Investors need to actually use their portfolio products

By boris, February 18, 2014

PayPal President David Marcus recently stirred up the hornet’s nest with a memo scolding employees for not installing and using the PayPal app. In part, the email read: “Everyone at PayPal should use our products where available. That’s the only way we can make them better, and better.” (you can read the complete text of the email here). While Marcus’ memo touches on numerous high-level debates like passion vs. paycheck, there’s one important message for start-ups, managers, employees, and investors alike: Eat your own dog food.

Investors, really? Should an investor really be expected to use the 10, 15, or 20 products in his or her portfolio? I say absolutely. After all, a great product is the basis for a successful company and an investor who doesn’t understand, know, or use the product is most likely a sub-optimal sparring partner and advisor.

A PayPal spokesperson further clarified the message of the memo: “We really want to be driving the best customer experiences that are possible. And part of that is having every employee be the customer and utilize our services wherever you can, and if you see a problem, highlight it and tell people to get it fixed.”

As an investor, using a portfolio company is easier when dealing with consumer apps and companies. For example, I’m a regular, sometimes heavy, user of Frank & Oak, Indiegogo, Indochino, Escapio, Clarity, Smore, tindie, and Twenty20. My wife uses Julep and Chloe & Isabel.

It’s naturally tougher to be a user for business apps, particularly vertically-focused apps. For example, Figure 1 is a photo-sharing app for medical professionals and Clio offers practice management software for lawyers. And I’m neither a doctor nor a lawyer.

In these cases, the investor should at least sign up for the service to get a high level impression of the workflow and user experience. As a start-up founder, you should make it a priority to include product presentations in board meetings or schedule separate sessions to go through the product demos.

At the end of the day, the more hands that touch your product, the greater the opportunity to improve the user experience. And you don’t necessarily want to trust the opinion of advisors who have never used or tried your product.

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  • While in principle I agree with dogfooding Boris I also always caution people that it can become easy to naval gaze internally (with the best of intentions) and get wrapped up with your own personal viewpoints and it is as and more important to get external and talk to the real dogs to understand what they like, don’t like…use, don’t use and why.

  • bwertz

    agreed – personal viewpoints / impressions of a product should only provide perspective, not drive the ultimate decision

  • chrija
  • Consider a startup with an incredible new colonoscopy device – would you expect investors to look into it 😉

    Humour aside, the assumption here is that investor (or employee) is in the market served. This was a huge weakness in the Marcus piece and it has been rightly ridiculed – To translate it into any market investors might enter is patently absurd.

    Suppose someone captured the international cremation and burials market – would Marcus want to be CEO and if so would he please step forward.

  • Kevin Kliman

    Great advice. The number of discussion Ive had with investors who have reached out to instaradio but havent used the product is shocking. Not to mention a pretty clear tell.

  • bwertz

    I think many start-ups had similar experiences

  • myBestHelper

    Agreed – being an end user as founder CEO has helped us propel our product forward time and again… In fact we got into a routine that the entire team has to do a go through the product at least every two weeks – amazingly motivating for devs to see the product from the user perspective!

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