20VC: Lightspeed Partner, Merci Victoria Grace on The Future of Collaboration Tools, Bundling vs Unbundling, Synchronous vs Asynchronous & What It Means To Productise The S*** Out of Venture

Merci Victoria Grace is a Partner @ Lightspeed Venture Partners, one of the valley's leading venture firms of the last decade with a portfolio including the likes of Snapchat, Mulesoft, Affirm, AppDynamics and more. As for Merci, prior to entering the world of venture, Merci spent 3 years at Slack including as Head of Growth where she grew the growth team to over 50 people and drove DAU's from 500K to 5M in under 2 years. Merci is also the Founder of Women In Product a global community of incredible women in product management. CLICK TO LISTEN ON ITUNES In Today’s Episode You Will Learn: 1.) How Merci made her way into the world of venture having led the growth team at Slack for close to 3 years? 2.) Merci has been working to productise venture, so what core elements of venture need productising? What systems and tools has Merci put in place to create a product around these processes and methods? What have been the biggest challenge in the attempt to productise VC? 3.) How does the decision-making process look like at Lightspeed? How does Merci use post mortems to help her improve post having lost a deal? How does she structure those post-mortems? What have been some of the core takeaways? What internal tech stack does LSVP run itself on? 4.) How does Merci see the future of the collaboration tools market? Are we entering a period of bundling or unbundling? How does Merci feel about the debate between synchronous and asynchronous? How does Merci determine between those who have grown sustainably vs unsustainably in the time of COVID? 5.) Why do the majority of collaboration tool startups fail? What do they get so wrong in their go-to-market? For those that succeed, what are the commonalities in those that succeed? Why is being good at Twitter a competitive advantage? How does Merci feel about the Superhuman, high touch onboarding style? Items Mentioned In Today’s Show: Merci’s Fave Book: Never Split The Difference: Negotiate As If Your Life Depended on It As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  We are back for another week in the world of venture capital here on the 20 minute VC with me, Harry Stebbings. And if you'd like to see more behind the scenes, you can on Instagram at H Stebbings 1996 with two Bs. But to our episode today, and I had heard so many great things about this guest from many different people in the industry. And so I'm delighted to welcome Mercy Victoria Grace, partner at Lightspeed Venture Partners, one of the valley's leading venture firms of the last decade with a portfolio including the likes of Snapchat, Mulesoft, Affirm, AppDynamics and more. As for Mercy, prior to entering the world of venture, Mercy spent three years at Slack, including as Head of Growth, where she grew the team to over 50 people and drove DAUs from 500K to 5 million people in under two years. Mercy is also the founder of Women in Product, a global community of incredible women in product management.

• 0:43Harry Stebbings?

  I'd also want to say a huge thank you. This schedule really was a team effort. So a huge hand to Jeremy Liu, Jana Messerschmidt and Nicole Quinn for some fantastic questions, suggestions today. But before we move into the show today, I wanted to take a moment to mention HelloSign, a great example of a company that found success in building a product focused on user experience. HelloSign is an effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements. And they've raised a total of $16 million in funding and then recently got acquired by Dropbox for an impressive $230 million. Check out hellosign.com/20vc to join the thousands of companies and founders who value fast, secure and simple e-signatures.

• 1:25Harry Stebbings?

  And speaking of signatures and getting deals done there, you really need to build that relationship. And there's nothing like meeting face to face and there's nothing like Zoom to make that happen. Zoom lets you connect and do business across town or around the world. Zoom ties together all of your communication needs into one easy platform for video conferencing, phone calls, group chat, webinars and your conference rooms and connect from anywhere easily with your mobile phone, your laptop or conference room. Zoom is how business gets done. Get your free account at zoom.com today. Meet happy with Zoom. And finally, I've always been a big history man. And so I do want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the very first venture fund in Silicon Valley, Cooley's formed more venture capital funds than

• 2:10Harry Stebbings?

  Any other law firm in the world with fifty plus years working with VCs. They help VCs form and manage funds, make investments and handle the myriad of issues that arise throughout a fund's lifetime. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to cooliego.com and check out coolie.com also. That is quite enough of these dulcet British tones though, so I'm very, very excited to hand over to Mercy Victoria Grace, partner at Lightspeed Venture Partners.

• 2:42Speaker 01

  You have now arrived at your destination.

• 2:46Harry Stebbings?

  Mercy, it is such a pleasure to have you on the show today. I've heard so many great things pretty much from everyone, but especially Nicole and Jeremy. So thank you so much for joining me today, Mercy.

• 2:54Speaker 02

  Oh, it's such an honour to be here. Thank you for having me.

• 2:56Harry Stebbings?

  Not at all, but I do want to kick off today with a little bit on you. So tell me, we've got some incredible ears operating, but what was the moment that you realised venture was for you and how did you come to be a partner at Lightspeed today?

• 3:07Speaker 02

  You know, I first learned about venture capital actually throughout the process of raising venture capital for the first time. I had a side project in college that I worked on for a year while finishing up. And I was working nights and weekends at my first job when a VC basically preempted our seed round by giving us a term sheet. So that opportunity really catalyzed my career. It's such a huge vote of confidence to have someone invest in you and it majorly opened the aperture of the world to me to show me what was possible. So I ran that startup, it was a gaming company for a few years and I raised a series A even before going out of business after the recession. But Silicon Valley really rewards some types of failure. And I went on to have a great career as a game designer and then a product manager

• 3:50Speaker 02

  at a bunch of early-stage companies before joining Slack early on in the first days of work of 2015. There I became the head of product and I started and ran the growth team in the effort to drive our daily active users from 500,000 to over 6 million in about three years. And then I decided to leave Slack after feeling like I'd really accomplished a lot of what I set out to do. And I got approached by investors who remembered me from having pitched them over a decade before. People asked if I was interested in trying out venture capital and it turns out. If someone asks you something like that the first time, say no, because it makes them much more interested in recruiting you later. I was looking at product roles, other growth stage companies, but spending all of my time talking to founders and making angel investments.

• 4:35Speaker 02

  And really learning that if I wanted to become really good at investing in technology companies, I needed to be able to apprentice with a great firm. And I was predisposed toward light speed from the outset. My husband and partner of 10 years was actually a light speed founder. So I understood the deeply committed and thoughtful approach that characterizes the firm. I absolutely love it and I think I'm going to do venture for the long term.

• 4:58Harry Stebbings?

  I mean, that's amazing to hear and I totally agree with you. I remember speaking to Peter Fentman when I was very young and I was like, should I be a founder or should I be a VC? And he's like, you want to invest, right? And I was like, yeah. And he was like, then be a VC, like learn and just do it. Like, there's only one way to learn and it's by doing it. So totally agree and makes me very happy to hear that. It is different though. You mentioned that angel investing and it's very different. So I'd love to hear your thoughts. And actually I spoke to Nicole before the episode and she asked, given your operating background and given the angel investing, what have been the biggest surprises for you since making the switch to venture full time?

• 5:30Speaker 02

  Yeah, absolutely. The sheer volume of ideas and concepts that people are building that you see as an institutional investor is just vast, right? And then as an angel investor, your deal flow will just come normally from people who you already know. So you might see the one company that's doing X, Y, Z and then send it to someone and say, hey, what do you think about this? And my experience was the institutional VCs that I knew would send me back an email saying, oh yeah, I met with them last week. Here are their eight competitors that are also building other things that you should know about. And that really opened my eyes to just this absolute global scale of venture.

• 6:08Harry Stebbings?

  Yeah, no, I totally agree. And I've had that many times before. It makes you go, huh, shit, I thought I was on something novel there. Tell me that because it is challenging as well. I certainly found there were certain challenges that I had to grapple with. What was the some challenges for you in making the switch?

• 6:22Speaker 02

  Yeah, probably the biggest challenge is focus. You only have your own time as a venture investor and sometimes the Small team or your other partners who are equally busy making investments and sitting on boards. In most of my working experience, I've been a leader and a manager and someone who had not just the leverage of a team around her, but also the leverage of the software that we were building. And so in venture, you have to be incredibly choosy with how you spend your time and what you look at.

• 6:50Harry Stebbings?

  I mean, you do it. It really is the hardest thing. You spoke about kind of leverage there with technology, though, and it's a perfect transition. So thank you for that one. But you spoke before specifically about productizing venture and how it helps you serve the core customer being the founder. I spoke to Jeremy before the show and he said Mercy is productizing the shit out of venture in delightful terms. So it sounds great, but in reality, what elements of venture do you think need productizing?

• 7:15Speaker 02

  Yeah, so the core loop, right, that powers a startup is build, ship and adapt. Companies live and die with their ability to execute just on that cycle. And what you're building, shipping and adapting is your product, what you deliver to the customer. In venture, founders are customers and the core loop is really similar. Evaluate, compete and adapt. But when you're a VC, the product you're improving is really yourself and how you work with your firm. So your viewpoint on technology, your understanding of the market and society, your ability to win, the value you can bring to founders. When you deeply know a space, you can connect with founders and have early conviction because it's more like recognizing something. So that cycle of evaluate, compete and adapt, making yourself smarter, faster and better, enables you to really be in that winning position from the get go.

• 8:01Harry Stebbings?

  Can I ask, in terms of the evaluation, and the thing that I'm really struggling with is just the compression of fundraising timelines. How do you think about that in the evaluation phase and not having the time that one would normally or one used to have in terms of really getting to know both the business but also the founder?

• 8:16Speaker 02

  Absolutely. I think when you really deeply know a space, then you can move with conviction and much more quickly. I spend the vast majority of my time just looking at productivity and collaboration because that's what I really deeply know. And that enables me to spend most of my time evaluating a company, getting to know the person and meeting their team, sometimes meeting their spouse and really understanding what drives them and why does it have to be this company for them now?

• 8:44Harry Stebbings?

  Totally get you in terms of that kind of founder product fit. In terms of kind of progressing that thought further in terms of productizing venture, what systems and processes have you put in place to really scale yourself and kind of create a product around venture methods?

• 8:57Speaker 02

  Yeah, so light speed has been a really good fit for me in part because of its resilient, highly adaptive culture. And it feels sometimes like being in a hyper growth company in terms of the speed and intensity. We work in deal teams alongside other partners and that creates a highly collaborative process that's not unlike building something with someone else. And especially now that we're working remotely, we're using a lot of the tools that our founders use at their companies. So I've run this light deal process focused around that core loop of venture, evaluate, compete and adapt. And then evaluation is about learning really quickly, getting everything into a single doc so that people can collaborate and give feedback, get everyone up to speed really quickly, uh, so that we can move with conviction and make a decision.

• 9:38Harry Stebbings?

  Can I ask, what does the internal technical stack look like for you in terms of like, and I know it's really nitty gritty, but I'm too intrigued. Do you take notes on Evernote? Is it Rome Research? How do you bring in other people? How do you think about funnel progression and note taking in that evaluation phase?

• 9:53Speaker 02

  Oh, absolutely. So I'm a huge nerd and what my Canadian friends call a tryhard, which is someone who's usually very overprepared and incredibly persnickety. And so I am a huge note taker from the very first time that I meet a founder and often before, especially if they've sent me the deck ahead of time. I read it, I have notes, I have questions, I'm there to dig in. Those notes become the basis for the deal doc in Google Docs. Then I create a channel in Slack that is, you know, company X, Y, Z, series A. I drop the post in there, I pin it, I get the deal team together. We go through those docs. Depending on the stage, obviously we'll use Excel. Less likely to use something like Google Sheets just because Excel is so powerful.

• 10:38Speaker 02

  And then we process that through really quickly, oftentimes on Slack in the deal channel, which has really sped up the process.

• 10:44Harry Stebbings?

  Totally get you on that. I definitely see Slack speeding up the process. In terms of like getting the chat done, what does the internal investment process look like for you in terms of consensus decision making versus contrarian decision making? And how do you think about that? Posting Slack, posting memos there pinned? What does that decision making look like from a kind of person to person perspective?

• 11:03Speaker 02

  Yeah, it really begins at the meta level, which is making Sure, you're always helping educate and shed light on the area that you're really knowledgeable about. So that you're not spending time in the pursuit of this one deal, bringing everyone up to speed on. Here are the competitors, here's our thesis on the space, this is what's been really good, this is what we've looked at before. And so, once you've been able to create basically a high information environment for your partners, it goes much more quickly. And there's less sort of convincing on the space and the area, on the business model. And then it's really about the fundamentals of the company and the founder as well.

• 11:40Harry Stebbings?

  Totally get you there in terms of those fundamentals. I think one of the things I loved was, and this conversation spawns from a tweet that you mentioned productizing this shit out of venture. But you said it was post having lost a deal, happens to everyone. What does that post-mortem look like for you? Post-loss deal, and I think, interesting, do you do it for every one deal as well?

• 11:56Speaker 02

  I probably should, but perversely, you really do learn more from failure than you do from success. But the best insights from creating the retrospective have come from the founders themselves. So even though they passed, oftentimes you really do get to know people throughout this process. And so far, every founder has been very gracious with me and given me feedback that's been hugely helpful. The other thing I do in the retrospective is I list out the timeline of the deal process itself. What happened, when was the meeting, how much of the time of the founder's process did we end up being able to get? Alongside the sort of classic list of start doing this, stop doing this, and keep doing this. And then I circulate it widely internally. I get the deal team who is closest to the deal to give me feedback.

• 12:39Speaker 02

  I call people for a back channel, I call the references, I, you know, do the often uncomfortable work. And it is uncomfortable because by the time you have everything together, the outcome seems obvious and totally unavoidable, right? But that's because you have new data and better feedback, and that's how you learn.

• 12:59Harry Stebbings?

  Can I ask, in terms of the feedback, and then do you say if this is too personal? Like, I do post-mortems too, or when I've lost a deal. And it's happened twice, and the feedback was actually the same for me, which was, great relationship with me. Trouble was, I wasn't there quick enough. And so, although the relationship was great, they had deeper, more trusting relationships with people they had longer time to get to know. And so, on me for not being quick enough, and that was the feedback. What are their takeaways from you from the feedback specifically?

• 13:25Speaker 02

  Yeah, but I mean, that's a huge relief to hear because that's primarily, I think, why every VC loses deals. It's just you can never be too fast and you can never have too much conviction about the company, the space, or the founder. And as a former founder, I get it. The person who shows up a couple of weeks or even days ahead of everyone else recognizes what you recognize in the product and believes in you from the get-go, that's someone you want to work with.

• 13:51Harry Stebbings?

  It is, but the hard thing is now, Mercy, and I'm sorry, you know, this schedule is just evolving into a natural conversation, which is

• 13:57Speaker 02

  No worries.

• 13:58Harry Stebbings?

  But the hard thing is, you know, when everyone's saying, oh, you know, you shouldn't be meeting VCs and you should have your heads down building products. I get it, but I'm also a VC who needs to meet founders, you know, and build that relationship. And it's really important to build that personal relationship. How do you think about being there early enough to build that relationship? When a lot of the psyche in the valley today is, hey, heads down and build, and then flip to fundraising and convert pipe. How do you broach that challenge?

• 14:24Speaker 02

  Yeah, you know, meeting founders early is a big challenge. One of the things that's been helpful for me is I have a lot of very relevant operational experience. And so I can say, hey, let's do a working session on product market fit. I would love to talk to you about go-to-market, things that are really low effort for me, just given the base of experience that I have, but can actually be a very helpful hour spent for a co-founder or founder of a company. So it's not just get to know me because maybe you'll pitch me a year from now. It's like, hey, I can help you today and hopefully that's a good start to a long-term relationship.

• 15:00Harry Stebbings?

  Totally off schedule, but too intrigued. When you look at like, especially maybe you and Jana at Lightspeed, you know, you have this incredible operational network spawning from, you know, Slack and then Jana at Twitter and Netflix. How important do you think these very tight-knit networks are to winning deals today? And do you think they'll become more or less important with kind of the democratization of funding, as intellectual as that sounds?

• 15:21Speaker 02

  I hope that venture funding becomes less of a closed circle and actually that these networks become less important and that access to this life-changing financial tool is democratized for many more people who didn't have the incredible luck that Jana and I have had in being able to work at places like Slack and Twitter and Netflix.

• 15:42Harry Stebbings?

  We're seeing that more and more as time goes on. I think hopefully it's a trend that just continues. You mentioned the focus on collaboration tools for you and obviously it's like the hottest space today. Jeremy Lewis especially, from your many months and years working in the space, it's a broad question, but I'm gonna just let you roll with it and apologies for it being broad, but how do you see the future of collaboration? I think this is a tacky old one for me, which is like, are we in a bundling or an unbundling phase? I see the verticalization of SaaS collaboration tools, but then I see Notion. So what's the future and are we bundling or unbundling?

• 16:13Speaker 02

  Just before COVID took hold, it seems like we might be heading back towards the bundled approach as more tools were emerging that were all-in-one toolkits, right, similar to Notion. But now I think we might be shifting against that. We're living through this historic moment and the shift of how we work. And it felt like years ago, but it was actually weeks ago, that we were debating the somewhat distant future of remote work. And suddenly, here we are, everyone having arguably the worst new user experience possible for working remotely together. But we've sped up the world a few years in the space of weeks. So I think the companies that get started in the next years will be companies that wouldn't have been possible if not for this seismic shift. They're going to be responding to very new needs of an increasingly traumatized

• 16:55Speaker 02

  workforce. A bundle is a perfect product for customers with a stable, predictable set of needs. A business could reasonably expect to understand what those needs would be in the future and provide that functionality within a cohesive tool powered by one identity. But bundles are also brittle. And now every aspect of how we work and how businesses provide services to their customers is different and it may be changed forever.

• 17:18Harry Stebbings?

  We spoke about bundling versus unbundling. Now, the other, the big question in kind of in the space is asynchronous or synchronous. It may not be as binary as choosing one can, but how do you think about the relationship between the two and where more potential lies in your mind?

• 17:30Speaker 02

  Yeah, you know, I think there's Still a huge amount of potential in asynchronous workflows because they enable distributed decision making and more autonomous teams. And here we are, everyone is on a distributed team and they need a lot of autonomy to be able to unblock and move on to the next part of their workday. But we also need synchronous time with other people to enrich our lives and also to develop and maintain empathy for each other. We're really social animals and we crave connecting with one another. But on the whole, I think the arc of the future of work bends toward asynchronicity. It enables people to work together across time zones and countries and we're really a global workforce now.

• 18:07Harry Stebbings?

  Totally agree with you. I'm definitely much more of a fan of async for sure, especially given my London roots. But I do want to ask, because you know, you've seen the likes of Slack skyrocket like, you know, no company has done before in the collaboration tool space in many respects. And then there's always companies that fail. If we start on the actual challenging side, why do collaboration startups fail? And are there commonalities and patterns in those that do?

• 18:28Speaker 02

  In my experience, the number one reason that collaboration companies fail is they have a poor go to market despite having a high quality product. As a product person, this really emotionally pains me to see this happen. But people will spend years building something with very little input from customers and then be surprised when it doesn't take off in the market, even though it's something that they're really proud of and the work is good. I think the next thing that I see is selling into managers instead of individual contributors. At the end of the day, it can be counterintuitive to approach it this way. But the end user is your customer, even if they're not the person who's taking out their credit card or filling out the invoice.

• 19:10Speaker 02

  There's a tendency to want to say, well, the manager is really my customer because it's the manager who has the credit card and I'm going to sell into them. But they have a lot of disincentives for rolling out new tooling and new processes. But they're highly incented to keep their team happy and staffed with the tools that the team already knows that they love.

• 19:28Harry Stebbings?

  Totally. In terms of like that problem of agency, because it's one that I think about a lot. How do you advise founders and how do they respond to that in terms of focus on the core customer and the manager will follow subsequently? How do you think about that problem of agency? Because it is prevalent still despite the rise of bottoms up.

• 19:42Speaker 02

  Yeah, you know, one of the things that really qualifies a lot of founders working in collaboration and productivity to be the people to build these tools is that they've used a lot of them in the past. And so often when I'm having a conversation with the founder who pushes back on selling into managers instead of individual contributors, it is just by referencing their own experience at work that often the light bulb goes off. So I think everyone has been part of a team that rolled out Jira, for instance, and much to the groans of the individual engineers who sometimes actually refuse to use it or often will just, after intense prodding, go in and update their epic or their story just in time for some weekly or monthly meeting.

• 20:23Harry Stebbings?

  We are going to discuss Jira, but I do want to flip to the other side of the table because that's the kind of challenging elements and the commonalities that those that struggle. In terms of those that succeed, why do those that succeed succeed? And what separates the good from the really great?

• 20:35Speaker 02

  Yeah, so I think in order to succeed in productivity and collaboration, because it's about the end user and it has a lot of commonalities with how consumer companies grow, you need a strong, well-liked brand. The quantitative version of that is you need an NPS of over 60. The other people who do really well are founders that have a great sense of PR and ability to generate earned media. We were huge beneficiaries at Slack of Stuart's, the CEO and founder, innate ability to just charm every reporter he ever met, as well as a lot of people on Wall Street. I think the other thing that really great companies have is strong expansion within their customers. Strong revenue growth in this sector really comes from expanding within customers you've captured,

• 21:19Speaker 02

  more so than just the top of funnel. And then great companies in this space will also have great engagement and continued paid use. What this looks like is that over 60% of your monthly active users should be daily active users. You should have a power user curve showing customers using the product every workday and net revenue retention of over 140%.

• 21:38Harry Stebbings?

  I mean, Mercy, you are making me with so many questions here. I guess one I am intrigued by especially is when you look at the cohort of metrics that you can look at today, everything from DAU to weekly active users, monthly active users, to time spent on site, the cohorts of power users. To revenue concentration within customers. This is so unfair of me. But is there one or two where you're like, aha, this is really working. I see this now. And what is that?

• 22:02Speaker 02

  If I had to choose one metric for collaboration and productivity companies, it would be revenue retention. Because that tells the entire story. It's a lagging indicator, so you need many quarters to actually look at this data. And often it's more appropriate for a series A or series B company than a seed stage company. But revenue retention, I think, is the gold standard.

• 22:22Harry Stebbings?

  Totally agree with you in terms of the revenue retention. Troubling for me at seed, but I do agree. First, the one question that I find myself asking a lot, especially when I look at the likes of Rome Research, is, and I don't know what I expect from the founders, honestly, which may make it a really unfair question. But I ask, what do you think you're doing or can do to create a cult following? Advise me, is that a good question to ask? And how do you think about kind of cult following creations?

• 22:48Speaker 02

  Yeah, you know, the cult following, it is a real thing. And I think that you do need what we could also call a super user fan base who are really vocal. And so this sort of blends into another thing that I've talked with a lot of founders about, but you need to be good at Twitter. And people like Connor at Rome and people like Rahul at Superhuman, of course Stuart at Slack are just really good at Twitter. And Twitter is where cult followings get developed.

• 23:17Harry Stebbings?

  I totally agree. And also Austin at Lambda lies in that. Speaking of that then, bluntly, would you advise founders to get good at Twitter? And for those that are considering, what would you advise them?

• 23:28Speaker 02

  Yeah, being good at Twitter is a competitive advantage, even though it sounds kind of silly. So, you know, a lot of organic growth flows through the conversations taking place on Twitter. And that's largely because that early core customer of a collaboration startup is very likely to be someone who works in technology, is an early adopter and is therefore pretty online, right? They're reading about the latest software, they're keeping up with new companies, they're eager to try new technology. And so a lot of these ideas and conversations that end up becoming blog posts and podcasts and companies begin on Twitter first. So I don't know how many times I've seen this on. Twitter, but someone, usually someone fairly prominent, will get on Twitter annoyed with some problem that they have, right? Twitter is ultimately for complaining and say, what's the best tool for

• 24:13Speaker 02

  taking notes? And then this sort of like cycle kicks off and super fans of all of these products, you know, the cult members of these cults will show up and overwhelmingly recommend their tool. And I know Superhuman, for instance, benefited a lot from that. And it looks lately like Rome Research is really benefiting from that as well.

• 24:31Harry Stebbings?

  Totally. And I'll give you one piece of advice there. Never diss Callum Lee on Twitter, despite it being a terrible product. It leads to a ton of hate. So I've learned that the hard way. That and Doc's End, you are entering a world of pain if you tweet about them.

• 24:44Speaker 02

  It's truly wise to never talk shit about anyone on Twitter.

• 24:48Harry Stebbings?

  No, it really isn't. I mean, it's actually a question that I often have and we really are digressing here, but it's like I've said before to friends, like if this has the potential to upset one person, I'm not going to tweet it. And they're like, well, then you're not showing an authentic self, Harry. Like if you believe this about politics or about a product, you should share it if you feel you would like to. And that's just limiting yourself. Like that's not authentic. What do you think?

• 25:10Speaker 02

  Yeah, I don't think it's possible to please everyone all of the time, or even most people some of the time. And so I think I side with your friend. There's being mean on Twitter or attacking someone on Twitter. And I think that's very different from taking a principled political stand or just sharing maybe a contrarian opinion. My experience has been when I do things like that, which I do often, I will get supportive DMs and retweets. And I think a lot of people, especially if it's someone who's somewhat prominent on Twitter, react to it very positively because they don't feel alone.

• 25:47Harry Stebbings?

  I guess, you know, you spoke about kind of you tweet and then you get this proliferation of messages that's like, hey, this, this, this, this, this. There is a large number of collaboration tools than ever before, more and more specialized. Bluntly with the proliferation, do you think you'll see a graveyard of collaboration startups first? And I guess kind of secondary, how do you think about the consolidatory market around collaboration tools?

• 26:08Speaker 02

  I really thought that we would see a sort of growing graveyard of collaboration. Tools, starting six months from now and continuing on. But almost all of these collaboration companies are proving to be counter cyclical with COVID-19. And so far, the mass adoption of remote work, I think, is really forestalling what you and I both thought would be a die-off of the first big wave of collaboration companies. Nearly everything that helps teams or even just people communicate or collaborate more effectively online is inflecting right now. So we may have pushed that off, and I'm sure the bigger players are eager in waiting to scoop up these teams and this fantastic technology.

• 26:44Harry Stebbings?

  Totally agree with you in terms of the growth there. My question to you, and it's one that I think about a lot today, kind of investing in the face of COVID, is how do you determine between those that are achieving very sustainable and long-term growth versus maybe shorter-term unsustainable, very, very much COVID-short-term-related growth? How do you think about analysing that with new opportunities today?

• 27:03Speaker 02

  First and foremost, I think, look at a company that's inflecting under COVID and look at their previous months or quarters to understand really what was retention and engagement. And so if retention and engagement were strong, but top of funnel is what's really changed, you're in business. Ultimately, anything that grows organically and has strong engagement can grow sustainably. And so that key question is, in the future, when the world has settled into a new configuration, does the need for that tool still exist and to what degree? So right now, it's really about judging what those new consumer and work realities are going to be. If knowledge workers have to remain physically separate from one another for the default going forward, and then we only sometimes meet up for offsites and things like that,

• 27:47Speaker 02

  then a huge number of the companies building like voice, video, and presence products can continue to grow sustainably.

• 27:53Harry Stebbings?

  One of my favourite sustainable growth mechanisms that a lot of people think is unsustainable, and we mentioned Rahul, is the superhuman for onboarding, which is, in my mind, a total category creation play in how they've kind of mechanised onboarding in that way. Do you feel it is a category creation play in terms of how they really present their onboarding? And I guess, how do you think about that moving forward with companies that you meet? Because I tell so many companies every week, have you thought about doing a superhuman for onboarding to really garner that kind of champion use of it? How do you think about it?

• 28:21Speaker 02

  Yeah, I think high-touch onboarding Experience, especially at seed and series A is a really great way to learn from and connect and actually develop a community of super fans, right? TBD whether the unit economics of that work past that stage, but I believe in human touch and companies like Slack and Superhuman are not only really active on Twitter and things like that, but have highly engaged, high-quality customer service too. And that is a really unsung competitive advantage. When you write into Slack or Superhuman, you get a response from a real human being who's really read your email. And oftentimes, and this was definitely the case internally at Slack, they've, you know, gone into the internal tool and looked at how you're using the product

• 29:05Speaker 02

  and they understand what your role is on the team and if you can even take this action that you're looking to change. And people move from being a zero or one in PS to being a nine or a 10 off of one human interaction. That's unchangeable because that's about human nature.

• 29:20Harry Stebbings?

  Yeah, no, listen, I totally agree in terms of that conversion from nah to real product champion. And that's amazing to hear on Slack. I wish some of the incumbents who I'm dealing with returning items in the face of COVID too would follow that suit, which they have not. Uh, I do want to move into my favorite though, Mercy, which is the quickfire round. So I say a short statement, you give me your immediate thoughts. Are you ready to dive in?

• 29:40Speaker 02

  I'm scared, but let's do this.

• 29:41Harry Stebbings?

  No, you'll be great. You'll be great. But I'm struggling on reading. I, I always would like to read more. What should I read and why?

• 29:49Speaker 02

  So my favorite book is Never Split the Difference. It's an incredible book on effectively communicating with other human beings. And it's actually improved every relationship I have. It is a business book about negotiation, but it's really about a lot more than that.

• 30:04Harry Stebbings?

  Speaking of improving human relationships, a little birdie tells me about knife throwing. Talk to me about that, Mercy.

• 30:10Speaker 02

  Yeah, when I was a kid, growing up in a blue collar family, kind of in the middle of nowhere, so this is I'm painting the picture for you of like rural America. I put in 10,000 hours teaching myself how to throw my mother's kitchen knives. Eventually I could actually go into anyone's kitchen, pick up any knife and stick it into a target from a distance, which I was very proud of. Until in the sixth grade, I tried to impress a boy I had a crush on by showing off that skill. And I'll just never forget the look that he gave me. He was not impressed, Terry.

• 30:42Harry Stebbings?

  I'm sure sheer terror would be the, the answer to that. And I'm pleased that you never, ever have arguments in your marriage because that's one way to resolve it.

• 30:51Harry Stebbings?

  Tell me, what motto or saying do you most frequently revert back to and why?

• 30:55Speaker 02

  You can't stop the waves, but you can learn to surf. And this is a truism about human life. And when I feel myself reacting automatically or getting caught up in something and not being mindful, or frequently the case in the current environment, feeling just overwhelmed by everything in the world. I say this to myself and it really helps.

• 31:15Harry Stebbings?

  No, I love that. Have you ever asked, can you take a boat instead?

• 31:20Speaker 02

  That's, I think you're smarter than me on that one. Very good.

• 31:24Harry Stebbings?

  Just, just a third option. But tell me, I, I spoke to Jeremy before the show. He said about the full sleeve of tats, what is the reaction eliciting and what's the favorite tat?

• 31:33Speaker 02

  Yeah, so I have a tattoo on my left arm that has native California flowers that I really love. And I'm also a native California flower. The reaction to my tattoo is most often actually a request for an introduction to my tattoo artist. And I think if people have less savory reactions, they maybe keep them to themselves.

• 31:53Harry Stebbings?

  I love that. It's clearly a good sign. Tell me that you know, you've now been in venture for a couple of years. What do you know now that you wish you'd known at the start of your career in venture?

• 32:00Speaker 02

  You can never be too early or too excited to work with the founder. And at first I was nervous about coming on too strong or being too aggressive, but it's really not possible to oversell.

• 32:10Harry Stebbings?

  Yeah, no, I definitely agree with you there. What would you most like to change about the world of tech and venture?

• 32:14Speaker 02

  Venture backed companies are this outsized engine of wealth creation and societal change relative, right to the dollars at work. Venture funding changed my life and it changes the lives of founders and employees. And venture backed companies have the scale and ambition to reshape the world. So because of this, I think that we need more people of color and more women to have the opportunity to become venture investors, to angel invest and to start companies. It matters who has power, it matters who has access to capital, because those are the people who will change the world.

• 32:45Harry Stebbings?

  Totally agree with you in terms of that access being in the core part. And I'm really impassioned also about being like check writers especially. I think a lot of funds have the bluntly quota play in mind, which is really frustrating because I think you have to write the checks.

• 32:58Speaker 02

  Yeah, you gotta write the check, you gotta sit on the board.

• 33:00Harry Stebbings?

  Yeah, totally. Good. I'm glad we agree. I suppose Nicole and she said that you're also married to another rock star GP you referenced earlier. Tell me about living with a competitive VC and I'm too intrigued, is it like, you know, but I've thought about, you know, life and future and, you know, finding the one for me and, you know, it's possible that it's a VC. Does one like hide phones and how does one live with a competitive VC?

• 33:19Speaker 02

  Yeah, it's always funny to find out after the dust settles on a deal that our firms were competing against each other because we're actually always the last people to find out. We are not only both VCs, but we're also both former founders. And in terms of great relationship dynamic, I cannot recommend that more highly because founders and VCs are some of the most driven and ambitious people that you'll ever meet. So it's a game changer to have a partner who implicitly understands that I need to take this phone call. It's a founder, it's 10pm and it's not even the conversation between us.

• 33:54Harry Stebbings?

  Yeah, no, I think that definitely takes someone of the same ilk for sure. Tell me, final one, the most recent publicly announced investment and why did you say yes?

• 34:02Speaker 02

  Yeah, so this hasn't been publicly announced, but I recently backed this incredible team that I'm so excited to work with. And they're building a new communication tool because I think that we can do better than what's currently out there. And there's a huge opportunity going forward, especially with the remote work that we're all doing right now in order to make this a real thing.

• 34:23Harry Stebbings?

  Mercy, I always said to you before the show, I'd heard so many great things, especially from Nicole and from Jeremy, but this was such a pleasure and thank you so much for going with my wayward conversations and I loved having you on the show.

• 34:33Speaker 02

  Not at all. Thank you so much.

• 34:37Harry Stebbings?

  Absolutely loved that discussion with Mercy and I have to say huge credit to her because we absolutely moved away from the schedule and pretty much asked no questions from it. I'd also want to make a quick correction in the intro. We said about scaling Slack from 50k to 5 million DAUs. It's actually 500k to 5 million DAUs. So apologies for that, but a correction there. And if you'd like to see more from us behind the scenes, you can on Instagram at H Stabbings 1996 with two Bs. However, before we leave you today, I wanted to take a moment to mention HelloSign, a great example of a company that found success in building a product focused on User experience. HelloSign is an effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements.

• 35:17Harry Stebbings?

  And they've raised a total of sixteen million dollars in funding and then recently got acquired by Dropbox for an impressive two hundred and thirty million dollars. Check out hellosign.com/20vc to join the thousands of companies and founders who value fast, secure and simple e-signatures. And speaking of signatures and getting deals done there, you really need to build that relationship and there's nothing like meeting face to face. And there's nothing like Zoom to make that happen. Zoom lets you connect and do business across town or around the world. Zoom ties together all of your communication needs into one easy platform for video conferencing, phone calls, group chat, webinars and your conference rooms. And connect from anywhere easily with your mobile phone, your laptop or conference room. Zoom is how business gets done.

• 36:01Harry Stebbings?

  Get your free account at zoom.com today. Meet happy with Zoom. And finally, I've always been a big history man and so I do want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the very first venture fund in Silicon Valley, Cooley's form more venture capital funds than any other law firm in the world. With fifty plus years working with VCs, they help VCs form and manage funds, make investments and handle the mirroring out of issues that arise throughout a fund's lifetime. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooleygo.com and check out Cooley.com also. As always, I so appreciate all your support and I can't wait to bring you a fantastic episode this coming Friday with Chris, founder of Substack.