teresa Mabale's study on creativity in organizations highlighted that progress motivates further progress.
• Effective leaders merchandise real progress to their teams, which requires repetition and marketing.

"I think a big part of the leader's role is the narrative, and being the steward of the narrative for why you're doing what you're doing."

This quote emphasizes the importance of leaders in crafting and maintaining the overarching story or purpose behind their organization's efforts, which is essential for motivation and direction.

"Progress is the best motivator of progress."

This quote summarizes the findings from Teresa Mabale's research, highlighting the self-reinforcing nature of progress within organizations.

• Scott Belsky refers to the process of keeping a team motivated during uncertain and ambiguous times.
• Leaders must narrate the journey and celebrate real milestones to maintain team morale.
• Celebrating fake wins, such as paid awards or press, can be detrimental as it encourages nonproductive behavior.
• It is crucial to strike a balance between motivating the team and promoting actions that lead in the right direction.

"And the antidote to that is to be narrated through the journey by your driver, by the leader, telling you which milestones you've achieved, which state lines you've crossed."

This quote illustrates the role of a leader as a guide who keeps the team informed of their progress and achievements, which is essential for sustained motivation.

• The concept of a "stretch VP" refers to someone taking on a role that is a significant step up from their previous position.
• The key to determining if someone can handle a larger role is their ability to recruit and retain talent.
• A leader must consider whether potential leaders will be able to mentor and inspire their teams effectively.

"But if that person is not going to become a great recruiter and also retainer of talent, then you're screwed."

This quote emphasizes the importance of having leaders who are not only competent in their roles but also capable of attracting and keeping skilled team members.

• Scott Belsky discusses the concept of making difficult decisions for the greater good, inspired by Reed Hastings' approach at Netflix.
• The analogy of a sports team versus a family is used to describe the need for high performance and contribution from all team members.
• Difficult decisions may involve letting go of people or features that do not contribute to the team's success.

"Is everyone around us making us want to do our greatest work and helping us do the greatest work of our lives? And if not, who and why?"

This quote reflects on the necessity for every team member to contribute positively to the work environment and the collective goals of the organization.

• Entrepreneurs must balance their initial vision and mission with the reality of market feedback and progress.
• Conviction is key; if it diminishes based on real-time data and experiences, it may be time to quit.
• Sticking through the "messy middle" is essential if conviction about the end state remains strong.

"You still believe that this will happen, that this is more important than ever before. You are simply in the messy middle, and you have to stick with it."

This quote advises entrepreneurs to persevere through challenges if they maintain a strong belief in their vision and its importance.

• Scott Belsky criticizes the trend of rushing products to market and advocates for taking the time to perfect core features.
• Before a product goes live, teams have the opportunity to make significant changes without the pressures of customer satisfaction.
• The concept of "slow cooking" involves meticulously developing the most promising aspects of a product before launch.

"Customers are not going to get excited about anything that's half ass."

This quote underscores the importance of fully developing key features to ensure a product resonates with customers from the first use.

• The product lifecycle often involves a simple product gaining popularity, then becoming complicated as new features are added.
• The challenge lies in maintaining simplicity while the product evolves.
• Avoiding the trap of complication is crucial for long-term success.

"Making a simple product that's great is one thing, but keeping it simple is an entirely different thing."

This quote highlights the difficulty in preserving the simplicity of a product as it grows and adapts to new challenges and user needs.

• Emphasizing the importance of focusing on the initial experience of new users for product growth and engagement.
• Recognizing that different cohorts of users may require different onboarding experiences as their needs and behaviors evolve.
• The first mile of customer experience is crucial and often overlooked or hastily planned.
• Continuous adaptation to the changing user base is key to maintaining product simplicity and balance.

"Well, I think there's a little trick that you can use, which is to constantly prioritize your newest users experience of the product."

This quote highlights the strategy of prioritizing the experience of new users to ensure the product remains relevant and accessible.

"So the new cohort that Twitter gets these days of customers that don't care to construct a timeline and carefully curate who they're following and make sure that it's the ultimate stream. The newest customers of Twitter, it seems, just want the news."

This observation about Twitter's evolving user base underlines the necessity for products to adapt their onboarding process to meet the changing needs of new user cohorts.

• Proposing the idea of beginning the product creation process with the onboarding experience to guide important decisions.
• The significance of establishing brand language, typography, and value proposition early on to serve as a compass for product development.
• Reflecting on the importance of brand narrative before product development through the example of Uber's early branding discussions.

"I really think so. I love the idea of building a splash page before even building a product, of thinking about the brand language and the typography and just the one liners of value proposition before starting to build the product."

This quote suggests that the conceptual elements of branding should precede product development to guide and inform the process.

• Arguing that great investments often create markets rather than exploiting existing ones.
• Highlighting the need for products to fundamentally change human behavior or provide a sense of superpower to expand markets.
• Expressing skepticism about the value of existing market size estimations (TAM) in early-stage investing, favoring the potential to create new markets.

"The greatest investments typically made markets, as opposed to exploited a common knowledge, large existing market that everyone's excited about."

This quote encapsulates the belief that the most significant investments are those that create new markets rather than just serving existing ones.

• Comparing the use of financial resources to carbs and resourcefulness to muscle in startups.
• Warning against the reliance on abundant resources to solve problems, which can prevent the development of operational skills and risk management.
• Encouraging startups to start with limited resources to foster creativity and resilience.

"Resources are like carbs and resourcefulness is like muscle."

This metaphor illustrates the idea that while resources can provide quick solutions, it is the resourcefulness that builds long-term strength and capabilities in a startup.

• Acknowledging exceptions to the preference for raising smaller amounts of capital, especially in competitive markets where large funding is necessary.
• Emphasizing the importance of not relying purely on financial resources but also on the value of overcoming challenges and growing through adversity.

"There are certainly stages of certain businesses where they should raise a war chest because of the nature of the competitive climate."

This quote recognizes that in certain competitive situations, raising substantial capital may be strategically necessary.

• Describing the personal benefit of writing to synthesize and internalize lessons learned from experiences and observations.
• Writing serves as a tool to enhance one's own instincts and to reinforce conviction in decision-making.
• The book "The Messy Middle" is mentioned as a collection of tactics and insights that are valuable for both the author and entrepreneurs.

"Well, the funny thing is that this writing is really for me. I like to synthesize the things that I learn, things that I learned the hard way."

This quote reveals that the act of writing is a reflective process for the speaker, helping to solidify their own understanding and strategies.

• Emphasizing the importance of honest dialogue from the beginning of a startup venture.
• Highlighting the preference for founders who openly discuss challenges and scaling plans.
• Recognizing the value of transparency in the entrepreneurial journey.

"We start having a truthful exchange from the offset as opposed to, we're going to change the world. We're building this. It's amazing. Customers love us. It's growing like crazy. Can I pitch you?"

This quote underscores the speaker's appreciation for candid conversations about a startup's real situation, instead of just hearing overly optimistic pitches.

• The role of a board member varies depending on the board's needs.
• Effective board members should listen, steer conversations, ask tough questions, and support executives.
• The importance of adapting to the specific dynamics of each board.

"Part of being effective on a board, I think, is finding your role on that know and on the different boards that I've been on, my role has been different."

This quote suggests that a board member should be flexible and understand their unique contribution to the board, which may differ across various boards.

• The best opportunities are often non-obvious and may appear unattractive at first.
• Advising career seekers to join teams with potential for growth, not just those that are currently successful.
• Encouraging taking initiatives in seemingly unsexy businesses or those undergoing rejuvenation.

"Great opportunities don't have 'great opportunity' in the subject line."

This quote encapsulates the idea that significant opportunities may not be readily apparent and can be hidden behind less glamorous facades.

• Valuing initiative and potential more than experience and resumes.
• Observing that individuals with strong initiative can excel even without traditional backgrounds.
• The challenge of measuring initiative compared to experience.

"I think I believe more in initiative over experience."

This quote expresses the speaker's conviction that a person's proactive approach can be more impactful than their past experiences.

• Benchmark's success comes from a deliberate and focused approach, resisting the temptation to scale.
• The team's decision to maintain a non-scalable business model and to concentrate on their core strengths.
• The importance of resisting conventional growth temptations to preserve the firm's unique value proposition.

"I think one thing I also learned from the team is that it's not a scalable business."

This quote reflects the insight gained from Benchmark's business philosophy, highlighting the effectiveness of a non-scalable, focused approach.

• Assembled Brands provides a new class of capital for direct-to-consumer micro brands.
• Recognizing the potential in companies that may not be suitable for traditional venture capital.
• The innovative approach of using technology to assess brand performance and provide capital.

"One that just recently got announced is a company called Assembled Brands, which is a fund and a company."

This quote introduces Assembled Brands as a recent investment, explaining its role in supporting direct-to-consumer brands with a novel funding model.

• Continuation of work with product teams, particularly in augmented reality.
• Aiming to support and build products for creative individuals in an increasingly automated world.
• Aspiration to be a top seed investor and support great teams throughout their journey.

"I think for the next five years, it's helping creative people be more productive building products for creative people."

This quote outlines the speaker's future focus on empowering creativity through product development and investment in innovative teams.