Ethan Kurzweil

Partner, Bessemer Venture Partners

THIS CHAT HAPPENED ON November 22, 2016

Discussion

Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
I’m Ethan Kurzweil and I heart entrepreneurs. As an investor at Bessemer Venture Partners, I’ve worked with incredible teams at Twitch, Twilio, Intercom, Sendgrid, PagerDuty, Periscope, Periscope Data and NPM. If you count The Cat Company (and somehow, most people don’t), I’ve been a founder since age 11; otherwise, I co-founded my first real company, SSB-Bart Group, as an undergrad at Stanford and have been enamored with startups ever since. I’m a proud Boston native (GO SOX!) and Stanford alum. Ask me anything!
Scott Raney@scott_raney1
What do you think are the characteristics of developer-led businesses that scale revenues (and not just developer usage)? And is Byron a nightmare to work with?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@sraney Ha! I'll take the second question first.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@sraney CENSORED.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@sraney Woah. Product Hunt censored my response. Strange. Byron must have pull there.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@sraney But seriously, Byron is great! (Not just saying that because this is a public forum). As for the first question, I look for businesses that do 7 things: -deliver products in a metered (cloud-connected way); -have a way of scaling utility as the underlying business grows; -replace a non-core skill-set for the customer (e.g., accepting payments or sending SMS messages aren't core to an e-commerce company); -offers an amazing developer user experience; -is an area with major enterprise spend attached to it (e.g., replaces something the company already pays for); -demonstrates strong customer love; and -exhibits network effects or economies of scale.
Dylan Qian@dylan_qian
Hi Ethan, Thanks for doing this! I was wondering if you had a favorite side project you have done or if there was a side project done by someone else that you thought was particularly interesting?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@dylan_qian You're welcome!
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@dylan_qian As for side projects from me, my current one is teaching my son to read (he's 5 but just missed Kindergarten) but I suspect that's not what you had in mind. My favorite side project I've seen recently is this Typing Speed Test I saw on Product Hunt last week: https://www.producthunt.com/post...
Dylan Qian@dylan_qian
@ethankurz thanks for the reply! I remember trying out that typing test and thinking it had a great UI! Please let me know if you're interested in coming to NYU to speak to students sometime if you're in NYC, would love to host you through our VC club on campus!
Andrew Ettinger@andrewett · 👟 @wearAtoms // ex @Twitter @ProductHunt
Hey Ethan! Which of your investments are you most proud of?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett That's like asking me to pick which of my children I like best!
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett That said, I was proud that we made the investment in Twitch when we did - as the company had been around for a long time as JustinTV and had pivoted to focus their energies on Twitch. The traction was great off the bat but most people had forgotten about the company and dismissed it as something that was never going to work. It just shows you that great teams find a way to win and pivots can work (with great teams). So I'm proud of that one!
Andrew Ettinger@andrewett · 👟 @wearAtoms // ex @Twitter @ProductHunt
@ethankurz That's my next question! (no one said this was going to be easy 😏)
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett Luckily my kids can't use computers yet! But they are both special of course...even when we refer to them affectionately as "monsters."
Tony Spiro@tonyspiro · CEO & Co-Founder, Cosmic JS
Hey Ethan, Been a follower of yours for some time, absorbing as much knowledge and insight as I can. So first off, Thank You! My question is for myself and others in the developer platform space, which I know you have a lot of experience. What is some advice you would give startup founders in the early stage building a SAAS developer platform?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@tonyspiro Thanks for the question, Tony. A couple of things: first off, make sure the problem you are solving is one that is felt by lots of developers, specifically ones at enterprises. Too often I see companies solving a very niche, one-off kind of issue. Second, make sure you can deliver it in a way (via the cloud) that allows you to monitor usage in a metered type of way.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@tonyspiro The reason for this is that you want to make sure you can price it in such a way as to grow with your customer's growth - they get more users, you charge them more. Etc. Pricing on a per seat basis isn't as good for this type of company.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@tonyspiro Finally, make sure you are addressing an issue that has a lot of spending associated with it - payments, security, communications, infrastructure - these are all areas with massive budgets at big companies. It means there is more of a chance you can justify big spending and support your costs.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@tonyspiro And finally, focus on the user experience of the developer. Heavybit calls this DX (developer experience) - it's the single most critical things to get right in the early days. Developers must love your product!
Tony Spiro@tonyspiro · CEO & Co-Founder, Cosmic JS
@ethankurz Thank you for your answers Ethan!
Mike Coutermarsh@mscccc · Code @ GitHub
Hey Ethan! What advice that you’ve received during your career has had them most impact on you?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@mscccc The best advice I ever got was early on when someone told me to just do the thing I wanted to do at that moment and not worry about "setting myself up for the next job" - that's served me really well and led to some unexpected choices, like joining BVP when I thought I was going to be starting a company.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@mscccc Other than that, I think the hardest part of building a career is learning when to follow advice and when not to. Having great mentors is great, but it's important to know when to trust your own intuition and make contrarian, risky decisions rather than just follow the "conventional" wisdom. All of the best founders have to ignore more advice than they take - I would venture to guess!
Niv Dror@nivo0o0 · VC at Shrug Capital
Which one of your father's books is your favorite?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@nivo0o0 This is like the which of my kids is my favorite question. But since you asked, Age of Spiritual Machines was most transformative for me in terms of how I should think about the future and opening my mind up to the possibilities will exist. But that was more about life stage when I read it (in college) and I'd recommend the more recent books like Singularity is Near and Fantastic Voyage and How to Create a Mind at this point.
Andrew Ettinger@andrewett · 👟 @wearAtoms // ex @Twitter @ProductHunt
Are you longer on AR, VR, or Tom Brady?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett Tom Brady.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett But seriously, I think both AR and VR will find their way into our society in meaningful ways. AR has the power to be more transformative. I'l elaborate a bit...
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett VR could be a great medium for entertainment - premium content, UGC, gaming, immersive type stuff - but I don't think it's that likely we are going to want to be in VR all day long. I do think it will happen that VR will become a big part of our lives, but still kind of like a "TV watching" or "playing League of Legends" kind of thing. I was at Linden Lab (Second Life) back in the day and everyone got ahead of themselves thinking something immersive like that might take over, but I now think it's going to be a useful medium for some applications but not an all-encompassing one.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett On the other hand, AR is different in that it can meaningfully augment (he he unintentional word choice) our lives and not be this other world we escape into. It has applications across every different industry and many different types of interactions. I do think it could be very transformative over time if we get the form factor right - e.g., Google Glass didn't exactly nail it.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@andrewett Just like we take medicine or get surgery or get the best sports equipment to make us better, we'll use augmented reality tech to make us better in certain situations for sure - be it every day life, medical applications or something else entirely.
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What advice do you most often to new founders?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@jacqvon do something you actually care about. Solve a problem you want solve because you've experienced the pain of it being broken. If you look at the best, strongest companies - they all have been started by founders that really cared about solving a particular issue, not just because they saw a way to make money.
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
Going from founder to investor, what has been the biggest lessons you’ve taken from your first companies to investing in others?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@jacqvon Honestly, the main lesson is that it's not easy - in fact, it's really, really difficult and we as investors need to be empathetic to that. It's a lot easier to diagram out how something should work in an investment memo that make it happen in practice.
Gregory Koberger@gkoberger · Founder, ReadMe.io 📘🦉
Hey Ethan! A good portion of your investments seem to be developer tools. What draws you toward startups focused on other makers, and what are some things you look for in them?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@gkoberger Hey Greg!
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@gkoberger I love developer platforms (more so than developer tools which I see as less connected and just pieces of functionality that don't deliver compounding value over time so I try to focus on the platform-type opportunities). As for why I am drawn to them, I love the reach, power and impact of the Internet. Full stop. So by focusing on technologies that make developers more productive, it enables developers to build even more impactful products, services and utilities for the Internet community as a whole. Things we couldn't even have dreamed of before. Most of what gets built on Twilio wasn't envisioned by Jeff and the team in advance but some creative, amazing developer dreamed it up and made it happen. Great building blocks for developers enable that kind of serrendipity (sp?) to happen!
Lily Marie Odegaard@nacl_lily · Co-Founder, Favii.co
Hello, Ethan. I read some of what you've been involved in, and really enjoyed your talk o n Intercom. I saw that Bessemer is involved on investment on multiple levels. I wanted to know, what are investors looking for on a seed round?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@nacl_lily Thanks for the question, Lily. I'm not often involved as a seed investor but my best educated guess is that it's about the personalities of the people involved and the nature of the problem. Do the people have a special skill that will enable them to solve the problem in a special, transformative way?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@nacl_lily And to my earlier answer, do they have an authentic desire to solve it that comes from experience and feels real - it's not just a business school exercise of finding a big market and going after it but something they feel passionate about to dedicate their life's work to solving.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@nacl_lily And then probably also whether the market feels ready for such a solution but I bet lots of seed investors discount that as very unpredictable and focus mostly on the people.
Lily Marie Odegaard@nacl_lily · Co-Founder, Favii.co
@ethankurz Thank you. We'll keep this in mind.
Tiffany Spencer@tiffanylspencer · Head of Marketing,
@nacl_lily It's worth noting that Bessemer does invest at all stages (seed--->growth.) Examples of well-known companies we've seeded: Twilio, DropCam, BlueApron. BVP invests in consumer, enterprise and healthcare companies.
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi Ethan thanks for being here today. What trends are most excited about right now in tech? What should we be looking out for?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@ems_hodge The most exciting trend for me is the convergence of entertainment content with the Internet. 75% of the Internet will be about delivering video to people's homes, phones, and other devices in the next two years. We will cross the lines in terms of getting more of a video content from the Internet than from television sometime in the next 4-5 years. And that's a lot of content that will move as a result! The result will be new applications, new enabling technologies and new types of content - hopefully something in it for everyone. That's the most exciting near-term trend for me.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@ems_hodge Longer-term, I think we'll see the power of the Internet get embedded in more devices and situations via AR and other cloud-connected devices/applications - and that will yield transformative properties for healthcare, fun, productivity, etc. But it won't happen right away and we often overestimate how quickly something transformative like this will happen.
Emily Hodgins@ems_hodge · Operations @ Product Hunt
What is your advice for people to acheive a work life balance? As someone who has building their own companies since 11, how have you learnt to balance work with maintaining a healthy life outside of this?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@ems_hodge I wish I had a better answer for this one - the truth is that startups are all encompassing and you can't really just "tell your employer you need a break" because the company might not survive without superhuman effort. It's something I struggle with too since I can't tell founders that I'm unavailable at certain times when I know they are killing themselves to make their companies succeed and may need something when and how they need it.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@ems_hodge I do think however that part of building a startup (and this applies equally to VCs building a portfolio) is architecting a company that is self-reliant and continues as an organism even you take a break. In the early stages, that's really tough but most successful companies get to that point within a few years where they trust the machinery of the company to function even without 24/7 attention. But I'd be lying if I didn't say that this is a real issue for founders and starting a company is definitely not the best way to achieve healthy work/life balance!
Ayush Mittal@aymittal · bro @boombro, Founder RefR ✌
Hey Ethan, Thanks for your time today. Could you please share your thoughts or experience on sorting out the pricing strategies for early-stage startups in consulting field?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@aymittal I'm probably not the person to comment on pricing strategies for consulting - sorry. It's better if you can figure out a way to price to the impact you have on the business rather than hours or units of work, but I realize that's a lot easier said than done. But I don't have good experience here to really help you out much beyond this. Good luck.
Ayush Mittal@aymittal · bro @boombro, Founder RefR ✌
In a scenario where you are just starting up and you have an idea of building a SaaS platform - How would you go about finding a tech co-founder provided that you are not from tech background?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@aymittal That's a really good question and a hard one. Is there a way you can try working with someone first before committing? I wouldn't commit to a co-founder without knowing them as completely as possible and trialing the working relationship. Ideally, it's someone who has also lived the problem you are tackling and feels as passionately as you do but I realize that's a very tall order.
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@aymittal I'd probably hold some sort of Hunger Games-style try-out and see who rises to the top (kidding, well sort of). But I do think you need a way to evaluate the working relationship and hunger and drive and see if it's a match. But I'm not the best person to answer this question since I usually get involved after the co-founding relationship has been formed. I'd find the best founder groups and ask them how they got to that point.
Ayush Mittal@aymittal · bro @boombro, Founder RefR ✌
@ethankurz You did hit the right chord - It's not about the technical competence as I have been struggling to find the right match reflecting the passion, the hunger and the drive. AND then mostly ethics do not meet. With the conversations I have had with people looking to be a tech co-founder, even the Hunger Games-style will eventually develop the facade for the desired outcome. As you mentioned - in an ideal world, I would love to do the trialling thing to see how the relationship works out. Thanks much!
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@aymittal Yeah definitely don't rush it - that will yield the worst outcome possible. It may take a lot of time to find the right mix of competence, ethics and fit but so be it. Good luck.
Ayush Mittal@aymittal · bro @boombro, Founder RefR ✌
@ethankurz Definitely! I appreciate your advice. Thanks much!
Michele Lorubio@mikchef94
Investing in the API market is something that is not yet developed in Europe as much as it should be. What would you suggest for companies working in this field, mostly focused in the "business to developer" market?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@michele_lorubio That probably suggests that there is a good opportunities for investment then. It clearly will come, and perhaps you're just ahead of the curve to think about it?
Ethan Kurzweil@ethankurz · Partner, Bessemer Venture Partners
@michele_lorubio Given your setup, my main suggestion would be to spend some time educating the market on how your solution works and why it's a good idea for your potential customers to outsource pieces of their functionality to the cloud and to another platform provider in this way. If it's new in Europe, this may not be intuitive and may require some educating and selling to make happen - just as adopting cloud did for many of the early adopters in that market beginning with Salesforce.