How to apply a product mindset?

This article reflects a talk delivered at the 2022 VC Platform Global Summit in New York. Minor adaptations have been made to accommodate recent updates and the written medium.

Applying a product mindset to test VC platform initiatives

As Head of Platform at maze, a European impact investing firm based in Lisbon, we have been applying a product mindset to test our platform initiatives at our venture capital (VC) fund (MSM) and scale our impact.

A product mindset in this context is a way of approaching our platform challenges (i.e. which platform component should I build next) in a way that creates the most value to the users founders we back while contributing to the goals of the VC companies we work with. In this article, I will explain what that means in practice.

Step 1 👉 Know your why

A product mindset starts with knowing your firm’s ‘why’. Ours is to prove that social and environmental impact ventures are the greatest economic opportunity of our time.

Our platform goal is a derivative of our why as it exists to grow the social and environmental outcomes of the companies we back. Why? Because our investment thesis sits on the premise that when the impact of the ventures we back grows, their revenues grow too. There are three immediate consequences to this premise:

1. The focus of our platform work is post-investment.
2. Everything we build is geared towards enhancing impact outcomes.
3. Our target audience is, first and foremost, the founders.

Step 2 👉 Identify the top challenges to be addressed by platform

Many frameworks can help you here. We profiled our founders following the value proposition canvas that separates: jobs-to-done, pains and gains. Here we write down our assumptions about our founders:

• What are they trying to get done? Their jobs.
• What annoys them? Their pains.
• And what delights them? Their gains.

After writing that down, we interview them to validate if our assumptions are true and drill down which job, pain, or gain is more important.

To prioritize and focus, start with the job, pain, or gain that is more relevant to your founders and best matches your team’s strengths.

For our founders, attracting mission-aligned individuals is essential for them. We all know that hiring the best talent is a proxy for success for an early-stage venture. We are also fortunate to be surrounded by talented people. So it seemed like a good place to start.

Step 3 👉 Build your opportunity solution tree

We are now jumping onto another framework: the opportunity solution tree, a visual aid for the product discovery process, a framework to refine our VC platform ideas by deeply understanding founders’ problems and then landing on the best way to solve them.

It starts from the firm’s mission and the platform’s goal. The first task is to transform the gain you selected into an opportunity. So, in our example,

To attract the most talented and mission-driven individuals to join my team

☝️ becomes the platform opportunity 👇

To grant access to high-quality talent, motivated to work in an impact startup.

Solution #1

Then, we ideate solutions for this opportunity. The first one we launched was to Contract a third-party job platform.

We defined success as at least 50% of our portfolio companies that are hiring request access to candidates via the platform every quarter.

The result? We FAILED.

Now, why did we fail? Because we did not run any experiment to test if this solution would bring value to our founders, and when we asked them why they didn’t use it, we learnt:

1. They were unwilling to pay a hiring fee from a third-party job platform that was not tailored for them.
2. We could not ensure candidates they had access to were impact-driven.
3. The third-party job platform was not top of mind when they were hiring.
4. Our metric was an adoption metric rather than a success metric (value to users)

Ultimately, we were tied into a contract and wasted money. In our next iteration, we learned from our mistakes.

Solution #2

Our second solution was to create our own talent pool with impact-driven candidates. Because we are an established European impact-investing firm, we receive a lot of inbound from people that want to shift to an impact-driven career, but we cannot absorb them.

To test this solution, we did the following experiment: we sent founders shortlists of qualified impact-driven candidates that had already contacted us tailored for their open positions.

We defined success as 70% of companies receiving these shortlists contact at least one candidate.

Founders were receptive and asked for intros, so it was a SUCCESS.

Only then did we double our efforts and built our in-house talent pool in Airtable, which is now distributed by our team and in all our channels.

What did we learn?

1. Experiments decrease risk.
2. Our in-house talent pool solution is being successful in increasing inbound for management roles BUT
3. It is not increasing inbound for tech roles.

In our next experiment, we set ourselves to solve just that. We launched a marketing impact-related campaign to increase the inbound of tech folks onto our talent pool.

The result? Ping me in a couple of months.

As you can see, you can experiment indefinitely.

Summing up

Listen

It does not work to offer VC platform features without verifying that they solve a founder’s job, pain or gain. So, LISTEN to your founders to validate your ideas before starting to build.

Iterate

Adding solutions to your VC platform without experimenting can be an expensive mistake. The power of doing cheap experimentation is to avoid big (bad) investments in productizing something without value. So, experiment and ITERATE first and always.

Build

Have an in-house low-code developer so you can experiment and BUILD faster.

Pivot

Have your experiments made you conclude that you are approaching the problem incorrectly? Then, learn from your mistakes and pivot.

In this article, I walked you through an example that most VC platform managers experienced — sourcing talent. However, the presented frameworks — value proposition canvas and opportunity solution tree — can be applied to any VC platform initiative.

The value of having a product mindset is not about bringing the most innovative solution to your firm but more about making sure that whatever you bring adds value to the specific needs of your u̶s̶e̶r̶s̶ founders, while serving your firm’s mission.

A product mindset is a structured way to prove the value of the VC platforms we are building every single day.

Our platform is a team effort being brought to light by Julian McNamara, Tomás Vila Luz and me with the undivided support of the remaining team members, including the precious advice from our Venture Partner, and product wizard, Vasco Pessanha, Director of Product Management at OutSystems. The thought process and frameworks used in this article are a result of the knowledge acquired with the One Month PM ‘Product Foundations’ course by André Albuquerque which I highly recommend to everyone taking their first steps in product management.

Enjoyed this post? Check out How we built a VC platform to serve impact founders across Europe to learn how our platform is growing the social and environmental outcomes of the companies we back.

If you want to discuss this further, reach out via LinkedIn or at cristina@maze-impact.com.