Venture Lessons: John Matheny, Former Senior VP at Yahoo
John discusses the importance of product-market fit, his enthusiasm for startups, and why he joined Foothill as a Venture Partner.
About
Welcome to the twenty-fifth installment of Foothill Ventures’ Lessons from Founders series. From time to time, we interview one founder and publish an in-depth founder interview. This week, we’re highlighting our venture partner John Matheny. Our conversation covers his personal journey, the lessons that shaped him, and his vision for the future. These insights and lessons are applicable to any entrepreneur — current or future.
John introduces himself
I’m John. After more than 40 years in highly technical software engineering and leadership positions, I decided to take a break to invest in myself and others.
I have a deep commitment to continuous education and learning, and so I’ve been taking continuing education courses at Stanford — 14 so far. I’ve been reading a lot of books, especially African American literature, which helped give historical context to the modern-day struggles of so many people. And, I have been taking some really fun classes on MasterClass in photography, choreography, cooking, and storytelling.
I have an enormous passion for giving back and helping founders, especially women, immigrants, and people of color. I’ve been an investor in startups for about 20 years, and I’m thrilled to be a Venture Partner at Foothill Ventures, where I have a much larger platform and structured approach for identifying promising startups and entrepreneurs, and helping them grow and reach their full potential personally and professionally.
His early background
As a teenager I was very involved in technical theater, including set building and stage lighting design and production. Those experiences ignited my passion for creativity, teamwork, and technology.
As an electrical engineering major at the University of Illinois, I had the opportunity to join an amazing group of people developing a pioneering online learning system called PLATO. Developing system software for PLATO was an extraordinary experience in so many ways. While my formal CS classes still used punched cards, PLATO offered advanced capabilities such as touch-enabled bitmapped graphics displays, instructor-authored courseware, and a vast online community. There were thousands of daily active users, and so almost overnight you could get feedback from real users. In that way, PLATO development was very much like modern software practices, where you run experiments, make improvements, and continuously iterate based on data and user feedback. Ever since, all of my roles have been in some way related to the lessons I learned and the skills I developed while building PLATO.
Ever since, all of my roles have been in some way related to the lessons I learned and the skills I developed while building PLATO.
Lessons from his first startup
After many years working at large enterprise companies, including Apple and Sun, a colleague and I started a company called Streetlight Software to make location-based services and applications for mobile devices. After licensing digital mapping data, we successfully built applications and backend systems that wirelessly delivered maps, directions, and points of interest to General Magic handheld devices produced by Motorola and Sony.
I’m very proud of what we accomplished, yet we started our company in 1992, which was insanely early. Location-based services and applications didn’t really take off for another decade or more due to fundamental technical limitations. Furthermore, our initial target, General Magic, was not a commercial success. This experience taught me several hard lessons about timing and product-market fit. Just because you develop a great product doesn’t mean it will be successful in the marketplace. There are many, many other factors that an entrepreneur has to focus on, including a product-market fit.
Just because you develop a great product doesn’t mean it will be successful in the marketplace. There are many, many other factors that an entrepreneur has to focus on, including a product-market fit.
On a successful startup exit with Microsoft
While Streetlight Software was a great learning experience, it did not lead to a successful exit. However, it did lead me to my next opportunity, which was to become a very early employee at WebTV Networks. There, in just over a year, we developed a commercially available set-top box based on custom silicon, a thin client operating system with automated update capabilities, a comprehensive set of internet applications and online services, and fundamental back office systems including sign up and sign in, billing, and customer service. It was an extremely intense effort, the kind of thing where people live at work and sleep under their desks for days and weeks at a time.
Microsoft acquired the company in 1997, two years after founding for $425 million. It was at WebTV that I became very deeply and intimately familiar with what it takes to create a successful startup, work collaboratively under intense pressure, grow and lead teams, and serve customers and partners.
Joining Foothill Ventures
Fast forward to 2020, I decided to take a break from full time employment after more than 40 years, which often included 80+ hour weeks. I wanted to take time off, invest in myself through books and classes, and invest in others through advising and mentoring.
In early 2021 I joined Foothill Ventures as a Venture Partner, where I will work with founders and their teams in the areas of enterprise software, life sciences, and deep tech. I chose Foothill Ventures due to the technical depth of the partners, and an investment thesis emphasizing highly technical founders, cross-border and cross-discipline opportunities, novel inventions and advanced technology, and a focus on early-stage “seed” investments.
In working with founders it is critical for me to develop a keen understanding of the business and market opportunity, product vision and roadmap, technological advantages, strategy for acquiring customers, and why they are uniquely positioned to grow and win. Over time, I help them grow as leaders, build their teams and capabilities, serve their customers, and reach the next stage of growth.
I chose Foothill Ventures due to the technical depth of the partners, and an investment thesis emphasizing highly technical founders, cross-border and cross-discipline opportunities, novel inventions and advanced technology, and a focus on early-stage “seed” investments.
Qualities he looks for in founders
I think it goes without saying that founders need to have a good idea, they need to be smart, etc. On a personal level, I think they also have a tremendous amount of tenacity, where they have a deep responsibility to themselves, their investors, their customers, and their employees. Additionally, I think that it’s absolutely critical to have a fair amount of humility and to realize that this is not all about you, it’s really about your customers. I like to look for people that are humble and curious, because that is how you build empathy for your customers and understand their needs. That requires being wrong all the time — for example, if you have a hypothesis and are absolutely firm on that but find out a different outcome after putting it in front of users, at a focus group or through a usability test.
I like to look for people that are humble and curious, because that is how you build empathy for your customers and understand their needs.
I am a firm believer of using data to help make business and product decisions. Founders who rely too much on their own intuition, assumptions, and beliefs are rarely successful. To borrow a phrase from a colleague, “you get what you measure”.
Building a successful company is a team effort among a diverse set of employees, customers, partners, mentors, investors, and more. Successful founders seek out and use the skills and experience of others to accelerate and amplify their progress.
To borrow a phrase from a colleague, “you get what you measure”.
Technology trends and industries he’s interested in
On a global level, I’m excited about advances in life sciences, clean energy, and space exploration. On a more local level, I’m excited about advances in remote work and distance learning, low-code/no-code development platforms, security and operational resilience, robotics and automation, and so much more. On a personal level, I’m excited about finding ways to help people and businesses reach their full potential. There is so much to look forward to.
Media recommendations
I spent much of my time during the pandemic exploring topics that would lead to me having greater understanding, empathy, and respect for others. Some standouts for me include:
An Unquiet Mind: A Memoir of Moods and Madness by Kay Redfield Jamison
Caste: The Origins of Our Discontents by Isabel Wilkerson
The New Jim Crow: Mass Incarceration in the Age of Colorblindness by Michelle Alexander
The Blessings of Liberty: A Concise History of the Constitution of the United States by Michael Les Benedict
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Foothill Ventures is a $150M seed-stage technology firm. We back technical founders across software, life sciences, and frontier technologies. Learn more about our origin story and our approach here.
Questions, thoughts, reflections? Let us know in the comments below. We’re always looking for great entrepreneurs and early stage ideas, and we’re always interested in having a discussion about venture, technology, and anything related. To see more about Foothill Ventures, please visit our website: foothill.ventures.
