Byron Deeter
Partner at Bessemer Ventures
Discussion
M
Byron Deeter
@bdeeter · BVP
I’m Byron and I’m all about cloud. I built my first cloud company, Trigo Technologies, at age 26 — where I first worked with Bessemer as a founder — and later sold it to IBM. As head of BVP’s cloud investments team, I’ve led over half-dozen cloud unicorn investments and we’ve been the anchor investor in 5 out of the 8 cloud IPOs since 2015. I’ve been honored to work with breakthrough founders at Twilio, Box, Gainsight, Cornerstone, Intercom, Adaptive Insights, Procore, SendGrid, DoubleDutch, Tile, Instructure, Docusign, Rainforest, ServiceTitan, and Vidyard, to name a few. I’ve also co-authored the BVP Cloud Index, BVP’s 10 Laws of Cloud Computing and the State of the Cloud Report.
I’m a former college Rugby national champ (go Bears!) and, most importantly, a husband and father of 3 kids. Ask me anything!
upvotesharetweet・
Paul Sondhi
@paulsondhi · Student
Hey Byron,
Thanks for doing this! As a college student myself, I'm interested to know if you would suggest working at a startup to recent grads interested in tech?
Of course, circumstances matter (student loans, etc.), but in your experience does the idea that the most learning for a young person happens at a startup hold true?
M
Byron Deeter
@bdeeter · BVP
@paulsondhi
Hey Paul – It’s awesome that you’re still in college and already thinking about the world of startups. I wish I was fully aware of this world when I was still in school as you’ve got a jump on me and others!
The short answer is Yes! There are very few jobs that offer the same learning experience that startups do, especially a smaller startups, where you will be encouraged to lead and explore a number of different roles and build processes and judgment with limited information.
But, make sure you have done your homework on the market and the product, and most importantly, the team you’ll be working with. You will spend many many hours with these people – so make sure you get along! I would STRONGLY counsel you to join a high quality company with a great manager, and focus on that above role and title. It’s important for your early jobs to get mental models of success.
If you don’t feel like you’ll be with great people, then go somewhere you will – join a larger tech company for a few years, or even a consulting firm (I sincerely had a great experience at McKinsey for 2 years as an analyst and it really helped me understand basic business). Early jobs are important to build a high quality network (of future co-founders!) and to learn how to build companies and products the right ways.
Paul Sondhi
@paulsondhi · Student
@bdeeter
Thank you for the response!
I see a lot of students get a bit caught up in role and title in search of credibility; I'll aim not to make that mistake myself :)
The other tough issue is the lack of formal intern recruiting at startups (understandably so). Undergrads these days are looking for summer internships that can carry over into full-time offers, which are non-existent at the earliest startups. Interesting to see if there will be any changes in this realm in the future...
P.S. If you're ever in NYC, would love to have you speak to members of an undergrad VC club at NYU!
Thomas Stöcklein
@tomstocklein · FoundersFundersFuture.com
To what extent are you and your partners using ProductHunt to identify new potential investments?
M
Byron Deeter
@bdeeter · BVP
@tomstocklein Morning peeps and thanks for joining! A good amount - we try to use all sources we can! We are constantly looking for new product ideas from all people in our network and online places. Also, one of my favorite candidate interview questions is "what cool apps are on your home screen that I probably haven't seen yet?"
Thomas Stöcklein
@tomstocklein · FoundersFundersFuture.com
During your 11 years at the firm, which contributions (if any) have you made to the Anti-Portfolio?
Jack Smith
@_jacksmith · Serial Entrepreneur & Startup Adviser
@tomstocklein it lists Tesla on here: https://www.bvp.com/portfolio/an...
M
Byron Deeter
@bdeeter · BVP
@_jacksmith @tomstocklein thanks Jack, and yes...Tesla stings every day I drive my (full priced) X to work!
[deleted user]
@deleted_user
Hello Byron,
Thank you for giving an opportunity to ask you questions.
In reviewing magnitude of submitted business plans, what kind of
submissions get discarded right away, which ones get the most attention?
Do you ever miss great ideas, which later on, become successful
with the help of other VCs?
Thank you.
M
Byron Deeter
@bdeeter · BVP
@victorpolyushko
Let me save you a lot of time: don’t spend your time on a business plan! 30+ page business plans simply aren’t read anymore. My recommendation would be to spend time talking to potential customers and solidifying your product/market fit – rather than conjecturing about a 5-year business plan. We usually receive ideas in the form of a tight 5-15 page slide deck and/or a 2-page executive summary with key details and vision. You can actually hack together a demo product these days in the time folks used to spend drafting a business plan.
In terms of "submission" of the exec summary - find an entrepreneur we have worked with in the past or a friend that can give you a warm intro to an investor at the firm. Cold emails almost never succeed. Part of it is just the sheer volume we receive, but the other part is that networking is critical for your overall success. If you can't network into a warm VC intro, then it'll be hard for you to get warm intros to customer prospects, future employees, etc.. Warm intros always go a long way, and we read 100% of quality referrals and meet with most of them.
On your second question – yes, we absolutely miss great ideas. It is part of the job and hurts every week when I read online about another great team we missed. We like to poke fun at ourselves when we do though. I think you’ll enjoy our anti-portfolio: https://www.bvp.com/portfolio/an... (Tesla is my most embarassing one!!)
[deleted user]
@deleted_user
@bdeeter You Rock! You just saved me a lot of time. Thanks much!
Emily Hodgins
@ems_hodge · Community and Marketing, Product Hunt
What one piece of advice do you often find yourself giving to new founders?
M
Byron Deeter
@bdeeter · BVP
@ems_hodge Let me try to give a couple here:
- know your "superpower" or your unfair advantage over everyone else. Why will you succeed in your market over everyone else. Of course it’s because you’re a better team, but what business/product advantage do you have that no one else does?
- Know how to tell your story well. Why did you start this company? What brought you to this stage of your career and why are you passionate about this market area? Founders that don’t have strong conviction around this or a real pain point behind their company usually don’t have what it takes to stick it out during the crazy startup rollercoaster!
- once you get rolling, have your hands around the metrics you care most about. It's not cool or acceptable for a growth stage CEO to say that your "operational team" handles that info. The best CEO's we've worked with (Jeff @ LinkedIn, Ben @ Pinterest, Jeff @ Twilio, etc..) all know their core metrics in great detail. It's possible (and needed) for you to be great at product and still understand KPIs and operational scale.
Thomas Stöcklein
@tomstocklein · FoundersFundersFuture.com
Based on all the pitches you and BVP have received in the last 6 months, what are some major trends you've been noticing for 2016 so far?
M
Byron Deeter
@bdeeter · BVP
@tomstocklein
We've seen acceleration in several of our "sub" roadmaps, most specifically:
- “Software” for large untapped verticals. We’ve done a lot of vertical SaaS and enterprise mobile in particular. ProCore in construction, ServiceTitan in plumbing/HVAC/electrical, DoubleDutch in marketing, etc…
- Enterprise mobile (85% of americans between 18-29 have a smartphone, global mobile penetration has grown from 1 to 73% from 1995 to 2014, and internet usage has tipped to mobile with 50% of our internet time on mobile.) We are excited to FINALLY see more activity here, and hope to make a lot of investments in this area going forward.
- Developer Roadmap (tools that make the developer’s life easier like SendGrid, Twilio, Auth0, etc.) are ramping quickly now
Anshul Gupta
@anshul_gupta1 · Founder@arfi.in
What is your view on the freemium model for consumer facing apps in segments such as lifestyle and fashion?
M
Byron Deeter
@bdeeter · BVP
@anshul_gupta1 Great question! I don’t entirely trust my judgment when it comes to consumer-facing apps such as lifestyle and fashion. I am more of a dev-focused/enterprise software guy!
However, I have a number of colleagues (Jeremy, Kent, Talia, etc..) who have helped the firm navigate potential investments in the fashion/lifestyle space. They look for a number of traits including but not limited to: a strong brand presence, resilient word-of-mouth dynamics, high retention/low churn, a good CAC/LTV payback (sub 12 months), and user cohorts that increase spend every month. With a freemium model specifically, high conversion rates from free to paid are also crucial.
COSTAS ANDRIOPOULOS
@candriopoulos · https://medium.com/strictly-curious
Hello Byron, and thank you for taking our questions today.
1. What kind of tools/websites do you use or consult to identify experts to help you with your investments? 2.Where do you look for startups in nascent industries (e.g. press/academic journals, events, websites, etc.)?
M
Byron Deeter
@bdeeter · BVP
@candriopoulos A few answers here. Personally I have about 3 dozen websites that I visit daily and another several dozen via RSS/Feedly. That’s general tech/cloud/mobile/geek content just to stay current.
From a longer term perspective, at Bessemer Venture Partners we spend a lot of time “roadmapping” future investments where we call out new sectors and spend years trying to become experts.
We lean on the experts in our portfolio companies to make us smarter, we also often pull in academics, and occasionally paid consultants. We also try to train each other to continuously be thinking about the future. We do this in a couple of ways: 1) we have an annual meeting where the global team gets together for 2 days and does a deep dive on the past year. What did we do well? What could be better? What did we pass on that we shouldn’t have? Which areas are heating up? What data supports these assumptions? The annual event gives us good fodder to continue the process for the year and helps align the firm around 3-5 strong roadmaps of interest.
For totally new areas, we sometimes have to start from ground zero. I’ll admit that my most recent (not yet announced) investment is in an area of cutting edge tech that I knew very little about before writing the check. I literally hit Wikipedia to prep for my first meeting. I had to start somewhere!
COSTAS ANDRIOPOULOS
@candriopoulos · https://medium.com/strictly-curious
@bdeeter Thank you so much for your insightful answer. I really appreciate it.
Thomas Stöcklein
@tomstocklein · FoundersFundersFuture.com
What was the most outrageous idea you were pitched so far?
M
Byron Deeter
@bdeeter · BVP
@tomstocklein We get entertaining ones constantly, and it's great to see that sometimes these end up working years later...and it's a constant reminder that "thinking outside the box" can pay off big.
A perfect example of this - ironically "in the box" - is Blue Apron. The founder, Matt, worked at BVP before and we all knew he was a super star, but I thought the idea was crazy. Boxed, semi-prepared food sent to your house?!
I supported the deal because of Matt and because my partners Bob and Kent loved the idea, but I'll readily admit that I didn't get it at all. Now it's one of the fastest growing companies, ever, and hugely valuable. I'm glad Matt and his co founders had the vision, and my partners were smarter than me!