Navin Chaddha, entrepreneur, investor and leader of the Mayfield Fund invests in early-stage IT companies that leverage the themes of mobile, cloud/SaaS, social, energytech and big data. Some recent Mayfield investments include Appcelerator, Branchout, Couchbase, Fab.com, Gigya, Marketo, Solarcity, and StorSimple. Navin has made over 35 investments of which 11 have had IPOs and another nine have been acquired. Navin was founder and CTO of VXtreme which was acquired by Microsoft to become Windows Media, and served in various management roles at Microsoft after the acquisition. He was also co-founder of iBeam Broadcasting (NASDAQ IPO), CEO and founder of Rivio (acquired by CPA2Biz). Mayfield Fund is a global venture capital firm with $3 billion under management and a history of investing in relationships. They invest early and globally in themes including mobile, cloud/Saas, social, energy and big data.
I have been involved in the technology industry for 20 years as a serial entrepreneur, corporate executive and investor. There are some key rules of the road that have guided my journey and these are especially relevant in the current era when the social Web is dominant, mobile platforms are ubiquitous and consumers are demanding simplicity. As an entrepreneur, I believe that living by some core beliefs is key to leading teams and building companies that last. Here are a few of my fundamental beliefs, illustrated with examples from the entrepreneurs that we are working with.
The Customer is Queen:
Actively listening to your customers and rapidly iterating to reflect customer needs has never been so important. From a vendor of cloud-integrated storage appliances to a mobile fashion marketplace, Mayfield Fund entrepreneurs like Ursheet Parikh and Guru Pangal of StorSimple and Manish Chandra of Poshmark, who constantly listen, react and respond to customer feedback, are finding a quick path to customer engagement.
Discover innovation across the value chain:
Innovation extends across the value chain beyond the technology level to product building, distribution and pricing. Entrepreneurs like John Newton and John Powell of Alfresco are using open source models to build products, distributing them through frictionless free SaaS models like Jerome Ternynck of SmartRecruiters, and using break through utility pricing and packaging models like leasing of solar panels by Lyndon and Peter Rive of Solarcity. Identify innovation points across the value chain to rapidly and successfully scale your company.
Focus - start-ups die of indigestion, not starvation:
It’s really easy to lose focus as an entrepreneur with a big vision (or an investor who is presented with many great opportunities). Phil Fernandez has built Marketo into a large and successful business by initially targeting the marketer with a marketing automation application, a category that was dismissed as being too narrow when they first started. Nailing that need first, allowed them to expand and offer a comprehensive revenue performance management platform to the marketing and sales organizations. Sticking to your roots and core competencies will get you to your final destination quickly and with much less heartburn.
Surround yourself with excellence:
As an IIT student in New Delhi, a graduate student at Stanford, a serial entrepreneur whose companies were acquired by Microsoft or went public, as well as a venture investor over the last decade, I have been lucky to be surrounded by brilliant, hungry, hardworking and persistent people. Learning from them has been exciting and rewarding, as together, we have built organizations beyond our personal expectations. Do not fall into the trap of hiring B people as they will hire C people and you will soon find yourself at the end of the alphabet.
Pain killers sell, vitamins do not:
You have to ensure that your company addresses a real pain point of your target customer. Sometimes it takes a while to evolve your idea or even pivot from the original one to nail the real pain, as was the case with Gigya, which was founded as a social widget and application distribution platform with a media/advertising business model. However, they evolved their technology and pivoted to address the much needed and cumbersome task of enabling websites to become social. Their SaaS offering is used by over 500 global businesses to leverage social logins, social apps and game mechanics that create loyalty and engagement with their customers and audiences.
Delight the user:
In an era of “appification” and “consumerization of the enterprise”, products only have seconds in which to captivate and engage users. UX/UI design is playing a critical role in leading social Web e-commerce companies like Fab.com which are providing curated experiences that will let them grow into an Amazon-size platform for design. Learn from these design leaders and do not be afraid to iterate, iterate and iterate until you get it right.
Capital efficiency is a must:
In an era of Big Gulps and multi-billion dollar valuations, it can be hard to go against the mega-trend mentality of the crowd. Do not be afraid to raise small amounts of capital and spend it efficiently so you can prove the product-market fit and the go-to market strategy before raising a lot of capital.
Adapt continuously, as dinosaurs do not survive:
As Eric Ries outlines in his book, The Lean Start-up, the build-measure-learn feedback loop is a new way of thinking about product development and a must have mindset for entrepreneurs today. Dinosaurs became extinct for a reason, so free yourself from old models and stay nimble and in touch with today’s times.
Remember that it is a marathon, not a sprint:
One of our most successful enterprise infrastructure companies, 3PAR Data, took over a decade from founding to dominating the category of utility-based storage and being acquired for $2.35 billion by Hewlett Packard. There were many twists and turns along the way, according to their CEO David Scott, but the company stayed focused and patient through them all.
I hope these learnings will help in your journey from founding to fame. Good luck building great companies.