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Serve Your VC Network

This is part three of the VC Community Series. Check here for Part 1: Rise of VC Community & 2: Building Community

Quick background, I’m the General Manager at Union Square Ventures. I run our 6+ year old community, the USV Network. The VC Community function has increased in popularity and complexity. VC Network structures are a core part of many similar organizations like Accelerators, Incubators and Professional Organizations. This series is focused on sharing best practices for starting, building, and growing a community in these organizations.

The key to any great product is building something customers want. VC Networks are no different. Design your product to serve your customers. We’ll look at the factors that enable you to make the best design decisions for your network. 

Understanding who you are and how you define your community is the first step (refer back to Part 2 if you haven’t defined the characteristics of your org yet). Now that you understand your capabilities, time to understand your audience. 

Describe your customers

At USV, we have 60+ technology startups spread across North America and Europe. They are in a number of industries and range in maturity from companies less than a year old to companies that have been in business for over 10 years. All of the companies fit into our investment thesis, but even that can range from doctors sharing serious medical cases to helping developers easily send SMS messages. The companies are varied but many of their challenges are the same: building a team, leveraging network effects, finding customers, and building products. 

What are the characteristics of your potential network? How many organizations are you including in your community? Where are they geographically located? What do they have in common? How long have these companies been in business? What is their organizational maturity—or the size of their teams? Are they open to collaboration? Are they tech savvy? Let’s start with a few easy ones:

Where is your community located?

If you have a physical space with all of your members in one place, easy, you have a gravitational pull in that spot. If your members are spread out, you need to think more strategically about how to connect them. 

  • Same place: Defined by central meeting place or office.
  • Different places, same city: Connect people in person nearby.
  • Different places, different cities: Occasional in person or digital.
  • Different places, some overlapping cities: Can build local and global.

How tech savvy is your community?

There are fantastic tools in the market to manage communications, contacts, and organizational discussions. However, tools are worthless if no one is willing to use them. 

  • How willing or able is your community to adopt new technology?
  • Do digital or paper resources work better?
  • Is your community more prone to want information from email, website, or phone call? This is a great place to ask if you don’t know.
  • Do you have the skills or access to the talent to build tech to support this community? If tools are required, do you have the capability to manage them?

What is your budget to manage the community?

Sometimes it’s hard to know how much money you’ll want to budget for your community outreach and network building. Having a rough estimate around the size of your budget will be a good constraint to understand how you serve your customers.

  • None, time to get creative! 
  • Budget for tools only
  • Flexible/Fixed
  • Paid by members/pay to play

Who is your audience within the community?

Even if you’ve defined your organization, you have to make the design decision about the participants you plan to serve. You can modify this over time but defining the initial scope will help focus resources. 

  • VC: Investments: any employee, executives only, or founders only?
  • Seed:  Investments: any employee, executives only, or founders only?
  • Accelerator: Participants: any employee, founders only, mentors included?
  • Professional: Just members or potential members too?

Not all of these design decisions may have clear answers at this stage. Just as we teach entrepreneurs, it’s key to “get out of the building” and talk to customers. Setup a few conversations with your new customers and get to know what they’re looking for. In my experience, entrepreneurs and operators will ask for help with lots of challenges in those conversations. Be patient, define your customers before you commit to what you’re going to provide. 

Not all communities are created equal

Given the growing number of VC Community roles, Accelerators and Incubators, there is a lot of existing advice about how to serve your community. Understanding the differences between your network and the next one will allow you to make smarter decisions for your unique community. 

After 50+ conversations with Network or Community building peers, here are the common benefits and challenges of serving these different types of networks: 

Serving an Institutional VC Community:

Benefits:

  • Long term, more flexibility to experiment
  • Range of experience in network
  • Big teams, lots of division of work
  • Low turnover of companies
  • External reputation of companies adds to credibility of the network
  • Relationship building
  • Companies adopt market trends together (ie: mobile)
  • If on investment team, can see behind the scenes, know co’s #s

Challenges:

  • Not one and done, long term relationships
  • Network only expands with investments
  • Rate of change is slow
  • Fatigue of services over time
  • Varied needs
  • Not network peers for everyone since different businesses
  • Potentially competitive companies within one community

Serving an Incubator/Seed Stage Community:

Benefits:

  • All of the companies are the same size
  • Smaller teams, get to know everyone quickly
  • Similar challenges and required connections (business 101)
  • Large # of companies quickly (?) or slowly (?)
  • Relationship building is done in cohorts
  • See behind the scenes, know co’s #s

Challenges:

  • May not have market leaders and company reputations may be unknown
  • Small # of people with open time, not many employees at each company
  • Less proven, companies can build or bust
  • Potentially competitive companies within one community
  • Clingers after they outgrow the stage but still want resources

Serving an Accelerator Community:

Benefits:

  • Very clear timeline and goals
  • Cohort is all in sync
  • You can supplement expertise with mentors or outside resources (all groups can)
  • Batch favors/resources at once.
  • See behind the scenes, know co’s #s
  • Smaller number of people
  • Pre-planned Weekly/Daily interaction
  • Shorter time to “Alumni” who could help
  • Time to anticipate and prepare in cycles

Challenges:

  • Not a lot of time
  • Short relationship
  • Expertise and experience may vary
  • All companies need the same resources at the same time: $, talent
  • Experiments may be static in each cycle.
  • Potentially competitive companies within one community

Serving a Professional Group’s Community:

Benefits:

  • Members speak the same language
  • Same field and challenges
  • Self-selected group
  • Relationship building over time
  • Invested in groups’ success
  • Clear success metrics outlined in bylaws or group charter
  • Tight control over membership (you can remove bad actors)
  • Can help members recruit members

Challenges:

  • Building trust, since it’s opt-in or pay-to-play
  • Varied experience of members
  • Expectations are varied or need to be managed
  • Desire to deliver value immediately
  • Competing for time
  • Only as open as members
  • Different access to resources for companies or organizations

The key to success is finding what works for you. In the next part of the series we will look at how to get started, stories from the experts, and how to measure success.

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Reap the benefits

It’s a great time to be an entrepreneur.

Hungry and foolish? You’ve got advantages like never before. 

Relationships used to be hard to establish, build over time and were location advantaged. The people you went to school with or the people you worked with were a huge part of your network. That was great for Harvard and a networked company like McKinsey, but you no longer need to join those ranks to gain access to the exact same people.

Now, it’s easier to connect to ANYBODY IN THE WORLD. I found out I was one degree away from one of the Powerball winners in TN, we’re all so close, even when we’re far. The internet connected the globe, and the social web has brought each individual online. It’s more noisy but for most developed nations, we’ve all joined the web and we aren’t leaving.

Fortunately, entrepreneurs noticed the increased noise from so many people now being present in social networks. They’ve created tools that have given us all greater capacity for relationships than ever before. According to Dunbar, the human brain maxes out at 250 human relationships. Tools like Facebook, LinkedIn and Gmail Contacts allow storage over 1000 and give us just enough information over time to feel connected to thousands of people we’ve met. How many people do you feel are part of your family, personal and professional network? Most likely more than Dunbar imagined.

Financial Capital used to operate under old rules. Only a few people had excessive capital and only a few beyond that could get access to it. Money was granted under strict rules from a small group of people, banks awarded loans and lines of credit but usually only with substantial assets or strict rules based on federal credit scores.

Now it is possible to raise money from a number of sources for very niche reasons. If you want people to fund you based on your future earnings, check out GoFundMe or Upstart. If you are looking for personal loans with smaller fees than what Mastercard or Visa offers you, you can seek loans through Lending Club or Prosper. If you’re interested in small business loans or capital to fund your business, you can check out Funding Circle, CircleUp, Angellist or Gust. If you have a working business and just need capital before you’ll get paid, there is C2FO for that too. If you have a product or idea, you can crowdfund from friends or strangers via Kickstarter. Interested in raising money for a real estate project instead, yes you can find funding for that too. Personal loans, small business loans, projects or property, you can raise money through many platforms today, no bank or credit score required.

Financial capital is still not free, but there are lots of financial tools to find the funding that helps get your future off the ground.

Education is in abundance. Anything you want to learn, anything at all, you can do so today with an internet connection. Rewire your home or learn Chinese, learn to make a film or how to build a website. Education used to be limited, restricted to those who could show up, and very expensive. Today, everything is available to learn online for free.

If you find something that is not currently being taught online for free, you my friend have found a business opportunity! For the most part, it’s all free. Most new education companies charge for content even though it could be found elsewhere at no cost, the difference is that they are selling the better learning experience. A more curated path to education is nice, but isn’t necessary so if you want to learn it, get to it.

Customers are everywhere. There are more people participating online than ever before, that means more than yesterday, the year before or a decade before. Google made a big business on a much smaller number of customers. The good news for google, more people online means more fragmentation. People are finding new places to spend their time. So there are more of them to find but the efforts to find them aren’t as easy.

Mobile to the web, there are participants online and they are ready to engage. As an entrepreneur, you don’t have to worry about the size of your audience, instead you have to look at the cost to acquire their attention. Attention grows with new people online, but don’t think every other online competitor doesn’t see it. The companies that figure out how to provide value to customers that are easy to find will have an advantage.

Experienced talent grown from the new incumbents. Apple, Google, and Facebook are the new tech incumbents. Players like Microsoft, Yahoo, IBM and Cisco still have a big place in the market but they are overshadowed by the new big three. The move to mobile has shaken out for now with Apple and Google in the lead with rights over most mobile phones in the developed world. Those platforms are stable and a great place to build a career if you’re an engineer.

Five years ago you couldn’t find an iOS developer with more than 5 years experience. Those platforms have evolved but aged nicely to allow great talent to become experts. The first iOS developers at Facebook have already vested and are in the market, and may be ready for their third new role now. Small and big companies can attract experienced talent. Stabilization in those platforms over time means that everyone wins in having a big pool to pull from.

No longer are engineers learning on your dime, they likely come from somewhere that could afford that type of risk. They now have experience and an interest in working for you, even if that means cut wages and longer hours. You’re in a good spot to continue to invest in great engineering talent, it may even get less expensive as the talent pool grows.

It’s a good time to be an entrepreneur. It’s a great time to the part of the tech ecosystem. Build the relationships that will earn you the new role that you want. You have access to all of the education that you need. Seek out experienced mentors and pursue the path that leads you to the customers you want to serve. A mature ecosystem will continue to evolve, but there is more room for you to be there to shape it.

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Community: Scale to Serve your Startup - Slush Conference, Helsinki, Finland: November 2015

In November I attended Slush Conference in Helsinki, Finland. It’s the leading tech conference in Europe and probably the coolest venue I’ve ever seen. 

I shared some of the lessons I’ve learned by running the Union Square Ventures Network, including how companies in our portfolio have leveraged community to scale their product, attract new customers and hire great talent. 

I met many incredible founders from all over Europe at the event and I hope to attend in the future as it was a fantastic event. Extra points for the moat they build around this main stage. 

Thank you to Slush.org, the 1,500 volunteers who made the event possible, and the Finnish community for teaching me more about tech in the Nordics. 

Small props to this dress too, it’s my favorite one to wear when I take the stage.

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How to Stop Talking About Diversity and Actually Do Something About It - TechfestNW, August 2015

In August, I was invited to TechfestNW in Portland to share thoughts on how startups, communities and event cities can not only talk about Diversity, but take action daily to improve it. This is a video of that talk and the fireside chat that followed. 

In this talk I provide two small pieces of action that everyone, not just those considered underrepresented, can take to increase diversity in their companies. 

The talk is around 15 minutes followed by a Q&A by the talented Mara Zepeda, CEO of Switchboard, artist and visionary. 

Thank you to TechFestNW, Mara and the Portland community for being incredibly receptive and open to make changes to support an inclusive environment. 

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How to create a company culture that embraces diversity

This post is the third in our “Lessons from the USV Diversity Summit” series. In December, USV hosted our first Diversity Summit. Below are some of the most helpful insights we gathered about how to take action.

If you’re just joining the conversation, you can find previous posts Part I: “Lessons from the diversity summit” here and Part II: “How to start talking to your team about diversity” here.

Take inventory

If you want your company to embrace diversity, the first step is transforming your corporate culture. Your first step is assessing what the current culture is like.

What exactly does culture mean? People sometimes use the word “culture” to refer to company perks like game rooms, free lunches, or vacation days. And while those benefits certainly have an effect on teams, they aren’t themselves culture. Culture is about how your team communicates.

At its core, your company’s culture requires three things: its mission, its vision, and its values. What problem does your company solve? How does it solve it? And upon what values do you base the decisions you make?

The mission, vision, and values are unique to each company, and each will no doubt be rewritten, revised, and revisited many times over the lifetime of the business, all the while shaping and influencing the culture of the company.

So to make sure that your corporate culture is welcoming toward diversity, you need to revisit your mission, vision, and values to assess how you’re communicating them to the people you employ, serve, and represent.

Beware of inadvertently sending messages that conflict with your values

Start by conducting an “external culture audit” to get a picture of how your company presents itself to the outside world. Imagine you’re a consultant and you’ve been asked to evaluate the company’s corporate culture from an outsider’s point of view. First, visit your company’s website and consider what messages are being sent by your landing page, job postings, careers page, and social media accounts.

  • What words does your company use to describe itself?
  • What visuals are provided—photos, logos, or graphics?
  • If there are photos, how would you describe the people shown? The environment?
  • Imagine you’re a world-class candidate for an engineer/sales/marketing/HR job landing on your company’s website. What would you find appealing and what would be off-putting?
  • Consider how different types of people would respond to the messaging on your site. What if you don’t drink? What if you’re a parent? What if you only want to work with the best talent? Are there things on the site that would make you feel uncomfortable or unsure about whether this is the place for you? If so, ask yourself this question: Is your company intentionally trying to filter out certain kinds of candidates, or is it accidental?

Now, the most important step: Are there conflicts or inconsistencies between your company’s stated mission and the way it comes across online? Does your company’s Twitter feed accurately reflect the mission, vision, and values of the company, or is it filled with off-color jokes? Does your company’s digital presence successfully reflect the values you want to celebrate?

A lot of well-intentioned companies inadvertently deter the most diverse candidates not because they don’t care about diversity, but because they fail to control the subtle messages being sent by their public-facing materials. Last year, for example, I did an external culture audit for one of our portfolio companies. I found a lot of conflicts between how the company viewed itself and how it was presenting itself to the outside world. Conflicts will inevitably creep in, so be vigilant and make sure to get feedback to ensure the company’s voice aligns with its values.

Values-Messaging Conflict: The Case of RunKeeper

In a comment on a previous diversity posts, Emil pointed out that RunKeeper, a company that makes an awesome fitness app, may be sending mixed messages to its users. RunKeeper is not a USV portfolio company, but I’m a big fan of their product and I’ve heard only good things about their team. Let’s take a look at their website, one page at a time, and consider where there may be an unintended conflict in their messaging.

As you can see above, RunKeeper clearly states its core values, addressing the issue of inclusiveness directly.

(link: UX Job Description)

I love these candid job descriptions. It’s easy to get a sense of the fun, lighthearted tone of the company. There are some inconsistencies, however. The job post doesn’t list the core values, but there are some hints about what it takes to fit in. So the question is this: If you’re not into The X-Files and arguing about beer, can you still work there? Would you think twice about applying? What if you’re not into TV, but you’re a fantastic UX Designer? Would you still apply?

There’s no doubt that teams within companies have their own idiosyncratic ways of getting along with each other, and I have no doubt that the above description really does capture the kinds of personalities that make up the UX team at RunKeeper. And it makes sense that they’d look for someone with a similar personality who’d fit in easily.

But the problem with a job listing that describes what the people on the team are like—and subtly demands that anyone applying fit that same mold—is that it creates a bias against people from different backgrounds, excluding people who don’t fit the profile of the existing team. The message is, “This is what our team is like, and we want to hire someone just like us.” But if you want to increase diversity, that’s not the message you want to be sending. What you should be saying is, “We’re an inclusive environment looking for top talent, and we want to welcome you to our team no matter what your background is.”

How to align your messaging with your values

The good news is that there are straightforward ways to communicate your company culture by speaking about the things you value, not just the things you do.

Take Simulmedia, an advertising technology company. Simulmedia has been thoughtful about making sure the job descriptions on its website include the company’s mission, vision, values, and culture. The same language is used consistently on every job description. (Yes, they’re hiring).

The thoughtfulness of the language in these descriptions subtly reinforces the idea that Simulmedia values hard work and play, but it’s through multiple mediums and the emphasis is on team or individual perks: “While we work ‘startup hard’ we also believe in letting loose via Happy Hours, team activities, and an unlimited vacation policy.”

So write a list of the values you want to convey in your own company’s job listings. Check out how other companies communicate their culture.

Another great example is SoundCloud. They recently published a new jobs page. They discussed the project at the Diversity Summit and I think they successfully delivered a more inclusive and very SoundCloud experience. The took the extra step to use their platform to talk about the company culture by share audio recordings from employees.

The internal culture audit

After the external culture audit comes the internal culture audit, which can be more challenging. Running a business means communicating all day long, which often means that speed gets prioritized over thoughtfulness.

To conduct the internal audit, keep your company’s mission, vision, and values in mind as you consider these questions:

  • How is good news communicated at your company?
  • How is bad news communicated?
  • How is feedback given or collected?
  • What happens if an employee violates a core value when they’re in a meeting with colleagues? With a customer?
  • How do you describe your company culture to friends?
  • How do you describe your company to people you’re trying to recruit?

Do your answers align with your mission, vision, and values, or do they conflict?

Ask your colleagues the same questions. Are their answers the same as yours or different? Where are there conflicts, are they coming from a subset of employees who are dissatisfied? Are they the same or different? Explore the disconnect and see if the company culture is evenly distributed.

Right fit your mission, vision, and values

The purpose of the internal and external culture audits is to understand what the company truly is and believes. The audits will signal whether the company is acting in alignment with it’s values.

If you want to make your company more diverse, you need to say so explicitly in your official statement of values. The only way things will change is if you’re new values are actually recognized. If not, it’s time to revise the way business is done.

Most mission, vision, and values come from senior leadership, so it’s important to include top managers in your list of findings and recommendations. Keep the team small for the first version, opening up the process to feedback from the wider team in time.

Your company’s mission shouldn’t change very often, but its description can fluctuate, especially given how fast companies today grow and change. During my time at USV, I’ve always been able to get a read on the health of an organization by asking various employees to explain what the company does. If their answers vary widely—like if one employee says, “We’re a Facebook app that books flights” while another says, “We improve travel with social recommendations”—there’s a disconnect. It’s a signal that communication of the mission is getting muddy.

Inclusion is a practice, not a statement

Values may need closer inspection too. Is the behavior of your employees consistent with your company’s core values? Almost every company has a stated value that captures the importance of diversity. The problem with diversity is not with the values companies have, but with the execution. Inclusion is a practice, not a statement.

Although not in the USV portfolio, BufferApp came up as a great example of a company living its values. Buffer values “defaulting to transparency,” which they embody by publishing a full transparency report that includes real-time revenues, salaries, and equity. The value they place on transparency is demonstrated with visible behavior.

Our summit attendees celebrated Buffer, but most were not in a hurry to implement this kind of transparency at their own companies. Values are important, but can overlap at the edges. The best way to navigate values that seem at odds is to provide more context or multiple values. AMEE balances the trade-offs between transparency and privacy, values that can seem at odds, in their principles and values: “We have 5 main values that guide our decisions: Open, Honest, Transparent, Simple, and Respectful of Individual Privacy.”

Companies need to live the mission, vision, and values they set forth. If they don’t, they should change either the values or the corporate culture so they align. Diversity initiatives need to be part of the company’s values. Revising the company’s values statement is only useful if the company lives in accordance with them.

Putting values into practice

Once the vision is laid out, it’s time to put it into practice. Small changes add up to make a difference. Companies in our portfolio have had success printing posters with the company’s values and hanging them in every conference room. The posters get referenced during difficult discussions, helping ground the conversation in what the company values and not just what one individual believes.

A company’s mission, vision, and values should also be posted on its website, included when onboarding new employees, shared at the beginning of town hall meetings, and compared against employee 360s performance reviews. Consistency is best complemented with feedback loops. Whether it’s surveys or informal asks, find ways to get feedback from customers, clients, and candidates on how you’re performing against your values. Values are a tool to help set a standard across the organization of what’s expected, celebrated, and prioritized. They have the biggest impact when they are part of the everyday communication of the company.

Distributed diversity initiatives

Once you’ve made sure your mission, vision and values are in alignment, it’s time to start implementing diversity initiatives. In our summit, the most often-mentioned way to start is to create three small working groups to tackle different issues and set a budget.

The working groups should focus on increasing diversity in three areas: internal, external, and recruiting. The most common reaction is to push all implementation to HR. Don’t do this. Do not make diversity only an HR issue.

Return Path, an email deliverability company, found success breaking diversity initiatives into three internal working groups: Retention, Recruitment, and Communication. They saw even more progress when people from cross-functional teams participated.

Tumblr took a similar approach. Instead of making diversity an initiative siloed within HR, they have cross-functional working groups. There are members of the HR team, but the team is not limited to it.

The same construct works for larger companies too. Morgan Stanley, for instance, has one diversity and inclusion council, but three sub-committees:

  1. Recruiting/pipeline
  2. Internal employees
  3. External relationships

These sub-groups work best when they have a clear mission, support from senior leadership, and a dedicated budget to get things done. The council as a whole has a budget allocated to it, and the funds are split among the three sub-committees. Having a straightforward structure makes it easier for employees to pick up a project and run with it based on which sub-group they support.

Many startups are wary of setting a budget for diversity sub-committees. I asked Lisa Lee, Pandora’s Diversity Manager, how she suggests how highly cash-conscious startups should allocate funds. She advocates having a budget, “It’s important to do diversity work. You don’t need a massive budget. There are so many ways it can still be done. ” So whether it’s the cost of a team lunch or a team offsite, remember that making a financial commitment to get things done is a way to invest in change. Look for ways to put that money to work.  We’ll cover those in the last two posts in this series.

Consistency and iteration

Diversity is never done. Adding it into the company culture requires time and constant evolution. But the earlier you start, the easier it will be to grow with your company.

Whether you’re an early-stage startup or a larger company, take inventory of your culture, build diversity into your values, organize teams to implement initiatives, and hold people accountable.

In our next post, we’ll explore more ideas on how to integrate diversity into your recruiting and onboarding processes.

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