Over the last six months, I’ve worked alongside several colleagues at NEA to launch NEA Studio, a 14-week incubator program to help professional designers start their own companies. Led by NEA Partner Dayna Grayson, our core project team developed the program objectives, designed a curriculum, selected seven “designer founders” from around 100 applicants, and assembled a cast of tech veterans to serve as program advisors.
The thesis of the program was simple: Design is now fundamental to every new technology business. A product or service must attract and delight users across many devices and platforms—and increasingly, design is the differentiator. Along with this shift, we’ve witnessed a new class of entrepreneurs emerging, particularly in design hubs like NYC—designers wanting to take their ideas to the next level and wanting to start their own businesses. These designer founders have often already created several beautiful products, but are often on the fringe of the startup ecosystem and need a crash course in aspects of company building like recruiting and funding. That’s the problem NEA Studio attempted to solve.
During the program, NEA investors and more than a dozen advisers (including Jon Steinberg, President of Buzzfeed; Adi Tatarko, CEO of Houzz; Albert Lee, Head of IDEO NYC; and Liz Danzico, Chair of SVA’s MFA in Interaction Design) served as mentors, sounding boards, and occasionally UI testers for participants in our inaugural class of “designer founders.” From white-boarding sessions to formal presentations, our goal was to help participants learn from experts, make key connections, and get the strategic and practical support they needed to build a business.
I’m pleased to say we had a blast and considered the program to be a great success. I am so proud of our 7 designer founders, and could not believe the progress they made on a week-by-week basis through the summer. The response from the NYC tech community was also something special.
The program took way more effort and planning than I had budgeted for, but the lessons I took away were also far more profound. Here are a few of the most important ones:
1. When you’re doing good, the NYC tech community takes notice
Numerous CEOs and Founders, thought leaders in the NYC design community and the majority of the NYC angel community participated enthusiastically in the program. Equally important, numerous entrepreneurs I’d meet would mention the program—unprompted—and express their enthusiasm too.
The surprisingly positive response led me to an “aha” moment—the NYC community recognized that what we were doing took effort, and that we were trying to add real value.
When we put in more than we take out, people recognize, and are willing to help. As NEA thinks more about how to conduct its outreach in NYC, this will remain an important piece of feedback.
2. Product people can use help thinking about how to build a business
The designer founders we selected for the program are some of the best product people we’ve ever seen. They worked fast, had incredibly inventive ideas, and nearly everything they turned out was beautiful.
Yet as a recent GigaOm article about NEA Studio noted, “A good product needs great design. A good company needs a lot more.” Even at these earliest stages, we found that our business backgrounds as VCs could add a lot of value. Over the 14 weeks, we helped these talented entrepreneurs articulate their ideas effectively, and helped define their strategies by teaching them how to think through their market, competition and business model. The popular mantra “the only thing that matters is product” applies to a degree, but only if one can articulate the vision. As these designer founders communicated with potential partners, customers and investors, their ability to deliver a pithy value proposition proved crucial.
3. Two founders can move three times as fast
In NEA Studio, we strongly recommended that our solo founders find co-founders to run their business. Those businesses that did have co-founders progressed significantly faster over the course of the summer.
The obvious logic here is that two hands can do twice the work. But in practice, two hands could do 3 to 4 times the work.
How is this possible? So much of the thinking is not done in actual physical code. Instead, much of the work behind a startup is mental—determining the appropriate direction and priorities. By being able to bounce ideas off a thoughtful, invested partner, co-founders can move with more conviction and confidence.
4. What scrappy really means
When speaking to Josh Berman and Diego Berdakin, Co-Founders of Beachmint, they told us stories about their efforts to scale MySpace in its infancy.
They converted Friendster users with large followings by taking them out to dinner, wining and dining them, one at a time, and convincing them to shift their online presences from Friendster to MySpace. True hand-to-hand combat.
Any startup, no matter how brilliant the idea, how great the product, or how differentiated the technology, needs to hustle. You can’t knock Josh and Diego’s hustle.
5. Startups REALLY matter to bigger companies
Even at their early stages, our designer founders attracted the attention of VERY big companies. One startup addressing the care space received attention from multiple Fortune 500 companies interested in collaborating.
Startup founders are often surprised—and flattered—when a big-time CEO shows great interest in what they are doing and thinks creatively about how to partner with them. But it doesn’t surprise us. The reality is that particularly for big companies, the only way to grow is to innovate, so speaking to early stage entrepreneurs is critical.
Even when you’re little, you can matter in a very big way.
6. Buzzfeed: Fighting battles and focusing on product
When Jon Steinberg spoke with our NEA Studio participants, I found his insights so significant that I wanted to share two of them.
While Buzzfeed is inventing an ad unit, they gained traction with advertising agencies by communicating their new product in an old way. They rigorously tracked every engagement metric they could with their ads, and presented it to the agencies in a format with which they were familiar. Takeaway #1: You can’t fight a battle on multiple fronts.
Buzzfeed has been very smart about choosing what to do and what not to do. Similar to their decision to NOT fight the traditional reporting war, Buzzfeed also chose not to pursue elaborate RFPs issued by large companies. More than 1 startup has bet their future on pleasing a larger company. Buzzfeed’s response, “if you’re not willing to spend a measly $50,000 for our product, you’re not going to spend money on a personalized product, even if you think you are.” Takeaway #2: Focus your efforts on your vision, not someone else’s.
7. The value of great counseling
“Ask for money, get advice, ask for advice, get money twice!”—Pitbull
Pitbull’s insightful line from “Feel This Moment” has become a favorite aphorism of Experiment Fund Co-Founder Hugo Van Vuuren. To me, it highlights the importance of surrounding yourself with smart advisors. Guys like Ed Zimmerman (Chair of Lowenstein’s Tech Group) and Albert Lee—these are people you want in your corner, helping you think smartly about your decisions and your company. So much about building anything is listening—digesting data to arrive at the right decision. You’re not going to have all the answers, but usually the insight you need is just a phone call or two away.
8. Your pitch deck—the modern day playbook
While the overwhelming feedback indicates that the designer founders enjoyed the program, one criticism was that we spent too much time on our pitch deck and on pitching. From our perspective, the purpose of the pitch deck was only partly to prepare the designer founders for fundraising—it was also to get them to think thoroughly about their business. Building a slide describing a company’s competition/business model/market takes more than just 5 minutes, it can take hours and hours of thought. There is a lot of nuance around each and every slide an entrepreneur presents, and communicating these concepts effectively is critical, not just for attracting investment, but for winning customers, suppliers and partners.
Treat your pitch deck as more than a way to get people to give you money. Treat it as your playbook for success.
9. Building a startup isn’t running a marathon—it’s training for a triathlon
After watching our designer founders progress over the 14 weeks, it strikes me that the analogy that company building is like running a marathon is not accurate at all. Firstly, entrepreneurs need to move FAST. They have lots of objectives and tasks, and need to get many things done over the course of the week. Secondly, entrepreneurs need to wear many hats. On the same day, they’ll act as CFO, head salesman, and product person.
For these reasons, the more effective analogy is training for a triathlon. A triathlon because you need to be diversely skilled; and training rather than performing, because being an entrepreneur requires repeated, consistent short bursts of tremendous energy. A triathlon requires about 10 different training sessions in a week. To me, this is more akin to company building than one extremely long, steady run.
Going Forward…
We’re looking forward to doing more NEA Studio events in the very near future. And just like our startups, we’ll continue to collect feedback, reflect, and iterate on the sessions we organize.
P.S. Check out the first company to publicly launch from NEA Studio—Karta. It’s an awesome site for creating and sharing maps, whether for travel destinations or just around town. I’ve already found it useful, particularly for finding and sharing places to eat in NYC / DC!