Measuring the impact of a VC platform strategy

Yesterday I joined into a pretty extensive Twitter thread about the importance of “platform efforts” at venture capital firms — or, the post-investment value add engagement work that I do on the Network team at USV.

In this thread, folks from many different firms jumped in to share their thoughts and opinions about what this work is, how it matters, and finally, as an answer to the original question: Can you measure it?

This role (the platform or network or community role or whatever you call it) has certainly been increasingly in popularity over time over the past few years. Back in 2016, USV hosted the very first “VC Platform Summit” for people who hold titles like this at different firms. About 30 people packed into our event space at our office.

Compare that to 2018, when more than 120 people joined this annual event, with some folks flying in from places like Australia and Europe. When I last counted, I found more than 250 people from more than 180 VC firms now supporting platform efforts for their companies. And because this is the most meta network ever — a community of supernode organizers who spend all day long running communities — you better believe they know how to self-organize. There’s now a full admin team that manages a Google Group, the logistics behind the annual summit, and this website, which includes a member directory.

Firms more than ever, are expanding (not contracting) the offerings that they provide to companies in their portfolios, as this trends report shows. (Something that Maria Palma of RRE Ventures pulled together in advance of the 2018 summit.)

Cory Bolotosky of True Search (and formerly of Underscore VC) does a nice summary of a few of the biggest impact ways he sees platform teams doing for their companies:

But of course, it does beg a series of questions about the intended output of all of this work:

• If 100% of VC firms are now offering events and programming to their portfolio companies, does it dilute the overall impact?
• Are these services becoming commoditized to the point of them being meaningless?
• And — If you can’t prove the direct link from any of these singular efforts, is it even worth having these teams at all?

Measuring what matters

There’s something elegant and lovely about that idea that Andrew Oddo of Bowery Capital proposes here:

But of course, it’s impossible *really* attribute anything as 100% pure. Like any marketing effort, a single touchpoint is only a piece of the puzzle. Did you decide to eat McDonald’s for lunch because you saw a TV ad earlier in the week, because you stumbled across one of your old McDonald’s toys in your bedroom, or because you smelled the unmistakable scent of greasy French fries when walking past the restaurant?

In the end, the outcome was probably a little bit of all of those, combined with one other thing that marketers have no control over: You were hungry.

The work I do in VC is very similar. Maybe somebody learned a new way to approach a technical problem at one of our summits, but who’s to say they didn’t already read a blog post about that? Or that somebody brought up that same topic in a board meeting? And even if you can prove they did this new thing, do you measure that in minutes of time saved? In dollars and in cents?

You can drive yourself crazy trying to track this stuff. (And trust me, I have.) Truth be told, this is something that I have struggled with since day one of joining USV back in 2016. As someone who came over the VC from the operating side, my tendency to measure as much as possible to “prove” my value certainly came off quite strong.

One of the early questions I had when I joined the firm was: “Well, who’s in the network? And what do they want?”

This first one (who are they?) proved to be really hard for us to answer. We had different snippets of information about different people over time (some from Slack, some via email, some via newsletters, and a lot in people’s brains), but none of it was consistent. People changed jobs, they grew out of one role and into another, or their email addresses bounced and with them, we lost all of the valuable insights that they may have been able to offer other emerging leaders who came after them.

As a result, I spent my first year at the firm capturing as much information as possible about our companies, our programming, and the people who engage with USV from up and down the network.

This was pretty tedious. For us, that’s a meaningful chunk of folks. We estimate that we have about 10,000 people across our now 75-company network. In any given year, about 3,000 show up for one of our 150+ events. We also manage a Slack channel that’s 3,500 members and growing. Admittedly, I went down two or three or four “data pits” or rabbitholes along the way that probably sucked months of my time and sanity out along the way.

But there is one thing this exercise taught me: Because the timeline of venture capital will always be longer than the timeline of any one employee at one of our companies, our system needs to be designed to outlive a typical life span of an employee. (And that’s hard to do.)

Now, our firm has been around long enough where we’re seeing people start to “come back” to USV — either as entrepreneurs, as senior-level hires at other companies, or even as mentors or advisors. To me, this is one pretty clear measure of success. And that’s why this is an area that we are investing in more today at USV. But even this “impact” is pretty squishy. We’re still figuring out what (if any) KPIs might be in this area.

If you think back to the earlier examples about McDonald’s, in the end, only one thing matters to their marketing team: “Do people think to eat there when they are hungry?” The same is true for the USV Network. The question I ask is, “Do people think to come here when they have a question or want to learn?”

If we can’t say yes to that, then we aren’t doing our jobs well enough yet. And if, when they do think to come to the network when they have a business question or a sticking point they’d like to talk through with industry peers, but we fail to help them, then we’ve lost out on a huge opportunity.

And if you look at it this way, then we have a long way to go.

Originally published at Dry Erase.