I recently went one-on-one with Vanessa Larco. Vanessa was a Partner at New Enterprise Associates (NEA) before recently launching a new venture capital firm.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks, or challenges have been most instrumental to your growth?
Vanessa: Learning to be flexible with my career path ultimately led me to where I am. I started down the tech path by studying computer science at Georgia Tech as an undergrad. From there, I was recruited to join Microsoft to work on cutting-edge products: Surface and XBOX. After launching XBOX Kinect, I moved to Silicon Valley in pursuit of experience in startups with the dream of becoming an entrepreneur myself. I joined Playdom and helped build one of their most successful game studios. Everything was up and to the right… I felt unstoppable, and then my next move was inevitably a failure. I left to start a company with a couple of friends, and it didn’t work out the way we hoped. We got acqui-hired, and I lost my friendship with one of my co-founders. That failure felt insurmountable, and then it got worse.
Every company I applied to leveled me a level or two below where I was before I started my company. It felt like salt on the wound. There was nothing I could do but accept that reality (I needed a job at that point) and work hard to prove I was good at my job.
I joined Twilio and got to work on the Voice API. Later, I joined Box, where I worked on the Mobile and Web apps. I was back on track with my career as a Product leader, and out of the blue, someone I had known for years recruited me to join NEA. He offered to teach me everything he knew about venture. I was initially very hesitant to leave Product because I finally got back to a great trajectory, but I also wasn’t afraid to fail again, so I decided to take another leap and transition into a VC role.
Looking back on the path, my failures taught me much more than my successes. It taught me humility, empathy, removed my fear of failure, built my confidence in my ability to persevere, and gave me some great stories to share with my kids someday.
Adam: What do you look for in companies you invest in? What are your best tips for investors and for entrepreneurs?
Vanessa: I invest in the earliest stages, so a majority of my evaluation criteria is around the founding team. I look to see if they have the right backgrounds for what they are building. I look at how thoughtful they are with discussing the details of their business and the history of their industry– I want them to strive to be experts. Passion and grit are important because it’s a long journey, and it never gets easier. They need the drive to always move forward. They need to be great at storytelling and recruiting since they will spend at least half their time on that. Lastly, they need to be execution machines– a good idea alone is rarely unique; it’s a team’s ability to execute well, rapidly, and consistently.
Once I get through assessing the team, I evaluate the product– does it serve a real need (e.g. is the solution faster, cheaper, easier to use)? Is there a product-market pull? Is there pent-up demand for this offering? Does the pricing/target user support the creation of a huge business?
Adam: In your experience, what are the key steps to growing and scaling your business?
Vanessa: The key is to have an effective distribution machine. It can be a very efficient sales team, some great partnerships, a clever viral/network mechanism, but you can’t grow your business if you can’t get your product into customers’ hands. The distribution mechanism depends on the nature of your business, and it can evolve over time, but it’s important to be on the hunt for it until you find a scalable solution.
I like to think that you also need a great product so you can retain the users you acquire, but history shows us that products that are “good enough” can also win and create huge businesses as long as they have the best distribution.
Adam: What are your best tips on the topics of sales, marketing, and branding?
Vanessa: I love this question! In tech, we often forget to speak to the customer in their language about their challenges and how we can help. It’s easy to dive right into feature lists, product positioning, technical innovation, and results your product can deliver. It’s worth spending the time to understand the buyer and their motivations, language, and concerns. You need to be able to connect to your buyer through your website, your meetings, your product, etc.
Adam: What are the most important trends in technology that leaders should be aware of and understand? What should they understand about them?
Vanessa: The obvious answer here is AI, but it’s harder than that. Leaders should understand that this isn’t just about buying some AI tools or new AI features from existing vendors– it’s a total reskilling of your workforce. It’s going to be a big lift, and that’s okay because it will be transformational. I’m not just talking about legacy companies, tech companies that were founded even just a few years ago need to figure out how to make time and space for their teams to learn and truly adopt this technology beyond.
Adam: What do you believe are the defining qualities of an effective leader?
Vanessa: There is a real difference between a founder-leader and a hired-leader. If I were to generalize across both, I’d say a competitive nature to win, a sense of urgency, and an obsession with the opportunity space are some of the traits I’ve seen across all successful leaders.
Adam: How can leaders and aspiring leaders take their leadership skills to the next level?
Vanessa: The most important thing is to make time to learn. It’s easy to be too busy with every fire drill or big opportunity ahead, but making the time to learn the new best practices, pick up a new tech tool, and read up on the latest advancements is critical to upleveling.
Adam: What is the single best piece of advice you have ever received?
Vanessa: You can’t be afraid to fail. When you feel that fear or feel uncomfortable with the challenge ahead, you’re likely in the right zone for learning. If you do fail, you need to give yourself grace and be confident that you can and you will rebound with a new skillset and more resolve than before.
