E601 | Andy Budd, Seedcamp: From CSS to Seedcamp - Why Design Is a Startup Superpower

0:00Welcome back everyone to what I hope for you is yet another good EUBC podcast. As you know, our mission is all about to connecting champion European venture and someone who's truly been leading the charge is of course heat camp who we are lucky and honored LPs of and today we're talking to Andy Butt who is a venture partner with the team Andy has an absolutely incredible unique journey from designer founder to investor and he has a bunch to offer to anyone who's thinking about design and how design thinking can drive startup success and innovation in the European tech ecosystem.

0:51This show is not investment advice and the hosts of this episode may be invested in the funds and companies featured. So here is a true, I don't know, Can I call you an OG, Andy, in design in Europe? I think that's, yeah, I think you're safe to call me an OG. Definitely go for it. Amazing. I'll stick to the OG labeling then. Andy, tell us about your journey and how you end up as a venture partner with Seedcamp, but also what we now have established is an OG. I mean, I don't know how far back you want to go, but like my early days of working in the tech space. I was one of the very first people in the UK to start playing around with CSS.

1:33I think I'd built the third ever website in the UK or maybe even Europe using CSS. This is back in kind of maybe 2002, 2003, when the only browser that could use it was Microsoft IE 5.2 on Mac. I wrote the third ever book on CSS-based design, which sold about half a million copies for a while. It was outselling Harry Potter. So my journey started as a front-end developer. But I really quickly realized that front-end development, CSS, HTML, web standards were going to just become the bread and butter of building. It wasn't going to be anything unique or special in it. So when I started thinking about running my agency, I started an agency called Clare Left.

2:15We decided that we were going to lean into this new process that was coming about, which in the US people were talking about user experience design. There was an agency called Adaptive Path, the first UX design agency in the world. And we became the first UX design agency definitely in the UK, possibly in the whole of Europe. And when we started, it was really hard because the way that design happened then is people would open up Photoshop and start moving rectangles around. It was like graphic design. It was making things look nice. And we would want to go and talk to our clients and run workshops and talk to their users and do usability testing and all of this kind of extra stuff.

2:52We were taking a scientific approach to solving these problems. It wasn't just making something look pretty. It was really about understanding what the customer wanted, what the business outcome was, what the users wanted to achieve and marrying those two. And so in the first few years of running my agency, my studio, it was hard work, but it got better and better and better. Really in the early stages, I saw all of my friends over in San Francisco and thought, they're all working in these amazing startups. I want to do startup stuff in the UK. But at the time, the UK ecosystem wasn't very well developed.

3:25In fact, the only real play is at the time with this little accelerator at the time called Seacamp. And so I went and talked to Carlos of Rashom and said, hey, look, can I come along to your very first, they were doing these kind of Seacamp weeks. I was like, can I come to your Seacamp week and I'll be a mentor. And basically for the next five or six, seven years, I'd come to Seacamp in their kind of weeks, they'd do pitches, they'll do kind of mentoring sessions, I'll help out. And sometimes I would speak and I speak about the value of design. I happened to be in Berlin once where they're doing one in Berlin.

3:56And so I joined the Berlin cohort. I happened to be in South Africa once where they did something in South Africa. And so I got to know the founders really well, especially kind of Carlos, we put up a really good relationship. We go out for dinners every now and again. I had maybe five or six other friends who were also VCs. And so I'd bring, gather people together and we'd go and have lunches and chat about this stuff. Now, from my perspective, I know it was really good fun. I mean, it was amazing. It was a really great time to be there. This was kind of like, you know, fund one on two in Ccamp's history.

4:25Like Ccamp are now up to fund six. So, you know, 18 years old. But I always had this kind of interested in wanting to use my skills to help early stage startups. But the company that I run, like we were more attracted to big businesses. Like we redesigned Penguin Random House. Like we took 57 Penguin book websites and turned them into one. We were designed Virgin Atlantic, Virgin Holidays, you know, British Gas, British Telecom. Like these are all major kind of infrastructure companies that come to us because they had big problems. But I always had this inkling of wanting to work with startups and working with founders.

5:01And so when I sold my business four years ago, I reached out to a bunch of friends just for coffee. And I had a conversation with Carlos and Carlos like, Hey, look, you know, we love working with you. Why don't you come and be an EIR, an entrepreneur in residence, come hang out, talk to our customers, talk to our sort of portfolio companies, share with them your expert design knowledge. And, you know, like, it'd be a fun thing for you to do and I was like yeah great and so I did that for three or four months and at the end of it it was like a limited program at the end of it Carlos was like look you know people have been really enjoying working with you our portfolio companies are getting a huge amount of involvement do you want to come on board on a more significant role you know come work with us two days a week I will give you a portfolio of companies to lead and so at the moment I'm sort a point of contact for around a dozen of our portfolio companies.

5:53And I'll have calls with them every couple of weeks. I'll hop on, you know, like we've got a couple of people fundraising at the moment. And so it's having daily conversations, helping them as a back and forward fundraising, you know, for companies that are trying to reach product market fit, I'm constantly helping them shape their team, shape their processes, you know, iterate towards product market fit, you know, that whole go to market strategy stuff. Having somebody that's run a, not a big business, but a 30-person business, I really feel what it's like to go from two people in a studio to 10 people in a co-working space to 20 to 30 to 40 people.

6:27And so because I've been on that journey before, I can really empathize with a lot of the feelings and emotion and challenges that these people have. A lot of VCs understand it intellectually, but having an operator that can actually recall those stories, I think can be really powerful. And so Seacamp have two or three venture partners. myself and Devin are two of them who are operators who spend two or three days a week working with the portfolio companies. We obviously got to talk AI, but I don't want to like just throw a big question at you with how does AI change UX design? It's obviously something we should talk about, but I'd rather ask you the question, how do you as a UX first focused builder work with startups and what's the value that you bring to them?

7:18How do they best use you? And kind of this, and then I'm thinking that this will automatically get us into the AI conversation because I can imagine it's quite a shift right now. I mean, I would say this because I come from a design background, but I think design is hugely important in the first few years of a startup's journey. I think it's really tempting for founders to think that the way they are going to succeed is by building a product that has more capabilities in the competition. You know, we have more functions, those functions, you know, deliver more power that, you know, we get them to market quicker.

7:56And, you know, I'm not denying the fact that having capabilities is really important, but I believe it's the way those capabilities are assembled. You know, most of the people at the moment are satisficing. They are using products that are kind of allowing them to do the thing that your new product is going to make better. So they've already got that capability. Often the real frustration is it doesn't work the way they want it to work, that it's frustrating, that it's a broken process, and they've got to jump to three or four different screens. It logically doesn't make sense why they've got to kind of bounce around this interface in a really frustrating way.

8:28And we've got so trained through consumer apps, we've got so trained through games about how we expect a smooth, with meaningful user experience. And so just assembling a group of functions and then giving it to people and then having them struggle their way through it is not enough. And so I really believe that design is a big part of finding product market fit. And I think designers play a massive role in that. I think a lot of the time founders have this vision in their head, but they really struggle to articulate that because words are quite limiting. They go and they talk to the engineering team and then the engineering team will go away and build a thing.

9:05And it's not quite what the founder thought. And so they'll go and ask them to change it. And there'll be this back and forth. And that can be a really time consuming and wasteful experience. It could be a really frustrating experience. And often, I see this all the time, the first version of a product usually isn't how the founder envisioned it. But worse, it usually isn't good enough to make a rush of people come in and use the product. All the capabilities are there, but there's no key USP. There's no real hook. The value is buried. The value is hidden. You know, it takes ages to sign up. It takes ages to kind of, you know, get using the product and getting the value out.

9:42And I think designers are really great at understanding that. Designers have a real empathy for users. They're really good at putting themselves in the user's position. Like a lot of founders, a lot of engineers are super users. You know, they have that mindset of like, oh, users will figure this stuff out. You know, like it might not be obvious, but we're smart and we'll figure it out. And designers are like, well, we might, you know, a certain number of people might be able to. But what if we made it easier? What if we made it more obvious? What if we chose language that they use rather than we use?

10:09What if we organize the interface so it's easy for customers rather than easy for the engineers to put together? Like, why do we have to build a system that is purely around visualizing the back end to customers? Why don't actually we build a back end that is focused on what the users need? And so designers are really good at talking to customers, understanding their pain points, understanding their frustrations, what isn't working with the current product, what isn't working with the way they're doing things at the moment, and how the new product needs to be assembled in a way that makes sense, that makes their life easier, that removes all the barriers and blockers, that makes it smoother, they can get to value quicker, and they can make the big change of shifting.

10:51because it's really scary. Like if you've got a product, even if you're using a product that's a bit broken, shifting to a new product is challenging because you've got these behavioral pathways. And so trying to make sure the product is 10 times better rather than just one time better, two times better is really important. And I think designers can be key in that journey. I imagine, Andy, you've seen the post by Sam Altman. It was actually not a post. It was a nestled point within a longer write-up by him, but where he said that we might be entering the era where the idea guy of the startup landscape will truly end up actually being valuable and not just the idea guy.

11:36And of course, to anyone that doesn't get that reference, the idea guy is, of course, the guy who shows up, has this great idea and then thinks he can kick it to the designers and the engineers and they'll go build it for him. And then they're like, well, what do you bring to the table, my friend? If I'm the one building it, what do you bring to the table? But now in this era of AI, the point is, of course, well, the idea guy doesn't bring it to the engineering team. And they basically go to Lovable or something like that and build it themselves. And they don't need anymore the engineering team, the design team.

12:10It's all in the AI tool. What do you say to this? Is this true? Is there some truth to it? I thought you was actually going to use a slightly different example. Because obviously, Sam Altman has also gone to buy Johnny Ives' company that has, I think it's 39 members of the team. no existing public product for$6.5 billion. And so I think in a world that's been dominated by AI, why would you spend$6.5 million on a 40-person team? Well, you're doing it because you're buying Johnny Ives. Some of that is the brand. Some of that is the idea guy. But some of it is also a realization that form and function matter.

12:55Trying to figure out how to popularize AI, trying to figure out how to get it into the hands of not just like one percent of engineers but the hands of me you your parents the plumber the you know just the the people in the street and so i think design is going to become more important rather than less important but i think this is also about like people's understanding design you know you have a good point let me just uh try and clarify this, at least for myself, is the point here that the power, the strength of AI is many times higher than its current adoption. So what really will be the limiting factor if we don't think about energy and all this stuff that everyone's talking about geopolitically is, will people be able to adopt it?

13:45And right now we have some power uses like I'm sure you are, and I am myself, I often ask people just to get a check with people outside of the ecosystem. How often do you use ChatGPT? And I use it probably, I am definitely doing 40 queries per day, if not more. And there are many that are like, well, per day? What do you mean? So the point here is to unleash ChatGPT, you will truly have to figure out how do you solve the adoption problem. And seemingly having a one type interface where you can chat is not enough. There are application after application after application where you'll have to get people out of their CRM into this world or out of whatever, whatever.

14:37Is this a bit your point that Johnny Ive and the team bring so much to the ChatGPT team around design? Because if you truly think about what is design, it is making a good experience, delightful experience with something that is actually rather technical, but it is all happening behind. All you have is one button or an infinite scroll. And that infinite scroll is then giving you everything you want, but as a user, all you got to do is scroll. I mean, I think that AI, LLMs, ChatGPT has a huge amount of value currently. And if the companies leading the charge just want to focus on super users, I still think they can be$100 billion businesses.

15:25But my suspicion is that they are wanting to see AI as a generational change and they want to put it in the hands of as many people as possible. and I see it really similar to the the the sort of the growth and the emergence of mobile phones to be honest you know the early stages of mobile phones they were they were sort of you know stock traders and drug dealers you know they were the only people in the world that needed to be contacted at any you know time and you know the mobile manufacturers would produce 10 20 30 40 different phones for very specific use cases and some of these phones were good but they were a bit clunky they were a bit frustrating.

16:02Yeah, Apple didn't invent the smartphone. What Apple did is it looked at emerging market and said, there's massive bifurcation. There's all of these competing products. And we're going to create something simple. We're going to create something delightful. We're going to create a phone for everybody. We're going to create a phone for the masses. And Johnny Ives was a huge part of that story. And I wouldn't be surprised if someone is trying to do a similar journey with AI. At the moment, we are seeing dozens and dozens and dozens of very, very targeted, specific niche products. And I suspect they're thinking, is there an opportunity to create a device that can kind of bring all this together and have the same impact on the AI space as the first iPhone had on the smartphone space?

16:45Now, we'll wait to see. But the fact that they're willing to spend$6.5 billion on a tiny team, I think is evidence that they think that the value of design is huge. They think that in order to make these tools popular, in order to get them in the hands of as many people as possible and improve utilization, make people using it five times a day, 10 times a day, rather than just once or twice a week, design is the answer. It's not more firepower. It's not more service. It's not chicks that call quicker. I mean, this is all part of that. you know my cousin or my uncle doesn't care about you know speed or you know even you know as much like the accuracy of the model they want to have an experience that kind of speaks to them and design is a big part of that story yeah at least it's definitely what's not what's keeping them from using it right now because it could there's so much to still gain okay well ai is definitely going to go through all of this conversation naturally because it is a big landslide in anything that's UX, I imagine.

17:53I'd love to ask you just to go back to the work with founders because you described it very clearly, but I would love to ask you, kind of where do you go in? So you're working with about a dozen of the Seat Camp team, sorry, of the Seat Camp portfolio. When is it that a design person like you is incredibly powerful to inject into those teams? Do you think about it like that? Is it more about empathy with the founders or the problem that they work with? Or is it more about a stage or a current situation that someone like you is super powerful to be brought into? I mean, it's an interesting sort of framing.

18:33I guess it is easy to see me as a design person. But then it would be easy to see somebody else on the Seacamp team who was once a lawyer, the legal person, or somebody who was once a finance person, the finance person. But as a team, we have all been around the block. So we bring more than just the kind of the background of the label. And so I am a founder. I founded companies. I've run companies of not huge, but 30, 40 people. I've got a startup that was doing a million in revenue ARR. That's not massive, but that is experience. I know how to build teams. I know how to scale teams. I know how to lead teams in terms of a cultural perspective.

19:13I know how to fundraise. I know how to advise people around fundraising and what a good narrative is. And obviously, I know how to help teams iterate towards product market fit. And I think product market fit is the big mission of the first couple of rounds of funding. What typically happens is a founder launches with this massive level of expectation. You know, they've quit their job. It's really scary. They've gone out on pitch. They've raised a million or two million dollars. Everyone's told them they're amazing. They're genius. Our idea is going to explode. And so they spend six months building it and then they launch.

19:44and they expect to be one of these sort of stories where suddenly hundreds of thousands of people start pouring in. And sometimes that happens, but more often it's a trickle. More often it's a few people here, a few people there. They have a 300 person mailing list, but actually only 30 of those people sign up. And they suddenly sort of fall into this bit of a trough. You know, they had certainty that go to market would just be natural. It would just explode organically. And when it they do is like starting to throw features at the problem. Well, maybe the reason people aren't using our product is because it doesn't have this feature or that feature.

20:19Maybe because it's not SOC 2 compliant. Maybe because we don't have deep ingrained user management controls. Maybe it's because we're missing this feature and that feature. And they go and they throw loads of features at the problem. Nine turns out of 10, each feature they throw gives a little bit of a bit of growth, but not much. And then it sinks back down. It's this whole kind of feature fallacy, The idea that you keep throwing features, but often the problem isn't that you're lacking features. The problem is somewhere else. Maybe the problem is that you're not very good at telling the story of your product.

20:49That people that are kind of comfortable using a broken product are scared to move because you haven't articulated why and how your product is better. Maybe you've got a terrible website. Maybe you've got awful positioning. Or maybe people do sign up. Maybe you're a great salesperson. Maybe you've got an amazing account executive or marketing team and you bring people in. But when they come in, they're struggling to get through sign up. Maybe they get through sign up, but then the value isn't obvious. And so they don't come back. And all of these things, that journey to finding product market fit is difficult and challenging.

21:23And that's why I excel. I excel at helping founders that expected a huge amount of growth. That growth isn't coming. And they're then panicking and thinking, oh, crap, I need to get something going because they can see the runway running out. They can see that they maybe need to raise seed or series A in six or seven months' time. They know that the market is getting a lot more focused on sort of progress and momentum than ever before. And they're really starting to think, hey, I need some help here. And I think that's where I come in. And that is around product. It's also around founder-led sales and founder-led marketing.

21:59It is also around assembling the right team because you need the right players on your team to be able to succeed. And so it's all of these things I think are bringing together. It's not just like purely a design lens. Yeah. And maybe this is the perfect pivot to talk about the book you've got behind you, because you've got a book that's called The Growth Equation, which is, how should I put it? You nail seven key influencing factors for startup growth. And maybe we could talk about those. Maybe I'll just tee it up for you and let you go through the seven and then we can play a bit of ball here.

22:33The reason I wrote the book first off is because I've spent the last four or five years at Seacamp helping founders. And previously to that, I spent 20 years helping a range of different companies sort of solve these problems, you know, figure out how to get more users in, how to get them kind of sticking around. out. And I found myself having the same sort of conversations over and over again with founders. When their sort of growth isn't going the way that they want it to go, I've been sort of finding myself repeating myself. But each time I repeated myself, I did it in a slightly different way.

23:10I use a slightly different analogy. And so what actually happened with the book is I started writing a blog post. And then that blog post turned out to be a series. And then that series started to be a new small book and then the small book started to be a big book. Basically, I had all this information I was trying to get down. And what I ended up writing is about 50 ,000 words that turned out to be pretty much a sort of a playbook for the first two or three years of your startup journey. I've got a lot of amazing friends that work at startups, folks from companies like Intercom, for instance, there's Trainer who read the book.

23:44And a lot of them have said, hey, look, Andy, I really wish I'd read your book when I started my journey because you've basically highlighted all of the pitfalls I found. And I discovered them and I got through them, but it took me time. And actually I had to go and read a whole bunch of articles and listen to loads of news, like, you know, podcasts and newsletters and all this information was hidden out there. And what you've done is you've pulled all this information into a single, single book. And so that was really the point. Like I see so many companies struggling, so many founders struggling unnecessarily, like the information is out there, but they don't know how to access it.

24:17And so if I can make that journey to put a market fit, rather than take three years, take a year and a half, you know, allow people to get through that process faster, then it benefits me. It benefits all of your portfolio companies because they get there quicker. And, you know, and so that's the reason I wrote it. The idea of the equation itself, like it's a bit of a bit of a sort of a McGuffin. Like I just found that there are kind of like seven high level factors. There are always the things that come up when I start talking to founders about why things aren't growing. And they're all really basic, really simple.

24:50Like literally the first chapter of the book is a growth equation. So the growth equation isn't like the whole book. It's just like, here are the things that keep coming up. But then what I do is I go through each phase. I go through how to find your first 10, 100, 1 ,000 customers, how to figure out your go to market strategy. whether as a founder you should choose product-led growth or founder-led marketing or founder-led sales how to put a growth team together like how to do good onboarding how to do you know good activation how to do retention how to do pricing these are all the same questions that come up and they come up because i think when founders get stuck they panic and they go oh well maybe i need to do a better online tour for my onboarding maybe i need to change a different pricing model.

25:34Like it's panic. And when they're panicked, they just reach for the last thing they saw. They'll have seen Lenny's newsletter. In the last edition, it said someone was talking about doing an amazing onboarding flow. And so they try and do onboarding. It doesn't work. And then the next week, somebody else shares something about a new pricing model. So the purpose of the growth equation is to act as a bit of a diagnostic lens, just in a way to say to founders, don't panic. You don't need to just start throwing things against the wall to see what sticks. Just take a step back, look at your product and try and figure out where in the flow the problem exists and then focus in on that and try and find solutions.