Kate Aronowitz (GV): The Real Work Between Funding and Product–Market Fit

0:10Kate Aronowitz:Hi, everyone, and welcome to The Design VC, the show where design meets business and creativity meets capital. And I'm your host, Andy Budd. Each week, I'll be talking to founders, investors and designers about the role design has played in the world of startups. And today, I'm really excited to be joined by the wonderful Kate Aronovich. Kate's currently working at Google Ventures. Before that, she's had an amazing stint as a designer, a design leader in some really outstanding companies, eBay, LinkedIn, Facebook, to name just a few. So Kate, welcome to the show. Thanks for having me. It's really exciting to have you join.

0:46Kate Aronowitz:I've been a huge fan of what you've been doing for ages. And so I'm really, really grateful that you'd spend time with me today. So I want to start with where you at the moment. So you're currently a portfolio operations leader at GV, Google Ventures in the Bay Area. I think most people will have heard of GV, but they might not know the kind of intricacies of the companies you invest in and the stages you invest. Can you just give a little high level, I guess, investment thesis around Google Ventures? Yeah, happy to. So Google Ventures, as you can imagine, we are a part of Google, but we're kind of not a part of Google, which is kind of interesting.

1:20So we have one LP, which means we get all of our money from one source and that is Google. But what's amazing about Google is that they trust us to invest the money. They don't get data from our startups. They don't look into our startups. There's very much a wall between who and what we invest in and Google. And we are their early stage investment arm. So Google actually has a few investment firms underneath it. We're early stage. And we're a bit sector agnostic, which is really cool. Almost half of our money actually goes into life sciences. I reported to somebody who's actually an MD who does biotech and health tech.

1:57We also have a really robust enterprise investment arm and then some consumer. As you can imagine, AI is eating into everything. We've been around for about 15 years and invest a little bit more than about a billion dollars a year, which is kind of crazy. But what's really cool is not only do we have one LP, which means we don't spend a lot of our time trying to raise money. Google is very patient capital. We get to work with founders and tell them like, look, we don't expect you to return the money immediately. We want to be there with you for the long haul. We believe in your big idea. Google believes in moonshots.

2:35We believe in moonshots too. And we believe in founders with really big ideas. So that's what kind of makes Google Ventures special in terms of just GV and and what we invest in. And then as far as my role goes, there's the investing side, and then we call it the platform of the ops team. And we've been there since the very beginning. One of the founding theses behind GV was that founders often need help with really critical functions. And so they built it in from the very beginning. And what's crazy is the first partner on the GV team, the ops team was actually designer. So design has been in GV's blood since the very beginning.

3:19And so I spend my time with founders helping them with design problems.

3:23Kate Aronowitz:Amazing. I mean, you've touched on a whole bunch of topics I want to dive into in a little bit more detail in a second, but I'm kind of curious, like a lot of VC funds work in terms of integers that have fund one, fund two, fund three, fund four. Is that how you work as well? Or is it just kind of a rolling deployment of capital no we do we do work in vintages and they're two year usually typically two year which is which is nice as well gotcha so you must be on on on fund seven eight or nine or something at the moment i guess longer than that yeah we actually started with one year funds for a while i think we switched to two year and probably like 2019 and because you you mentioned like the focus is on patient capital does that sort of skew your investments towards more deep tech because obviously like you know there are kinds of products that kind of take sort of five or ten years to kind of come to market in scale and then there are ones that take 20 or 30 years i remember sitting down with a founder who was creating a new salt-based nuclear reactor and i was chatting to him he's like well we think we're going to have a lab demo working in like eight years time i was like i just don't know how to manage that running you know working in a fund where we have like a 10-year kind of desire to get our returns back.

4:33Kate Aronowitz:Not even having a working demo for eight years seems like a crazy thing. But is that where you're focusing on these sort of big, long... Yeah, I think it shows up in a couple of ways. I think one, some of the investments we invest in, I mean, we invest in drug development. Drugs take 10 years to bring to markets. Just that in and of itself, you have to be patient and you have to believe in the science and understand that process, which we deeply do. but then I think it's also just across the kind of founders that we look for we don't want somebody that's just going to solve the problem that's immediately in front of them we love to ask them like what happens in five years if everything goes right I don't want you to just think about the problem you're solving next quarter what happens if this really takes off we are looking for founders that have really big um world-changing ideas and we're okay going along the ride um we're okay.

5:27I was seeing pivots. In fact, we encourage it. If something's not working out, let's pivot. We'll be there for you. And let's get on to the next thing to solve.

5:35Kate Aronowitz:So does that mean, are there particular things you have like almost like an anti-portfolio, an anti-thesis? So there's certain sectors that you don't generally invest in. Are you sort of avoiding the current craze for sort of, you know, AI rapper kind of co-pilots, for instance, or is there anything else that you don't really sort of focus on? I don't know that we have an anti-portfolio. I think, you know, it's interesting to see how the fund has evolved over the past 16 years. And, you know, it was very much a seed investment at the beginning. And no one knew who Google Ventures was, even though we had the Google name behind us.

6:08And it was just, you know, to do seed investing, you just have to do a lot of investing. And over the years, the investors that we've hired each kind of have a specialty and a thesis. And we really trust them to go after that. So whether it's fintech or security, health tech, insurance, those types of things, it's we we really trust the investors to go deep on their theses.

6:34Kate Aronowitz:So I'm curious, you said that you're kind of a portfolio operations lead. And you talked a little bit about how a big part of what you do, I guess, is to support founders once you've invested in them. Do you have any involvement in the investment decision at all? Or do you come on board once the investment decision is made and your job is to kind of help them kind of scale and grow and be successful? We do, actually. One of the reasons, so we can get at some point about why I joined GV. One of the key reasons I joined GV, I wasn't actually looking to get into venture capital, but the operating partners really do.

7:07We talk about seat at the table. We have a seat at the table. We are in all the pitches. We are there start to finish. Many times the investors will ask us to come in and help evaluate a company, whether it's like if the company is very user experience centric or that's their edge. I go in and I take a look at the product and I get deep with the design team. If it's very talent reliant or we want to know more about the leadership team, we'll send our executive talent partner in. So we are very much involved from the very beginning to the very end. We have partner meetings on Monday. We are all at the table.

7:43My team has its own section of the agenda. And we work very, very close hand in hand with the investors. We have Kerry in the fund. We are very much a part of the firm, which obviously just makes it a much more rewarding experience. It also just makes for better work. when I can meet a founder at a pitch. I was in a pitch yesterday. They asked me to come in. They're like, it's very UX heavy. Come in and kind of grill the founder and see like how big they're thinking, how much they truly understand the problem they're trying to solve. And then kind of test their design chops a little bit. What are they curious about?

8:17And how could you help them?

8:19Kate Aronowitz:I mean, that's all very familiar, very much the same as what I do at kind of Seacamp. So I'm a venture partner at Seacamp, but I am sort of involved Most of my work is kind of 70 % is kind of post-investment, but I'm involved in a lot of the pitches, a lot of the presentations. And like you, I'll be sort of invited in to speak to founders to kind of give my assessment on where the product is and where they're heading, where they all kind of make sense a lot. And so I love that balance. I love the balance of being able to see founders from the very first time they interact with us all the way through, hopefully, for them being successful and graduating.

8:53Kate Aronowitz:And you get a lot more kind of context through that. So I think we probably sort of do really similar things. Like as a portfolio operations lead, do you manage a team? Have you got a whole bunch of people working for you or how does that all sort of fit together? I do. So as I said, you know, the investors make the investments and then I've got a small team and intentionally small, even though we have more than 400 companies in our portfolio. Now, some of them go back many years and are small investments. We're an intentionally small team that just focus on a few key areas. So design being one of them and executive talent being another.

9:30I mean, I love to think that I can affect a company with my design jobs, but getting the right talent on the team like early and quick. I mean, I just think that there's no better impact you can have. So we have an executive talent team that's really killer. And we also have marketing and comms help. And then another awesome benefit we have is that while Google can't see into what we're doing, we have a lot of people at Google that pick up the phone for our startups. And so if they're interested in building on cloud or they need help with their ad strategy or they're trying to get to the Android store and understand that better, we have an awesome group of folks over at Google who get really energized by working with our startups.

10:13It's kind of a two way street. They get to help and then they also get informed and inspired by what our startups are doing as well.

10:20Kate Aronowitz:And so how big is the sort of operations team? Are there more operators than there are investors or is it sort of even balanced? No, we're less than 10 people. We're less than 10 people. We're small, whereas like other firms have, you know, 10 people just doing marketing. I think this is the thing that really surprised me when I got into VC. Like you imagine that these firms, because they've got huge amounts of money, are really, really big beasts. And a lot of them are actually sort of small little kind of, you know, sort of not lifestyle businesses, but they're kind of micro businesses. They're 30, 40 people.

10:50Kate Aronowitz:In fact, a lot of, you know, I made a lot of VC funds that just two people, two general partners in a room, you know, in a kind of, you know, in a Soho loft or whatever. Often the size of the fund is no indication of the size of the team. No, like I think of ourselves as almost being like this small boutique agency. We don't do a lot of the one to many things. We don't have a giant Slack channel for all of our founders. We don't do newsletters. We don't do lots of one to many things. What we try to do is have my team focus on a few founders, a few companies at a time that are real rising stars where we think we can have really dramatic impact at like certain inflection points.

11:32And also, we just know that other VCs are offering a lot of that other stuff. Like I could start a Slack channel. I could start a community group. But, you know, they're probably getting it better somewhere else and I don't have the time to manage it. So we just try to focus on where we think we can really add value.

11:48Kate Aronowitz:I'm going to be talking to Jake Knapp and John Zorasky sort of soon, who are obviously GV alumni. And they were very involved in the sort of the early shaping of design sprints. Is that a practice that you folks still do? Or is that kind of fallen by the wayside? Yes and no. And I have tons of respect and credit for what they did. I mean, they're a huge reason why I joined GV. I had such excitement around the sprint book. I wrote to Jake very early and I'm I heard you're writing a book. I need to see it. He printed out a galley copy. I was working at Wellfront. We took it. We read it and used it.

12:22I would say that we still use sprint methodology in pieces. Sprint formally is a five-day process and takes a few people from GV to run an entire five-day process. It takes us offline for a week. It takes a lot of investment from the founders. but if you think about it a sprint is really just problem identification and articulation same for an audience testing and designing and iterating quite a bit and then doing user testing on the other side to get real feedback to figure out what to build we do all of those things we just rarely string it together anymore in a five-day sprint we joke sometimes I really like doing Mondays at sprints like I love the the big questions and trying to get everybody on the same page whereas Vanessa who used to work closely with me she loved the Wednesday Thursday let's get in the in the like pixel pushing in the details and stuff like that so a lot of times we'll say okay this firm just needs a Monday we just need an alignment workshop we need everybody to come together versus look the design team is at a place where they got 17 ideas they don't know what to do we need to do some user testing and then we'll do that so I would say that a lot of our work is very inspired um and but it's evolved in the same way it makes sense and i think it's

13:37Kate Aronowitz:quite a challenging thing to scale i think in the early days of gv when you had a small number of portfolio companies it's probably easy to deploy with the sheer volume of what's going on at the moment and also like you say i think 10 or 15 years ago maybe the knowledge was less available whereas now i think um there's so many more people doing this kind of stuff there's so many more funds offering value add that maybe it's it's less of a there's less of a pull for you to do that now than there might have been 10 years ago um so you you mentioned it already but like you were a former designer i was a former designer i'm curious like how you found your way in a little bit more detail both into venture and into gv particularly into venture and into gv so um it probably you can go back as far as far as near as you want you know oh that's okay um i think it actually goes to i'm going to call it facebook when i was there it was facebook uh now meta um and while i was there you know when i joined the the design team i mean now it's probably in the thousands it was just a few designers basically sitting in a hallway near mark and when i interviewed with mark it was like I want you to build me the biggest, best UX product design, whatever we were calling at the time, product design team in the world.

14:54And I'm going to give you carte blanche to do it. If you need to buy agencies, buy companies, travel, but we like go find the very best designers and we'll do this. And which was kind of an exciting remit. And so I got together with the team and we made a list of who we thought were like the, I don't know how long the list was at least 50 people, like who we thought we really wanted to work with. And one by one, we put together a strategy who knew them. Why would they want to come work at Facebook? How could we get in touch with them? And one by one, and many, many of those designers ended up working with us.

15:28On that list was Daniel Berka and Jake Knapp and the GV team. And what's funny is they, no matter what we did, I mean, We joke, we like had dinners with Mark. We invited them to campus. We were like, you can work on whatever you want. They wouldn't come to Facebook. And so I just kept saying like, what are these guys doing at this venture firm? Why won't they leave? And so I finally got some real time with them when I got over like being aggressive recruiter Kate and just got to know them and just was like enamored with the job that they got to do. It was like, they just spent their time with all these different companies helping, helping enabled design with these early founders, oftentimes introducing design to founders and getting their hands straight.

16:16It was kind of like running this consultancy where your base was already built in and your clients were there and they had to deal with very little politics. Everyone was excited to see them when they came into the room. They didn't have to fight for the seat at the table. And so when I left Facebook, I took a break. I was at Wealthfront for a little while. I was really trying to think about what I wanted to do next. And I'm like, I literally was like, I want to go to GV. And it just so happens Daniel called me and we started talking. And six months later I was there and that was eight years ago.

16:48And it's, it's been the best job of my career. I mean, I've just, I've loved it. I've loved really almost every moment of it. That's amazing.

16:57Kate Aronowitz:And I didn't realize Daniel was the kind of the, the sort of, you know, the routine so that's amazing I love Daniel got a ton of time very much was yeah yeah brilliant I mean you've mentioned already like GV has got a huge history of hiring amazing designers you've talked about you know we talked about Jake and John and Daniel Braden Cowich was another one who I knew really well back in the day and even in the UK you've got Tom Holm who was kind of coming from an amazing kind of background in IDEO like what is it do you think that kind of GV sees in these designers that maybe other funds or other companies don't see?

17:35That's a good question. When I think about design, it's less about the pixels and things like that. I think where I see it show up in the most meaningful way, if you're a founder, you have to be able to find a problem to solve, a real world problem to solve. And then you have to bring along a company, a venture fund, investors along on that journey and build empathy for the person that you're trying to solve that problem for. I regularly get on the, you know, the calls with founders. I couldn't, if I would read their website 15 times, I wouldn't under, I couldn't tell you what they do. But I think as designers or designer investors, I think we have a unique talent of being able to really articulate the problem we're trying to solve in a very human way.

18:24How is this going to make someone's life better? How is this going to make a system better? How's it going to make the world better, society better? And tell those stories and bring people along. I think Tom has a really special talent for that. And I would like to think, I mean, I'm getting on a call next after we hang up, working with a very technical, super talented founder. He's just struggling with how do I articulate this in a way that my my initially my customers will understand and then you know on top of that more customers and also the people I want to join my team

19:02Kate Aronowitz:I mean I I I recognize a lot of what you you've just described there I mean I think when I joined CCAMP initially people thought I was a design guy and they'll roll me out if like hey we want someone to kind of review the product or hire a designer but really quickly I think what became evident is the skill I have and I think most designers have is a real ability to see things from from you know beginner's mind to see things from first principles to really understand how someone that's never interacted with this product before could really see it and so like you I find myself spending a lot more time talking about kind of positioning than I ever thought I would do because it's you know the way that people describe what they do can often feel like a jumble a word salad of kind of nonsensical kind of buzzwords and people don't get it and you know a lot of the time I spend actually in sales and marketing because again a lot of a lot of sales and marketing is asking the right questions it's describing the product in a way that that really lands and I think a lot of people tend to have quite a sort of mechanical kind of super user like they see things from their perspective and I think designers are great at turning that lens around and going okay well I understand what you're saying but will the user will the customer understand and so I find that I'm doing a lot of that.

20:17I think there's two things there too, just designers, I think, tend to be curious. And honestly, we kind of use design as a Trojan horse into these companies, right? Like if you say, do you want product leadership help? You know, the founder often is like, I'm the product leader. No, I don't need that. But if you say, hey, you want a designer to spend some time with you? Almost no one ever says no. And then we get permission to ask the really basic, what some might call, I hate when people say I'm going to ask it on questions, not a dumb question but to ask those really basic questions that that help us move along really really well so like people like do you want to be called a designer yeah I don't yeah I run a team I don't call me a designer it's great because you know what people usually aren't afraid of me when I come into a room and we can really get to the heart of the matter very quickly I mean from my

21:07Kate Aronowitz:perspective like I identify as a designer but I actually haven't designed in anger for many many years but I think you're you're right it kind of people want to talk to someone that doesn't feel threatening if it's like hey do you want to talk to our general partner do you want to talk to our kind of legal counsel do you want to talk to somebody else it feels a bit threatening whereas there's something about kind of you know talking to a designer which actually feels quite exciting and also what I find is like my relationship with a lot of my sort of portfolio um sort of founders is that because of that because we're talking about product related stuff because we're an operator there's almost kind of more of a camaraderie like whereas when you talk to the investing partner there's always a worry that what if I say the wrong thing what if I kind of you know if I let slip the things aren't going as perfectly as as my last update said so I feel that I'm able to build a really really familial sort of friendly relationship with the people I work with that might not be possible if someone was coming in you know with a with a briefcase and a Patagonia gilet absolutely no I mean our our investors they get to see the board version of the founder I mean you know uh founders know this when i work with them i'm regularly sharing information back to the investor and i get to see different team dynamics i can i can say look i've seen the head of product in the room with the designer you don't get along they're not listening here's where i think the founder's really strong we haven't seen him yet or heard so um it's it is fun to see kind of the inner workings of the of the teams where the where the investors don't Absolutely.

22:34Kate Aronowitz:I mean, I definitely get to kind of meet a lot of the team, you know, the heads of design, the heads of product, you know, the other investors might not interact with. But also then I get a kind of an idea from both sides. You know, I don't just have everything filtered through the founder. I get an idea of what the people on this coalface are actually feeling. But then to your other point, I often find myself working with a founder to help them improve their storytelling of their board deck. even though that I'm almost like I'm also the consumer of the deck somehow they feel much more comfortable with me helping them craft that image even though like there's a good chance I might go back and have a you know a conversation around like how things are going with with with the rest of the investment team there's a there's a feeling of of being on their side which I think is I love and again to the other point you mentioned like as you know like I've never I've never worked in the tech space really I've run a small few little small startups but I come from the agency world and you've mentioned like being in gv was a little bit like being an agency where you know people invite you in they're really appreciative of your help you come in and you consult and you and so for me that transition from agency into venture it doesn't sound obvious but actually it was incredibly smooth experience it was just kind of using those same skills yeah but the cool thing is that you're not looking for billable hours now absolutely neutral party like all like Literally, if your startup succeeds, I get carried.

24:01We are like all, I'm not looking for billable hours. I'm not trying to sell you a bigger package. Like we are all on the same team. And when you say that, I mean, it's reality and it works, which is nice.

24:14Kate Aronowitz:Absolutely. Absolutely. So I'm kind of, I'm curious. So you obviously coming from a design background, like, like, what is your sense of the level of kind of understanding and proficiency that the founders you interact with have around design? I would say, you know, starting from basics, I don't ever meet a founder now that's like, what's design? I don't think that this is important, which is amazing. I mean, I'm sure that they were like that at one point. I think that, you know, I've been here for eight years. founders are looking for design earlier and earlier and earlier. You know, it used to be, you know, consumer products were what looked good.

24:57And that's what everybody thought of as, you know, iPhone apps, right? That's what needed design. But, you know, it's the consumerification of enterprise software. Everybody is expecting a great experience. And frankly, raising money is almost the easy part now. And if you're not good at what you do, and you're not solving a solution, somebody else in the market is going to take it from you. So I really enjoy those early conversations. And a lot of times it's like, hey, I had some experience. I've built something where you take a look at it. Can you introduce me as a designer? Sometimes my favorite conversations are on the health tech side, where you get somebody who's been a physician and been in industry, in the medical side of things for years, and they have an idea, but they've never built a product before and they think what we do is magic whereas I'm looking at them and they're solving diseases and they're treating people and I'm like no really you're the person that has all the talent in the room and they're like no I feel like I've never built a product before I need you to help me like get started so um people want to talk early about design um and it varies their experience some could be like hey my friend has helped me design this app I don't think it's good can you do a tear down with me and let's get moving.

26:15Or it could be, look, I know design is going to be important to me in a year or two, but right now I just need to build a proof of concept. I've got some engineers ready to test it and we don't need to lean into it as hard.