20VC Why Venture Is A Service Product Why There Is No Such Thing As Product Market Fit & Why Startups Need To Be More Design Orientated with Ben Blumenfeld, CoFounder & General Partner @ Designer Fund

In this episode of "20 Minutes VC," host Harry Stebbings interviews Ben Blumenfeld, co-founder and general partner at Designer Fund, an investment firm focused on startups co-founded by designers. Blumenfeld shares insights from his journey from a design lead at Facebook and design director at Varian to venture capital. He discusses Designer Fund's mission to integrate design into the core of startups, highlighting the importance of design in product development and company success. The conversation also touches on the challenges designers face, such as lack of capital and outdated education, and how Designer Fund's programs like Bridge and Designer Founder Guild support and scale design talent within their portfolio companies. Blumenfeld emphasizes the evolving VC landscape's growing appreciation for design, the synergy between deep tech and design, and the need for products that align business success with societal improvement. He also discusses the transition from a builder to an investor role and the importance of scaling support mechanisms as an investment firm grows.

• Harry Stebbings introduces himself and mentions his activities on Snapchat and his writing on mojitovc.com.
• Harry encourages listeners to provide feedback and highlights a previous episode with Pesman as a must-listen.
• The introduction sets the stage for the guest of the day, Ben Blumenfeld.

We are back in the land of the 20 minutes VC with me Harry Stebings found drinking mojitos on Snapchat at htebbings with two B's and writing a lot more these days on mojitovc.com.

This quote introduces Harry Stebbings, the host of the 20 Minute VC podcast, and directs listeners to his social media and blog.

• Ben Blumenfeld is a co-founder and general partner at Designer Fund.
• He was a design lead at Facebook and design director at Varian.
• Harry Stebbings acknowledges Scott Belsky for introducing him to Ben.

Today as we welcome Ben Blumenfeld. Now. Ben is the co-founder and general partner at Designer Fund now.

Harry Stebbings introduces Ben Blumenfeld, highlighting his current role and past experiences.

• Designer Fund invests in startups co-founded by designers.
• They also educate design teams through the Bridge program.
• The portfolio includes companies like Gusto, Stripe, and others.

They invest in startups co-founded by designers and build and educate design teams through their program bridge.

This quote explains the mission of Designer Fund, which focuses on supporting designer co-founded startups and providing education for design teams.

• Ben managed the communication design team at Facebook.
• His team was responsible for visual branding and marketing pages.
• Ben's experience includes growing Facebook's design team.

Years, where he helped build products for nearly a billion people and grow Facebook's world-class design team.

The quote outlines Ben's role at Facebook, where he had significant responsibilities in managing the design team and impacting a vast user base.

• Intercom offers a messaging platform for marketing and customer support.
• It integrates chat, targeted messages, and personal support.
• Live customer data powers all products, enabling real conversations throughout the customer lifecycle.

Intercom is the first to bring messaging products for marketing and customer support together on one integrated platform.

This quote describes Intercom's product offering, emphasizing its integrated approach to customer communication and support.

• Cooley is a global law firm focused on startups and venture capital.
• They have extensive experience with venture funds and represent VC-backed companies.
• Cooley assists with fund formation, management, investments, and more.

Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world.

The quote highlights Cooley's expertise and history in the venture capital space, positioning them as a leader in legal services for startups and VCs.

• Ben's experience at Facebook involved meeting designers and recognizing a need in various industries.
• He observed a lack of well-designed products in sectors like healthcare and education.
• Ben's concerns about the future of design in critical industries led to conversations about change.

And I started thinking to myself, well, why aren't designers joining these companies? Also, why aren't designers starting these companies?

This quote reflects Ben's initial thoughts that led to the creation of Designer Fund, where he questioned why designers were not more involved in founding companies or joining industries with design needs.

• Ben and Enrique Allen identified a gap where designers were not pursuing entrepreneurship.
• They conducted research by interviewing designers to understand the barriers.
• Lack of capital, role models, and outdated education were identified as major themes.

How do we get more designers to take the path of entrepreneurship? How do we get better design products and services?

The quote summarizes the core questions Ben and his partner Enrique Allen asked, which drove their research and ultimately the establishment of Designer Fund.

• Designers lacked connections to VCs and capital.
• VCs undervalued design, as seen with Airbnb's early struggles.
• There was a dearth of designer role models and stories to inspire.
• Design education was not aligned with entrepreneurship, focusing instead on agency work.

A lot of designers didn't have great connections to VCs, and actually a lot of VCs at the time didn't really value design that much.

This quote captures the challenges designers faced in accessing capital and recognition from the venture capital community, which was a barrier to entrepreneurship.## Design Education and Market Needs

• Design education is lagging behind the skills required in startups.
• Designers often acquire necessary skills outside of formal education.
• Top designers acknowledge issues in design education and support initiatives addressing them.
• The endeavor to improve design education is mission-oriented and community-driven.

"So I think a lot of design education still needs to catch up, both teaching the skills that designers need in startups, but also even making that path something that is given to designers."

This quote highlights the gap between current design education and the practical needs of designers in the startup industry. It suggests the need for educational reform to better prepare designers for the market demands.

• Design background provides insights into what constitutes a great product.
• Experience in building products informs the evaluation of companies' products and processes.
• Continuous striving for product-market fit is essential, not a one-time achievement.
• A replicable design and product process is crucial for sustained success.

"And so not only do we look at can this team or do they have a great product now, do they also have a process to continue to produce great products going forward, because one of the things that we're realizing, this idea of product market fit as a thing that you either have or don't have, it's not really true."

This quote emphasizes the importance of not just having a great product at a single point in time but also having a process in place that allows for the continuous creation of great products, challenging the binary notion of product-market fit.

• Venture capital is approached as a design problem.
• Research and iteration are used to build services tailored to company needs.
• Focus on helping portfolio companies with hiring and product development.
• Bridge program developed to scale services and support for portfolio companies.

"And so by treating venture as a product, we're able to design accordingly and we think create a much better service for our portfolio companies and founders."

The quote conveys the innovative approach of treating venture capital as a product that can be designed and improved upon, leading to better support for portfolio companies.

• Increasing value placed on design by VCs and the rise of design partners in VC firms.
• Design is still often viewed as an aesthetic add-on rather than a necessity.
• Advocacy for design's integral role in building successful startups is ongoing.
• The goal is to make great design, engineering, and technology foundational elements in startups.

"And so a big part of what we do is try to be huge evangelists for design. And whenever we meet with other investors, whenever we meet with founders, kind of continuously champion the value of design and kind of show its effectiveness in building great companies."

This quote reflects the effort to promote the importance of design in the startup ecosystem and to shift the perception of design from an afterthought to a core component of company building.

• Deep tech and design should be integrated for the best outcomes.
• Companies with both advanced technology and excellent design achieve superior results.
• Great technology needs to be paired with great design to be effective and useful.
• Examples include Facebook's newsfeed and Tesla's vehicles.

"No, they absolutely should go hand in hand. And I think the best companies are where those two things do come together."

The quote asserts that deep tech and design are not only compatible but essential to each other for creating exceptional products and companies.

• The distinction between good and bad products is not strictly binary.
• Good product design is about effectiveness and the user experience.
• Both technology and design contribute to a product's success.

"You need to actually also marry that with great research, great product design, make it useful."

The quote implies that the success of a product lies in the combination of innovative technology and thoughtful, user-centric design, rather than in either element alone.## Subjectivity in Design

• Cultural differences impact preferences in UI design; Western cultures favor cleaner designs.
• Products have various goals, including business goals, consumer satisfaction, and societal impact.
• The alignment of these goals can lead to successful products that benefit businesses, consumers, and society.
• An example of a successful alignment is Omada Health, a diabetes prevention platform.

"Everything is like, there's a gradation there."

This quote emphasizes that evaluating design and products is not binary but rather exists on a spectrum.

"Ideally, all those things are aligning beautifully where if a business does well and if the product does well, then people get what they want out of the product, and actually the output is a better society."

This quote highlights the ideal scenario where business success, product effectiveness, and societal benefits are all aligned.

• Minimizing surprises by modeling activities and understanding the ecosystem before raising a fund.
• Challenges include adjusting from a builder's role to an investor's role, where direct control over product development is limited.
• The importance of believing in a company's potential without the ability to be involved in day-to-day operations.

"We actually modeled our activities for a couple years before we raised our fund."

This quote explains the proactive approach taken to understand the venture capital landscape and minimize surprises.

"As an investor, you can't really do that, right? It's more of a managerial role, it's more of a coach, it's more of a mentor."

This quote illustrates the different roles and limitations faced as an investor compared to being a designer or builder.

• Building scalable programs like Bridge and Designer Founder Guild to provide sustainable support to companies.
• The focus on depth over breadth in investments, choosing to support a limited number of companies intensively.
• Considering the type of relationship investors want with their portfolio companies and the expectations from both sides.

"We've also built another program called Designer Founder Guild, which is a program where we bring great designer founders in our portfolio, but also ones outside of our portfolio together on a regular basis."

This quote explains one of the scalable initiatives created to support a growing portfolio.

"We only do about ten to twelve investments a year. And so we're not trying to do 40, 50 investments a year."

This quote highlights the strategic approach to investment, focusing on quality and depth rather than quantity.

• Investors have different styles, from hands-on support to making fast decisions and providing inflection point assistance.
• Founders need to consider the type of investors they want and the working relationship they desire.
• Investing is a long-term game, requiring consideration of the investor-founder relationship dynamics.

"But I think as founders, founders need to consider who they want around the table and how they want to work."

This quote advises founders to be selective about their investors and to consider the working relationship they wish to establish.

"This is a long, long game."

This quote underscores the long-term nature of investing and the importance of building lasting relationships between investors and founders.## Tenure of Fund Commitment

• Investing in a fund requires a long-term commitment, typically spanning a decade.
• It is crucial for investors to align their investment with their desired working style.

A fund is a ten year commitment. And so I think it's really important for investors to make sure that they are doing it in a way that aligns with how they want to work.

This quote emphasizes the importance of investors ensuring that their fund commitments are in harmony with their personal work preferences and long-term plans.

• Ben's favorite book is "The Power of One," a coming-of-age story that resonates with him due to its heroic journey and quality storytelling.
• Ben believes in the positive role of religion in life, especially in creating ritual and heritage, which he feels is lacking in the tech community.
• The tech community often comprises agnostics or atheists, and Ben sees a parallel between religious rituals and events like Burning Man.

So my favorite book, there's a book called the power of one, which is a coming of age story about a kid and his adventures. And it's simply one. I'm a total sucker for coming of age stories. I'm a total sucker for kind of the hero's journey. And this is a beautifully written book.

Ben expresses his affinity for coming-of-age stories and the hero's journey, which is why "The Power of One" is his favorite book.

I'm jewish and have recently engaged more with the local jewish community here in San Francisco. And one of the things that I think not many folks in tech, there are not many religious folks in the tech community.

Ben shares his personal engagement with his Jewish heritage and observes a lack of religious individuals within the tech industry.

• Charles Hudson's honest and conversational newsletter is a top read for Ben.
• Social Capital's "snippets" and First Round's content are considered valuable for founders and are among Ben's preferred readings.

Charles Hudson has a really great newsletter, and his tone is, like, super honest and conversational, and it makes you realize just how rare that is, how often people communicate to you in a really natural way.

Ben praises Charles Hudson's newsletter for its honesty and conversational tone, highlighting the rarity of such natural communication.

• Ben admires Joe and Brian from Airbnb for integrating design into their company and taking risks.
• Evan from Snapchat is respected for his non-traditional, fun approach to company building, which differs from the typical Silicon Valley mindset.

Joe and Brian at the company Airbnb is by no means a perfect company, but the way that they've instilled design in every aspect of that company and the risks that they've taken...

Ben respects Joe and Brian for their comprehensive incorporation of design into Airbnb and their willingness to take risks.

Evan and Snapchat are doing because I think they're a very non Silicon Valley approach to company building.

Ben appreciates Evan's unconventional approach with Snapchat, which contrasts with the usual Silicon Valley strategies.

• Ben's recent investment in Hustle was due to its significant improvement in outreach for advocacy groups.
• Hustle's tool allows efficient one-to-one text messaging, which Ben sees as a game-changer for communication in campaigns and advocacy.

There's a company called Hustle that we recently backed. So they improved the outreach advocacy process by, it's something like 30 or 40 x.

Ben explains the rationale behind investing in Hustle, highlighting the substantial improvement the company brings to outreach and advocacy processes.

• Harry Stebbings expresses gratitude to Ben for his insights and to Scott Belsky for the introduction.
• Intercom is recommended for its integrated messaging platform for marketing and customer support.
• Cooley is recognized for its longstanding service to startups and venture capital firms.

So fantastic to hear the design orientated perspective on investing there from Ben and a huge congratulations to him on all the success of designer fund...

Harry Stebbings compliments Ben on his design-oriented approach to investing and acknowledges the success of Designer Fund.

Intercom is the first to bring messaging products for marketing and customer support together on one integrated platform.

Intercom is endorsed for its innovative messaging platform that unifies marketing and customer support.

Cooley is the global law firm built around startups and venture capital firms.

Cooley is acknowledged for its expertise and history of serving startups and venture capital firms.