David Skok

David Skok

General Partner, Matrix Partners

THIS CHAT HAPPENED ON April 29, 2016

Discussion

David Skok
David Skok@bostonvc · General Partner, Matrix Partners
Hello - I’m David Skok, General Partner at Matrix Partners, and author of forEntrepreneurs.com. I’m a serial entrepreneur and have advised many companies in my role as a VC at Matrix. I’m looking forward to your questions, and would love especially to answer any you have on growth and building a business, cloud computing, SaaS, recruiting and hiring, and sales and marketing. Best, David.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
Which apps are on your home screen?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@tomstocklein Waze, Spotify, Slack, WhatsApp, WeChat (for our Chinese partnership), Pcalc (a great RPN calculator), SoundHound, DJI Go (for my drone hobby), Instagram, SnapSeed, OneNote (one of Microsoft's few really great apps that I use intensely for note taking and to do lists)
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
What was getting a computer science degree in the 1970s like in terms of 1) course work & lectures 2) most common job aspirations and opportunities you and your fellow students had at the time 3) your long-term vision at the time for how you would be using your degree in the decades ahead?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@tomstocklein This is really going to date me, but when I studied Comp Sci, it was the very first year you could take that course in the UK, and there were only two universities offering the course. As a result, we spent a lot of time on less valuable stuff like electronics. But my favorite part of the course was my project which was to build a controller for a bank of elevators to optimize wait times. And of course I had to build a visual simulator to show the queues at each state change, etc. In those days the language was Pascal. Outside of my course, I was always busy thinking about how to write games. My fellow students and I had no thoughts of startups, but were most interested in creating cool software. We all wanted to be part of the set of people that was going to change the world by writing software. We saw an amazing array of problems around us that we were convinced could be solved by computers.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
What are some growth tactics early stage startup founders can implement without a large budget?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@ems_hodge Hi Emilly if you are in the B2B space, and need to get results quickly, there are two tactics that yield results pretty quickly. The first is to try paid search ads. The second is to create an event where you bring together the experts in your particular product area, and get them to debate where the market is going. Use this event as a hook to talk to prospects and invite them to the event to start to build a relationship with them. I also often tell B2B startups to do outbound cold calling, the way that a Sales Development Rep would do it. You're probably surprised with this answer given that I am all about Inbound Marketing, and this is very much outbound. The reason why I don't put Inbound content marketing first, is because it typically takes time to ramp up, and as an early stage startup, you need results fast. Using the event I described above gives you a great reason to call them where you are offering them value, as opposed to selling (which they hate). You might have seen somewhere that I like to treat customers like a bank account: you have to deposit money before you can expect to be able to draw it out.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
If you could pick only one company to invest in this year, which company would you choose?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@tomstocklein That's a hard question to ask me, as we usually invest so early that it's hard to know for sure that companies are clear winners at that stage. But if I were to give you one example of one of my investments that is most exciting where I'd love to invest more money that would be Namely.
Jordan Gonen
Jordan Gonen@jrdngonen · trying my best.
Hi David! Thanks for joining. I am a student that really loves working in VC. What would you do to accelerate growth in to the Venture Capital Industry?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@jordan_gonen Hi Jordan, I would recommend joining a startup and learning the business side of the house. It's really hard to get straight into VC without having demonstrated some knowledge and passion for startups. Also do some Angel investing, even if it is very small amounts to learn the business, and figure out what really matters when making investments. Being a VC involves four things: Sourcing (hustle to find new deals), Judgment to know which deals to do, Ability to win the deals, and ability to be a great board member and drive better outcomes for your investments
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
What are the essential traits you look for when hiring?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@jakecrump For each job, I typically start by writing the job description, then I write the person description. For the person description there are often a bunch of things that are specific to that job. But there are a few common items that I love to see, and I think that's what you are asking me to discuss. Perhaps top of my list is I'm looking for people that are Smart. Then people that are driven. I 'm looking for people that have shown a track record of results in their past careers, and made smart choices when they face critical decisions like when they change jobs. I like humility and self-awareness, and the desire to keep learning. Passion is another great attribute. And if they have a great way of interacting with other humans, that will take them a very long way. Communications and selling skills are powerful for many jobs.
Ben Tossell
Ben Tossell@bentossell · Services for startups
What is the craziest thing you have seen in a pitch?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@bentossell Hi Ben, I have been racking my brain trying to remember some of these. I know I have seen some really crazy things, but have been having a hard time remembering them right at this moment. My apologies!
James Meincke
James Meincke@jamesmeincke · Marketing @ CloserIQ
Hi David! What do you look for in the sales and marketing teams of a prospective investment?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@jamesmeincke I am looking for evidence that they understand funnel math. Funnel math starts with the desired end point, which might be we need to close 100 customers in this particular quarter. It then uses known, or guessed at conversion rates to figure out how many demos (or whatever other stage preceeds orders) to get to that number of closed deals. Then works backwards to qualified leads, and then earlier in the funnel. I am looking to see that they have clearly thought through how many sales reps are required, what their productivity is, including the ramp time, to support that number. Then what marketing activities are needed to provide that lead flow. When I see that, I usually know the company is in good hands. The great thing about funnels is that they are about optimizing only two major variables: flow (i.e what number of leads at each stage) and Conversion rates. And two minor variables: cost of processing a lead, and time to get a lead all the way through the funnel.
COSTAS ANDRIOPOULOS
COSTAS ANDRIOPOULOS@candriopoulos · https://medium.com/strictly-curious
Dear David, thank you for joining. How do you identify emerging trends and interesting founders who want to capitalise on them?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@candriopoulos A key learning that I had to go through when I first joined was that we don't back ideas, we only back teams that have ideas. So it's no good coming up with your own idea, as that will lead you to try to find a team that has the same idea, and usually when I did that, it didn't work. So we leave the idea creation to the entrepreneurs, and just try to find the entrepreneurs and have them want to meet us and tell us about their ideas. I think the best way to do that is to try to figure out the broad areas where major disruption is taking place. For example, when SaaS came into being, it was clear to me that this was the first time that SMBs were going to be able to really adopt computing, and so I focused on SMB SaaS products. Another broad area of focus for me right now is making it easier to develop and deploy applications. We know that "software is eating the world" but it is still way too hard to develop modern applications, particularly as you have to support the iPhone, Android, and Web for most apps, and that means learning a ton of languages and technologies. Often times, we'll get lucky and be early to hear about a new emerging area from an entrepreneur, and then start mining that area from there. Once I have the broad sector, then I start out trying to meet all of the interesting companies and people in that area, develop some expertise and knowledge that can be useful when I talk to other founders. Perhaps attend meetups and conferences to learn more about the area, and to network as broadly as possible. And more recently I have found that my blog has helped me to meet many new founders, and they are a great source of ideas.
COSTAS ANDRIOPOULOS
COSTAS ANDRIOPOULOS@candriopoulos · https://medium.com/strictly-curious
@bostonvc Dear David, thank you so much for your wonderful insights. I really appreciate it.
Corey Hubbard
Corey Hubbard@corey_hubbard · Founder - DreamHighr
Hello, David and thanks for taking our questions today. My question is how should a first-time founder go about building culture into his two-person startup?
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
What are the most common pitch mistakes (first-time) entrepreneurs make when trying to raise money from Matrix Partners?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@tomstocklein Hi Tom, great question. We are writing a whole series of blog posts on this topic. See: how to build a deck and make a great investor pitch: http://www.forentrepreneurs.com/...
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
Bessemer Venture Partners' anti-portfolio lists companies that the firm didn't invest in, but in hindsight should have (e.g. Apple, Telsa, etc.). What are some notable companies you missed/didn't see the potential at the time?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@tomstocklein My worst mistake was missing Shopify. I met Toby Lutke in the early days of writing my blog, and we got on really well. My mistake was worrying about the size of the SMB eCommerce market. Dumb, dumb, dumb!
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi David, what's been the best advice you've ever received and how has this effected your life / career?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@ems_hodge The best advice I've received (after having started my first startup, and repeatedly since then) is that there are few more important things to focus on than building a great management team. If you get the team right, amazing things happen, but if you get it wrong, you'll spend your time fixing problems and not moving forward. This same advice was the top piece of advice I got from my partners here at Matrix when I first joined: focus on helping your portfolio companies build their teams right. Sadly I got this wrong in my very first startup, as I hired what looked like great managers, but they turned out to be great managers for a large company and wrong for a startup. So that was my first failure in life. I learned then that you need to find people that know how to get stuff done in a startup in the early days, but who can also think strategically, and also build and manage teams as the company grows.
Ben Tossell
Ben Tossell@bentossell · Services for startups
What are your favourite questions to ask founders?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@bentossell I really love hearing founder's stories - I'm looking to learn the journey they have been through, and in particular what led up to the insight for their startup. I find that how they have chosen to go through the various key decisions in their life tells me a lot about them. Ideally I'm looking to understand why they are uniquely qualified to bring a new solution to the area they decided to focus on. The founder is really the most important starting point for any investment. After I've understood the pain they are solving, I am looking to understand things like how big is this idea, (i.e. a true product company that can go all the way, versus a feature that will get rolled up into another company), how big is the market, what are the barriers to entry, is there good thinking about how to go to market, and what looks like a viable business model.
Ben Tossell
Ben Tossell@bentossell · Services for startups
If you weren't in VC what would you be doing?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@bentossell I'd start another company.
Ben Tossell
Ben Tossell@bentossell · Services for startups
What advice would you give your 20 year old self?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@bentossell I would tell myself to join an early stage startup so I could learn as much about how startups work and fail. Join in a role where you are interacting with customer, ideally sales, as that is what I think of as the Coal Face of the business. I.e. that is where you find out if the company value proposition is working, and if not, why not. Then I'd tell myself to go and do my own startup. I think being an entrepreneur is one of the most rewarding things you can do with your life. (It's also extremely demanding, and not for everyone.)
neeharika sinha
neeharika sinha@neeeharika · Google, Threadchannel
Hello David ! For a mobile App company what are the best growth strategies that work in your experience? At what stage do you like startups to reach out to you?
David Skok
David Skok@bostonvc · General Partner, Matrix Partners
@neeeharika Hi Neeharika, let me answer the stage question first. I ideally like to invest at the Seed and Series A stages. I wouldn't classify myself as an expert on the best growth strategies for a mobile app, as that is frequently a B2C problem, and I focus on B2B. I believe in the B2C space you are best off working with the firms that specialize in helping you get your app onto the top 25 lists in the App Stores, and usually that involves purchasing downloads, which can quickly get very expensive.
Syed Ahmed
Syed Ahmed@tabishis · Altimus Solutions, Inc.
What is that one enterprise product would you invest in at a really early stage without any hesitation?
Dave Gerhardt
Dave Gerhardt@davegerhardt · VP of Marketing at Drift
Which companies are you excited about in Boston right now?