157. Leveraged Growth, the Consumer Echo Chamber & Customer Obsession (Rebecca Kaden)

The Full Ratchet Rebecca Kaden Union Square Ventures

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Rebecca Kaden of Union Square Ventures joins Nick to discuss USV’s Newest GP on Leveraged Growth, Consumer Brand Building & Customer Obsession. In this episode, we address the following questions:

  • I’ve heard you talk about Allbirds, Zullily, and others before, can you highlight a few notable investments from your time at Maveron?
    Previous career as a journalist? Did you write about tech?
  • How’d you end up joining Maveron?
  • Why the move to USV?
  • Fred Wilson said: “Each partner who has joined USV has done two things very well. First, they have figured how to operate inside of our shared investment thesis. And second, they have figured out how to stretch it.”
  • You’ve said: “Next up: exploring the intersection between our core USV thesis around network effects, whether centralized or decentralized and the entrepreneurs building the standout consumer businesses that integrate into our hearts and minds.” Talk about the types of Network effects that you look for and can create large, strong businesses on the consumer-side.
  • Investment Process/Structure at Maveron vs. USV?
  • You often talk a lot about one of my favorite items… customer obsession. It’s well documented on this podcast that I will not invest in founders that aren’t customer obsessed. I’d love to hear your thoughts here and how you test for this characteristic with early-stage founders.
  • What are your thoughts on the role of brand and importance of brand in consumer companies?
  • What are the key elements to building strong brand and can you give us specific examples that you’ve observed in portfolio companies?
  • Thoughts on vertically-integrated brands– strengths and weaknesses, is that critical for a brand w/ a physical good for you to make an investment?
  • What’s your role as investor, are you passive or active; are you coaching and teaching or more of a listener and support? What’s your style?
  • What do you like least about your job?
  • In what ways do woman VCs support and help each other out in this male-dominated industry.
  • Case Study–ย very incomplete information, two companies, early stage, very similar sector and product category, both have exceptional founding teams… one has modest growth rates but exceptional NPS scores, the other has exceptional growth rate but modest NPS.ย  All other things being equal, which one are you more likely to invest in?


Guest Links:


Quick Takeaways:

  1. Entrepreneurs should ask how they can create leveraged growth– growth that doesn’t require purchased customers but rather customers do the growth work for you.
  2. There are many approaches and styles that work in venture. Any single firm does not have the ideal approach.
  3. Venture is simply capital and people– and capital is a commodity.
  4. USV focuses on defensible moats and leveraged scale.
  5. Marketing is not a defensible asset.
  6. She likes to meet entrepreneurs before they’re ready for investment. It allows her help the founder and get a better sense for many qualities such as their level of customer obsession.
  7. A way she thinks about brand is to ask the question, “Why do customers care?” The emotion reveals the brand value.
  8. Key element of building brand is consistency. You have a clear message and you tell it over and over again in every channel. This creates an echo chamber and customers reiterate your message.
  9. What she looks for in startups, full stop, is– are you building something that customers love?
  10. If customers really love your product, it’s easier to find more of them than it is to find something to love for your unhappy customers.


*Please excuse any errors in the below transcript