In this engaging episode of "20 minutes VC," host Harry Stebbings is joined by Todd Jackson and Finn Barnes from First Round Capital to discuss Todd's transition from an accomplished product leader to a venture partner at First Round. Todd shares his journey from growing Gmail's user base to 200 million, redesigning Facebook's newsfeed, and leading product management at Twitter and Dropbox, to angel investing and ultimately joining First Round. Finn offers insights on the importance of balancing learning with impact in new roles and the key qualities First Round seeks in a partner. The conversation also touches on the significance of product-market fit, the value of ideas, and the art of being a great coach to founders. The episode concludes with a look at the generational transition within venture firms and the team-based approach that sets First Round apart.
"Welcome. You are listening to the 20 minutes VC with me, Harry Stebbings, and it'd be amazing to hear your thoughts and feedback on the show."
This quote serves as Harry Stebbings' introduction to the podcast, inviting listeners to engage and provide feedback.
"Before first round, he worked on some of the most transformational consumer products of the last decade, including as a pm at Gmail, taking it from zero to 200 million users to leading a major redesign of Facebook's newsfeed, to serving as director of product management at Twitter, and then most recently being Dropbox's vp of product and design."
This quote summarizes Todd Jackson's extensive experience in product management, which contributed to his new role at First Round Capital.
"I started my career in Silicon Valley at Google in 2004 as an associate product manager... And then ultimately I wanted to be a founder... And so at cover, I got the experience starting something from scratch... And then finally, most recently at Dropbox... And so at Dropbox, I got the experience of being on an executive team and of managing hundreds of people in product and design."
This quote outlines Todd Jackson's career journey from a product manager at Google to becoming a venture partner at First Round Capital.
"And so I think for me, the piece of advice would just be to encourage Todd to balance the learning and the doing. So take risks by pushing for what he believes and to help us continue to evolve our product and our firm."
This quote reflects Finn Barnes' advice to Todd Jackson on how to approach his new role at First Round Capital, emphasizing the importance of active contribution and risk-taking.
"So, there were so many. But I'll highlight three big takeaways, one on product, one on business model, and one on culture."
This quote introduces Todd Jackson's three main learnings from his experiences at leading tech companies, which he believes have shaped his mindset and approach to venture investing.## Carousel Shutdown and Dropbox's SaaS Pivot
"My first official task, actually, as vp of product, was to shut down this product called Carousel, which was this beautiful consumer photo sharing app... And so we had all these folks working on it internally, and it was just this key moment for us. Can we afford to support and invest in this consumer oriented part of Dropbox, or did we really need to turn the ship and focus 100% on SaaS? And we chose the latter, which was, in retrospect, I think, a really good decision."
This quote explains the strategic decision to shut down Carousel and pivot towards a SaaS business model, which proved to be beneficial for Dropbox's growth and eventual IPO.
"Last on the culture related takeaway, the thing that I've loved learning about seeing how these different companies operate internally, and one of the patterns that I've seen is that the way a company operates, its culture, its values, the way it makes decisions, it's really a manifestation of the founders and of their values."
This quote emphasizes the importance of founders' values in shaping company culture and decision-making processes, with Dropbox as a prime example.
"I mean, I think as we think about those things early, you want to think about the founder's orientation towards those things... But I don't think that if a founder came in at a precede or seed stage and said, when I go out to raise my series a, I'll have a CAC into LTV of three to one or ten to one, that we'd be more or less interested, and probably actually less interested given that they think they can predict that so far out."
Finn Barnes' quote indicates that while early-stage founders should be mindful of CAC and LTV, it is unrealistic and unnecessary to have precise predictions at the pre-seed or seed stage.
"Yeah, so I think it's probably a good time to talk about my startup, which was called cover in 2013, and we thought a lot about this at the beginning. And honestly, when you talk about finding product market fit, in my opinion, the most important choice you make as a founder is picking a good market other than choosing your co founders."
Todd Jackson's quote highlights the significance of market selection in achieving product-market fit and the success of his startup, Cover.
"So in our seed fundraising process for cover, we actually talked to over 50 investors... And I leaned so much on Josh during the most critical pieces of that journey. And so I just have a good recent feel for how investors can and should be helpful to founders."
This quote reflects Todd Jackson's personal experience with fundraising and the value of investor support, shaping his approach to assisting founders as an investor.
"But I learned over the course of working with many founders that it's better to be in a listening mode, helping the founder themselves deeply understand the problem and the different approaches they might take to thinking through the problem rather than trying to answer the question yourself."
Todd Jackson's quote captures the essence of effective coaching, which involves guiding founders to find their own solutions rather than providing answers.## Team Dynamics and Evolution at First Round
"Since then, there have been some changes with founding partners Chris and Rob transitioning to board partner roles in 2018. And so the truth is, we've been operating as a smaller team for more than a year now with really only four investing partners."
The quote explains the recent changes in the First Round team's structure and the reduction to a core group of four investing partners.
"So first with Todd, we've known Todd for quite some time. We invested in a startup, as he mentioned, back in 2013, and similar to over half of our investments, Todd was referred to us by another founder that we'd already partnered with, Dave Gerard from Upstart."
This quote details how Todd Jackson was introduced to First Round and highlights the importance of referrals in their partner selection process.
"And so we think, will this person be a founder magnet? Someone founders are absolutely effusive about, someone that the best founders are dying to work with."
The quote emphasizes the importance of the new partner being highly regarded and sought after by founders, indicating their potential positive impact on the firm.
"So the biggest reason that I wanted to join a fund instead of starting my own fund or instead of staying as an angel is that I really wanted partners."
This quote explains Todd's motivation for joining First Round, highlighting the value he places on collaboration and mentorship within a team.
"Yeah, it's a great question, and certainly I've heard more than once that generational transition is the number one cause of death for venture firms."
The quote acknowledges the difficulty of generational transition in venture firms and sets the stage for explaining First Round's approach to avoiding common pitfalls.## Consumer Perspective in Venture Capital
"What's really special about both Tod and Haley is that they've been consumers of this product. So they have the added benefit of being on the other side of things very recently."
This quote emphasizes the advantage that Tod and Haley have in understanding the needs and perspectives of founders, given their recent experience as consumers of venture capital.
"I think it's where first round really have innovated so well in terms of viewing venture as a product."
The quote highlights First Round Capital's innovative approach to venture capital, treating it as a product that includes community and support, not just funding.
"The first one is Creative Selection... And the second is Trillion Dollar Coach..."
This quote is Todd giving book recommendations that have influenced his understanding of product design and leadership.
"Your team will define your success. They'll make you better, and any investment you make in pushing them to be their best will come back to you sort of ten times over."
Finn explains the importance of a strong team in venture capital and how it contributes to a VC's success.
"We ran a really good process... And so that allowed us to really control the timeline and get a great outcome on the acquisition, if I'm honest."
Todd discusses the structured approach they took when selling their startup, which led to a positive outcome despite uncertainties.
"How do you move the room to make a higher quality decision is the critical metric."
Finn describes how influencing the partnership and contributing to high-quality decisions is a measure of success for a new venture partner.
"Josh was my first call. And as we discussed, Josh is really big on this idea of the pick."
Todd shares how Josh Kopelman's mentorship and emphasis on making careful career choices have influenced him.
"The idea is the most valuable thing you have when you start, and the best ones are the result of a tremendous amount of work and effort, experience, insight."
Finn counters the common advice that ideas are not important, arguing that they are indeed valuable and foundational for startups.
"First is Papaya payments... And then Snack Pass."
Todd shares his personal and professional investment choices, highlighting their innovative solutions and his reasons for excitement about their potential.
"I think it's absolutely something where the venture community fully recognized and respects all that first round's done in terms of productizing venture."
Harry Stebbings expresses his admiration for First Round Capital's achievements in the venture capital industry, particularly their innovative approach to treating venture as a product.
"It was a really good learning experience."
Todd reflects on the acquisition of his startup by Twitter as a valuable learning experience that contributes to his ability to advise founders today.