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- [00:00]
Steve Malia
So you'll see successful PLG companies cross verticals. And so think of Atlassian was probably like the flagship one. And I think of Slack. Even think about how you use Slack, right? You can use it as a consumer and then you and I start using it at work because we're chatting during the day, then all of a sudden this whole group's using it. And then your group leader says how you guys all talking during the day and then brings it to your president or CFO to say, hey, we should be using this as our company communication.
- [00:32]
Interviewer 1
Right.
- [00:32]
Steve Malia
So it's around the virality in the product effectively sells itself, you know, at those earlier stages. So, you know, that's an extreme example, right, with Slack. And if you look at Calendly, one of our portfolio companies, I send you my Calendly link.
- [00:48]
Interviewer 1
Great.
- [00:48]
Steve Malia
And then I, you know, you're like, oh, what's Calendly?
- [00:53]
Joel Palathinkel
Welcome to the Investor, a podcast where I, Joel Palathinkel, your host, dives deep into the minds of the world's most influential institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights. Get this live here and then we'll just get, get rolling. So it looks like we are good to go. So we're here with Steve Malia with Open View Ventures, new friend of mine, really getting to know their fund and understand what their thesis is. But before we kind of get into the fund structure, Stephen, number one, thanks for coming here. I know you're super busy, so really appreciate you making time to do some storytelling and talk about venture, talk about your background. So again, thanks for sharing your bandwidth and your time with us. Maybe we can kick off with just a little bit about your career and your background and how you broke into to recruiting, how that's evolved and you know how that's kind of evolved with Venture and your journey into Openview.
- [02:11]
Steve Malia
Yeah, absolutely. And thanks for having me. So, interesting journey so far. I'm from the Boston area. I went to school out in New York at Union College, the classic econ major. That was the closest thing I could get to business. It was econ or engineering. And I definitely didn't fall into the engineering bucket. So one Econ Junior summer comes rolling around and say, hey, I have to get an internship or I'm never gonna make it right? So followed everyone else, chased the Wall street dream, talked to a lot of banks, and in that networking process actually met someone who worked at Korn Ferry, who was the managing director here in the Boston office, didn't know anything about recruiting. All I know is that this person could potentially help me open some doors at these banks. So I went and sat down with them and said, hey, you know, here's my story, here are some of the firms I'm talking to. Went on for about 45 minutes doing exactly what we're doing right now. And you know, the person started laughing. So I said, oh great, the person who's gonna get me a job is now laughing at me. So he said, hey, you know, I hear so time and time again everyone's looking to get right into Wall Street. You know, it's the only way you can break into investing or other industries. But that's actually false. A lot of people are getting to different swim lanes, learning new skill sets. He walked me through executive recruiting. What came with that, how it's business but more on the people side. And I was hooked. And Goldman Sachs was not calling me back at the time. So actually end up doing an internship with them that summer. Started full time post school and Korn Ferry is the largest executive recruiting platform in the world. So they work with a majority of the Fortune 2000 companies, hiring all C suite functions you can think of across the board and doing it the longest. So that was great training experience. Over time at Korn Ferry I got more and more exposed to the private equity practice and working with those companies, which was very different than the Fortune 100 clients. A little bit more like the wild west at the time. So executive search has taken off and one of the big things that was happening was people were spinning out of these large platforms and starting their own boutiques. One of those was True Search. So connected with one of the partners there who I used to work with the Korn Ferry and said hey, what are you doing over at tru? And said listen, we focus exclusively on venture private equity backed businesses and doing exec recruiting for those companies. And I said that's exactly where I want to head. So left. Korn Ferry made my way to true search about five years ago. At the time they were a 50 person small executive search firm just starting to do some work with Excel and Sequoia, some some flagship funds, but a really competitive landscape still. And then they took off. They're now top 10 global search firm, really catering to that group. They stayed really consistent with that venture private equity back business group. So we did work anywhere from a seed stage, Bain Capital Ventures, Sequoia company up through Series A through F With Insight, Excel, open views of the world and then into the private equity players as well with Vista and others. So great experience. I was part of the go to market practice there. So did a lot of CRO and CMO work primarily for those growth stage businesses. Did a lot of work with uipath1Password. A lot of these emerging businesses that have, you know, have now gone on to be very successful public companies. Really like the transformational stage of the business. In that time I got to work with a lot of VCs both on the operating side for their portfolio companies and then started to do a little bit of work on actually recruiting for the funds for their investment teams. So got to see how both sides work. Open View was always in my backyard. I always admired their portfolio and how they approached investing. Is definitely a unique model and timing lined up for this talent partner position which I'm in today. So made the move just about a year ago, almost moved in March and obviously some things unfolded in March of 2020 that were on first seen so put it on ice and then actually officially joined in July when things settled just a little bit. So then with the firm sense, that's really great.
- [06:30]
Joel Palathinkel
Maybe you can walk us through just some of the differences with just tier one VCs trying to get in versus kind of what you've seen with just people getting in on their own. Because I know that there's kind of a lot more steps in the process when you go into a tier 1 BC. So in general. Right. What are some of the things that you've seen as a pattern that, that have, that have helped people kind of get over the. Get over the hump and kind of go through the process. Is it. And you and I were talking about this before, you know, it seems like the, the concept of just the pedigree has, has actually surpassed.
- [07:07]
Interviewer 1
Right.
- [07:07]
Joel Palathinkel
So there's not really just the top tier school that you went to, but kind of the whole package right now. Now it seems like they're making people do a lot more interactive exercises. People are putting together an investment thesis probably maybe in real time. So I guess maybe could you walk us through what to expect if somebody is applying to Sequoia and what, you know, or Excel and what does it really take, you know, the ones that you see get passed through, you know, what, what are kind of some of the, the challenging steps that they have to kind of make sure they go through and be prepared for?
- [07:44]
Steve Malia
Yeah, it's definitely evolving. I think it's very different fund to fund. I think everyone has their own approach and looking at OpenView specifically. So we are getting larger, we're on to fund 6, but certainly have some years behind or funds behind the Excels and Sequoias of the world in terms of AUM. But for looking at OpenView then kind of branching out to these bigger funds. So we're all B2B expansion stage software. So we leave series A and B investments check size from anywhere from 10 to 30 million on average. We cast a wide net across B2B. So you'll see anywhere from Datadog through to calendly through to Axonius. So security infrastructure, DevOps, smart tech and we can go pretty broad but we're very stage specific. And when we get involved with companies, so our deal team is structured with people who have experience and skill sets to really cater to both the diligence work and assessing a prospect companies and then working with those companies post investment. So our deal team today from a ladder perspective is associate VP Partner. There are varying levels of associates and different types of backgrounds within the associate clients class. For us we have people who are skewing very heavily towards the diligence side. So that's like a diligence associate for us. A lot of those people come from investment backgrounds or have some sort of skill set where they're working on finance teams to do a lot of the heavy lifting around. Okay, we have X amount of prospect companies. We need to do market calls, work with any data we have, running a lot of those diligence processes and modeling. And then we have on the other side of the aisle is more of the sourcing focus associates. So people who really can come in with venture experience or not and really kind of come in with more of a fresh perspective and really personality, presence, communication style to work with founders, do quick reads, not be afraid to set up meetings, dig in, develop a relationship and develop that trust early on. So kind of stepping away from just the numbers and getting more interaction with founders. So a lot of teams are structured around it differently. You know, for us we have different types of associates and that's a lot to our focus on our stage and things like that. It does, you know, in terms of the interview process. From the diligence side, we have a lot of those cans put together. You know, an actual case study specific to we'll give them, you know, some data from one of our portfolio companies, sign an NDA and say, you know, would you make this investment? Run the model, tell us about the business, things like that. It's really meant to get Them kind of working on paper, talking, put a position in and stand by it. And on the sourcing side, we'll do something a little bit more interactive to say, hey, you know, what is a company you think we should go invest in? And obviously we're not looking for them to go find us the next data dog, you know, in that week. But we want them to come back and say, hey, you know what, I really like this space. Here's why. Here's a company that I think is trending in the right direction, whether that be headcount or differentiated product or you've seen other companies larger in the industry acquire a lot of companies. So really the idea there is to get them talking, right, and see if they have the confidence and communication style to step in. So for us we're looking for a lot of those things in our interview process. When you get to vp, principal partner other funds, the game changes in terms of some of the skill sets you need to step in. If you go to an Excel or Sequoia, I'm sure they're a little bit deeper into if you're going to be focusing on their consumer group versus their B2B group, their early versus growth. So I think when you look at funds like that that have gone to a multi fund strategy, they're going to try and push you into lanes where you're going to help round out those specific teams. Whereas other firms, whether it be very small or kind of emerging to that level, will have different profiles that they can actually attract to the team to round out what they have and to bring a full package investment team together. So it's very different fund to fund.
- [11:55]
Joel Palathinkel
Yeah, what, how far outside of venture have you guys hired? Like, have you brought in people from banking consulting, from product management? Is there a little bit of open mind? Because you know, some funds are pretty close minded where they're, they're like, hey, you know, you need to have done some type of internship or have, have sourced some deals. So you know, it sounds like you guys have a little bit of flexibility and you guys are open to people from different walks of life. And you know, those are the three Personas that come to my mind, right, like product management consulting, like, you know, somebody that's coming from McKinsey because they're usually working with a lot of data sets and then possibly somebody from banking. But any other, you know, new types of Personas that you're seeing break into venture and, and you know, how can people bridge the gap to, to kind of get closer to a Better fit?
- [12:48]
Steve Malia
Yeah, it's a great question. I think OpenView as well as other funds are looking for talent in a lot of different ways. I think you're spot on that it's not just about pedigree, getting your three or four year Wall street rotation and then stepping into these things. I think there's a lot of great talent out there and it comes back down to the entrepreneurs you're going to be working with and getting people around your team. So for us, in terms of backgrounds, if you look at some people on the team, we do have people, some partners who look at Tom Hollahan. He came to Open View, I think about two years ago now. He started his career more on the investment side, actually shipped in a bank, shifted to an operator role and more of a BD focused role at Datadog. Did that for some time, Went to General Catalyst as an associate, but came in with more of that sourcing capability from having that sitting, you know, time in the seat as an operator, working with teams on the other side of the table and then has since, you know, grown to become a partner over here at openview. Caitlin Henry, a VP on our team, was with Amazon and part of their product groups. You want the profiles you flagged and you know, she brings this whole, you know, fresh perspective and just her ability to connect with entrepreneurs is different, you know, than some people who come from strictly finance and look at the numbers. I think be able to speak to product and space and look at teams because you were part of those teams in the past is interesting to a lot of funds right now across all levels. And you know, I think for looking at an associate class, naturally you may get a lot of people coming from investment banks and or consulting groups that work with PE firms, I think for those associate roles because they'll have some of that diligence experience to be able to step in and learn it. But that being said, we're branching out and finding different ways to bring in top sourcing talent. So for us, one of the new profiles we've thought through recently is can you go get someone who's early in tech as an operator, who comes from even an AE background or someone who's really had developed BD or product shops who've gotten in front of and really can put their sales hat on, right? Because a lot of ventures today is, is selling your firm your money and making connections. So there's a lot of different ways you can find top talent. I think another bucket we're seeing more of are people coming from corporate development teams, which is interesting. So there's a lot of ways you can get into that within a lot of different types of B2B software companies. But those people are going to be working really heavily on the diligence side and then you can combine that with a certain personality. You can have a really rounded, well rounded investors. So I think more and more you're going to see people come from different types of backgrounds. Operating backgrounds are definitely becoming more popular. I did some work with Spark Capital on the west coast years ago for their consumer team and they were actually, for the most part exclusively focusing on people coming from the operating side who can bring that perspective. I've done some work for Information Venture Partners in Toronto, a small fintech focused fund. They skewed very heavily towards Operator to round out their team. I think core of a lot of these flagship funds, they have the top heavy people who've been in the space a long time with really strong finance backgrounds. And now it's about getting kind of fresh talent in with their own perspectives to run with the team.
- [16:26]
Joel Palathinkel
Sure, yeah. And I mean, a point that you mentioned is really important. I mean, this is something that I've been kind of advocating a lot in the last few months. But to me, really, sales is the most important skill in life. It's what gets you a job. Like you said, when you're working with founders, there's a lot of investors to choose from. Right. So how do they, you know, how do you convince them to take your money when they're oversubscribed? There's been a few deals where I just felt super lucky that I even got into the deal and the founder let me in and I just tried to genuinely just build a friendship with them. Not even, not even the cliche can I be helpful. Right. I mean, that's the meme. But I really just try to build a friendship and I think that's part of sales is like relationships and you know, and then I would say some of the best deals that I got into is just because another VC told me about it as a friend. So. And I think that relationship building is so important because you just won't get into any deals no matter how quantitative you are or how great of a model you build. If you, if you build a model and you can't even get into the deal and the people don't like you, then I think you're kind of, you get, you're kind of handcuffed. Right? So, so I think that's, I totally agree. I think that's that's another Persona that's super important and, and it's, you know, the way that you engage with the, the hiring manager, the first impression that you make when you're interviewing. I think that's a big piece. I would also say part of VC and I'd say this is something that I'm constantly working on is, is almost being a media brand. So I guess how important or how often do you kind of do a Google search on the, on the candidates to see if they've written any blogs? I guess. Is that something that's interesting to you and do you think it's helpful for people? And I guess this is just kind of pointed to some of the audience. Do you think they can get some brownie points if they have some investment thesis or if they even put together something that's related to kind of the, you know, because I think I've seen on your website you guys have focused on product led growth. So maybe looking at their thesis on product led growth and writing an article on that. Do you think that is helpful in kind of the whole package that they put together?
- [18:39]
Steve Malia
Absolutely, yeah. I think that just speaks to someone's interest and passion.
- [18:44]
Interviewer 1
Right.
- [18:44]
Steve Malia
I think we've come across some candidates over the last few months who are extremely impressive, could clearly step in day one and do the diligence side or possibly, you know, get. Be trained to source deals. But you know, I think a lot of people don't make it through to the final rounds in our, in our process. And a lot of it comes back to, you know, everyone says culture fit but it's really passionate team at OpenView and a lot of the times in, you know, I think one of the questions we ask and you'd be shocked at how people respond to this, but it's like what gets you excited about our stage or like talk to me about a company and you know, a lot of them like, you know, I'm just excited to really like work with founders, you know and like. Yeah, well what about that, you know, why about this stage is this so pivotal to get capital at that series A or B and like being able to like really you have to have all the right answers around what's going on with these companies at the time, things like that. But speak, be able to speak to specific examples of what gets you excited about a, you know, company doing that 1 to 5 million push and some of the things they're going through that you like to help with or dig into in the business and looking at the landscape is Whether you're junior or senior as an investor you're going to have to have some level of interest somewhere. And for us we cast a wide net across B2B. So if you say listen, I look at OpenView's portfolio and see that you invest in a lot of companies. I personally have been following fintech the last year around everything I've gone to these virtual events. I've done this just to show your actually passionate about something goes really deep with a hiring manager. Because again it doesn't mean you have to identify four great companies for us to go invest in. But we're betting on the fact that you're going to want to go hustle and find those companies.
- [20:30]
Interviewer 1
Right.
- [20:31]
Steve Malia
And then actually be passionate when speaking to those companies because you're constantly around it and you're living and breathing it in your day to day. So we had a candidate that got on our radar through a blog post. You know, he had his own perspective on product led growth and that was flagged by one of our partners and said hey, I actually gave this a read and was impressed. We reached out and engaged with the candidate. So I think that can certainly help and doesn't mean everyone has to go become a professional blog writer tomorrow. But I think even being able to speak to blogs, things you follow, newsletters, you know what's been getting you excited about a space that next layer is where you want to speak to and live in your kind of interview discussions. You can never be surface level and get anywhere in these processes.
- [21:21]
Joel Palathinkel
Sure. Yeah. And I think there's a lot of ways now I think the bar is just getting higher every I would say six months right before it was kind of like hey put together an investment memo and here's your resume. But I've seen some people build like these, these dashboards tracking different types of trends in notion and that has replaced like a pitch deck. I you know I also run like an emerging manager program and I got a bunch of doc sends but there was one person that sent me like a notion like interactive dashboard and I was like blown away. So I think you know I would not be surprised if somebody puts together some type of airtable and, and it's the same thing the blog. You know it's one thing to kind of see something just posted like a couple of weeks ago and then no history. But there's ways for people to actually kind of live the VC lifestyle and you know constantly source deals. There's so there's scout programs, there's other ways that you can Join angel groups where you can just kind of source deals and post them and, and get feedback. And I think, you know, as you do a Google search on that person, you can see the history that they've been tracking it for, you know, a few months. And then also like you said, I mean, just knowing about the events and, and where those communities are and being plugged in, I think that's a huge thing as well. So.
- [22:46]
Steve Malia
Yeah, and having a perspective.
- [22:47]
Interviewer 1
Right.
- [22:47]
Steve Malia
I think that's the thing too. Like don't be afraid to have an opinion and go with it. Like it doesn't even have to completely align with an investment thesis. You're the, with the partner you're talking to.
- [22:58]
Interviewer 1
Right.
- [22:59]
Steve Malia
I think if that was the case, if everyone had agree at any venture firm or open view, there wouldn't be a firm.
- [23:04]
Interviewer 1
Right.
- [23:05]
Steve Malia
And I don't think any great investments would be made. You have to have different perspectives. You have to have some arguments along the way. But people here will want you in the room if you can back it up and kind of show why your interest and be able to speak to things. It's too competitive right now to get into firms if you're not passionate about something and can back it up. So. And again, that doesn't mean you have to be 2, 3, 4 years with experience and be able to speak to everything about fintech or health tech or DevOps, but, and it could be multiple things, but being able to point to concrete examples of what you're following, trends, things you're reading, things you participated in in the space, that's what jumps out at hiring managers. It's not just like, hey, it looks like datadog did awesome. Other companies in that space are probably going to do well too, you know, I mean that's obviously an exaggerating example, but you got to go deep.
- [24:03]
Joel Palathinkel
Sure. Hey Tim, I think you had a question. So when you said GMs, what does GM stand for? General managers.
- [24:10]
Steve Malia
General Manager.
- [24:11]
Tim
Yeah, that's right. Like a general manager background kind of territory. Whether it's like an Uber or a handy one of those kind of platforms that uses the GM model.
- [24:23]
Steve Malia
Absolutely. Yeah. I would look at Sparks Group, Excel on the consumer side, NEA and their Bay Area teams. You're going to see a lot of those backgrounds from all different operating functions. I think that GM, certainly GMs depending on the size of the org, can sometimes be many CEOs in their mind how they think. I think you're going to see all sorts of operators get into venture. It's more about the conviction than about why you want to get into venture. I think that a lot of people have made that transition and done very well. I mean some of the top investors out there were either multi time founders, CEOs or just parts of great runs. I think a lot of the Spark team came from Twitter across and then some of them even early stage product or design marketing. I think, you know, it's just how you want to position yourself as an investor development perspective on companies from what you've learned as an operator is your biggest tool there with that background.
- [25:27]
Tim
Very helpful. Thanks Steve.
- [25:30]
Joel Palathinkel
Yeah, it's really helpful. Any other questions guys? What, what are the questions you guys have? Maybe about the recruiting process? I guess how important is the resume? Is that kind of the standard? You know, I guess when people submit and apply to a position, what are some of the artifacts that you like to see? Do you like to see some type of investment memo, you know, along with the resume? Or do you usually just start with the resume and then, you know, kind of take the conversation a little more organically after that?
- [26:04]
Steve Malia
Yeah, I think, I mean you're still seeing resumes. You know, I think that's part of it. I think, you know, most people are on LinkedIn now. It's going beyond that. I think a lot of firms are building processes to get to the core of things faster. So I mean, I think you're going to have steps along the way. You know, I think, you know, being able to send a resume over, getting a background, kind of laying out your story is important.
- [26:25]
Joel Palathinkel
Yeah.
- [26:26]
Steve Malia
And be able to speak to stops along the way and kind of, I think one thing that we tend to always dig in on and this is part of having a resume and just generally how you look at your careers, being able to go back and say, okay, like I did this, that's what got me here.
- [26:42]
Joel Palathinkel
Yeah.
- [26:42]
Steve Malia
And even if it was a failed stop, that's fine. But like learnings from that, what, what made you move to the next step? So I think people tell the right story behind where you're going, where you've been and where you're going is always key. And that sounds obvious, but a lot of people don't have to tell their story a lot. You know, they get on these calls and they're so focused on the questions specific to the role that when they're saying like, hey, tell me about yourself, they get through it in like 45 second. And sometimes that's a red flag.
- [27:11]
Interviewer 1
Right.
- [27:12]
Steve Malia
Like you kind of want someone to be able to say, hey, like, you know, this is where I've been and to where I got to right now. Us talking and why I'm excited is a pretty powerful piece of the interview process, so definitely worth having the resume. But you're going to have a process for us. You know, just for example, for our associate process, we'll do a combination of inbound applications as well as outreach and that's going to be across a lot of those buckets we discussed. Will have a first screen or conversation and really that first call is just interacting with the candidate, whether it be inbound, outbound source to someone that you want to talk to to say, hey, here's our story. So treat that as like informational. Always have questions around funds digging into, like, hey, what does the team look like today? Things like that, you know, are always a good sign that you're thinking about, okay, like what am I joining really? Like you can get into investment thesis and things down the road, but you know, you want to always show that you're thinking about your career, how you're progressing, what that looks like at a platform. You know, definitely want someone to indicate that they're looking for a long term home or as you know, I don't know how you want to define long nowadays professionally, but you know, certainly having those right by signs and early conversations from there you'll get into a little bit more of a formal interview for us. We have a partner kind of running point and in those early discussions you're going to have, you know, I'm just thinking about actually some of the questions up probably that you know, you might get hit with. It's like if you're at a current firm or what you're doing, you know, if you're working with deals, kind of what was your role? You know, what was, you know, if you're looking at a company, what got you excited about it? What was the leadership team like? What was exceptional about it? What were the biggest risks that kept you up at night? You know, all these things that kind of get you talking about some of the work you're doing day to day instead of just the I get in, I do this, I do that. Like they want to get into examples of what you're doing with actual live examples, case studies. So you're going to get into a lot of that up front and then kind of continuously move through the process to dig into certain things along the way. And then always a formal on site and typically a case.
- [29:23]
Joel Palathinkel
Sure, yeah, I would say that's a good point. I mean, I think having live deals that are relevant. So the people in our program have been successful, some of them that landed jobs, because every Monday we're bringing in deals, right? So it's pretty handy because we have, like a backlog of like, five to six deals that when somebody is interviewing, they can kind of rapid fire and say, hey, this company is Great. It's a $400 billion market size. These are the five competitors that they have. And, you know, I know that competitor two is kind of doing this, but this is still why this company is going to win, right? And. And it should be like a relevant. I feel like it should be a relev. That you guys actually would probably maybe take a second look at, right? And the smart people will do their homework to cater to the fund, right? So they're not going to bring you guys, like a life science deal, right. It should be something that's related to what is kind of catered. And part of that goes back to emotional intelligence sales, right? So if you're going to. I had somebody, and this just goes back to just basic sales skills, right? I had somebody that was like an emerging manager that wanted to kind of join my program, and he was like, hey, I'm going to take you to this, you know, this awesome steakhouse. And I. I luckily eat steak. I eat pork. I ate everything. And it sounded great to me. But what if I was, like, vegetarian, right? What if I did not care about steak? So it's kind of the same thing. So it's kind of like the sales skills and the emotional intelligence skills, like, kind of prospecting, understanding, like, targeting of leads, making sure, like, it's a good fit. I feel like some of those skills, like, are just intangible, right? You can't just come in and kind of go directly and kind of execute on those hard skills. So I think those are things that you probably read as well, and you probably catch that just in the first couple discussions on how thoughtful they are when they're answering these questions.
- [31:17]
Steve Malia
Absolutely. Yeah.
- [31:22]
Joel Palathinkel
So then we've got. Okay, so we get another question here. Tim, it looks like you got a little paragraph here. You want to just rattle that off, that question you had?
- [31:29]
Tim
Yeah, happy to. Yeah. So, Steve, I guess, you know, if you've sort of been developing, you know, a resume and a background sort of with an operating career in mind, and you're just trying to make sure that you're putting your best foot forward for a venture recruiter and really, like, making sense and framing everything with that in mind, you know, just thinking about that, you know, is your reaction, like start from scratch with that in mind and just, you know, completely redraft, like work with somebody who knows how to do that or you know, I guess just talk me through how you would, how you would think about that if you were making that kind of career switch.
- [32:16]
Steve Malia
I would beef it out even more on the operating side, to be honest. I would speak to the skill sets you've developed there.
- [32:22]
Interviewer 1
Right.
- [32:23]
Steve Malia
I don't think you should try and flag anything or speak to trying to position it to be more like investor approach or finance approach. I think people really value. I would really kind of bake in things of your day to day, not specific even just to like what you're doing right for your function, but maybe exposure you're getting to other leadership too. Like if you're meeting with the CEO or group heads, cross functional work. That's super interesting. So being an expert in a function or getting that experience and then really positioning yourself as someone who understands how to work in a company, like on the operating side across multiple teams, like a lot of them, super helpful. Don't have that.
- [33:06]
Interviewer 1
Right.
- [33:06]
Steve Malia
So it's something that sounds simple to you, your day to day. Just even working with executive teams and new product launch and revenue or sales or wherever it is. A lot of the people sitting in investor seats today who came from just finance, they don't know that world.
- [33:25]
Interviewer 1
Right.
- [33:25]
Steve Malia
So I would love that. And really position, that makes a ton of sense.
- [33:29]
Tim
Thank you.
- [33:31]
Joel Palathinkel
Cool. Pauline, you want to go ahead and ask your question to. Pauline is an investment, she comes from like an investment banking background. So it looks like she had some good questions there. You want to go ahead and call that one out?
- [33:43]
Pauline
Yeah, I'm like the quote unquote the one with the finance background. But yeah, I'm just curious in terms of early stage versus growth stage, do they look for different skill sets or if for people with heavier finance background, would you suggest them to target more of a growth stage vc?
- [34:03]
Steve Malia
You'll see both. I think if you looked at team backgrounds across early and growth and tried to break down the percentage of people who got into growth from finance, it'll probably be more. I think that's just that stage of investing, you are betting on entrepreneurs, operators, their story and space. But a lot of it is skewing, starts to skew towards the numbers. So as you kind of hit that series C and beyond D, like that growth equity into private equity, you're going to see a lot more finance backgrounds because that's a heavy part of the deal flow and deal process. But at the same time that still exists in early.
- [34:41]
Interviewer 1
Right.
- [34:42]
Steve Malia
I think it's just having conviction for what gets you excited about early. And a lot of it's back to those things we talked about in terms of your interest in space passion, being able to speak to what gets you excited about early stage companies. And I think that for us with these A and B deals, the expansion stage, which is still on the early side, you're going to have enough meat on the bone with these companies data revenue to run a model that's still part of it, but it's going beyond that and balancing that with personal connection to founders, CEOs, thinking through spaces more strategically. So I think that it's just more of a blend of skill set. The earlier you go and then when you go, I mean seeds obviously much different ball game. But you know, early stage investing, you, I don't think you have to limit yourself to one versus the other. But I think before you go into interview processes one way or the other, realize what they're going to be digging in for. I think like again early though, they'll really want to press you on is this, you know, do you want to get into this stage that's going to be much more hands on with, with founders and build.
- [35:53]
Joel Palathinkel
Yeah. Going back to the artifacts real quick. When you said models, what are some good models for these guys to, you know, warm up on? I mean we go through some of the, you know, the financial models are going through like the three statement model, you know, modeling out kind of how much revenue they'll have. You know, we've done a couple like revenue and churn models that have been helpful and then some cohort analysis. Those are some things that we've looked at. But any other models that maybe we should brush up on or just be aware of to kind of just be prepared and especially in the real life, right when you guys are working on some of these more late stage deals, when there's more meat on the bone. As you said, any other additional spreadsheets or models that they should brush up on?
- [36:39]
Steve Malia
Honestly, those are all great. I actually think so. I actually asked that question. I have not done financial modeling myself, obviously come from recruiting, so I can't speak as if I know everything there. But when I started helping with interviewing candidates with the investment team, I said, hey, how hard should I really assess them and push on the modeling skill sets? And a lot of the feedback I got was the modeling you can do in venture isn't really as I don't put the right adjective on this. I think some of the models you do with banks and outside of venture actually will probably be a little bit more challenging, a little bit more built out. I think the modeling skills you need to step into venture and learn it and kind of grow on that isn't as complicated as you would think. So a lot of it is like what you just described and being able to look at data sets, run the model, a lot of it around the revenue, looking at churn rates, things like that, a lot of that can be taught. But I think that you will run models probably more and over longer periods of time as you get to later stage investing.
- [37:51]
Interviewer 1
Right.
- [37:52]
Steve Malia
I think that it's just those a lot of deals are starting earlier. So on the venture side and on the early stage investing, a lot of the deals, that relationship starts with just this. Right. You're getting to know the founder, team story, mission, learn about the space. You're doing some customer calls. The diligence goes beyond sometimes just the numbers. You're market research, talking to customers, figuring out as much as you can about the space, taking what you can from the data they gave you at one point in the deal, typically towards the end, and be able to build a case for, hey, this company's growing at this rate. Here's where we see them going, et cetera. As you get towards growth and pe, you're going to have much more of that data earlier to go off of. All these companies are going to be. I just had a more mature revenue scale, so it will vary.
- [38:41]
Joel Palathinkel
Yeah, no, it's a good point. Yeah. I mean, and there's, there's a lot of stuff on the Internet that people can, you know, download and play. I mean, some of the best models I'd say I built a bit have been just kind of from scratch. Like there was one that I did ad hoc during like a lecture a couple of weeks ago. And it was just assuming how much the evaluation would increase. And then also the. It was the revenue. So kind of the revenue multiple and then the valuation. It was really simple math, but it's kind of cool to kind of lay it out. So some of the things you can just kind of of do ad hoc and kind of build some creative models based on different assumptions. And to your point, you know, sometimes it's. It's imaginary numbers, right?
- [39:20]
Steve Malia
It's.
- [39:21]
Interviewer 1
Right.
- [39:21]
Joel Palathinkel
It's stuff that could potentially happen in the future. And even when you look at valuation, it's paper gains. Right. So it's not real, not Real money until there's a real ipo. So.
- [39:30]
Interviewer 1
That's right, yeah.
- [39:31]
Steve Malia
And you'll have multiple, you know, you can have your use like a baseball analogy, your single, double, triple, home run kind of modeling where you're saying like, hey, here's worst case, here's likely, here's, you know, kind of the stretch, you know, you're going to be able to run certain models to kind of pitch the company to the investment committee at your firm, you know, which is a whole different process. But yeah.
- [39:55]
Joel Palathinkel
I used to be intimidated by it in the beginning and then I just started turning into a data nerd. I started kind of just kind of playing with it and diving in and it's not, it's not as bad as you think in the beginning. Cool. So Keith has got a question. So Keith has some experience at a venture studio. So I think that's interesting too because he's kind of like incubated businesses and then helped them scale. So I thought he had an interesting background as well. But Keith, I guess you have a question here. You want to just shout your question out.
- [40:27]
Keith
Yeah. So this was actually more about the PLG model that you guys are investing in. And I was actually wondering what makes it so crucial for PLG companies to hit that $10 million mark and what exactly changes around that. And then do you see any limitations around the different industry verticals? Like you can't exactly put in a PLG model in something like industrials, right?
- [40:53]
Steve Malia
That's a good question. So we, I mean a lot of the companies we invest in naturally are at that stage specific to A to B1 to 10 million ARR. For us, we invest in PLG companies. We invest in some non PLG companies. I think it's more. PLG is really more specific to the go to market playbook and approach with your product versus others. And that's where we're finding is becoming really just a dynamic playbook in the market to date. So you'll see successful PLG companies cross verticals. And so you think of Atlassian was probably like the flagship one. And you know, I think of Slack. Even think about how you use Slack, right? You can use it as a consumer and then you, you know, you and I start using it at work because we're chatting during the day, then all of a sudden this whole group's using it. And then your group leader says, how are you guys all talking during the day? And then brings it to your president or CFO to say, hey, we should be using this as our company. Communication.
- [41:59]
Interviewer 1
Right.
- [41:59]
Steve Malia
So sure it's around the virality in the product effectively sells itself at those earlier stages. So that's an extreme example.
- [42:09]
Interviewer 1
Right.
- [42:09]
Steve Malia
With Slack. And if you look at Calendly, one of our portfolio companies, I send you my calendly link.
- [42:15]
Interviewer 1
Great.
- [42:15]
Steve Malia
And then you're like oh, what's calendly? So now you're using it and then you're going to be using it across multiple invitations, groups of friends, teams, companies, firms. What's pivotal on these proctored growth companies is that take a security business like SNYK or Security DevOps but some of these industries like industrials or security in general has been these old school enterprise selling deals on the golf course sales leaders and how they approach getting deals and six figure deals over the finish line with these customers that can still exist. You can implement product led growth best practices earlier in a sales cycle and how you approach the market and really that's just to show value of your product earlier. So can you get an enter someone in enterprise enterprise level company to see your product do a free trial kind of like remove the friction of the sales process as you build up that account to be a future enterprise level account. So you're going to see more old school industries adopt product led growth habits and strategies in their go to market and then combine that you hear like land and expand. So can you get a lower ACV deal contract through more product led growth initiatives but bank on growing that account over time?
- [43:39]
Interviewer 1
Right.
- [43:39]
Steve Malia
So it's more of a transformational kind of player we're seeing in the market with companies.
- [43:45]
Keith
How do you guys get over like the hurdle in the beginning of all the revenue loss that isn't happening.
- [43:54]
Steve Malia
So yeah, I mean they're, you know it's the one thing they're very cost efficient productly growth businesses because you don't have to go hire 50 sales reps to go close deals.
- [44:04]
Interviewer 1
Right.
- [44:05]
Steve Malia
So it's you know, as from an investment standpoint it's a very attractive business on paper when you look at the financials just because you know that again that you're not, your spend is really around product. Right. So you're investing engineers, product managers, you want your product to sell itself. So it needs to be the best experience and your UX design needs to be really kind of almost catered to like a consumer approach. Right. If you want someone to use it and have it be user friendly, easy, you know, take seconds.
- [44:38]
Interviewer 1
Right.
- [44:38]
Steve Malia
So a lot of the companies are focusing on that and they're actually because they're so Capital efficient, one of the hardest. I think one of the biggest challenges product growth businesses like accountly is that a lot of times early on in their growth they don't need your money. So it's like hey, we're doing fine just now. So you'll see a lot of these PLG companies be bootstrapped for longer because they don't need to clog up the cap table early. So it's a really interesting play. It continues to evolve. You're going to see more and more companies do it. I can send over Joel, our product led growth map, Lumascape, which is really interesting. Again it's cross vertical and if anyone ever wants to talk about it, I'm happy to chat. I'll put it in here.
- [45:23]
Joel Palathinkel
Oh nice. Thanks.
- [45:24]
Steve Malia
You're seeing a lot of different companies adopt it across a lot of different verticals.
- [45:28]
Joel Palathinkel
Oh wow. This is really cool. Yeah, this is a really huge expansive overview. So this is kind of the whole landscape of product led growth.
- [45:36]
Steve Malia
Yeah. And you'll see on the left PLG like maturity. So a lot of the companies at the top will be people who've really adopted product like growth playbooks, but towards the bottom they're trying to implement it right where they're putting into their playbook.
- [45:50]
Interviewer 1
So.
- [45:52]
Steve Malia
Very.
- [45:53]
Joel Palathinkel
This is great. Yeah, this is really helpful.
- [45:55]
Keith
Do you have any examples by any chance, Steve?
- [45:59]
Steve Malia
Any what?
- [46:01]
Keith
Any bad examples of product led growth companies.
- [46:08]
Steve Malia
This is being recorded so I don't know if I want to honestly, top of mind, I don't have a specific example. I think there are certainly companies that may try and adopt PLG in the wrong way. Like PLG is not easy.
- [46:29]
Interviewer 1
Right.
- [46:29]
Steve Malia
Almost to your point earlier, some industries there needs to be some component of sales. If you're gonna go sell to a government enterprise level customer, very low chance there may be some frictionless component of them just gonna try your product for free and buying it.
- [46:48]
Interviewer 1
Right.
- [46:48]
Steve Malia
They're used to having these two 300k ACV deals brought to them, go through a lot of hoops, six to eight month sales cycle. So I think it's, you know, there are companies who do it great out of the gate and I think that you'll see companies have more challenges maybe adopting it later, maybe because they didn't lay it into their strategy earlier.
- [47:11]
Joel Palathinkel
Yeah. And Keith, I think you alluded to it a little bit in one of your earlier comments. I mean if you're trying to build a product led growth company and you're just burning too much capital in the beginning and you're not getting enough adoption to, you know, hit that, hit that growth curve that you need to. Right. I mean, because essentially it should be selling itself in the beginning. Right. The product is just kind of a product that is addictive. You share it with all your friends. But if you're just not getting to that point and you're just burning too much money, you're just going to die very fast. Right. Because there's. Because it's a freemium model in the beginning. So I think you kind of hit it a few minutes ago. But that's what I would say. Right. If they're just not. If they're not achieving product led growth and they're supposed to be a product led growth company, that's the biggest issue, I would say. Cool. All right, looks like we. So I guess Steve, we got a couple more questions and then I think we can wrap up here if that's cool.
- [48:07]
Steve Malia
Sounds good.
- [48:08]
Joel Palathinkel
So Pauline, you had another question on cold outreach.
- [48:13]
Pauline
Yeah, sorry. Well, we were supposed to continue with a product conversation. But back to recruiting. Just one quick question on code reach because I've heard nowadays there are more medium and blogs and obviously there's more visibility about who's hiring and who's not. But in terms of code outreach, I've also heard successful cases where people sent over a cv, got engaged and then somehow land a role. And I'm curious about would you suggest that would be an approach and then following up on that for the first year VCs like Sequoia and or companies like that. Is this still very important? Like important to be close to recruiters, like close like to like some head honked versus like us applying directly?
- [49:07]
Steve Malia
Yeah, it's a good question. I think that cold outreach is definitely becoming more common. We had I think two of our diligence associate candidates, cold outreach inbound, one to myself, one directly to one of our investment partners and actually a third Now I think of it that went one right to our vp. All kind of had a different approach. I think to one of our VPs it was another operator to say, hey, I saw you made the transition from, you know, operating into venture. I'd love to chat and kind of put it more as a networking conversation and then kind of worked into why, you know, obviously the person came prepared to why they thought OpenView was very interesting. I think used that angle. The other associate came from more of a finance background like yourself came which is saying really looking to get into venture, liked the stage space, looks the portfolio. He actually I think attached to one of his models he did in the past just to say, hey, I'm getting much more involved with modeling in my team in the day to day and want to take that and move into venture with what I've learned so far. And, you know, the partners are always extremely busy at these firms. But to get his attention, he flipped it, you know, to the team and we followed it. So, you know, I don't know if I would go cold outreach, maybe the, you know, managing partner at Sequoia, but I think I would kind of go through the groups, look at people's backgrounds. I would probably prioritize targeting some of the VPs or principals, people who are kind of in the trenches working with associates in their day to day and to try and make those connections. You can also send someone a LinkedIn request and put a note that you want to connect. We get inbound a lot and I think more times than not we're going to respond to some degree, you know, and engage. So I think if, you know, you find firms that you're interested in, I wouldn't hesitate.
- [51:11]
Joel Palathinkel
That was really helpful. John, you got a question here?
- [51:17]
John
Sure.
- [51:18]
Steve Malia
Good to meet you, Steve.
- [51:20]
John
Great feedback. So one of the questions that I was posing earlier today with to Joel was about the blogs. Right. You want to market yourself. That's a way of, you know, exposing your capabilities, your passion, your abilities. Right. And the question came to, well, how do I differentiate myself from all those 7 million people that are out there blogging and providing their, you know, they're sharing their thoughts, their expertise. And I did this with edge computing because I wanted to write a blog about edge computing. And I went to Google and I said, okay, let me see how many people are writing about the same thing. So that was the outcome. Seven million people. Seven and a half million people. So how do I differentiate myself sharing information? And what does an experienced VC look for in a blog? Obviously that's going to be part of the assessment whether this candidate is worth considering based on what he's expressing. But can you share with me a little bit more? What would you think is most important in the blog?
- [52:37]
Steve Malia
It's a good question. I've recently done some of my first blog posts. I think Open View does a great job on the content side. So from a talent side of the house, we're getting more involved in developing content. I think if I'm, you know, look, if you're going to be someone who's gonna get more into the blog side of it and looking to get into venture in general, I think it's specific, you know, diving into something specific. So I think the person, one of the person, one of the cans we spoke to the blog post one was about product led growth and having a unique perspective there specifically around one company, so making a case there. So I would try and get as down in the weeds as you can and make a position that's what's gonna get a response. There's a lot of people blogging about high level things and that's probably like the seven of the seven and a half million people saying the same thing over and over again with a few different words. I think that in venture you see a lot of people do like S1 teardowns. So as different companies that you've been following a certain space come out with public filings and you can kind of get your hands on that information. What are your thoughts on it? Confluent just filed for an IPO and I saw already three posts about it from three people who blog and have a lot of followers, all with their own perspective on what those numbers look like, what's that going to mean for the space? And again, I don't think you have to do hours of digging into it. Maybe you do, but I think it's taking specific examples of something you're responding to versus being like, I'm going to write a blog about health tech and why that's going to be moving forward. And everyone knows that there's a lot of, you know, things going on with health tech. So I think it's taking something specific, they're making an argument to it, that's what will grab someone's attention and obviously it's going to trigger a lot of responses because a lot of people may disagree with you, which is a good thing. So for us and looking at, you know, back to we talked about earlier for candidates, we were attracted that someone took a stance on something, had their own opinion on it and they were able to go deep on why and whether or not that that partner would agree with that. Their ability to walk through an argument and then have concrete data to back it up, that jumps out.
- [54:52]
John
I see great feedback. So you have to be specific and you have to focus on the argument that you're trying to make based on that specificity. Right. The second question I have, which is a very quick one and I think some of the of my fellow colleagues here have been discussing as well, is how do you differentiate good versus bad PLGs? Right. More specific, what is the criteria or the criterions that you leverage to make the Decision of a go no go, go no go.
- [55:26]
Steve Malia
Oh man. That is a day to day battle in the world of venture. So our deals for the go no go a lot of it is where they are in the journey and things we like to see. I mean a lot of it sounds obvious. On the people side you want to have a founder who's going to articulate their story the right way. Space, why they got into the space, momentum, like what was differentiated about the product and where they think they're going to fit into it. Thinking about their addressable market. How big do they have a really solid opinion on how big it is? Have they done the actual research? A lot of time those things are all there. Who is that person attracted to the company? Whether it be like an advisor, who are they leaning on for advice? You know, are they the only. Are they always right in the room? You know, that's never a good sign. Like you want to see them surround themselves with other good talent. If they can't tell their story and attract people excited to come follow them in that story in the company, usually a bad sign. So at least with the companies we're getting involved with a lot of them around that 30 person mark headcount across multiple teams along the technical side, maybe starting to build out the go to market. You know, who have you attracted so far to the company? I think the CEO falls, that falls a lot in that person or early executives. So seeing momentum there, having a clear idea of like what plans they have in place. So that's on the people side because a lot of time you are betting on them. The second is, you know, around more of the numbers, you know, for plg I guess specific, it's a great motion and you can get a lot of users quickly which is fantastic. I think churn comes up like how many of those people or customers or users are you maintaining month to month? Because a lot of, you know.
- [57:15]
Interviewer 1
I.
- [57:15]
Steve Malia
Don'T know, it depends on the kind of where they are from a stage perspective. But you can have a lot of users drop come and go quickly in these companies because it's so frictionless to engage. So you want to look for the upward trends in terms of revenue as well as users and people using your product.
- [57:32]
Interviewer 1
Right.
- [57:32]
Steve Malia
I think calendly now has millions. So early days was it, you know, users going like this and staying like this and we're having people continuing to sign up and use the product, then getting to more advanced parts of the product and seeing that that customer come through the different parts of the journey is key. You know, I think it's sometimes can be deceiving because you can get so many customers or start to drive some real growth because of the virality in the product. But is that sustainable? Are you actually sustaining that growth with both existing customers and net new customers?
- [58:09]
Joel Palathinkel
Yeah, that was really helpful.
- [58:10]
John
Thank you very much. Yep. Go ahead.
- [58:13]
Joel Palathinkel
Be mindful of time, I guess. Steve, you have time for one more question? I guess we got one more from Pauline.
- [58:20]
Steve Malia
Sure.
- [58:21]
Joel Palathinkel
Cool. All right, Pauline.
- [58:25]
Pauline
That was, that was. I think you can answer. I was just out of curiosity. Yeah. Do people actually like VCs or bloggers, actually pay for SEO or marketing to bum up their blog posts or get more attention?
- [58:36]
Steve Malia
I'm just curious purely do VCs or people in general or like bloggers?
- [58:42]
Pauline
You know, because you can, you can block it, but you know, you're. Well, at the time when you're blogging, you're probably still nobody. Right. Like everyone. Do people do it?
- [58:54]
Steve Malia
I'm new to the blogging game. I know a lot of people are blogging a lot at Open View now and we have, you know, luckily a really, really strong marketing team producing a lot of our content and going to, you know, ghostwriters or TechCrunch and even a lot on, on LinkedIn. I wouldn't, I wouldn't, you know, sleep on LinkedIn. It's. People think it's basic. I have my profile on there. There's becoming more and more engagement there. I would follow VC PE firms you like. I would follow their content. A lot of things that sound to us, you would imagine like we've had people get in with interviews and be like, oh, I saw your blog post or saw this, I followed this. And a lot of the time these VCs or investment firms are producing a lot of really interesting content in spaces.
- [59:40]
Interviewer 1
Right.
- [59:40]
Steve Malia
So I think. And down to specific deal partners there. So I would follow that. But personal blogging, yeah, I'm sure it's getting crazy out there. I'm sure people are paying for it.
- [59:51]
Pauline
I found one thing that was also very helpful is the podcast because I feel like I found out a lot of partners have done some form of interviews and they're all on podcasts.
- [60:03]
Steve Malia
While I'm online, I have to promote the Open View podcast. Blake Bartlett runs it and he has some extremely impressive people there. Specific to product led growth. It came up a lot tonight, but anywhere from founders and president Jay Simmons from Atlassian and I mean, you name a product led growth company, the top executives been on the podcast and digging into not only the story, but what made them successful early on, when they got investments, what did they use that investment for? Different functions that were built out. So the Open View podcast, I'm biased, I think, is probably one of the top ones out there.
- [60:39]
Joel Palathinkel
Sure, that's great. Yeah, we'll definitely check that out. We'll pull that up. But yeah, you're right. I mean, I think one. You know, one thing that I would say is just from an SEO perspective, sometimes if you build your blog, like through your website, it's like a tab of one of your websites. If you're doing, like, SEO on your website in general, I think that should help your blog as well because, you know, you got, you know, links kind of tracking back to the site. That's kind of my limited knowledge of SEO. So. But hey, you know, I know we're over time, so, Steve, thanks so much for, you know, being generous with your time and mentoring us and sticking around with us for the last hour. So really appreciate it and looking forward to hopefully catching you up in Boston or if you come out to New York.
- [61:26]
Steve Malia
Yeah, absolutely. My pleasure. Thank you for having me. And if anyone ever wants to dive into this in more detail, please reach out. Joel, give you my. My email. I'm always happy to chat.
- [61:35]
Joel Palathinkel
All right.