By Ana Hevesi (Team Member, Founder Labs) Union Square Ventures partner and Founder Labs mentor Fred Wilson has worked closely with early stage companies for years. We caught up with him at his office to talk about his investment philosophy, the startup ecosystem, team dynamics and mobile startups.
Founder Labs: What do you think some of the key areas for growth are in startups generally, and in mobile?
Fred Wilson: There’s so much opportunity out there, its kind of hard to give you a couple of specific interesting categories, but in mobile, the most interesting applications on the market today are ones that can deliver an experience on a mobile device that you couldn’t have had on a desktop or laptop, whether that’s a geo-located experience, real-time, or one that takes advantage of the capabilities on the phone -- the camera, or the microphone.
I think its important for entrepreneurs to think creatively about things you could use a mobile device for, and really push the envelope there. That’s certainly a big area of focus for us when we’re trying to look for new ideas.
Founder Labs: Any other really notable changes in the ecosystem, recently?
Fred Wilson: Customer development is really important, giving people a way to test their hypothesis early on, get feedback from the market quickly, to know if they’re doing the right thing. I’ve seen companies spend 2 years building something nobody wanted when they finally released. It’s such a waste of time and money.
Another thing that’s changed a lot is the willingness of investors to back things earlier. There’s a much bigger community of angel investors here and in the Valley. It may not be hundreds of millions, but an entrepreneur can raise quarter million, half a million, even up to a million dollars fairly early on in the life of the company, whereas it was much much harder to find that kind of money in the past. It’s making a big difference.
Founder Labs: How about the importance/impact of diversity on teams?
Fred Wilson: There hasn’t been much of it over the years, which has been unfortunate. The more diversity we see in a team, the more excited we are about the team, whether it’s gender diversity, or ethnic diversity, or age diversity. It suggest to us that the team has a more open minded way of looking at things.
If everyone is a 24 year-old white male, and there’s 6 of them, they’re all going to be thinking about the same thing in the same way. But when you can get lots of different points of view into a team, you spark debate and creative tension that sometimes produces the best products and the best companies.
Founder Labs: What are some of the tenets of a great team?
Fred Wilson: I think teams need a leader, which is ideally someone who controls the product vision. At an early stage, teams should be product heavy and business light, so I don’t think it makes sense to have a bunch of sales, or marketing, or business minded people. I think that’s appropriate at some point in the company, but not necessarily right at the start.
We look for teams which are engineering and product-heavy, and founders who can be the VP of Product for at least the first 2-4 years of the company’s life, and people who were doing the startup because they have been interested in the market that they’re going after and the problem that they’re trying to solve for a considerable amount of time.
We don’t really like people who say “Oh gee, we can copy this company and add this little twist and we can make a bunch of money so lets go start a company.” It can work, but it doesn’t work as well as teams who are coming at it from a much more fundamental place.
We like category creators -- people who are the first to develop a company and a market -- as opposed to copy cats.
Founder Labs: Any advice for someone who’s deciding whether to act on their entrepreneurial inclinations?
Fred Wilson: It has to start with the idea, and if they’re really passionate about the idea, and they can’t stop thinking about it and are just dying to go out and build it, they should do it. And if they’re doing it because they’re bored in their current job or their friends are trying to talk them into it -- may be not.
Read the full post at Founder Labs.
About the guest blogger: Ana Hevesi is a Founder Labs team member. She is also Community Manager at Shapeways. Prior to that, she has worked as the Events Director at New Work City, founded a own non-profit, and consulted with tech startups and local businesses on how to grow their customer base while pioneering their company culture. In her spare time, she's teaching herself to program (Rails + iPhone), scoping out the best food in the 5 boroughs, and enjoying obscure electronic music. Ping me.Follow her on Twitter at @anoemi.