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The Villain Test: Mastering Consumer Tech Trends

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January 14, 2025
Craig Shapiro shares insights on founders, investing, and future consumer tech trends.
Topics discussed in the episode:
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What practices can multiply a founder's productivity?
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What is the 'Villain Test' in evaluating product viability?
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How can VCs get comfortable with being misunderstood?
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Will consumers stop giving away their data?
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How do you balance mission-driven goals with profitability?
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How can VCs win competitive deals?
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How will consumer products look different in the future?
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How can founders build long-term loyalty in changing markets?
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How can VCs identify breakout companies for follow-on investments?
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How can consumer products differentiate in a changing market?

What practices can multiply a founder's productivity?

Simple habits like walking can enhance thinking and productivity.

"I think better when I'm moving...it's helped my productivity maybe more than any other tool."

  • Incorporate movement to stimulate thinking.
  • Find personal habits that boost productivity.
  • Leverage simple practices for big impacts.

What is the 'Villain Test' in evaluating product viability?

The 'Villain Test' assesses whether a product appeals to consumer self-interest.

"The villain is a really strong component to consumer purchasing decisions...humans make decisions based on self-interest."

  • Recognize consumers' inherent self-interest.
  • Ensure your product satisfies a core desire.
  • Balance broader impact with self-interested benefits.

How can VCs get comfortable with being misunderstood?

Investing in non-consensus deals requires comfort with short-term misunderstanding.

"Getting comfortable with being misunderstood...that's the most succinct way to say it."

  • Be willing to look dumb in the short term.
  • Non-consensus investments can lead to outsized returns.
  • Have conviction despite outside opinions.

Will consumers stop giving away their data?

Consumers will continue trading data for value if the proposition is strong.

"I generally am skeptical that...you're gonna see this mass exodus from consumers away from...giving up their data."

  • Offer compelling benefits in exchange for data.
  • Design products that make the trade-off worthwhile.
  • Understand consumer willingness to share data for value.

How do you balance mission-driven goals with profitability?

Profitability and mission can align; supporting founders' missions leads to better returns.

"Can we be more mission driven? Can we partner with founders in a way that aligns with their mission, but in a non-sacrificial way..."

  • Mission-driven companies can be profitable.
  • Align with investors who support your mission.
  • Integrate mission and profitability without sacrifice.

How can VCs win competitive deals?

Building relationships early and showing genuine interest helps win deals.

"I reached out to him cold and said, 'Hey, I'm interested.'...I put the first check in...and he was off to the races."

  • Proactive outreach differentiates you from others.
  • Invest time in building early relationships with founders.
  • Show genuine interest to win competitive deals.

How will consumer products look different in the future?

Personalization is key for future consumer products, meeting individual needs.

"Consumer products are becoming much more personalized...there's opportunities to really personalize those consumer products."

  • Leverage technology for personalized experiences.
  • Tailor products to individual customer preferences.
  • Use personalization to stand out in the market.

How can founders build long-term loyalty in changing markets?

Emphasizing community helps retain customers despite shifting trends.

"I think the community piece is something that we think about quite a bit as it relates to consumer technology companies."

  • Build products that foster strong user communities.
  • Community creates stickiness beyond the product.
  • Focus on user engagement through community.

How can VCs identify breakout companies for follow-on investments?

Identifying breakouts involves assessing how well teams communicate and adapt.

"For us that reporting component is key...it's really trying to understand the team's ability to...see things clearly...adapting, and then...making hard decisions."

  • Breakouts communicate effectively with investors.
  • Look for transparency and adaptability in teams.
  • Strong reporting indicates strong execution.

How can consumer products differentiate in a changing market?

Building a community around a product increases customer loyalty in a fast-changing market.

"I think about these businesses less as consumer products...but more as community...the product is almost tertiary to the community."

  • Creating a sense of belonging boosts retention.
  • Focus on fostering strong user communities.
  • Use community to build long-term brand loyalty.