It may seem counterintuitive to tell startups to put as much effort into their product as they did before the recession hit, when many of them are laying off employees and cutting costs to survive. Do consumers value a good product experience during a recession? Yes, according to Mighty Capital, which counts Airbnb and Amplitude among its investments.
The San Francisco venture capital firm operates under a central tenet: “The best product wins.” The fact that macro conditions have shifted does not render it useless. When asked whether Mighty Capital is still relevant, founding managing partner SC Moatti said, “perhaps more relevant now than ever.”
SC Moatti is an ex-Facebook executive who loves products and loves Facebook. In addition to leading Mighty Capital, she established and serves as CEO of Products That Count, a large group of product managers who advocate for and promote product-led expansion.
In a slumping economy, product-led expansion makes perfect sense: if the product sells itself, then fewer resources need to be spent on marketing and promotion. This increases the likelihood that product-led companies will experience rapid expansion and sustained profitability, two characteristics that are particularly attractive to investors right now.
The caveat is that you can’t claim to be product-led unless you have a truly outstanding offering. When a company’s burn rate is already a major source of anxiety, the type of investment this would require is understandably concerning.
We asked SC Moatti a series of questions that founders might have if they are considering making the shift to a product-led strategy in order to get a sense of how she approaches the product versus spending dilemma. For length and clarity, we’ve included her edited responses below.
Subtly charming pop culture geek. Amateur analyst. Freelance tv buff. Coffee lover