May 1, 2019
Measurement as a Differentiator
Errors using inadequate data are much less than those using no data at all — Charles Babbage
Promus Ventures has been investing in companies that are building amazing products at the intersection of data and tools like AI and Machine Learning since our first fund in in 2013. With the PV team’s background in data and quantitative analysis this investment focus fits well with our natural inclination towards analytics.
We are always interested in finding startups that are measuring and metering the world in unique and very hard to replicate ways. We fundamentally believe that entrepreneurs who manage to identify and capture these types of data assets are well-positioned to create real and lasting value for both enterprise and consumer customers, and we are alway excited to move quickly and with conviction to partner with these entrepreneurs — together we can build towards an amazing outcome.
This laser-like focus on finding companies that fit this pattern also involves using data, as you might expect. Like many early-stage investors, we track many thousands of startups across various sectors in the universe of early-stage technology companies, and we gather metrics that help us filter and identify the companies that we want to get to know well and spend more time with. Many venture investors talk about investing in trends or lines instead of just isolated data points, and there is no question that we find data on progress and milestones helpful as we get comfortable with an investment opportunity.
In a similar fashion, we are always interested in the data that an entrepreneur or startup themselves is tracking — not just the underlying data that they are building their product or business around, but also the internal metrics that they themselves use as a dashboard for their business. This is not a new or revolutionary concept — Peter Drucker reduced it down to its very core over 60 years ago when he said “If you can’t measure it, you can’t improve it”. Whether it is common SaaS business metrics like acquisition cost and lifetime value, or defect rates and yield for a manufactured process, measuring and understanding the performance of a startup’s internal functions is important.
At Promus Ventures we try to take it even further — we believe that internal process measurement and data have been a fundamental enabler of every innovation that we have seen since the enlightenment and the scientific revolution. I spent many years in the semiconductor industry, an industry that demonstrates perfectly the incredible power of measurement and data in enabling innovation. The global semiconductor industry has adopted detailed measurement and statistical analysis techniques around every aspect of their manufacturing and processing flow — the same flow that turns a simple raw material (silica sand) into the complex integrated electronic devices that have revolutionized the world and enabled innovation across the hardware-software stack.
(Quick aside: if you are interested in finding out more about how the semi industry developed, with some background on how the pioneers in the industry used these measurement techniques there are a couple of great resources that help as starting points for exploring that evolution — Steve Blank’s Secret History of Silicon Valley is a good jumping off point, and if you ever get to Mountain View make sure you visit the Computer History Museum — you can explore the evolution of compute platforms from the abacus to the cloud!)
When the past is always with you, it may as well be present; and if it is present, it will be future as well — William Gibson, Neuromancer
This same relentless focus on measurement and improvement continues to help the best entrepreneurs differentiate themselves from their competitors.
It helps Promus Ventures portfolio companies like Rocket Lab achieve milestones like multiple successful commercial launches, produce an Electron launch vehicle every 30 days and move towards launches every two weeks. It helps Spire demonstrate continued excellence in manufacturing and product development as they reach the milestone of 100 successful satellites launched. It helps Mapbox build their location data platform for mobile and web applications. In fact, the importance of continually measuring and improving can be seen right across our portfolio.
This focus on measurement and improvement even helps Promus Ventures as we scale our platform — we are working on some exciting new things that will expand our influence on the wider ecosystem of early-stage deep technology funding and innovation, and we will be engaging closely with our partners to measure and understand the impact of the work we are doing. Stay tuned for more details as soon as we can share them!
We continue to search for exceptional entrepreneurs and do our best to help these companies grow through this cycle of development, measurement, and improvement — let us know what you are working on and where you think we could help!
