Mark Suster Profile picture
Mar 20, 2021 19 tweets 4 min read Read on X
1/ A thread on "founder types" & how to hire those who complement you

There are no "exact types" of founders but to simplify:
A framework I think most founders broadly fall into:
1. Product centric
2. Tech centric
3. Customer centric

It helps to figure out which you have / are
2/ Many tech companies are "product centric"
- They understand how customers use today's products & where the gaps exist in the market.
- Know how to get tech built by high quality engineers
- Often win through 10x better products
- But often don't truly understand the customer
3/ In order to understand the customer you need to know:
- how they work
- what their problems are
- how to satisfy their needs
- how they get approval to spend $
- why they adopt new solutions
- how they train themselves
- how they get buy in from teams
- what choices they have
4/ I work with many "product centric" orgs.
Each time they truly believe they know the customer. In my experience they often don't. I didn't. I built better products. Then I sat in user sessions and would get frustrated that they couldn't figure out the most obvious things
5/ I realized that often my users didn't care about my features. They cared about "the job to be done" (Clay Christensen reference). They weren't in love with my product.
They wanted:
- easier, faster, cheaper, less cognitive load, less training, less remembering how to use
6/ Many "product centric" orgs don't think about the psychology of why leaders at enterprises adopt new technology
- career advancement
- controlling process
- cutting costs
- excitement
- perceived as a futurist
- willing to fight battles / change agent
- etc
7/ So I think that some "product centric" orgs end up winning despite not fully understanding the customer.

I think the right strategy if you're product centric is to realize it and hire customer-centric executives.
8/ Something I often tell CEOs

"Hiring a senior sales / biz dev professional helps greatly. They are customer-centric by nature. They will come kicking and screaming to you to improve product, pricing, customer success, training"

They PULL you into being more customer centric
9/ As @sethjs once said to me (metaphorically)

"tall people hire tall people, short people hire short people"

Best to hire people different than you. If you're product centric SEEK out others who aren't. Recognize both are a strength
10/ Customer-centric leaders aren't better than product-centric, they're different.
They start from:
- how does customer work
- how do I make his/her life better
- how do I hook them into buying / trying
- how much money, time would I save them
- how do I make them a hero?
11/ Customer-centric CEOs often come from backgrounds in consulting, sales or biz dev. They sometimes lack sophistication of how to build the best products. So they scale revenue quickly but eventually get beat by better products. They need to partner with great product leaders
12/ I won't fund customer-centric CEOs unless I have confidence that they understand the importance of product & engineering. It's like having somebody who knows how to build a beautiful restaurant & how to create buzz but not how to make world-class food. It takes both
13/ Tech-centric founders are slightly more obvious. They build stuff that has never existed before because, well, they can. This works really well when selling to other engineers or users who want to consume via APIs. It works less well when it requires more business functions
14/ I often remind tech-centric founders that often "best product doesn't win"
- Word Perfect > Word
- Lotus > Excel
- Harvard Graphics > PPT

Microsoft won

The world is littered with "best in class" tech that lost. Tech leaders who understand this partner well with biz people
15/ As I said, there is no model that wins every time. The starting point is:
- know your personal strengths (customer, product, eng)
- hire to your relative weaknesses
- make sure you give power & voice to the other roles and understand & value their contributions
16/ Sometimes the smartest people I know are the quickest to discount the value of "customer insights" (hating on consultants or sales professionals) or thinking "those customers are stupid." This is usually a recipe for an unsuccessful outcome

/fin
17/ (post script, an example from my early product days)

When windows & mice first became popular I designed systems to replace "green screen terminals."

I designed the tech I would use, all my friends would use, cutting edge, best-in-class ... the future!

The users hated it
18/ What I learned (AFTER) we built the system
- cust svc reps valued speed / knew short codes on green screens
- mice & windows were more intuitive but slowed down their operations
- our system helped a new rep but for experienced ones they could do less work
- they hated us
19/ If we would have spent time watching reps take calls & use existing systems. If we had asked why they did what they did & what was important to THEM we would have designed better systems. Not fancier, but met their needs. But we "knew better." Sigh.

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More from @msuster

Mar 14, 2023
1/ Update on what I know about SVB situation. New info on industry call with new CEO last night.

Their main message, "we are open for business, your deposits are fully FDIC insured & safe"

They understand you will have cash in multiple banks, they would like to be one of them
2/ CEO told us they will honor existing debt (i.e. you don't have to pay back on accelerated rates) and they will honor uncalled debt lines. They are underwriting new debt lines.

His main message, "we are open for business" and want to serve the tech industry
3/ They know they had systems issues in handover to FDIC but they believe they've turned a corner and will be fully operational to be a banking partner. There relationship managers should be reaching out to customers ASAP
Read 7 tweets
Mar 10, 2023
1/ What next at SVB? Nobody knows but here's what I suspect:
- Reports that they can't raise equity, looking for a buyer of the business
- Trading halted on their shares
- We suspect they will find a buyer that will emerge today or over the weekend

What if not?
2/ You can look back to WaMu in 2008 for last example of a bank run
- Fed stepped in
- Forced a sale to JPM
- JPM took over deposits

SVB is a great bank with great customers. Clearly others had their eyes on it
en.wikipedia.org/wiki/Washingto…
3/ At this point,
- every LP is asking every VC about their exposure
- every VC is asking every CEO about their exposure

This is not the GFC or the S&L crisis. SVB had a great customer base. But a run is now inevitable due to panic.

So what should companies do?
Read 6 tweets
Mar 9, 2023
1/ More in the VC community need to speak out publicly to quell the panic about @SVB_Financial ... I believe their CEO when he says they are solvent and not in violation of any banking ratios & goal was to raise & strengthen balance sheet
2/ They announced that they are selling long-term investments at a loss and investing in higher-yield investments that improve their financial metrics. They are raising $2.25bn to stabilize their balance sheet. But they say they are not insolvent & I take at face value
3/ I believe the biggest risk to startups AND VCs (and to SVB) would be a mass panic. Classic "runs on the bank" hurt our entire system. People are making public jokes about this. It's not a joke, this is serious stuff. Please treat it as such
Read 8 tweets
Jun 27, 2022
1/ Starting a company is hard. It's way more stressful & lonely than most admit. Industry has been a cheerleader for years. But failures will go up exponentially now. I urge temperance in your urge to dunk on founders or funders who struggle. Humiliation + depression is dangerous
2/ I personally backed a founder (as an angel) a decade ago who took his own life when his startup failed.

I have reflected on this for years. I'll never know the full story but always thought humiliation of impending failure played a role
3/ Before I fully appreciated how much having public voices & social media affected others, in the past I found myself publicly saying things like "well, that was a dumb idea anyways." But somebody has put their life & reputation into that idea. I now try hard to moderate myself
Read 5 tweets
May 4, 2021
Today @upfrontvc officially opened its Santa Monica offices after 14 months. I can't tell you how thrilled I am to begin to collaborate in person with colleagues, portfolio companies, startup entrepreneurs - in person.
2/ I will outline what @upfrontvc is doing in our office re-opening, not to say "we have all the answers" but just to put out thoughts for others planning or considering. Here goes ...
3/ In order to work in our offices require employees to be fully vaxxxxed. No vax, work from home for now. We will not be wearing masks indoors with our vaxxed colleagues. We have a small enough company to pull this off.
Read 11 tweets
Apr 16, 2021
1/ I had "strategic" investors at my first startup. I learned first hand what a bad idea this can be, even when they're good people. A thread ...
2/ I use quotes for "strategic" because it's really an oxymoron. Most industry investors are the opposite of strategic. They have vested interests and sadly this plays out on their board and investor participation
3/ Many strategic / industry investors are bad for startups even though it's no fault of their own. They often have different incentives, different expectations and are playing a different game. Let's examine this ...
Read 10 tweets

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