John Zeratsky

John Zeratsky is a co-founder and general partner at Character, bestselling author of Sprint and Make Time, and former design partner at GV. the new $30M seed fund supporting startup founders with design sprints

For this new year, we wanted to start in style, with an exceptional guest: John Zeratsky, the legendary co-creator of the design sprint process. 

He is the bestselling author of Sprint and Make Time, with Jake Knapp, and former design partner at GV, (Google Ventures). Previously, John was a design leader for YouTube, Google Ads, and FeedBurner, which was acquired by Google in 2007. 

In December, John has officially announced his new venture: Character, a $30M seed fund, that supports technology startups with capital and design sprints.  

We’ll discuss with John about his personal journey, from designing websites to venture capital, how he chooses in which startups to invest, what makes a good tech team, the role that the design sprint will play in Character, and much more!

Participants who attend LIVE, will also be able to ask questions.

John Zeratsky

John is a former Design Partner at GV (Google Ventures), where he developed the Sprint method and supported many of GV’s most successful investments, including Slack, One Medical Group, Flatiron Health, Blue Bottle Coffee, Gusto, and Digit.

John studied journalism at the University of Wisconsin and graduated from the UW School of Human Ecology, where he’s now an advisor to the Dean and faculty. Originally from small-town Wisconsin, John has lived in Chicago and San Francisco with his wife Michelle. They spent 18 months traveling in Central America aboard their sailboat Pineapple before moving to Milwaukee in 2019.


It’s so great to have all of you live today. So today is a very special day because we welcome an innovation superstar. You’re going to discover in a few minutes who he is. But before that, maybe you were wondering about the name Itoday Apéro

What is that weird names? So just so you know, in Switzerland or France in our region it is like a tradition. It’s kind of like a happy hour, right? So, if you want to have good time with friends, kind of 5:00 PM you meet with your friends and you take a good bottle of wine. Looks like this or a beer or coke or whatever you have in your fridge, right? And you just have a good time, and you chat with friends. So, I’m from a family of winemakers. So, you know, the tradition of Itoday Apéro? This bottle is going to go straight to Milwaukee USA, because our guests star of today is going to receive it. And I have a second bottle. I will send it to one of you guys. If you have a good question, if you interact well, we are super happy to send it to you.

Our guest of today is going to choose who’s going to be the lucky winner and we ship worldwide. So, get ready to win your wine. That’s it for the wine.

Let’s talk about our guests today. He’s let’s get ready. He’s the author of the couple of the books, Sprint and Make time. You can see them right here. Super famous, of course, he is a designer. He worked for companies like FeedBurner. Like, like Google. Of course, he works for companies like Google Venture GV is going to tell us a lot about this. And now he’s a venture capitalist which sounds like a crazy job. So, it’s going to tell us everything about venture capital. Welcome from Milwaukee USA. Mr. John Zeratsky.

Hey John, hey how’s it going? Thank you so much for coming to itoday Apéro. It is great to have you here with us. This is a pleasure, and I was saying to you and Eglé. Before everyone joined, I feel like this is more like talking to family than talking to, you know, some big public event. So, it’s a super fun. And I only wish it was a little bit later in the day, so I could enjoy some of that wine.

You know, like in here when we have an apéro, we drink it like at 11:11 AM. So, it’s the same right? You could. Yeah, so thank you so much John for doing, uh, for joining us. Maybe before we start can I ask you to, you know, give us a bit of background about who you are and about your journey in design.

John Zeratsky’s journey in tech

Yeah, I’m one of those people who’s never been able to settle on one job or one title. But I think the theme that has connected all my work has been designed so started out early 2000s when they used to call it web design. So, making websites and then worked at a tech startup in Chicago called FeedBurner. That was acquired by Google, went inside of Google, worked on a bunch of boring advertising products at Google. They made a lot of money for Google, but they were boring.

And then add, uh,  not boring opportunity to go to YouTube. I was the product design lead for YouTube channels. So, when YouTube decided it didn’t, it just wanted to be a quirky website for cat videos, but they wanted to be a true platform where people could build brands and audiences and businesses.

And then from there headed in even less boring opportunity to go to Google Ventures when it was just starting out, they were building out this team too. Go work with the portfolio companies. So, after GV made an investment, they’d send us in and we’d help them out. Me and other designers, researchers, engineers, marketers and that was of course that led to the design Sprint.

Because, you know, we were trying to help all these companies, but we were just a couple of people. So, we heard about what Jake had been doing at Google with his design sprints. Brought him to GV. He started working together and then we decided to write the book, so we decided hey, this has been useful for, you know our companies. Maybe this will be useful for other people to write the book. And we’re almost up to the current the current date.

The creation of Character (VC)

I took some time off, did some travel but I was getting sucked back into the world of startups and venture capital and decided last year to start a new venture capital firm. So basically, trying to do design work in a way that is really, really connected to the core challenges and things that people care about. And do it in a way that is really aligned with the people that I’m working with. So those events are the driving forces throughout my career. Artstone yeah, this is great. So, character was kind of a secret project, right? Yeah, until December.

Not entirely. Because we wanted it that way, but because the laws sure, you know, every country has laws like this, but the ones I know about other ones in the United States, the laws here, if you’re raising a new investment fund, are very strict. And you can’t really talk about the fact that you’re raising money, because then you might get into trouble with somebody who isn’t supposed to investor. Something you know finds out about it. So anyway.

So yeah, we had to kind of keep it a secret which was. Which is we not how operating as you know, like you know, Jake and I have done a lot of you know we like to write about things and speak about things and you know, kind of pull people in. So, we had to keep it a secret. But we finally we finally announced it on December 1st of 2021. So, it’s been. It’s been exciting to. Tiny deal to talk about it in the public.

Can you tell us like how many startups do you have already a part of the of the Character VC?

Yeah, we’ve invested in. 7 Startups already and might sound like a lot. Or maybe I don’t know, maybe, doesn’t it? It would be a lot if we had just started in December, but December was only when we announced it.

We started officially back in April. So, we started. Our first investment was in April of last year, and then we made. The most recent one was just last week, so up to date. But yeah, we will probably invest in like 6 to 8 companies per year, so we’re trying to stay on that on that pace. It’s hard because everybody that we invest in is so interesting in there all.

For every size, I should say everybody that we meet with is so interesting and all working on such exciting projects that we want to invest in all of them. But we only have $30 million. We don’t have unlimited amounts of money to invest, so we must. We’re learning, you know what is kind of the perfect company for character. What is our sweet spot for investing?

How to raise $30M

I like the way you said, well, we only have 30 millions of dollars. It sounds like a lot of money, right? And maybe the question that everyone here wonders is like, what did you find all that money like is it yours? Like are you rich or is it all these people money like yeah how does it work? It is other people’s money.

So, I can give you just a bit of a primer on venture capital. Venture capital fund you have the people who run it who are called the general partners. These names are kind of weird, but the general partner and they go out and they raise money from what are called limited partners. And these are people some of them are individuals. Some of them are big institutions or organizations and they want to invest in startups.

But either they don’t know how to invest in startups or them maybe they don’t know any startup founders. Or maybe they would like to invest in startups, but they want to diversify their investments. They want to have a little bit of money and a lot of startups. So, these limited partners. They give their money to us, so we kind of gather it together. We pull it into a fund and then we go, and we make it our full-time job to go out and find great companies. We invest in them. We support that. Help them be successful. And so, the way we found $30 million was by having a lot of meetings.

We have a partner another works with he had worked at a different VC firm but he you know it wasn’t. It wasn’t his fund, it was, you know he was an employee of the of the fund. So, this is the first time that that we’re all doing it together. There’s a lot of trial and error. It was honestly it a little bit like you know sprints like. Research we made a lot of different prototypes of our deck and writing up documents about our strategy and how we plan to invest.

And then we did a lot of a lot of tests, interviews you know, talked to a lot of our customers. Who are these limited partners? And you know, eventually we started to. Conan on yeah, this is the. This is the type of person this is, the type of organization who’s looking to invest in a fund like ours and it took us about. It took us like. Almost a year to raise all the money it took us like maybe 10-10 months or so from the first.

The very beginning to when we had our final closing for the fund. What was it like? A goal to reach like a milestone to reach 30 million. Or basically it’s what you could get like, you know. Which how much should you start a fund? Basically yeah, it’s it was our goal. And. Basically, when we were deciding how much we wanted to raise, we had to consider a bunch of different factors we needed to consider.

You know how many companies do we want to invest in? And since we’re running design sprints with every company, we couldn’t invest in 100 or 200, you know that would be impossible. But on the other hand, we didn’t want to invest only five because you know the risk, we wanted to have some diversification, so our partner, Eli he’s much more quantitative than me and Jake. He’s he has a finance background. He studied math in college, so he was very good at figuring out.

OK, what’s the ideal number? And then we had to combine that with how much money do we want to invest into each company. And that was, you know, we had to learn about the market. What types of companies that we want to work with. How much money are they raising? How much money do they need?

What percentage ownership would we have those companies after we make the investment, then we needed to think about how much we could raise as a new fund. You know we couldn’t go we even if we decided we wanted to raise 10 times as much. It just wasn’t going to happen. It wasn’t possible, so we needed to be realistic. So we had 30 million.

As our target from the beginning, what we said was, I think 25 to 30 million and then and then we also came up with another number which was the minimum number that we could raise and still do it, and so that was around $10 million. So basically, the way we did it is we. We didn’t make anything official until we got that end. So, once we get to 10. Then we made everything official. We got the lawyers; we got all the documents. We signed. Everything you know got people committed. Got them to, you know, send us the first little bit of money and then we could start making investments.

And that was when we made our first investment that was back in April. But then once we you know kept going, we had some momentum. People could see what we were doing. It wasn’t just a slide deck, it was real. So, then people you know were committing to give us more and more money until we got up to close to 30. And then we said, OK, we’re good. Let’s cut it off. Let’s focus on now doing the real work which is making investments and running sprints with our companies. And then let’s put a pause on fund raising, at least for a little while.

John’s role at Google Ventures GV

If you look back at what you were doing at GV, I guess you were more designing and facilitating and writing the book, right? So, like, why are you picking the startup so choosing them where you on that side of the company on the truly? And this is something that you had to learn. Jake and I both were we.


We got to help with choosing the companies and deciding who to invest in, but it wasn’t our primary job so there was there was a team at Google Ventures who was all they did was find companies and then decide whether to invest and negotiate the investment. And but when they got to a point where they were seriously considering new company, that founder would come in and this was back in the, you know, the glorious old days of in person in person everything.


So that person would come into the office, and you know they would give a presentation. You know it’s sort of like would you imagine happening when a? founders pitching a VC and when those meetings happen then then everybody was everybody from GV was welcomed and encouraged attend Jake and the other the other design partners. Engineering partners, marketing partners, etc.


We were all encouraged to attend and then we were all able to give our input on that company and what we thought. And one of the cool things that we came up with that GV that we do at character as well as the idea of an individual scorecard so. Instead of, you know everybody just sits back and says no, that’s interesting, you know.


And then after the founder leaves, you have a conversation instead. In this you will not surprise anybody who knows about design sprints when the founder would leave instead of, you know, talking, we would all put our heads down and we would start making notes and writing down scoring. You know, here’s what we think of this company. So, we got to contribute with that, but no, the short answer to your question after all right that you know story is that.


I had not been responsible for making investment decisions. Eli had been. That was all he did, so he so he we continued to improve the process that we use to make decisions and hopefully will improve the quality of those decisions. But it’ll take a little while to learn if we’re making good ones or not.


The advantage of being a designer in VC


Like do you think that being a designer gives you an unfair advantage? You know, I’m choosing the startup and I’m trying to buy some stocks and I make horrible decisions and I’m also a designer, so yeah. Are you just better than others? With all the knowledge that you have acquired or on the GV?


Well, for what it’s worth, I’m horrible at picking stocks too, so every time I buy an individual stock in the stock market, it always goes down even when the rest of the market is going up and mine always goes down. So, I’m not good at that either, but that’s because investing in a stock is totally different than investing in a startup. When you invest in a startup, you get to sit down with the founder. You get to understand what they’re doing. We get to, you know, in our case, we get to work with them.


We get to kind of help them out and get behind the scenes. So, I think that us being designers gives us a big advantage because, you know, a lot of founders like to think about the market and the strategy, and fund raising. And all these big picture stuff. But none of that stuff matters if you don’t build a product that people want, and you don’t have a way of reaching those people. Finding those customers and getting them on board and so. Yeah, I think that you know Jake and I, we’ve worked with so many companies and we’ve seen so many cases of products that work well.


Products that don’t work well that when we look at what somebody is building, we just have a very intuitive understanding of is this going to work or maybe even if we don’t know if it’s going to work. We can talk to the founder, and we can understand. Are they going about building this business in a way that that means they’re going to? They’re going to figure it out, right? Even if they don’t know today, and even if we don’t know, do we think they’re on the wrath? Are they pay? Are they just sitting there with the doors closed and building something perfect for six months or are they out constantly testing and talking to customers and trying things and building prototypes?


I think that that we that sort of the core idea that we raised our fund on is that you know we had this unique way of looking at the world. We have this unique way of supporting our companies. It comes down to, you know, product and go to market or, you know product, market fit and so yeah, we 100%. 1000% believe that having that perspective and that approaches is going to make us better investors.


What Character will do differently than GV


So, you did work at GV, right? And now you’re creating a new VC. What are the recipes or the weights functioning like? What do you take from GV? What do you copy and what are the things that you want to do differently? That’s a good question.


The most important thing that we brought from GV is the design Sprint, obviously, and I think. More broadly than that, it’s the idea that a VC an investor can do more than just. Provide advice and provide feedback and make introductions that it’s possible for an investor to work. Hand in hand with a founder and a lot of investors.


Can’t do that and they either they can’t do it because they don’t have the right kind of background or the skills or experiences to do it or. They don’t have a model for doing it at scale because in the early days when we joined GV at first, we also didn’t have a model. This was before the design Sprint and so we would invest in a company and then I would just still work with them and help them out. You know I would just do the design work with them, but it doesn’t scale and so.


You know, if you if we hadn’t created something like the design Sprint, we wouldn’t have been able to do that work to help lots and lots of companies and so. Most investors they either don’t have the skills or experience because they haven’t been. You know, working inside of startups for a long time or they don’t have a model to scale it, so they kind of fall back on these things that aren’t naturally scalable, which are again giving advice, giving feedback, making introductions, etc.


So that’s the most important thing. There’re some elements of decision making that we also have taken and built upon, and I already mentioned this idea scorecard when we meet with the company, we individually rate our score, the company before we have a conversation about it because we want to try to eliminate narrative bias.


You know, we don’t want someone to say, oh that was so interesting. You know that that color is what everybody else is thinking in the room. Just like on you know I’m Wednesday of the design Sprint when we’re making decisions, right we want to keep everybody sort of opinions separate until we’re ready to share them all at the same time on level playing field.


Those are the those are the main things I think the one thing that’s different. I mean first of all character is way smaller than GV. You know we are. Let’s see 10103 orders of magnitude smaller, so yeah. 303 and there were two hundred of magnitude smaller, so we’re like way, way smaller. But I think the thing that’s that I hadn’t really thought about a lot.

But Jake pointed out is that there’s a different relationship that we have with founders because we are both investors. And were the designers or the Sprint leaders? And at GV, even though you know GV believed in US GV, you know we were partners. We truly we had ownership and equity in the company. You know, we you know it’s not like we were off to the side but still there was this.


There was this handover. You know there was like somebody made the investment and then they handed them over to us and then we tried to help them out. Jake pointed out in some of our very first meetings with founders that when we are running a Sprint, it’s totally different because we’re also the investors. We’re the people, you know, we represent the money from the limited partners. You know we have our own money, you know, a small percentage of the fund is our own money, our personal money.


We have skin in the game. We’re, you know we’re making that decision and then we’re there and we want what’s best for the company because everybody’s incentives are aligned. So that’s not like a tactical thing. It’s not like a, you know, a process or anything, but it’s more of a structural. Saying, that’s quite different from GV, but I think is unique and really special about what we’re doing.


Facilitating design sprints for his own startups


When you’re facilitating a Sprint for one of your startups?  You’re obviously the Sprint facilitator, but are you actively participating? Like are you sketching or do you prefer to stay neutral?


We try to participate as much as possible because I think that Sprint facilitation is important. As you know the difference between a bad facilitator and a good facilitator is huge. But Jake and I and the other people that we work with are also experienced designers.


We’ve designed a lot of stuff, we’ve seen a lot of stuff. And so we think that if we cannot just facilitate, you know, so we’re going to facilitate. But we can. We can help even more if we also participate. As you know, provide sketches you know actively participated in making decisions, and then I think it’s it. It’s also connected back to the fact that we have skin in the game in terms of the investment.


You know we’re going to everybody in the room is going to make money. If the company does well so. It, I think that we could provide a value to this. The startups by just facilitating, but we think that we can provide even more value. We can be an even more helpful investor if we’re also really participating in the in the Sprint. If we’re really contributing our ideas.


If we’re taking an active role. In sort of shaping the direction of that company, but it’s you know it’s kind of hard to do it as you know, like facilitating a Sprint leading a Sprint takes a lot of energy. It takes a lot of attention, and so that’s part of why we always try to have multiple people from our team in a Sprint. That’s why you know me and Jake are me and Jake and. Eli or me and Eli, you know, because it means that we can kind of share the responsibility of facilitation while also having some mental bandwidth leftover to contribute. Our best ideas.


Have you been in the situation when you weren’t facilitating but you were the decider? But it’s always I see you. Well, if we’re working with a startup that we invested in, then it’s always the CEO, but we have run some sprints on our own internal stuff for character. So, we used a brand Sprint and a name Sprint to come up with the name character. We are running an opportunity Sprint and a couple of weeks about this this new.


Program that we’re considering developing, and in those cases, Jake has been the facilitator and I’ve been the decider. But normally our philosophy, when it comes to working with our startups that we invested in is that you know, we sort of. We exist, our job is to support them and serve them and help them be as successful as possible. So, I don’t think it would ever be appropriate for us to be the decider.


Picking the right startups: John’s OATS decision making framework


I guess there are a lot of questions about how do you choose the startups and what the key things you are looking at the startup? Is it the people? Is it the tech? Is it the field? What is your magic recipe?


Yeah, we. We created a decision-making framework. That we call OATS.  It has nothing to do with food, but it’s just easy to remember and it stands for opportunity, approach, team and success. And then within each of those categories we have like 4 maybe three to five or three to six. Criteria that we look at. So, I’ll pull it up right now and I’ll just give you an example. In real time while we’re. So, for example, within opportunity, the first section, the three criteria that we look at our R1, is it a real problem and meaning that you know like is it a nice to have thing where it’s like?


Oh, that’d be cool if you could do that? Or is it like? Oh my God, this is something that you know causes me to lose money every day. It drives me nuts it’s you know whatever it is it is it a? You know sometimes people talk about vitamins versus painkillers like is it a pain killer? Is it really helping somebody fix this big problem that they have the second criteria within opportunity is?


Market size, so how big is the industry and not just today’s industry? Not just you know how much money people are spending on this sort of thing today? But how much could they be in the future? Our first investment is a company called Phaedra, which is doesn’t sound like the sort of thing that we would invest in as designers, but it’s. It’s this software to optimize the heating and cooling systems in factories and they talk about why we think it’s interesting as designers, but it’s a good example of where the initial market size. You know if you only look at well how many people today want software to optimize their energy usage in their factory.


Well, maybe not that many, but if you think about it in five years or 10 years, you could have this software installed in every factory in the world. You know, helping to control the systems, helping to optimize, helping to keep them running smoothly. So, we think about that, and then the third criteria under the opportunity are. His competition, so it’s not just it’s not simple as is there already a lot of competition, but we try to look at that unique situation and say OK, who are the competitors? Not only direct competitors, but what are the substitutes? Is this competing with some other thing that already exists or that they’re already doing and? If so, what are the benefits or the downsides of that? So that’s just the old category, but so just that just gives you an example of like fruit for show, which is the opportunity A, which is the approach, which is basically about OK, that’s the opportunity now what are they doing about it? What is what’s the product that they’re building?


Like, what’s their strategy? How are they going to market? Team, you know something. We have some criteria around; you know the technical skills and the design skills and the ability for the team to raise money and the ability for the team to build and validate their product. And then the success category is all about what they’ve achieved so far. So how many customers do they have? How much revenue do they have? How quickly are they growing?


And you know, that’s kind of the framework that we used. And of course, the assessment, the rating or scoring for each of those components is subjective, right? And that’s where our experience as designers and investors for the last ten years comes into play because.


We believe that we can. We can make the right assessment on each of those categories, so there is no secret formula. It’s not like we can just plug in all you know data on the company and spit out like should we invest or not?


But we do think that just as we do in a design Sprint, we think that by having a structured approach to decision making, we can make decisions that are high quality decisions. That are free of bias, that are inclusive of everybody in the conversation and that that in this might even be the most important things that give us a record of our decisions. Overtime a structured, consistent record.


So, we can look back in six months and we can say, WOW, that company we rated them like this, but turns out they went out to be successful. What was going on? What did we miss? What did we get wrong, and how can we improve the quality of our decisions overtime?


Relationships with startups


Can you? I don’t exactly know how it works with VC, but like, do you sign a long-term contract with them? Or can you break up with a startup that is not doing a good job?


When we invest the like simplest way to think about it is that we are buying a piece of the company. So, in that way it’s like buying a stock. Let mechanics of it are a little bit different, but we give them cash. They put the cash in their bank account and then we get stock we get. Percent ownership of the company, so it’s there’s no contract in that sense. It’s a. It’s a transaction that happens. The only way for us to break up with them is to sell our stock that our ownership in the company. But because these are early startups, there isn’t. There isn’t really a stock market. There isn’t really a market for those types of shares, so it’s very it’s virtually impossible. And it’s very uncommon for an investor at our stage to sell or to break up with a company. You know, maybe in five years, maybe they’ve grown, but you know. We think we would have potentially opportunities to sell down the road, but if you know in six months, we say oh it’s not working out, we can’t really get out of it.


I think the only thing that we can do is maybe to spend less time with them, and that’s not what we want. From a financial perspective, there’s no obvious way for us to sort of end that that engagement with them.


How often do you sprint with your teams?


Alright, so we are getting some, some questions from the participants. Really good ones. Jameel was asking, how often do you Sprint with your teams?


I don’t exactly know. I can tell you how it’s been going so far, but we just, relatively speaking, we just started. So, we don’t quite have the feel for it yet. What we have been seeing is that within the first couple months of making a new investment the team is ready to run some type of Sprint. Either a Brand Sprint, an Opportunity Sprint or a full Design Sprint.


And we’ve only had one company that has run multiple design sprints. That was that first investment I mentioned. That company called Fedra. We invested in them in April and they had a lot of sorts of back-end technology work to do. We ran a Design Sprint with them in September, and then they ran their own Design Sprint in November.


But we sort of coached them, so we weren’t there for the full five days of the Sprint, but we coached them and they ran the Sprint on their own. So, we had to kind of like do some math based on like how often we thought companies would run a Sprint. And compare that to what we were doing at GV to make sure that we wouldn’t find ourselves in a situation where everybody wanted to run a Sprint every week and there was no way we could possibly do it.


So, we assumed that we would be running sprints one week per month, which we’re not quite. We’re not quite at that level yet. But that’s because we’ve only invested in seven companies so far, and we’ve assumed that most of the startups that we invest in will run maybe two to four full design sprints per year where they need our help. But that overtime they will run their own sprints and we’ll be able to just help them out a little bit here and there.


So those are some of the assumptions that we made and it’s working out so far, but there’s a lot of a lot of things still to figure out as we continue to go.


Training the teams to run design sprints


This is super interesting. Are you giving the facilitation power to someone else? Are you training someone inside the startup who will become the facilitator?


Yeah, totally and for real we didn’t do it on purpose, really, like we ran a Sprint with them, and then a little bit later they emailed us telling they were like “hey we decided to run another Sprint”, like “I don’t know if you guys are free to join us but it would be cool to have you and somebody who had been in that first Sprint”.


She decided she wanted to be the facilitator by herself. This is awesome. The CTL one of the cofounders, he was like you know, an engineer. He was like: “this Sprint thing is so much better than how we had been designing products”. So, he was really excited about it.


So maybe when we get bigger, we’ll have like more of a training program or something, but for now it’s just kind of organic where people pick it up and decide to run with it.


I don’t know what you think, but usually at least in my sprints there is also. There’s always one person, you know, who is the perfect person for facilitation. You can spot that person right away, and that’s what comes to ask questions and looks exciting.


Yeah, so that’s totally right. Yeah, that person is always there. When sprints really stick in. A company is usually. There’s like some stealth components, and I think in this case that I was just mentioning it was the engineer the CTO, who was like you know, he’s not running the Sprint but he like behind the scenes was like telling the team- you got to do a Sprint like this is this is the way that to you know, figure out our product. So yeah, I don’t know if you’ve seen that but like the sort of the person who’s going to take over the facilitation. Kind of behind the scenes champion who’s sort of like pushing it when those two elements exist. Then then they’re going to take it and run it on their own.


Something we get a lot is people asking. Can I just come to observe the Sprint? You know, like being a fly on the wall. Because they want to see and to learn. Yeah, it makes it a bit awkward. But the companies that we invest in are too small to have the observers. They’re only like 6 people, so, you know, everybody is in the sprints anyway.


As an investor, do you facilitate differently?


Stephen has a good question. Do you want to open your mic? Well, first, thanks for being here John. I’m honored to listen to you and congratulations on your new venture. All the best! I just want to know as an investor, since you’re, do you think it changed anything to your way of facilitating your sprints? Just because you might be a bit pickier on like the business model, on the potential? To be more challenging on the decision process, the concepts and on the winning the decision, on the winning concept. Does it change anything or it’s all old way you did it at GV?


That is a really good question and. I think the honest truth is that I probably care more now than I ever have before. Like even at GV where like we had, we had skin in the game. We had an incentive, but TV was so much bigger that I think I’m just like being totally honest here like I think I had this. Thinking back that you know is like OK, well this one doesn’t work out great like there’s this other one. There’s like hundreds and hundreds of companies. Plus we were like, yeah we were still figuring out the design strand like we hadn’t fully developed the process itself.


And then I also experienced that a lot when I was working like as a consultant. Working with companies, especially bigger companies and I it sounds bad. If I’m running a Sprint with a bank, I just like I don’t know I’m there. I’m present I’m doing the best I can, but like I’m not going to put my finger on the scale and try to change the outcome if I believe they’re making the wrong decision but.


As an investor, I totally feel that way. I mean I feel much more engaged and I feel great sense of responsibility for them to make what I believe to be the best possible decisions. So, tactically, I don’t know how that changes things, but certainly my mindset going into it is quite different.


I have a question about, you know like you have created the sprint too to like to avoid a lot of meetings, right? But then the Sprint is always like synchronous. Do you see it like the same? The way you work with startups? Are you getting way more asynchronous right now?


So far we have continued to run sprints synchronously. Everybody here knows it’s already but I think that is. It’s just such an important part of the core philosophy of a Sprint that the team is together that they’re focused that they’re engaged, that they’re putting their energy 100% into the most important problem that they face, so I don’t. I don’t see us moving away from that, with one exception.

That is that there’s this interesting situation that we’ve. We’ve observed that before somebody runs or before somebody starts a company. And before they’re raising venture capital money. There’s often a period of three to six months where they are basically just exploring ideas, and they’re just going out and talking to customers and they’re thinking, yeah, there might be something here.


There’s kind of a cool opportunity. And sometimes we get to talk to people when they’re in that phase. You know, it might be well if you’ve read this Sprint book you know about Flatiron Health. And there’s a couple people who left Flatiron health. They’re both engineers, and they’re in this situation right now where they don’t really have like a clear business idea, but they’re exploring some things, and they have run several design sprints. Essentially sprints but kind of asynchronous.


They go through all the steps, but because it’s just the two of them, and because they’re in this broad exploration mode, they haven’t, been sitting together in the same room from 10:00 AM to 5:00 PM each day doing it. So I don’t know if that’s good or bad, but it’s something that we’ve observed that will meet with them, and you know, we’re not there with them because we haven’t invested and there’s still too early for us to invest.


But we kind of coach them and give them pointers and say, hey, I think you know you’ve been talking to these customers. That’s great, make a prototype you know and use that in your tests. You’ll learn a lot more. Here’s the process you can use. They’re kind of doing these sorts of asynchronous-ish types of sprints.


So I’m interested to see where that goes and what happens with that. But for the most part, yeah, we’ve been 100% synchronous altogether. Same time you know, totally focused virtual, obviously, but hopefully that will change before too long.


“Making time” for a design sprint (focus)

When you run sprints full week, synchronously. We get pushed by companies because it’s sometimes because it’s a huge time commitment and it’s a forecast that they need to have. And in a podcast you said with quote committing time for focus and design sprint is always hard, but it’s on purpose and I really love that. So can you elaborate on that?


Yeah, well I think. In the context, especially of a larger company or an established business, part of the magic of a design Sprint is just the decision to do it. It’s just the decision to say this thing is so important that we are going to focus on it. We are going to clear our calendars and get in the room, and even if you. Like even if you did that and then you put the book away and you just you just worked, you’d probably still get a lot done like it would still probably be way better than whatever you were doing normally.


It’s like having meetings and like sending emails and stuff so that that I think is the core idea that I believe in strongly and I, but I think it’s even more interesting. With startups, because the things that you do in a Sprint. Figuring out you know what you are. What are you building? Who are you building it for? Do those customers care? Do they understand it? That is all a startup exists to do.


A startup doesn’t have anything else going on. They don’t have committees. They don’t have you know ongoing project. Check in meetings for projects that have been going for the last. You know 18 months. All they’re doing is trying to figure out that we are building the right thing for the right customers.


And so for them it’s a very natural fit to run a Sprint. And it’s not hard to clear the calendar because they’re not clearing it from anything. They’re clearing it from doing what they were. You know, working individually, working in an unstructured way on product market fit. Now working in this very focused, structured way and product market fit. So it’s much more of a natural transition and natural fit for what they’re doing.


But yeah, that decision to focus. Is very purposeful. It’s very important. If you want to really make progress on our things, it’s really part of the experience of the Sprint, right? It’s what makes it in a way disruptive. But for good like it’s really bringing a change in the way people work, and that’s the that’s the point.


I was, you know, curious about bias from founders right? Because founders, their ideas or their products, are like their children. They’re very passionate about it. So when you step into a Sprint it does. Does the founder at times you don’t have that bias as part of the process? And how do you as an outside adviser or your team of advisors or others in the company work to resolve that? Yeah, that’s a good question.


And I have a question for you, which is are you really in Milwaukee? That is so cool. Well, hello from the Upper East Side. That is happens and you know one of the things that we look for when we invest in a company is. And this is one of the criteria under approach. It’s called weakly held vision, which might sound like kind of weird.


But, but we believe that the most successful founders they don’t hold on to their vision too tightly because we’ve worked with Jake and I could tell you some horror stories from Google Ventures. We have been working with companies where the founder had two, two clear of a vision and their whole mindset was I just need the team to bring this vision into the world and I know it’s going to be successful.


It’s never successful, right? It never works. Founders who are successful, they see an opportunity and they have ideas. They have beliefs. They have a hypothesis, but they’re willing to change when they learn they’re willing to. You know, test things to. To validate their assumptions and change direction when they learn something new. And so we try to get ahead of that of the situation that you’re describing by investing in the first place in founders who aren’t holding on too tight to their vision so that they so it doesn’t create that conflict in a Sprint.


But of course there’s always going to be a certain degree of people believing in what they believe, and you know, particularly founders, who raised money for an idea, they’ve had some success so far with what they’re doing. So I think that you know we don’t. We don’t do anything.


It’s special to try to counteract that or address it outside of what we would do in a normal Sprint, which is, you know, make sure that their idea is captured and represented a level playing field with all the other ideas. Make sure that everybody has a chance to weigh in, but then ultimately deferred to the decision maker, and so it’s basically. You know who is the founder? Who is the CEO? So it’s basically OK.


You know there’s, you know we see this opportunity this problem, this thing we’re trying to figure out. There’s ten different ways to do it. Let’s hear. Let’s think about why each of those ten is a good idea. Let’s sort of hear the pitch or see the pitch for that. But then you know if at the end of all that the founder says, you know what I’ve seen it. I’ve seen you. I’ve heard you. I still believe my way is the way to go. So be it. You know at least we went through that process, at least we gave that founder an opportunity to evaluate different options. The opportunity to learn so you know.


I think a lot of that stuff is already baked into the Sprint process but we do try to get ahead of it by, you know, evaluating founders on that. That measure of weakly held vision. From very beginning we had that on the Sprint Day one the founder is like I know exactly like he was:  I really don’t know why we are doing this because I know exactly what we should do.


Turn then on  the two he was he was catching on day three there was a sketch that was exactly what he was saying since the beginning so we knew it was his. And then, you know at lunch day three was like OK, OK. My thing wasn’t the best so I’m going to pick the other one that was good. Took time that is good.


The Brand Sprint and Opportunity Sprint


We have a great question from Timothy. Uh, it’s the same than Jameel. Both have the same question. Timothy, you want to ask? Yes thanks Stéph. Hi John, yeah some time ago you talked about brand or name sprints and opportunities prints and full design sprints. So can you tell us what the. What’s the structure of these? Well, we know very well what’s the design Sprint full design Sprint, but what’s the difference with the brand names brand and the opportunity Sprint?


Yeah, so I’ll start with the Brand Sprint because it’s easy because we wrote an article about it several years ago when we were still at GV. So maybe staffer. Glad maybe somebody can find that and paste it into the chat, but it’s really the goal is to. It’s only half a day. It’s only three hours.


And so when you take a five-day design Sprint and you shrink it down to only when you shrink it down at all, you must cut stops, right? You can’t just accelerate all the steps you have to cut things out. When you shrink it down that much, the brand Sprint is all. It’s essentially just parts of Monday. Getting the team aligned on why they’re doing what they’re doing and what you know what they care about what. What isn’t important in essential to that team in that brand. And then sometimes, and we have a PDF about this that I could send.


It’s like several if you’re familiar with the note in vote from the design Sprint. It’s essentially like a couple rounds of nolanville. Where we first identify themes for a name so categories you know like nature or exploration, or you know space and then and then another couple of rounds of note and vote where we identify. Actual names for the company or for the product or for the future related to those themes, and it builds off the brand spend, so that’s that stuff. It’s all well documented.


The big difference between the opportunity Sprint and the design Sprint is when you do a design Sprint you already know the opportunity. So you understand the problem you’re trying to solve. You understand the opportunity that exists for your product. And you’re focused on solutions. So in the context of a known opportunity, you’re generating and evaluating and testing solutions. You’re trying to figure out what should we do in order to achieve this goal in opportunity sprints.


Essentially the step before that there are a lot of different opportunities. There are different parts of the market there are different new product categories that we could consider. Which one do we think is the most promising? Which one should we? Should we prioritize and spend our time on? And then the next step after that would be to run a full design Sprint and I can.


Similarly we just have a doc that just that has the outline. For the opportunity spread and it’s not like it’s not ready to share and it’s you know someday we’ll get around to writing about it publicly. But it’s essentially like parts of Monday, Tuesday and Wednesday, so it doesn’t include the prototyping or testing because it’s mostly about deciding. And prioritizing internally, which opportunity does the team want to focus on so you know, hopefully, hopefully staffer exit can send that out to you. But that’s it. You know, in a nutshell, that’s kind of what it is.  Yeah, it’s in this in the chat for the for the brand, Sprint and opportunity, you just must write the


Running a sprint before or after getting funded


Hi John, nice to meet you again. Nice to see you. Nice to see you too. I have a question so when you run the designs then do you do that before you invest? Or after you invested. That is an excellent question. And. We run sprints after we invest. We would like to run sprints before we invest. But we haven’t figured out how to do it yet, and what I mean by that is. Startup fund raising is really weird because.


If you imagine that there were 100 startups in the world, 99 of them, they basically just need to raise money from, you know, from anybody that that sounds bad. But like they need money to keep the business going right. And so investors are sort of in the position of power. yeah, they can say. Well, maybe we’ll invest in you, maybe not. But for one of those hundred startups, it completely flips where all the investors are trying to invest in that one company. So there’s an inverted competition where the investors are all competing for the ability to invest and. In those situations.


What we think, and we may be wrong about this. But we feel that to say to a founder. Hey, we were interested in investing in your company. But first you must spend a week with us. We think that’s a hard pitch to make. So we had some ideas for how to get around it. That we’re working on, but so far we haven’t quite figured it out, but we do think it could be interesting because we could learn a lot about the company about the opportunity about the team if we were to run a Sprint together and the team could.


Also, they could learn a lot about us. You know they could learn what it’s going to be like to work with us. So it’s something we would like to figure out, but so far we are still in the GV model of us. We invest and then we run this Sprint.


The companies that we have invested in and I believe the ones that we will continue to invest in, they want to run sprints with us. That’s part of the value proposition. I’m going to raise money in then I’m going to have the opportunity to work with the character team to work with. With you know Jake and me and Eli and run sprints together.


Yeah, there is a comment in the chat a week in Milwaukee. This is the appeal I guess. I guess that you run remote sprints right? Or is it difficult? Yeah, yeah we do it remote but yeah, I mean once people are a bit you know traveling more freely and gathering more freely. Yeah, be funded to. Maybe not in the maybe not in the winter, but in general it’d be fun to have, you know, Sprint week in Milwaukee for lots of startups who were considering investing in could be cool. Yeah, that would be a seller. Definitely yeah.


A roadmap for following up after a design sprint


You had a great question where you are it? I’m here, hi. Hi, so these early-stage startups. I guess the early stage right when you run a Sprint with them? Uhm, I’m assuming maybe it’s bad, but like I’m assuming that it’s more of a vision Sprint. And like where they’re going to be like that. The prototype is something that’s like more visionary. I guess that’s from my experience with early stage.


It’s not only early stage, but when left to really rethink something in our and then the problem is, is that I’ve run into problems with these kinds of companies where they. Think that this prototype after it’s been semi validated. It’s a road map now and I don’t know how to like what do you do with them so they don’t think this is now a road map and now you’re done with discovery? You’re done with talking to users or you know what do you do with them for? With their startups for that.


Yeah, um. That’s interesting. We do that, we do see that sometimes it does. It does happen for sure. One of the things that we talk about a lot with startups is the idea of. It’s not a road map for like the features you need to build, but a road map for the questions you need to answer, and we often will use the Sprint questions on Monday or the risks as the start of that road map. So and we’ll talk about it a lot. We’ll talk about it before the Sprint during this Sprint. After this print and we’ll say, OK, you know, for this new product.


Yeah, it’s for adding on this this new functionality to your product or going and trying to reach this new set of customers with your product. There’s a bunch of things that you don’t know that you need to figure out, and if you don’t figure them out you might fail the problem. You know probably won’t work. Maybe there’s five. Maybe there’s 10, maybe there’s 15 of those things and we try to capture as many of them as possible on Monday of the Sprint, but sometimes we capture them.


Outside of this brand or after the Sprint, and So what we what we talked about during the Sprint and at the end of it is OK. You’ve answered these questions like you put the check marks next to this question and you believe the answer is yes. But now it’s time to move on to the next one. And what is what is the you know that’s the next.


Question on the road map. You know what is the best way to answer that question? Do you want to do another design Sprint or is there another type of test or experiment or prototype that that would be more appropriate for answering that question? So that’s how we talk about it. And that’s sort of how we coach companies. And I’m making this transition from the initial design Sprint into what they do next is.


Think of it as a road map of questions or road map of hypothesis or assumptions and then and then. Eventually it just sorts of just sort of morphs. You know, I, I think there’s often this idea that like you do discovery and design and then you do. Implementation you do execution, but it’s not really like that. It’s a. It’s like a gradient. It’s like you know you. You figure things out, you test things and then like you start to make them real and then if you’re like OK that parts good.


Now this part we need test with and so it just sorts of morphs over time, then eventually you’ve done everything on your road map, but you didn’t really. You know, I think about it. In that way you thought of it in terms of the questions that you need to answer. Instead. It doesn’t always work, but that’s what we try to do.


Do you see like? I mean you’ve changed the way product were built with a design sprint. Do you see the same thing coming for the VC journey like? Do you think running a Sprint will be a monetary step?


If you want to ask for more money to other VCs on your journey as a startup 118 B&C and uh like OK well you won’t have any money on romby if you haven’t done at least two or three Sprint before coming in front of me, do you see that? Coming as a trend or not. But exactly like that, but I, but we do see, and we’ve been seeing for years.


More investors use design. More investors have designers on their staff, more investors running design sprints as part of their process, and even if it’s not directly what you’re saying, I think one of the things that happens that is like what you’re saying. Is that at each stage of funding there are certain there are certain questions you must be able to answer.


So you know you must be able to say OK. You know how are you acquiring customers? You know? What is the process of selling a new customer and getting them? You know, set up and on board with the product and design.


Sprints are a really good way to answer those questions you know to for us. Start to be able to say, you know, here’s what we’ve seen when we’ve when we’ve. Tested these ideas with our customers, you know, here’s what we’re hearing here


Here’s the method that we’ve used to validate. You know how we; you know how we put this product into the market? And so, it’s not like a checkbox hard requirement to you need to run a design Sprint to raise money. But the design Sprint is such a natural way. To prepare you to raise money that that I hope we will see it more and more. And that would be you know honestly that would be an amazing long-term outcome.


Long term goal for the work that we’re doing with character. Awesome, thanks. Alright so uhm, I think that’s it’s a thank you so much John for answering all our all our questions. It was great to have you so I would like to show these two books.


First book of course is Sprint by Jake, NAB and John Deere add ski. So read it. If you haven’t read it yet, in the second book, great. Book two is make time. It’s the perfect companion for Sprint. So, Sprint is about work and this is about life, right? Do you have anything to add about character about yourself? Where can we find you online?

Yeah, I’m easy to find online if you’re interested in learning more about character or website as character dot VC. If you know somebody who is starting a company who wants to work with us, send them our way. Otherwise, Twitter and LinkedIn are pretty good places but we’re not. Yeah, we’re not hard to find so thanks everybody. This was this was fun to these questions were super glad. I’m so glad that I had a chance to come and bring you all. Thank you so much, John.