Investor Stories 480: The Traits of Visionary Founders: Customer Obsession, Self Disruption, and Why Love Can Be a Competitive Advantage (Dillon, Patnam, Ries)

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Natalie Dillon: Welcome to the podcast about venture capital, where investors and founders alike can learn how VCs make decisions and reach conv. Your host is Nick Moran, and this is the full ratchet.

Narrator: Welcome back to tfr.

Host: On today's special segment, we asked guests to discuss the most visionary founder that

Narrator: they've worked with and what makes them so special. Here's the segment called Visionary Founders.

Host: On today's special segment, we have Natalie Dillon of Maveron. Natalie, can you tell us about an exceptional founder you've worked with in the specific thing they do that's unique, the

Natalie Dillon: story that comes to mind, and the person that comes to mind is Jessica Rolfe at lovevery. She's built an amazing kids play essential brand. And when she came in and pitched our team, she turned off all the lights, which also was very unique. Uh, and had us for about 5 minutes just read customer reviews of what parents and grandparents had said about the lovevery product. And it doesn't sound like much, but five minutes in the dark, just reading these reviews was, um, was so powerful, but it was just a tiny glimpse into who Jessica was as a founder who is absolutely customer obsessed and product obsessed. And you could see that both in the reviews of how much parents love these products. But then getting to work with her, I mean, the, the detail of every coloring, the shape, the feel, I mean, every product has been iterated 10, 15, many, many times. And I, I just, I so admire that quality of staying incredibly close to your customer and being customer obsessed, but also showing up for your customer and your product. And, and she, yeah, she has that, uh, ah, that in stripes.

Host: On, uh, today's special segment, we have

Narrator: Sandesh Patnam of Premgie Investors.

Host: Sandesh, tell us about an exceptional founder you've worked with and the specific thing they do that's unique. You know, a great founders, all of them. Like, I feel like for me, the, the sort of, the resonance on product and their view of the world and how they think about mission orientation goes a long way. But I call out Ariel Cohen at Navan as, uh, an exceptional founder. I think the thing about Ariel is that he is maniacally focused in ways that I think he lives and breathes the business. But I'd say a, uh, manifestation of everything he does is he's always trying to figure out how to disrupt himself. There's always an incubation team internally saying, what does Navon look like five years from now? If there is a Navon disruptor, I want to disrupt myself. And he always invests in that, you know, in some ways and you, you wonder like, you know what first principles thinking you have to protect the team. You've got to think about product you got. There's so many things that go in there. And since the day at Men, and he always said like I'm going to, if there's going to be a disruptor, I'm going to disrupt myself. And so I need to know what's coming. I'm going to separate the team, going to build a Navaan inside Navan. So that's going to be the next gen. And no matter what happens, I want to be the winner of that category. I think is sort of a unique capability in my mind and because he has a view of the world and the vision of the world that may the world not see yet. And I kind of think that he's list principle based and incredibly maniacally focused. So I absolutely enjoy working with him across every, you know, every dimension here. Amazing.

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Host: We have Eric Reese, founder of the Long Term Stock Exchange and author of the Lean Startup and Incorruptible.

Narrator: Eric, tell us about an exceptional founder

Host: you've worked with and the specific thing they do that's unique.

Eric Ries: I work with so many great founders. This is like my favorite ask me my favorite child. Very difficult and, and no disrespect to any of the founders I didn't pick. But, um, let me tell you about Todd park, because Todd's not that famous, but he should be. He doesn't like the spotlight, so he'd probably be mad at me for making him more famous. But he deserves it. He's, he's a really great person Todd was the CTO of the United States under, under President Barack uh, Obama. He has founded a bunch of companies. He founded Athena Health and, and Castle Health. He's been a very successful health entrepreneur. But his new company that he started, I don't know, five, six years ago now called Devoted Health and it's one of the fastest growing private companies in the stack reimagining of the American healthcare system. And I won't get into all the details. Uh, you can find out about it. I tell his story in the new book. But if you ask him what is the product that you make, he will say, look, we do have a health insurance company, we have a care delivery company, we have a technology company. But uh, none of those things are our product. We make those things. The product we make is love. And people are like what? I thought I was going to get some kind of ruthless business strategy. Now what are we talking about? Like if you were very. But he's very serious about this. The way they run this company is they tell their employees your instructions, like your marching orders are to treat every customer the way you would treat your own parents. And people hear that and uh, they're like, it sounds vague but no, we're just used to these nonsense strategy documents that are over prescriptive. This is the most specific, easiest to follow instruction any employee has ever received. Someone calls in for customer service and they have a problem. Well, if your mom called, you had a problem, would you be like get

Host: off the phone Mom.

Eric Ries: I don't, I. Our terms of service don't. No, you'd be like, okay, let's get the problem fixed. You wouldn't be like, sorry, that's not really our thing. You're calling me about the wrong topic. You need to call somebody else. No, you want to help. So just to give you one example of why I buy or Todd so much, the customers of Devoted Health call the customer service agents who work there, the guardian angels, because if you call them with a problem, they will fix your problem. And I give a bunch of these amazing examples in the book of people who've literally had their life saved by a customer service agent. Now is this squishy, soft hearted emotionalism?

Natalie Dillon: Maybe.

Eric Ries: But I want you to consider this story from the perspective of some a hole private equity roll up guy, okay? He hears about Devoted Health, he sees how much money they're making, he's like, I'm going to roll up all the local health insurance companies and care. I'm going to do the same thing as them with my roll up, I'm going to charge a lower premium, drive them out of business and then I can jack up the prices. This is like classic strategy. People do this all the time. You go into the market and you call up these people and you're like hey, I need you to switch away from your guardian angel to save a couple bucks and they won't even take. So is love soft hearted or is this actually the most ruthless business strategy ever? Because when you create a bond of true loyalty with a customer, you are literally shrinking the total available market that is available for your competitors to access by one person. I don't think it's that soft hearted actually.

Narrator: That will conclude this installment of Investor Stories.

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Narrator: moment and leave a five star review in itunes. Okay, that will wrap things up for today. Until next time over. Prepare, choose carefully and invest confidently.

Host: Thanks for joining me.